Marcos keeps VAT on fuel for now, says 'windfall' to fund programs

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April 13, 2026 | 5:20pm

MANILA, Philippines — President Ferdinand Marcos Jr. on Monday, April 13 defended the continued collection of value-added tax (VAT) on fuel, saying it generates funds needed to support subsidies and other welfare programs.

Marcos said rising global oil prices have increased government revenues from VAT, creating what he described as a "windfall profit" that can be used for public assistance.

"The VAT on petroleum products, we are going to get a windfall profit from that because the price of crude has increased. And because of that, all the importation at the present VAT rate, we will get extra funds from that," he said in a mix of English and Filipino.

He added that keeping VAT allows the government to fund broader support beyond a single sector.

"The VAT on petroleum products, it will only help the petroleum market. What we need is funding to help the entire society," Marcos said.

The president said the additional revenue could finance fuel subsidies and cash assistance, not only for transport workers but for other affected groups.

Marcos said the government is still open to studying a possible reduction of VAT on fuel but noted that current conditions favor retaining the tax.

"If the time will come that VAT should be brought down for whatever products, then we will certainly study it very well. Right now the balance, the cost-benefit analysis between the VAT collections and the benefit to people, to ordinary people, still favours that we collect VAT," he said.

In the Philippines, VAT is rate-based or percentage, with tax collections increasing as the price of goods, including fuel, rises.

Criticism, tax pressure

The remarks come as transport groups and some industry players push for the removal of VAT to help bring down pump prices amid prolonged tensions in the Middle East.

Earlier in the day, the Makabayan bloc criticized the administration's response to the fuel crisis, saying the government had acted largely as an "announcer" of possible price rollbacks.

Malacañang rejected the criticism.

"Para sabihin na walang ginagawa para maibsan ang nararamdaman natin dito sa krisis sa Middle East, ito po ay napakalaking kasinungalingan. Kapag hindi nakikita, uulitin ko po ulit, kapag hindi nakikita ang Pangulo, hinahanap sasabihing may sakit, naospital kung anu-ano. Ngayong nagpapaktia at nagbibigay ng ulat sa bayan, pipintasan pa rin ninyo," Presidential Communications Office Undersecretary Claire Castro said.

(To say that nothing is being done to alleviate what we are going through with this Middle East crisis is a huge lie. If you do not see the President, I say it again, you would look for him and say that he is sick and hospitalized or whatnot. Now that he is showing up and reporting to the public, you still criticize him.)

Subsidy, rollback

The administration has rolled out targeted fuel subsidies for public utility drivers while monitoring global developments that could ease prices.

Marcos earlier said a rollback in fuel prices is expected following a fragile ceasefire in the Middle East, although uncertainty remains as negotiations continue.

As of writing, the government has suspended excise taxes only on LPG and kerosene, but not on diesel and gasoline used by transport operators.