The Makati Business Club (MBC) has called on President Ferdinand Marcos Jr. to reconsider the possible suspension or reduction of fuel excise taxes, warning that such a move could weaken government revenues needed to assist vulnerable sectors.
In a statement issued April 1, the group said halting excise taxes would contradict the administration’s efforts to shield consumers from rising fuel costs, particularly given the country’s limited fiscal space.
The MBC cautioned that this could “further erode the government’s ability to provide the short-term targeted assistance needed while other medium and long-term projects are being implemented.”
Marcos earlier signed Republic Act No. 12316, which allows the suspension or reduction of excise taxes on petroleum products upon the recommendation of the Development Budget Coordination Committee and the Energy Secretary.
This may be enforced if Dubai crude oil prices reach or exceed $80 per barrel for one month. The measure, however, remains under review and has not yet been implemented.
The MBC argued that suspending excise taxes would effectively serve as a broad subsidy benefiting all sectors, potentially increasing demand at a time when global oil supply remains tight due to ongoing conflict in the Middle East.
“The companies we represent do not need subsidies–those should be directed to jeepney drivers, etc.–but we do need supply,” the group said.
Instead, the organization urged the government to focus on strengthening domestic market mechanisms and implementing what it described as “enlightened regulation” to ensure stable oil supply.
Last month, Marcos signed Executive Order No. 110 declaring a state of national energy emergency, citing the “imminent danger posed to the availability and stability of the country’s energy supply.”
According to the MBC, this declaration should be used to mobilize resources, streamline government responses, and address long-standing structural issues in the energy sector.
“Ultimately, this declaration should serve as a catalyst for deeper reforms that strengthen not only the country’s energy security but also other aspects of the economy, such as transportation, logistics, agriculture, and manufacturing, among others,” the group said.
The business group also emphasized the need to accelerate key infrastructure projects, including cold storage facilities and port upgrades, to help lower agricultural costs.
It further advocated for the modernization of domestic logistics through a national digital backbone, enabling more efficient transport systems such as backhauling for empty trucks.
“There should be many other initiatives that the government and the private sector can work on together to make our economy more efficient and resilient,” the group added.
“But all these will need funding, and foregoing the excise taxes will make it more difficult for the government to support all these needed initiatives/reforms.”
The MBC stressed that maintaining transparent and consistent policies would be crucial in attracting investments, generating jobs, and sustaining economic growth.
“Let’s use this crisis as an opportunity to effect and institutionalize the much-needed reforms, so we come out much stronger, and we can realize the full potential of our country,” it said.