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The national government (NG) debt service payments jumped to PHP 2.1 trillion in 2025, surpassing the government’s own program which signals mounting fiscal pressures.

Data from the Bureau of the Treasury showed that NG’s debt repayments rose by 4.08% in 2025 from the PHP 2.02 trillion recorded in 2024. It also exceeded the PHP 2.05-trillion full-year program for debt payments by 2.6%.

Debt service refers to payments made by the NG on its domestic and foreign debt.

More than half, or the bulk, or 58.91% of total debt payments came from amortization payments.

Principal payments slipped by 1.46% to PHP 1.24 trillion in 2025 from PHP 1.26 trillion in the previous year. This was 3% higher than the PHP 1.2-trillion program for the year.

Amortization on domestic debt dipped by 0.26% annually to PHP 1.015 trillion in 2025 from PHP 1.018 trillion in 2024.

Principal payments on foreign debt went down by 6.53% to PHP 223.669 billion last year from PHP 239.293 billion in 2024.

On the other hand, interest payments went up by 13.2% to PHP 864.139 billion in 2025 from PHP 763.313 billion in 2024. It was 1.9% higher than the PHP 848.031-billion program for the full year.

Interest paid on domestic debt went up by 17.6% to PHP 634.846 billion in 2025 from PHP 539.829 billion in 2024.

Broken down, PHP 416.77 billion went to interest payments for fixed-rate Treasury bonds, PHP 162.74 billion for retail Treasury bonds, and PHP 44.97 billion for Treasury bills.

For external debt, interest payments went up by 2.6% to PHP 229.293 billion in 2025 from PHP 223.484 billion in the year prior.

December debt service

In December alone, debt repayments increased by 18.6% to PHP 78.642 billion from PHP 66.3 billion in the same month in 2024.

Month on month, debt repayments fell by 12.6% from PHP 89.97 billion in November.

Amortization payments surged by 80.4% to PHP 15.01 billion in December last year from PHP 8.32 billion in December 2024.

Amortization on domestic debt totaled PHP 6.25 billion in December. There were no payments made on domestic debt in December 2024.

Meanwhile, principal payments on foreign debt went up by 5.22% to PHP 8.754 billion in December from PHP 8.32 billion a year prior.

On the other hand, interest payments increased by 9.75% to PHP 63.63 billion in December from PHP 57.98 billion in the same month in 2024.

Interest paid on domestic debt increased by 11.59% to PHP 41.779 billion from PHP 37.44 billion in 2024.

Broken down, interest payments on retail Treasury bonds stood at PHP 19.18 billion, fixed-rate Treasury bonds at PHP 17.47 billion, and Treasury bills at PHP 3.76 billion.

Interest payments on external debt jumped by 6.41% year on year to PHP 21.86 billion in December from PHP 20.54 billion in 2024.

“The rise in debt service reflects more expensive borrowing from higher rates and heavier repayments,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said in a Viber message.

“In 2026, pressures should stay high but may stabilize if rates ease — so the priority is smart debt management: lock in better rates, extend maturities, and borrow only for growth‑driving projects,” he added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the higher debt servicing reflects increased NG outstanding debt in recent years.

For the coming months, he said that the country can expect to make bigger debt payments.

“Geopolitical risks, especially in the Middle East since Feb. 28, which led to higher global crude oil prices, could lead to higher inflation and interest rates, which could lead to higher interest payments and debt servicing costs,” he said in a Viber message.

“A higher US dollar-peso exchange rate… would lead to a higher peso equivalent of foreign debts that, in turn, would lead to higher principal servicing costs of foreign debts,” he added. — Justine Irish D. Tabile, Senior Reporter

The Philippines’ unemployment rate climbed to 5.8% in January 2026, marking its highest level in more than three years, as the labor market cooled after the holidays, the Philippine Statistics Authority (PSA) said on Friday.

