A three-month wage subsidy has also been proposed by the labor department.
Philippine economic managers rejected calls to suspend excise taxes on petroleum products, instead pitching for more subsidies to affected sectors and a shorter work week to cut costs.
The government is expecting to collect 131.4 billion pesos ($2.5 billion) this year from excise taxes on fuel, Finance Secretary Carlos Dominguez said in a Tuesday briefing televised on Wednesday. Yielding to some lawmakers and transport groups' call to suspend the levy will cut this year's revenue by 0.5% of gross domestic product, he said.
Instead, Economic Planning Secretary Karl Chua pitched for more direct aid to affected sectors including the poorest 50% of households. He also proposed a four-day work week to reduce costs for businesses and workers, a move done in past oil shocks. A three-month wage subsidy has also been proposed by the labor department.
Russia's attack on Ukraine has fanned oil prices, sending shock waves to nations including the Philippines, which imports most of its fuel requirements. The commodity's rise retreated, as attention turned to possible reduced demand amid a Covid-19 flare up in China.
Other Highlights
- Dominguez said suspending excise tax on fuel will increase this year's deficit to 8.2% of GDP from a projected 7.7% and the debt ratio to 61.4% of GDP from a 60.9% estimate
- Government to collect as much as 26 billion pesos in additional value added tax should Dubai crude average $110 per barrel
- Chua said increasing jeepney fares by 1.25 pesos will add 0.4 percentage point to inflation, while a 39 pesos hike in the capital region's daily minimum wage will add 1 percentage point
- The labor department is seeking approval of a 24 billion-peso wage subsidy that may run for three months to benefit 1 million workers, Assistant Secretary Dominique Tutay said
--With assistance from Ditas Lopez.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)