ECONOMIC MANAGERS backed a possible suspension or reduction of fuel excise taxes and a mandatory 20% cut in nonessential government overhead to mitigate the impact of soaring global oil prices on the domestic economy.
During a joint hearing of 13 House committees on Wednesday, Finance Undersecretary Karlo Fermin S. Adriano said that the Executive branch is currently weighing tax adjustments to provide immediate relief at the pump.
“The economic managers have undertaken rigorous assessment of the macroeconomic and fiscal implications to the President for the suspension or reduction of excise tax on fuel,” Mr. Adriano told lawmakers, committees comprising the Legislative Energy Action Development council.
“The government must balance the urgent need to provide support to the most vulnerable sectors with the equally critical responsibility of maintaining fiscal discipline,” he added.
To offset potential revenue losses and fund relief programs, Acting Budget Secretary Rolando U. Toledo recommended mandating all departments to save at least 20% from their non-essential maintenance and other operating expenses. This move supports Executive Order No. 110, which declares a national energy emergency, and Memorandum Circular No. 114, which directs agencies to adopt strict energy conservation.
Economy Secretary Arsenio M. Balisacan warned that if global crude prices hit $150 per barrel, local inflation could surge to 6% or 7%.
“These assumptions may be a little bit scary, but I think they’ll be more tempered,” Mr. Balisacan said. He added that the oil shock could drag economic growth below the current 5% to 6% projection as higher transport and production costs dampen domestic demand.— Erika Mae P. Sinaking
