Philippine exporters reiterated the organization’s strong support for the proposed suspension of the value-added tax (VAT) on fuel, emphasizing its potential to provide immediate and meaningful relief to both businesses and consumers amid persistent cost pressures.
Philippine Exporters Confederation Inc. (PHILEXPORT) President Sergio R. Ortiz-Luis Jr. said that high fuel prices continue to drive up production, transportation, and logistics costs, significantly affecting the competitiveness of Philippine exports and the overall business environment. He noted that suspending VAT
on fuel would help temper these costs, enabling enterprises—particularly micro, small, and medium enterprises (MSMEs)—to sustain operations, preserve jobs, and remain competitive in both domestic and international markets.
“Fuel is a fundamental input across industries. Reducing the tax burden on fuel will have a cascading positive effect, lowering operational expenses and ultimately stabilizing prices of goods and services,” said Ortiz-Luis.
In pushing for the VAT suspension, he expressed appreciation and backs the proposed legislative measure championed by Senator Loren Legarda which seeks to provide temporary relief by suspending VAT on fuel products. Ortiz-Luis described the proposal as a timely and pragmatic response to ongoing economic challenges, particularly in mitigating inflationary pressures.
Recent government and economic data show that suspending fuel taxes—including VAT—can deliver immediate and measurable relief:
•Fuel price reductions by as much as PHP6 per liter for diesel and PHP10 per liter for gasoline, translating to substantial savings for transport, logistics, and export sectors.
•Household savings: Recent tax suspension measures already resulted in price cuts of about PHP5.60 per liter for kerosene and PHP3.36 per kilogram of LPG, or roughly PHP37 per household tank, demonstrating direct consumer benefits.
•Inflation mitigation: Economic managers project that suspending fuel taxes could help contain inflation to as low as 3.6 percent to 4.2 percent, compared to potential spikes of up to 7.5 percent without intervention, highlighting its role in stabilizing prices.
Ortiz-Luis stressed that rising fuel prices drive inflation across the economy, as higher transport costs are passed on to basic goods such as food and medicine, disproportionately affecting low- and middle-income households.
While acknowledging concerns over foregone revenues—estimated by the Finance Department to reach PHP136 billion from combined excise tax and VAT—he emphasized that the broader economic benefits, including sustained business activity, preserved jobs, and stronger consumer demand, can help offset fiscal losses over time.
“Targeted, time-bound relief measures such as the suspension of VAT on fuel are critical to safeguarding economic momentum, supporting exporters, and protecting Filipino consumers from further price shocks,” added Ortiz-Luis.