Preliminary results from the January 2026 Labor Force Survey (LFS) showed the number of unemployed Filipinos rose to 2.96 million, from 2.17 million in the same month last year, and 2.26 million in December 2025.

PSA Assistant Secretary Divina Gracia L. Del Prado said that the January unemployment rate was the highest recorded since June 2022, when unemployment stood at 6.0%.

The January jobless rate was higher than the 4.3% in January 2025, and the 4.4% in December 2025.

“Usually in our time series, after the Christmas season, our employment rate really goes down… because there are no longer available jobs,” Ms. Del Prado told a livestreamed news briefing.

“Because in December, of course, there are lots of jobs available for our labor force. But month on month, the number of unemployed increased by 695,000. And most of the reasons for this are that people got tired — maybe they were exhausted from working in December, or believing that there are no jobs available,” she added.

The quality of employment also saw a shift, as the underemployment rate — the proportion of those with jobs but seeking more hours — stood at 13.2% in January 2026. This was a tad lower than the 13.3% underemployment rate in January 2025, but higher than the 8% in December 2025.

About 6.35 million Filipinos were considered underemployed persons in January, slightly decreased from the 6.47 million underemployed in January 2025, and 2.42 million seen in December 2025.

The country’s employment rate fell to 94.2% in January 2026, down from 95.7% in January 2025 and 95.6% in December 2025. This was also the lowest employment rate recorded since June 2022 when it stood at 94%.

The number of employed persons in January 2026 fell to 47.94 million, a decline from 48.49 million employed in the same month last year, and 49.43 million in December 2025.

The labor force participation rate (LFPR) eased to 62.3% in January 2026, translating to 50.89 million Filipinos in the labor force. This was lower than the 63.9% (50.65 million) recorded in January 2025, and the 64.4% in December 2025.

Job losses 

On a year-on-year basis, the agriculture and forestry sub-sector lost 1.42 million jobs in January, driven by a drop in the cultivation of paddy rice, corn, and leafy vegetables. Wholesale and retail trade followed with the loss of 729,000 jobs, while fishing and aquaculture shed 140,000 positions.

On the other hand, several sectors posted annual gains in January, led by administrative and support service activities (+403,000), public administration and defense (+342,000), manufacturing (+326,000), and transportation and storage (+160,000).

Month on month, agriculture and forestry jobs plummeted by 1.76 million, while wholesale and retail trade also saw a month-on-month decrease of 888,000 jobs, followed by construction (-199,000), education (-154,000), and accommodation and food service activities (-140,000).

Ms. Del Prado pointed to weather disruptions as a contributing factor, specifically the impact of Typhoon Ada on regions such as Bicol, Eastern Visayas, and Caraga.

Despite the overall job losses, some sub-sectors showed resilience month-on-month. Manufacturing added 546,000 jobs, while other service activities grew by 248,000, and transportation and storage increased by 238,000 from December 2025 to January 2026.

Regarding the quality of remaining jobs, wage and salary workers continued to make up the bulk of the workforce at 68.8%, followed by the self-employed without employees at 24.7%. Within the wage-earner group, private establishments employed 78.5%, while the government accounted for 14.3%.

Among all regions, South Cotabato, Cotabato, Sultan Kudarat, Sarangani, and General Santos City (SOCCSKSARGEN) recorded the highest employment rate at 96.0% in January 2026, while Bicol region posted the lowest at 91.8%.

On the other hand, Bicol region logged the highest unemployment rate in the country at 8.2%.

Eight regions recorded unemployment rates exceeding the 5.8% national average, including Eastern Visayas (7.7%), Zamboanga Peninsula (6.7%), Caraga (6.53%), Negros Island Region (6.50%), provinces of Caveat, Laguna, Batangas, Rizal, and Quezon or CALABARZON at 6.4%, Northern Mindanao at 6.1%, and the National Capital Region at 6.0%.

