The government is currently mobilizing resources to mitigate the effects of the crisis in Middle East to 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.”

In a separate briefing at the House of Representatives, Balisacan assured that the government will implement a safety net program for most vulnerable sectors and is pushing 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, reduce dependence on imported oil.

He said the economic team is also still working with Congress to give authority to the President to reduce or suspend oil excise taxes to mitigate the rise in fuel prices.

Balisacan said that for diesel, the suspension of excise tax will reduce the increase to 13 percent from 24 percent.

“In the case of the gasoline, removing the excise tax could make prices of gasoline even lower than the baseline. Instead of 20 percent increase in price in 2026, you would find roughly 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 said the suspension of excise tax could also lower the impact of the crisis on inflation.

However, Balisacan said the suspension of the excise tax could lower revenue collection and slow down 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.” (PNA)