The windfall from rising crude prices — not fiscal stubbornness — is driving President Ferdinand Marcos Jr.’s decision to leave the value-added tax on petroleum products untouched, he said Monday at a Palace briefing.
With global oil prices climbing amid the Middle East crisis, Marcos explained that VAT collections on petroleum imports automatically generate surplus revenues at the existing rate — money he said the government intends to channel into broader relief efforts rather than surrender through a tax suspension.
“The VAT on petroleum products, we are going to get a windfall profit from that because tumaas yung presyo ng krudo,” Marcos said. “And because of that, all the importations we will have at the present VAT rate, we will get extra funds from that.”
The President argued that eliminating the VAT would effectively redirect those gains to the oil sector alone. “If we take away the VAT on petroleum products, it will only help the petroleum market,” he said, adding that the resulting fund gap would cut off resources intended for the wider public.
His preferred intervention remains adjusting the excise tax — a narrower lever that he indicated can ease consumer-level pressure without sacrificing the revenue stream that a VAT suspension would forfeit.
On whether that position is final, Marcos left room — conditionally. He said the government would “certainly study it very well” if circumstances shifted enough to warrant reducing or suspending the VAT, but framed the current calculus as settled: collecting the tax and deploying the proceeds as subsidies still comes out ahead for ordinary Filipinos.
“There is nothing that we are not looking at as a possible option. We are looking at all the options,” he said. “If the time will come that VAT should be brought down for whatever products, then we will certainly study it very well.”
The cost-benefit equation, as Marcos described it, continues to favor collection over relief at the point of sale — with the government positioning itself as the distributor of whatever cushion the oil price surge creates.
