Wicked joke from Malacañang

President Rodrigo Duterte has made a move on how to deal with surging oil prices worsened by the war in Ukraine. It is an understandable move–the President has agreed with the Department of Finance (DOF) not to suspend the excise taxes on fuel products as the government revenues would be hit hard. For obvious reasons, the National Government needs funds to fuel its projects and basic services; if its revenues are depleted, it could only do so much and it could resort to more debt borrowings.

Finance Secretary Carlos Dominguez has said that the fuel excise tax must be kept because the DOF had “already budgeted it for salaries of school teachers; ‘Build, Build, Build’ program; and other expenses.”

Taxes from fuel products are expected to deliver P147 billion to the government’s coffers, Dominguez said. Of the amount, P131.4 billion is from excise taxes, while the rest would be from valueadded tax imposed on oil i mpor t s.

The current excise tax rate is P10 per liter for gasoline, P6 per liter for diesel, P5 per liter for kerosene, and P3 per liter for liquefied petroleum gas.

Dominguez said suspending excise taxes on fuel products would only force the government to borrow more money and would result in revenue losses this year to the tune of P105.9 billion, or around 0.5 percent of the country’s gross domestic product this year. If the fuel excise tax is suspended over the next 10 years, the losses in revenues are projected to reach P1.76 trillion, the finance chief added.

The numbers could have terrified President Duterte. So it is understandable that he rejected the calls to suspend excise taxes on fuel products.

However, what is disorienting is the President’s acceptance of the finance chief’s suggestion to shell out P33 billion for unconditional cash transfers to the bottom 50 percent of all households or an estimated 74.7 million Filipinos. This means each eligible household will receive P200 every month or P2,400 in a year.

An aid of P200 per month? A wicked kind of joke it is. ( Sunnex)