Senator Sherwin Gatchalian said on Saturday, June 21, that the government can release a ₱2.5-billion fuel subsidy fund to cushion the impact of rising oil prices on the transportation, agriculture, and fisheries sectors, with the Israel-Iran conflict driving up fuel costs.

In an interview on DWIZ, Gatchalian explained that while the Philippines does not import oil from Iran, the ongoing geopolitical tensions in the Middle East can still affect local fuel prices due to the country’s heavy reliance on oil imports.

Ang kasamaan lang halos 99 percent ng ating langis ay imported, ibig sabihin halos lahat binibili natin sa labas at kapag sinabi mong imported, yung presyo sinusundan nila ang international market (The downside is that about 99 percent of our oil is imported, which means we buy almost all of it from abroad, and when it’s imported, prices follow the international market), he said.

Kaya kapag tumaas ang presyo sa international market, nararamdaman natin dito yan (That’s why when prices go up in the international market, we feel the impact here as well), he added.

To address the potential burden on consumers, the senator pointed to a special provision in the 2025 national budget allocating ₱2.5 billion in fuel subsidies. He said the provision allows for the release of the fund once the average global oil price reaches and sustains $80 per barrel.

Sa special provision nakasulat na kung ang average ay $80 per barrel tuloy-tuloy, puwede nang irelease yan. Pumalo na ng $80 per barrel ilang beses itong presyo ng langis kaya kung magtuloy-tuloy siya ng $80 per barrel pwede nang irelease at magbigay na ng subsidiya (The special provision states that if the average price reaches $80 per barrel consistently, the subsidy can already be released. Oil prices have already hit $80 per barrel several times, so if this continues, the government can proceed with releasing the subsidy), he said.

Gatchalian said the Department of Energy (DOE) and the Department of Agriculture (DA) will be responsible for disbursing the subsidy to farmers and fisherfolk, while the Department of Transportation (DOTr), through the Land Transportation Franchising and Regulatory Board (LTFRB) and the Land Transportation Office (LTO), will handle aid for the transport sector.

He also raised the possibility of expanding the subsidy to tricycle drivers, who are likewise affected by fuel increases.

Gatchalian emphasized the need to closely monitor the situation to determine if it’s time to use the funds.

When asked whether the government could suspend fuel taxes to alleviate costs further, Gatchalian noted that suspending excise tax as well as Value Added Tax (VAT) would require new legislation, as the President does not have the authority to lift them unilaterally.

He also pointed to a provision under the TRAIN Law that allows for a temporary suspension of the excise tax on fuel if global prices remain above $80 per barrel for three consecutive months.

Based on four days of trading in the global oil market, gasoline prices could increase by ₱2.50 to ₱3.20 per liter next week.

Diesel prices are also expected to go up by ₱4.30 to as much as ₱4.80 per liter.

DOE cited the ongoing conflict between Israel and Iran as the cause of this looming price surge.