Manila: The government is currently mobilizing resources to mitigate the effects of the crisis in the Middle East on the Philippine economy, Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio Balisacan said on Tuesday. "Obviously with the deployment ban and repatriation of workers, may effect yun (there will be an effect) and we need to provide assistance to those who are coming back especially for integration and training," Balisacan said at the sidelines of the Juana Trabaho launch in Mandaluyong City. "Remittances from the region will also be affected and that will have an impact on many households and the economy."

According to Philippines News Agency, Balisacan, during a briefing at the House of Representatives, assured that the government will implement a safety net program for the most vulnerable sectors and is advocating for a staggered implementation of price hikes. The government is also pushing for the expansion of the use of lower-cost bioethanol to reduce fuel prices and, in the long term, decrease dependence on imported oil.

Balisacan stated that the economic team is working with Congress to authorize the President to reduce or suspend oil excise taxes to alleviate the rise in fuel prices. He mentioned that for diesel, suspending the excise tax will reduce the increase to 13 percent from 24 percent. "In the case of gasoline, removing the excise tax could make prices of gasoline even lower than the baseline. Instead of a 20 percent increase in price in 2026, you would find roughly a 1 percent increase if you remove the excise tax. The reason is the excise tax on gasoline is higher, PHP10 per liter as opposed to PHP6 per liter in diesel," he added.

Balisacan noted that the suspension of excise tax could also mitigate the crisis's impact on inflation. However, he acknowledged that this measure could lower revenue collection and delay the implementation of crucial projects. "The total revenue loss is roughly PHP40 billion to PHP106 billion depending on the scenario and the duration of those scenarios," he said. "Let me note that while the effects on the revenue are quite a bit, the net effect on the economy of not doing anything about it is even worse. Providing assistance to the vulnerable groups, particularly taming the inflation, will help the economy."