Support for workers

Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio M. Balisacan said in a statement that the government is intensifying support for the workforce amid “elevated geopolitical tensions and global uncertainties” due to the Iran war.

“Our priority is clear: create more and better jobs at home, strengthen industries, equip our workers with the skills needed for higher-value employment, and ensure that those affected by global disruptions, including OFWs, can transition smoothly into productive opportunities here in the Philippines,” Mr. Balisacan said.

PSA’s Ms. Del Prado warned that the spike in fuel prices could further impact the labor market.

“When the price of oil spikes, businesses, some of them, no longer hire or some of them, lay off. So, it might affect our labor market,” she said.

“Those [migrant workers] who were repatriated [from the Middle East] will also come back home, they will become part of the labor force. Or some of them, not in the labor force, but if they will become part of the labor force and they are unemployed, then they will increase the total number of unemployed and of course the unemployment rate,” she said, adding this will be reflected in the data in the coming months.

Benjamin B. Velasco, an assistant professor at the University of the Philippines Diliman School of Labor and Industrial Relations, said that the big jump in the unemployment rate means that the private sector is not generating enough jobs.

“The unemployment rate for January 2026 should be a wakeup call to the Marcos Jr. administration to shift priorities in its economic and employment agenda,” Mr. Velasco told BusinessWorld in a Facebook messenger chat.

“In the long-term, we need an industrial policy that is state-led and incentivizes labor-intensive and jobs-creating industries and sectors that cater to the domestic market,” he said.

“Things are going to get even worse before they get any better given Trump’s war in Iran which has led to a global economic crisis,” he added. — Erika Mae P. Sinaking, Reporter

Fuel prices are unlikely to go down anytime soon despite the recent decline in crude prices in the global market, the Energy chief said.

At the same time, a group of jeepney drivers is planning to seek a PHP 5 provisional fare increase from the regulator next week as soaring pump prices put a strain on their daily operations.

“On our calculations, on average, it’s still not going down as we hoped, but at least the market has calmed down slightly. But this war is very erratic. We don’t know what’s going to happen. Nobody knows,” Energy Secretary Sharon S. Garin told One News’ The Big Story on Wednesday evening.

Ms. Garin said the Department of Energy (DoE) is monitoring fuel prices as adjustments will only be determined after Friday’s trading in the global market.

“Hopefully, something better will happen, and the prices will stay down and hopefully go down,” she said.

Oil prices dropped by more than 11% on Tuesday, the steepest decline of any session since 2022, Reuters reported.

As a net oil importer, the Philippines is particularly vulnerable to fluctuations in global oil supply and prices.

President Ferdinand R. Marcos, Jr. earlier said the Philippines is exploring alternative oil suppliers to ensure stable fuel supply.

“Actually, there are offers already… So, hopefully we lock in some already to make sure that we have deliveries by April,” Ms. Garin said.

This week, the Philippines had its largest single-week adjustment, as pump prices rose as much as PHP 38.50 per liter.

“We are going to file a petition on Monday at the LTFRB (Land Transportation Franchising and Regulatory Board) for a PHP 5 provisional fare increase,” Pinagkaisang Samahan ng mga Tsuper at Operators Nationwide (PISTON) President Mody T. Floranda told BusinessWorld on Thursday.

He said the provisional fare hike is intended to ease the strain of rising fuel costs on jeepney operators, adding that the PHP 5 adjustment still falls short of covering losses from volatile fuel prices.

Earlier this week, other transport groups like Manibela have also said that they have requested a PHP 2 fare hike, citing fuel price increases.

PISTON’s Mr. Floranda said that since last week, the estimated loss of income for drivers is around PHP 1,000 per day, while the daily expenditure of drivers for fuel has doubled. 

“But the fare hike is only one option, there are other options that the government can explore. We highly favor the suspension of the excise tax. If the government considers that then maybe we will withdraw our petition,” Mr. Floranda said.

