By Katherine K. Chan, Reporter
TARGETED ASSISTANCE for the segments of society deemed vulnerable to grease price volatility will likely be more helpful for the Philippines than suspending or reducing excise taxes on fuel, the Asian Development Bank (ADB) said.
“I imagine that greater targeting of the help can be higher than a blanket reduction in excise tax, because should you reduce the excise tax, wealthy individuals with a number of cars would profit more, whereas you would have provided, say, income or food subsidies for the more vulnerable,” ADB Lead Economist for Southeast Asia James P. Villafuerte said at a briefing on Thursday.
He added that effectively reading the associated fee of fuel sends the “improper signal” because “gasoline pollutes.”
The federal government said it can release P5,000 price of fuel subsidies for the general public transport sector starting next week.
A measure looking for to grant President Ferdinand R. Marcos, Jr. the authority to cut back or suspend the excise tax on fuel is awaiting third reading on the House of Representatives.
Fuel prices have spiked after the US and Israel attacked Iran, which sits on the north shore of the Strait of Hormuz, a waterway in heavy use by tankers carrying Middle Eastern crude oil.
On Tuesday, Philippine fuel retailers raised gasoline prices by between P7 and P13 per liter, diesel by between P17.50 and P23, and kerosene by between P32 and P36.
The Department of Energy has said that pump prices are expected to climb further attributable to the uncertainty that continues to hold over the provision of Persian Gulf oil.
Mr. Villafuerte also noted that the high price of petroleum-based fuel may drive demand for electric vehicles (EV) within the Philippines.
“I feel… most individuals will probably begin to essentially take into consideration either hybrid or EV due to the price of gasoline,” he said, adding that the Iran crisis may find yourself conditioning the general public to “get comfortable (with crude prices of) $200 per barrel,” he said.
Mr. Villafuerte noted that the shift to EVs or hybrid cars has lagged adoption rates in Thailand, Singapore and Indonesia.
Individually, the ADB called the “green transition” a “moral imperative” and “strategic opportunity” for Association of Southeast Asian Nations (ASEAN) members, especially those vulnerable to climate risks.
“By aligning economic growth with environmental sustainability and social equity, ASEAN can transform its development model to at least one that’s future-proof, resilient, and inclusive,” the ADB said in a report published on Thursday.
“The green economy transition isn’t only an ethical imperative but a strategic opportunity to drive innovation, construct climate-resilient economies, and reduce systemic inequalities,” it added.
Based on the ADB, the green transition could also help the region’s green economy generate as much as $1 trillion in revenue by 2030 and create 30 million jobs.