Abstract

This policy note asks whether suspending fuel excise taxes is a well-targeted way to protect poor households from rising oil prices. Using the 2023 Family Income and Expenditure Survey, I show that a blanket suspension is poorly targeted: the bottom 30 percent of households capture only 17 percent of forgone gasoline excise revenue and 2.5 percent of forgone diesel excise revenue, while the top 30 percent capture 48 percent and 85 percent, respectively. A supplementary input
output exercise using the 2022 Philippines IO table shows that poorer households are more exposed to fuel price increases through indirect channels—food, public transport, and electricity—which is precisely why targeted compensation through those channels would be more effective than an across-the-board excise suspension. The fiscal cost of suspension would be better spent on public transport subsidies, temporary cash transfers, and electricity lifeline support

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