Transportation Acting Secretary Giovanni Z. Lopez said in a statement that there will be a fare increase for public utility vehicles (PUV), but did not give details.

“Hopefully, the LTFRB will finish the review of fare hike petitions. We have to treat this very carefully with abundance of caution,” he said.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the proposed PHP 5 fare increase would disproportionately affect low- and middle-income households who allocate a larger share of income to transport.

“Higher commuting costs could force households to reduce spending on other goods and services, potentially slowing consumption in the short term,” Mr. Rivera said in a Viber message.

Targeted transport assistance may be needed to support operators’ viability while also prioritizing household welfare, he said.

“LTFRB already has a time-tested methodology on fare adjustments due to fuel price and other increases — they can dig into their past experience in coming up with the best decision that is fair to all,” Nigel Paul C. Villarete, a senior adviser on public-private partnerships at the technical advisory group Libra Konsult, said in a Viber message.

Rene S. Santiago, an international consultant on transport development and former president of the Transportation Science Society of the Philippines, said the proposed fare hikes are long overdue.

“Delays have weakened public transport, aside from the government losing elbow room to stagger fare increases with a jump in fuel prices. Fuel subsidy is a pittance and benefits only urban-based public transport,” Mr. Santiago said.

Meanwhile, Mr. Lopez said starting March 17, the government will begin disbursing a P5,000 fuel subsidy to PUV drivers in Metro Manila. He said the Department of Transportation (DoTr) has also asked toll operators to provide discounts to buses and trucks.

NLEX Corp. President and General Manager Luis S. Reñon told reporters on Wednesday that the company is in talks with DoTr to provide rebates to haulers and truckers. — Ashley Erika O. Jose and Sheldeen Joy Talavera, Reporters

Philippine export receipts of semiconductor and electronic products are expected to rise to a record USD 50 billion this year despite global trade uncertainties and an ongoing conflict in the Middle East, the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) said.

“At least we would breach USD 50 billion,” SEIPI President Danilo C. Lachica told reporters on the sidelines of the ASEAN Business Environment Forum on Wednesday.

For 2026, SEIPI projects semiconductor and electronics exports to grow by a 5% this year.

SEIPI data showed that electronics exports rose by 16.11% to USD 49.64 billion in 2025 from USD 42.75 billion in 2024.

“Last year was close to a record. It’s USD 20 million short of our 2022 record,” Mr. Lachica said.

“Of course, there are geopolitical concerns, such as the Iran war and the US tariffs,” he noted.

Mr. Lachica said the Iran war will unlikely have a significant effect on the industry’s export growth, noting that the Middle East is not a key market for the Philippines’ electronics and semiconductor products.

“So far, we don’t see it affecting demand, but then again, we’re at the edge of our seats,” he said.

Outside North America and Asia, the country’s top destinations for electronics exports include Germany and the Netherlands, he noted.

Despite this, Mr. Lachica said that ongoing tensions in the Middle East may drive up operating costs for the industry.

“The cost of fuel, transportation, and energy will have eventually an impact,” he added.

“Right now, only the cost of operations will increase, but it’s still not disrupting the supply chain,” Mr. Lachica said in mixed English and Filipino.

Global fuel shipments are currently disrupted amid the closure of the Strait of Hormuz, where about 20% of the world’s oil and liquefied natural gas pass through, amid the ongoing conflict involving the United States, Israel, and Iran.

Mr. Lachica said the uncertainty surrounding US tariff policies still poses a risk to the industry this year.

US President Donald J. Trump in February announced that he will be imposing a new 15% duty on US imports. This came after the US Supreme Court earlier ruled that he had exceeded his authority when he imposed the reciprocal tariffs.

Finance Secretary Frederick D. Go earlier said that the majority of the country’s exports — including semiconductors and key agricultural products — were already exempted before the US Supreme Court’s ruling.

Mr. Lachica said the industry is still shielded from the United States’ 25% tariff on the exports of artificial intelligence (AI) chips.

