The Financial Executives Institute of the Philippines (FINEX) has backed the government’s proposal to temporarily suspend fuel excise taxes, citing the need to shield the domestic economy from escalating geopolitical tensions in the Middle East.

In a statement on Friday, March 13, the business organization warned that the sharp rise in international crude prices is creating a ripple effect across the Philippine economy.

The group emphasized that these pressures are driving up transport and logistics costs, inflating the expense of moving agricultural goods, and straining the operations of both small businesses and large corporations.

These costs are ultimately being passed on to consumers via higher prices for essential goods and services, the group said.

FINEX argued that during periods of heightened global instability, government policy must prioritize economic stability and inflation control.

The organization expressed support for President Ferdinand Marcos Jr.’s certification of urgent legislative measures that would grant the executive branch the authority to suspend fuel excise taxes during extraordinary price shocks.

Such measures, if strictly time-bound and carefully designed, can effectively anchor inflationary expectations before they broaden, the organization said.

The group also noted that sudden spikes in fuel costs disproportionately erode the purchasing power of low-income households and rural communities.

While fuel excise taxes under the Tax Reform for Acceleration and Inclusion (TRAIN) Law were intended to finance critical infrastructure projects, FINEX maintained that extraordinary global shocks justify a temporary, rules-based adjustment to the tax regime.

Regarding the impact on the national treasury, the organization said the cost of forgone revenue must be balanced against the systemic harm of unchecked inflation.

Allowing fuel price hikes to cascade into food costs and household expenses suppresses private consumption and dampens business confidence, the group added.

According to FINEX, even marginal reductions in inflationary pressure can yield significant welfare gains for households already struggling with the cost of living.

Looking forward, the group urged the government to institutionalize a clear policy framework for tax adjustments during international disruptions.

FINEX said it is prepared to help develop a plan that balances a swift crisis response with fiscal discipline.

The organization noted that the primary objective remains softening the impact of taxes, including Value Added Tax, should the upward trajectory of global oil prices persist.