According to Malacanang, President Rodrigo Duterte has approved providing a P200 monthly cash aid or “ayuda” for poor households for an entire year to mitigate the impact of fuel price spikes.
Given the string of rises in fuel prices, acting presidential spokesperson Martin Andanar said Duterte approved the Department of Finance (DOF) proposals at the Palace briefing.
“Inaprubahan ng Pangulo ang dalawang rekomendasyon ng DOF kaugnay sa pagtaas ng fuel price (The President has approved the two recommendations of the DOF regarding the fuel price hikes),” he said.
“Una, ang pag-retain ng fuel excise taxes na ini-impose ng TRAIN [Tax Reform for Acceleration and Inclusion] Law dahil ang pagsuspende nito ay magre-reduce ng government revenue ng P105.9 billion na magpopondo sa mga programa ng pamahalaan. At pangalawa, ang pagbibigay ng targeted subsidies ng P200 bawat household to the bottom 50% of Filipino households,” Andanar said.
(First, the retention of fuel excise taxes imposed by the TRAIN Law because the proposed suspension would result in a P105.9 billion reduction in government revenue — which funds government programs; second, the distribution of targeted subsidies of P200 to every household in the bottom 50% of Filipino households.)
Low-income families to receive P200 monthly ‘ayuda’
Finance Secretary Carlos Dominguez III recommended providing a P200 monthly subsidy for low-income families for an entire year to ease the impact of fuel price hikes. He also advocated for keeping the fuel excise tax.
Although Dominguez acknowledged that the amount might not be sufficient, he stated that it is the most the government can afford at this time.
According to Dominguez, the targeted subsidies will require P33.1 billion in budgetary resources.
The funds for the subsidy, according to Dominguez, will come from a higher collection of value-added tax (VAT) due to higher fuel prices.
Dominguez estimates that VAT revenues will increase by P26 billion due to the $110 per barrel Dubai crude oil price. At $125 per barrel Dubai crude oil price, VAT revenues will increase by P34.6 billion.
However, some senators said the cash aid was insufficient and called for a temporary suspension of the fuel excise tax.
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