“The good news is we don’t produce AI chips itself. What we produce are peripherals like power devices and controllers supporting the AI infrastructure,” he said.

Mr. Trump in January slapped a 25% tariff on certain semiconductors, particularly on advanced computing chips, citing national security and economic risks.

Mr. Lachica also said that recent electronic and semiconductor investors in the Philippines are focusing on expansion, and less on new investments.

He noted that demand mainly centered on automotives, components, and AI peripherals.

Data from the Philippine Statistics Authority showed that exports of electronic products grew by 17% to USD 46 billion in 2025, while semiconductor exports rose by 18.7% to USD 34.62 billion. — Beatriz Marie D. Cruz, Reporter

Over eight million customers served by Manila Electric Co. (Meralco) will have to tighten their belts this month as the power distributor announced a rate hike, citing higher transmission and generation charges.

However, Meralco consumers may see even higher bills in April as the widening Middle East war continues to drive up global oil prices.

In a statement on Tuesday, the company announced an increase of PHP 0.6427 per kilowatt-hour (kWh), bringing the overall rate to PHP 13.8161 per kWh in March from PHP 13.1734 per kWh in February.

The upward adjustment translates to an increase of around PHP 129 in the electricity bills of typical consumers consuming 200 kWh. Households consuming 300 kWh, 400 kWh, and 500 kWh will have to pay an additional PHP 193, PHP 257, and PHP 321 in their bills.

Driving this month’s power rate hike was the P0.2880 per kWh increase in transmission charge, fueled by higher costs of ancillary service procured by the grid operator from the reserve market.

The costs from the reserve market, an avenue where generators sell backup electricity capacities, accounted for almost half of the total transmission charge for the period.

Also contributing to the upward adjustment was the generation charge which increased by PHP 0.2209 per kWh to PHP 7.8607 per kWh. Fixed charges from the second extension of the power purchase agreement with a gas-fired power plant in Batangas added around PHP 0.38 per kWh to this month’s generation charge.

These offset the decline in the cost of power procured from the Wholesale Electricity Spot Market (WESM) amounting to PHP 1.0952 per kWh, as supply conditions in the Luzon grid improved.

Meralco began collecting the PHP 0.2817 per kWh price adjustment sought by four power generators for fuel costs recovery, as approved by the Energy Regulatory Commission (ERC).

The impact of this adjustment, totaling about PHP 789 million, was more than offset by the completion of the recovery of a previous adjustment which amounted to PHP 858 million.

Other charges, including taxes, registered a net increase of PHP 0.1338 per kWh.

This month’s rate also reflected the implementation of the new uniform national lifeline subsidy rate of PHP 0.01 per kWh in accordance with an ERC directive earlier this year.

“Pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively; while taxes, universal charges, and renewable energy subsidies are all remitted to the government,” the company said.

Meanwhile, Meralco’s distribution charge remained unchanged since the PHP 0.0360 per kWh reduction in August 2022.

Higher rates loom

Meanwhile, the recent surge in fuel prices did not contribute to this month’s electricity rate hike but could impact rates next month, according to Joe R. Zaldarriaga, Meralco’s vice-president and head of corporate communications.

“(The increase) will probably be felt next month in April, based on the current March supply month,” he said at a press briefing in Filipino.

Mr. Zaldarriaga said that the expected rise in power demand amid the onset of summer months, exacerbated by the Middle East war, “are most probably going to drive prices higher.”

While oil does not form part of Meralco’s power supply, the rise in global fuel costs could trigger increases in coal and gas prices as well, which the company largely depends on for supply.

Currently, gas accounts for 60% of Meralco’s power supply requirements, followed by coal at 20-25%, and renewable energy at 10%. The rest is sourced at the country’s electricity spot market.   

Lawrence S. Fernandez, vice-president and head of utility economics, said that higher fuel costs will affect electricity rates, although the extent will depend on how long the situation in the Middle East continues.

