Marcos Jr. Temporarily Suspends Excise Taxes on LPG and Kerosene

MANILA, Philippines — President Ferdinand Marcos Jr. on Friday issued Executive Order No. 125, which temporarily suspends the excise taxes on liquefied petroleum gas (LPG) and kerosene. This measure is intended to alleviate inflationary pressures and ease the financial burden on households. According to the executive order, the excise taxes on LPG, except when used as raw material for the production of petrochemical products or for motive power, and on kerosene, except when used as aviation fuel, will be temporarily suspended. The duration of this suspension has not been specified, but the government intends to make decisions based on the prevailing economic conditions. In the Philippines, rising prices of essential commodities like LPG and kerosene have continued due to global energy price hikes and domestic economic factors, straining household budgets. This temporary suspension of excise taxes is expected to contribute to mitigating these price increases. However, the measure will directly lead to a reduction in government tax revenue, making its fiscal impact a significant consideration. The Philippine economy is in the process of recovery from the pandemic, and the government faces the challenge of securing funds for infrastructure investments and social welfare programs. If the suspension of excise taxes is prolonged, it could potentially lead to an expansion of the fiscal deficit. Analysts are closely monitoring the extent to which this measure will help curb inflation and stimulate consumption. Simultaneously, how the government plans to compensate for the loss in tax revenue will be a crucial factor for the stability of the Philippine economy moving forward.