Gov’t readies ‘targeted assistance’ as oil prices rise

Gov’t readies ‘targeted assistance’ as oil prices rise

By Chino S. Leyco

Amid calls to suspend taxes on petroleum, President Duterte’s economic managers announced that the government will instead provide targeted relief assistance and support to sectors affected by the skyrocketing oil prices.

The inter-agency Development Budget Coordination Committee (DBCC) said on Thursday, Feb. 24, that the government is preparing to release P2.5 billion to fund the fuel assistance program that will benefit to over 377,000 qualified public utility vehicle (PUV) drivers.

According to the DBCC, the fuel assistance wherein subsidies in the form of vouchers will be given to PUV drivers who are operating jeepneys, UV express, taxis, tricycles, and other full-time ride-hailing and delivery services nationwide.

In addition, the Department of Agriculture (DA) has a budget of P500 million to provide assistance through fuel discounts to farmers and fisherfolk.

“This will help mitigate the impact of elevated fuel prices on production and transport costs of farm and fishery products,” the DBCC said in a statement.

Moreover, the DBCC said the government is also pursuing a holistic value chain approach to ensure an adequate and affordable food supply amid the rising oil prices.

In particular, the DA supports legislation such as Senate Bill No. 139 or the Philippine Livestock Development Industry Act and Senate Bill No. 2176 or the Affordable Pork Act to help ease possible domestic supply constraints and prevent second-round effects on prices, the DBCC said.

Based on the Banko Sentral ng Pilipinas’ (BSP) latest assessment as of Feb. 17, the Dubai crude oil price for this year is projected to average at $83.3 per barrel. Nonetheless, the DBCC expects it decelerate to $79 by the end of this year based on the latest oil futures.

The DBCC’s announcement comes in the wake of some proposals pending in Congress seeing to suspend oil taxes.

In particular, lawmakers pitched the reenactment of Section 43 of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which provided for the automatic suspension of excise taxes when the price of crude in the world market breaches $80 per barrel.

Last October, the Department of Finance (DOF) cautioned the Congress in suspending excise tax on petroleum products as it will incur substantial revenue losses for the government and may affect the budget for coronavirus recovery measures.

Finance Undersecretary Antonette C. Tionko said the proposed suspension of fuel taxes would result in P10.95 billion in foregone revenue per month.