“Actually, the increase in global oil prices has no direct impact on generation costs in Luzon. But Luzon’s power generation uses liquefied natural gas and coal, and usually, when there’s pressure from rising oil prices, both liquefied gas and coal tend to follow,” Mr. Fernandez said.

Meralco Chairman Manuel V. Pangilinan said last week that the company will undertake a comprehensive reassessment of its fuel position and sourcing strategy.

“We want to ensure adequate supply of power and manage price volatility as responsibly as possible. Have made it clear to the team that we must help protect consumers as cost of goods rises globally,” he said in a post on X.

Meralco Executive Vice-President and Chief Operating Officer Ronnie L. Aperocho said the company is “closely coordinating” with its power suppliers to keep generation charges at least-cost while prioritizing reliability across its system.

“We are optimizing our energy mix and fully leveraging cost-efficient sources, regardless of technology. In addition, we are carefully managing our exposure to the WESM, where price volatility is high,” he said in a separate statement on Tuesday.

He said the company will also secure lower-cost replacement power whenever needed.

In line with the government’s call to strengthen energy efficiency across all sectors, Mr. Aperocho has called on the industrial and commercial customers to participate in the Interruptible Load Program, a proactive measure to help preserve available supply should de-loading from the grid become necessary.

For residential customers, he said the company is intensifying its efforts to provide simple and actionable tips for households to better manage their electricity consumption.

Meralco is the country’s largest private electric distribution utility, serving more than 8.2 million customers in Metro Manila and nearby provinces, including Bulacan, Cavite, Rizal, and parts of Laguna, Batangas, Pampanga, and Quezon.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera, Reporter

The Iran war could trim 0.2-0.3% from the Philippines’ gross domestic product (GDP) growth this year, as the oil shock could drive inflation to above 4% this year, Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio M. Balisacan said on Tuesday,

At the same time, the House Ways and Means Committee passed a proposal authorizing President Ferdinand R. Marcos, Jr. to suspend excise taxes on fuel products, advancing a proposal aimed at cushioning the impact of volatile oil prices on consumers.

“The suspension of excise taxes… could reduce the inflationary effects of oil prices and global oil price escalation,” Mr. Balisacan told lawmakers at a congressional hearing. “Oil prices affect practically all goods and services produced in this economy, so the effect is considerable.”

He said the soaring pump prices will stoke inflation, eroding Filipinos’ purchasing power and weighing on economic activity.

As a net importer of oil, the Philippines is highly sensitive to sharp fluctuations in global oil prices.

While fuel retailers agreed to stagger this week’s big-time price adjustments, the surging prices risk reigniting inflation.

According to its baseline scenario presented to the House Energy Committee, the DEPDev projected inflation could quicken to 4.5-5.1% this month, and 4.5-4.8% in April, with full-year inflation seen settling at 4-4.2%, above the central bank’s target band.

In a worst-case scenario where oil prices hit USD 140 this month and stay above USD 80 until September, DEPDev said inflation could accelerate to 6.3-7.5% in March and 6.4-7.5% in April, bringing the full-year print to 4.5-4.8%.

Inflation could settle at 3.5-3.6% in 2027 under its baseline scenario, and at 3.6-3.7% under the  second scenario, according to DEPDev’s presentation.

“With this kind of inflation, if you don’t do anything, that’s going to hit hard the consumers and substantially reduce household consumption spending, affecting our economy,” Mr. Balisacan said.   

Unchecked inflation could drag the country’s full-year growth “back below 5%,” he said, adding that the Development Budget Coordination Committee is still targeting 2026 growth of 5-6% and 5.5-6.5% for 2027.

“We are assessing the situation when the new number comes in May. But with the impact we are seeing, that could push us back below 5%,” he said.

Philippine GDP growth slowed to 4.4% in 2025, the slowest in five years, as the flood control scandal weighed on government spending, investments and consumer spending.

