Budget Secretary Amenah Pangandaman has expressed support for the President’s order to change the language of the 2024 national budget provision on fuel subsidies for the transport sector to shorten the trigger period and to simplify the subsidy release requirements.
In a phone interview with Malaya Business Insight, Pangandaman said the Department of Budget and Management (DBM), together with other agencies such as the Departments of Transportation and Energy, will be drafting a special provision to simplify the process of releasing the government’s fuel aid.
Under the current system, the release for the fuel subsidies requires a lot of documents and had to go through a memorandum of understanding among the different agencies, she said.
The list of recipients also had to be consolidated.
The tedious procedure, along with the long trigger period, prevented the targeted recipients from quickly getting the support they need.
Pangandaman explained that the process is such since the fuel subsidy program is relatively new, but as the government has picked out the lessons from its implementation, the necessary improvements will be made.
Currently, whenever the Dubai price per barrel exceeds $80 for three months, that triggers the provision of subsidies to the transport sector drivers.
“(Under the current system), the government is unable to quickly respond and provide the necessary support, since we have to wait for three months,” Pangandaman said.
The budget chief said with the shorter trigger period and the simplified fuel subsidy release requirements, the government will be able to quickly provide the assistance to the affected sector.
One of the ways looked at to simplify the process, Pangandaman said, is to release the amount to the implementing agencies once the Dubai price per barrel reaches a certain point, before it even activates the $80 per barrel one-month trigger.
The agencies will then “hold” the amount while waiting for the trigger period.
The fuel subsidy program has a budget of P3 billion for 2023, while the proposed budget for next year is P2.5 billion, which Pangandaman said is sufficient for the program.
Since the proposed 2024 General Appropriations Act is still being deliberated by Congress for approval, Pangandaman said a letter will be sent to the Senate, copy furnished to the House of Representatives, regarding the proposed change of language on the fuel subsidies for the transport sector.