Fuel subsidies may be slashed with excise tax hike suspension: DOF

Dharel Placido, ABS-CBN News

Posted at Oct 24 2018 03:13 PM | Updated as of Oct 24 2018 04:07 PM

A jeepney driver receives a fuel subsidy card. Mark Demayo, ABS-CBN News/File

MANILA -- The government may halve planned fuel subsidies for public utility drivers should further increases in fuel excise taxes be suspended for the whole of 2019, a finance official said Wednesday.

Finance Assistant Secretary Tony Lambino, quoting an "initial estimate" from Budget Secretary Benjamin Diokno, said the aid could be reduced to P10,000 from P20,000 per beneficiary.

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Unconditional cash transfers, however, will continue as programmed, Finance Usec. Karl Kendrick Chua told ANC's Market Edge. 

With easing prices of fuel and rice and the impending imposition of a suggested retail price on the staple grain, inflation is "slowing and may have peaked," Chua said.

Select jeepney drivers each received a P5,000 fuel subsidy this year to cushion the impact of higher duties on diesel and gasoline, which were scheduled over 3 years from 2018.

If the excise tax increase is suspended for the entire 2019, it could result to P41.6 billion in foregone revenues, the Department of Finance said.

As inflation held at its highest levels in nearly a decade, the government suspended the P2 per liter excise tax increase on diesel and gasoline that was supposed to take effect in January.