MANILA, Philippines — The Bureau of Customs (BOC) reported on May 9, 2026, that the recent suspension of excise taxes on liquefied petroleum gas (LPG) and kerosene has caused a near 90-percent plunge in duties and taxes collected from these specific products.
While the policy—enacted through Executive Order No. 114—has successfully lowered household costs, a BOC oil monitoring document shows that collections from these two fuels dropped to ₱50.2 million for the week of April 27 to May 3, a steep decline from the ₱409.3 million collected just one week prior.
The suspension was triggered when global oil prices breached the $80-per-barrel threshold for 30 consecutive days, as mandated by the newly signed Republic Act No. 12316.
- Savings for Households: The tax relief has reduced the price of a standard 11-kilogram LPG tank by approximately ₱37 and slashed kerosene prices by ₱5.65 per liter.
- Revenue Impact: In the first full week of implementation, import volumes for these fuels also plummeted by 85 percent to 7,222 metric tons, as importers adjusted their schedules to the new tax-exempt status.
- Scope of Relief: The suspension is specifically targeted at household consumption. It excludes LPG used for motive power (autogas) or petrochemical production, and kerosene used as aviation fuel.
Despite the sharp drop in revenue from LPG and kerosene, the BOC managed to exceed its overall April 2026 collection target.
| Metric | Performance (April 2026) | Comparison (Year-on-Year) |
| Total Collection | ₱86.4 Billion | +15% |
| Target Surplus | ₱7.8 Billion | — |
| Fuel Import Revenue | ₱33.7 Billion | +45% |
- Exclusion of Diesel and Gasoline: Excise taxes on diesel and gasoline—which carry much higher levies—remain in place, providing a stable revenue base.
- Weak Peso: The Philippine peso, hovering around ₱60–₱61 per dollar, increased the taxable value of all imported goods, effectively “balancing out” the losses from the tax suspension.
- Increased Oil Values: Rising global oil prices meant that the remaining duties and taxes on other petroleum products (crude, diesel, and gas) actually rose by 31 percent in value.
BOC Commissioner Ariel Nepomuceno emphasized that while the agency supports the tax relief, it has intensified monitoring to prevent tax leakage.
- Inventory Checks: The BOC and BIR are conducting physical inventories of existing stocks to ensure that only “newly imported” products—removed from customs after April 17—avail of the zero-tax rate.
- Supplier Shift: The report also noted a shift in the Philippines’ oil sources. South Korea has emerged as the top supplier (accounting for ₱31.5 billion in taxes), overtaking the UAE and Saudi Arabia.
The tax suspension is scheduled for a three-month duration, subject to monthly reviews by the Development Budget Coordination Committee (DBCC). If Dubai crude falls below $80 per barrel for one week, the taxes will automatically revert to their original rates.