Excise tax suspension

Mr. Balisacan said the economic impact of continuous increases in gas prices could be tempered by suspending excise taxes, which would help ease the burden on consumers.

“A temporary suspension of excise tax collections could restore part of the purchasing power,” he said.

The House Ways and Means Committee on Tuesday approved an unnumbered consolidated bill that would give the President special powers to suspend or reduce excise taxes of petrol during national and global emergencies for no more than six months.

Any suspension or cut in the fuel excise tax rate could be extended beyond six months through a joint congressional resolution.

Any extension cannot last longer than a year, according to Ways and Means Committee Chair and Marikina Rep. Romero “Miro” S. Quimbo.

He said the bill also requires the President to submit to Congress a report backing his decision to cut the excise tax, including estimates of foregone revenue and the impact on inflation, fuel prices and economic activity.

“We are dependent on the international market. Whatever happens there, we do not have leverage,” Mr. Quimbo told reporters. “The only thing that we can leverage to reduce fuel prices is by removing excise taxes.”

Moves to suspend the collection of petrol duties have gained traction in Congress after successive fuel price hikes that will likely drive consumer prices higher.

The Philippine Chamber of Commerce and Industry (PCCI) said it supported efforts to empower Mr. Marcos “to implement measures that will absorb and stabilize prices” amid fuel hikes. 

“Our request to government is to absorb temporarily the fuel price increases,” PCCI President Perry A. Ferrer said in a statement. “Hopefully, the President will be given the authority to exercise and use other means that will help cushion potential shocks this week or next week.”

A 2017 law previously allowed the government to suspend the collection of excise tax on petroleum products when world oil prices reach USD 80 per barrel for three straight months, but the provision lapsed six years ago.

Mr. Balisacan said revenue losses from the suspension of excise taxes on petrol could reach PHP 43.3 billion if the suspension lasts three months, and PHP 106 billion if extended until September.

“If you suspend excise taxes, that would mean less revenue collection for the government. That would impact our projects and programs and mean less fiscal resources,” he said. 

Projections from the Department of Finance showed suspending excise tax collections could lead to PHP 136 billion in foregone revenue, which the department said could widen the government’s budget deficit and raise the country’s debt.

“While the effects on the revenue is quite a bit, the net effect on the economy of not doing anything about it is even worse,” said Mr. Balisacan.

Temporarily halting excise tax collections on fuel products could lead to cheaper fuel and ease inflation, he added.

According to the DEPDev, suspending excise taxes from March to May could help inflation ease to 3.6-4.2% in March and 3.6-3.9% in April. This could bring full-year inflation at 3.9-4.1% by end-2026, under the baseline scenario.

On the other hand, if global prices remain elevated and excise taxes are suspended from March to September, inflation could settle at 5.4-6.6% in March and 5.5-6.5% in April, with full-year inflation at 4.-4.3%.

For 2027, DEPDev sees inflation settling at 3.5-3.6% under the baseline scenario, and  3.6-3.7% under the worst-case scenario.

Deployment ban?

Mr. Balisacan said remittances from overseas Filipino workers (OFWs) could also be affected if the government decides to impose a ban on deployment to the Middle East.

The local economy could lose between PHP 226.6 billion and PHP 232 billion if about 550,000 Filipinos are repatriated, he said. 

“If you assume a total deployment ban… this reduction represents about 65% of the remittances from the region,” he said. “It’s quite a significant impact on our OFWs… and also the economy.”

There are an estimated 2.41 million Filipinos in Middle Eastern countries. More than 975,000 are stationed in the United Arab Emirates, while others are in Saudi Arabia (813,000), Qatar (250,000), and Kuwait (211,000). There are about 800 Filipinos in Iran and 31,000 in Israel, according to data from the Foreign Affairs department. — Kenneth Christiane L. Basilio, Reporter