MANILA – A lawmaker on Friday recommended reallocating some amount in the budget to finance the proposed transportation cash subsidy or "Transpo Ayuda" to public utility vehicle drivers, as well as those in the farming and fisheries sectors that were severely hit by the oil price surge.
Davao City Rep. Isidro Ungab said the government should study the possibility of setting aside some projects and reallocating a portion of the budget to be used as subsidies or some form of direct assistance to help mitigate the impact of the continued oil price hikes.
"We acknowledge that everyone is feeling the brunt of these oil price hikes, but the ones suffering the most are those in the transport, farming, and fisheries sectors,” Ungab said in a statement.
Ungab’s proposal is in consonance with President-elect Ferdinand "Bongbong" Marcos Jr.’s plan to focus on helping those most affected by the hikes by giving financial aid instead of suspending oil excise tax.
“I agree with President-elect BBM’s directive of finding the most viable solution to this financial distress our kababayans are experiencing now, and at the same time, the government must ensure that this will not be to the detriment of our country’s economic stability,” he said.
Meanwhile, Ungab cautioned against oil excise tax suspension, arguing that the government might be losing a huge amount of funding, which could be used to help the marginalized sector in times of crisis.
“The option to suspend taxes should be on a case-to-case basis. There is a need to study the proposal, or else the government might run out of funds, which might cause a huge problem," he said.
He said collections from excise and value-added taxes have already been projected revenues in the budget, and thus already allotted to finance major projects and programs of the government.
If the government decides to suspend these taxes, Ungab computed the estimated loss in revenue collection to be around PHP100 to PHP200 billion.
“I support 100 percent PBBM’s position to provide direct assistance or ayuda to those really affected by the rising oil prices than suspend the excise tax on fuel products. PBBM is right in saying that reducing fuel excise tax does not necessarily help those who are directly affected by the energy crisis,” he said.
Quezon Rep.-elect Reynan Arrogancia, meanwhile, said Congress should suspend the collection of all fuel excise taxes for 90 days or three months.
Citing the macroeconomic and revenue settings of the 2022 national budget, Arrogancia said the national government expects PHP346.9 billion in revenues from various excise taxes for 2022. Of that total, the projection for excise taxes on fuel is PHP106.7 billion for the entire year.
He said if the incoming administration decides to suspend the excise tax on fuel, the monthly revenue loss would be about PHP8.9 billion, while the quarterly revenue loss (three months or 90 days) would be about PHP27 billion.
Another option, he said, is to allocate the monthly revenue of about PHP27 billion on targeted subsidies that will directly benefit workers, small businesses, and households that are poor, low income and lower middle income.
He said one more option is a combination of both aforementioned solutions: on top of suspending fuel excise taxes for 90 days which will result in foregone revenue of PHP27 billion, the revenues collected by the government should be spent on targeted subsidies. (PNA)
