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To reduce inflation, suspend the fuel tax and implement a 5% savings requirement in the government.

MANILA, Philippines β€” A legislator said on Wednesday that requiring government agencies to set aside 5% in budgetary savings might liberate up to PHP250 billion from the PHP5.04 trillion national budget for 2022, helping to lessen the country’s record-high inflation.

Rep. Alan Peter Cayetano of Taguig-Pateros stated in an interview that this is one step toward tackling the high inflation risks posed by Russia’s invasion of Ukraine and that such a move might assist the government cope with the revenue shortfall caused by the plan to suspend fuel excise taxes.

“The first thing we have to do is suspend ‘yung gasoline excise tax.” Di ba kaya ayaw natin tanggalin’yung excise tax, kasi kailangan natin’yung pondo? We didn’t want to reduce excise taxes since we needed the money). “However, if you have 5% savings, the government will spend 5% less nonetheless,” Cayetano explained.

He believes the government’s attention should be on containing growing fuel prices in order to prevent inflation from spiraling out of control, which reached a six-month high of 4% in March.

The growing price of petroleum, according to Cayetano, has a domino effect on all other commodities.

“Sunod-sunod na yung isang domino kapag bumagsak.” So hindi pwedeng ihihinto sa gitna mo kasi marami nang tumumba (If one domino falls, a chain reaction will ensue.) So, because some dominoes have already fallen, you shouldn’t stop the effect in the midst),” he explained. “‘Yung unang domino talaga e’yung presyo ng gasolina,” says the narrator. As a result, we must, in my opinion, i-arrest mo muna ‘yan para hindi tumaas lahat (The first domino is the price of gasoline. So we have to arrest that first, in my opinion, so that the price of everything else does not rise).”

Cayetano introduced House Bill 10832, often known as the Obligatory Savings Bill, which proposes a mandatory savings rate of 5% to produce PHP250 billion “to support help to our countrymen who are in desperate need of recovery from the harmful impacts of the current epidemic.”

The law proposes streamlining and reducing government activities that are “no longer required in the delivery of public services and may be scaled down, phased out, or abolished, according to civil service rules and regulations.”

In the face of rising fuel prices, the government has set aside PHP2.5 billion for a fuel subsidy that will help 377,000 public utility vehicles (PUVs), operators, and drivers.

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