Business and employer groups are urging the government to consider the potential removal or suspension of the value-added tax (VAT) on essential goods as a buffer against economic pressures caused by the Middle East conflict.

In a joint statement on Thursday, April 30, the Leaders Forum called for “urgent and concrete measures” to ease the burden of rising costs on households and enterprises.

The Leaders Forum comprises the Philippine Chamber of Commerce and Industry, Employers Confederation of the Philippines, Philippine Exporters Confederation Inc., Federation of Free Workers, Sentro ng mga Nagkakaisa at Progresibong Manggagawa, and Trade Union Congress of the Philippines.

“Workers and employers may come from different sectors, but we face the same reality: the rising cost of essential goods is placing unsustainable pressure on both livelihoods and businesses,” the groups said.

“In this context, the continued imposition of VAT on essential goods adds to the cost burden borne by both consumers and producers. These taxes, while important from a fiscal perspective, have real and immediate impacts on affordability, enterprise viability, and overall economic activity,” they added.

To help protect workers and employers from higher costs, the groups are pushing the government to conduct a targeted review of the removal or suspension of VAT on essential goods such as fuel, electricity, and basic commodities.

The groups said this should be supported by effective monitoring and enforcement to ensure that any reduction in taxes translates into actual price relief.

In addition, they want the President to certify as urgent a proposed measure increasing the tax-exempt income ceiling to cover middle-income earners, thereby increasing their take-home pay.

The business and labor groups are also seeking targeted and time-bound fiscal measures to address high costs and preserve investment incentives and long-term economic growth.

“When basic goods become less affordable, workers struggle to meet daily needs, and businesses face declining demand and rising costs. The result is a vicious cycle that weakens both household welfare and enterprise sustainability,” the groups said.

“This is not only a matter of taxation. It is a matter of economic resilience, social stability, and shared responsibility,” they added.

As the government looks for a clear response, the groups said there should be a thorough exploration of whether to trigger Section 14(E) of the Oil Deregulation Law of 1998, which would empower the Department of Energy (DOE) to temporarily take over oil companies during a national energy emergency.

At present, oil firms retain full control over pricing and supply decisions, while the government’s role is largely limited to monitoring price movements.