Manila: Malaca±ang on Monday stated that suspending the value-added tax (VAT) on petroleum products is beyond President Ferdinand R. Marcos Jr.'s authority and would require legislative action from Congress.

According to Philippines News Agency, Palace Press Officer Claire Castro clarified this position following calls from business groups, including the Philippine Chamber of Commerce and Industry (PCCI), to remove VAT on fuel amid rising global oil prices. Castro emphasized that no current law grants the President emergency powers to suspend VAT on fuel products, highlighting that this responsibility lies with Congress.

Under the Tax Reform for Acceleration and Inclusion (TRAIN) law, petroleum products are subject to a 12-percent VAT, in addition to excise taxes, which together significantly contribute to pump prices. Although President Marcos has previously signed a law allowing him to suspend or reduce excise taxes on petroleum products until December 31, 2028, VAT suspension remains outside his jurisdiction. This law aims to mitigate rising fuel costs, enabling suspension when the price of Dubai crude exceeds USD80 per barrel for a month.

The call to suspend VAT has intensified as global oil prices fluctuate due to geopolitical tensions in the Middle East, disrupting supply chains and escalating fuel costs worldwide. Castro explained that the administration is carefully weighing the need to provide consumer relief while maintaining government revenues, which fund essential programs like infrastructure, social services, and targeted subsidies for vulnerable sectors.

Despite these executive limitations, Castro noted that the government is exploring possible tax-related interventions. The administration has already implemented measures such as fuel subsidies for public utility vehicle drivers and service contracting programs to help stabilize transport costs. Efforts are ongoing to identify additional strategies to alleviate the impact of high fuel prices on consumers and businesses.