MANILA, Philippines —Senate President Pro Tempore Panfilo Lacson has warned that suspending the value-added tax (VAT) on fuel could result in more than P320 billion in lost government revenues, a move he says would severely impact the country’s fiscal stability and economic growth.

Lacson issued the warning on Sunday, April 5, 2026, amid proposals to suspend VAT on petroleum products to ease the burden of rising fuel prices. He explained that while suspending excise taxes alone could already cost the government around P200 billion in foregone revenues by 2027, adding VAT suspension would double the losses to over P320 billion. 

“Sa excise tax lang, assuming na aabot tayo sa 2027, nasa mga P200 billion yung impact sa foregone revenues. May suggestion pa na i-suspend pa ang VAT. Magdodoble iyan, papalo tayo ng P320 plus billion kung pati ang VAT i-suspend dahil sa krisis,” Lacson said in a radio interview.

He cautioned that while suspending VAT may appear beneficial to consumers in the short term, the long-term consequences could be damaging to the economy. “Hindi ganoon kasimple. Tinitingnan natin suspend-suspend para masiyahan ang kababayan pero ang impact sa GDP natin matindi. Tayo rin in the long or medium term tayo din ang matatamaan,” Lacson stressed.

The senator also urged the government to consider “extreme” but lawful measures to address the energy crisis, such as tighter regulation of energy-related industries or even temporary takeovers if abuses are detected. He emphasized that decisive action is needed to protect consumers from surging fuel prices while ensuring that fiscal stability is not compromised.

The debate over VAT suspension comes as fuel prices continue to rise, putting pressure on households and businesses. Advocates of suspension argue that removing VAT would provide immediate relief to consumers by lowering pump prices. 

However, Lacson’s warning highlights the trade-off between short-term affordability and long-term fiscal health, as the government relies heavily on VAT and excise taxes to fund public services and infrastructure.

Economic analysts note that the government faces a difficult balancing act: easing inflationary pressures without undermining revenue collection. With the projected P320 billion loss, the administration would need to explore alternative revenue sources or risk widening the budget deficit.

As discussions continue, Lacson’s remarks underscore the importance of carefully weighing fiscal policies against their broader economic impact. The issue remains a pressing concern for both policymakers and the public, as fuel costs directly affect transportation, food prices, and overall inflation.