DOF's ‘fiscal consolidation, resource mobilization plan’ could affect vehicle prices

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The Department of Finance (DOF) said that it is ready to present to the incoming administration a “fiscal consolidation and resource mobilization plan” that could affect vehicle pricing.


  • What is included in the first package of the “fiscal consolidation and resource mobilization plan?"

    The initial package of the plan includes the reform of motor vehicles users charge (MVUC), repeal of the excise tax exemption on pickups, and excise tax imposition on motorcycles.
  • When will the first package be implemented?

    The first imposition could be as early as next year.
  • The proposal has three packages: the first of which include the reform of motor vehicles users charge (MVUC), repeal of the excise tax exemption on pick-ups, and excise tax imposition on motorcycles.

    Should the aforementioned parts be prioritized, the changes are expected to be implemented next year, which will likely affect the current retail price of the involved models.

    Toyota Hilux

    The probable MVUC reform will help the government earn P38.3 billion in revenues while the imposition of excise tax on motorcycles and pick-ups, an additional P19.2 billion.

    In a statement, Finance Secretary Carlos Dominguez III said that the implementation of a fiscal consolidation and resource mobilization plan is imperative to “ensure that the government can continue to effectively manage its increased budget deficit while spending on investments in infrastructure, education, and healthcare for economic growth and recovery.”

    He noted that the larger deficit is a result of lower revenue collections due to reduced economic activity during the pandemic and increased spending to beef up healthcare capacity, procure vaccines, and provide subsidies to vulnerable sectors.

    Department of Finance Secretary Carlos Dominguez

    Aside from that, the department said that the priority programs such as the “Build, Build, Build”, distribution of special risk allowances and free rides to medical frontliners to meet the mobility requirements under the imposed nationwide restrictions during the early part of the pandemic— among other reasons — also affected the country’s incurred debt.

    According to Dominguez, the inaction on fiscal consolidation “could force the government to cut spending on necessary socioeconomic programs or to finance debts with additional borrowings, resulting in cascading effects on interest payments that could also ultimately force budget cuts and stifle economic growth.”

    Yamaha YZF-R3

    “We are optimistic that the incoming administration and our next set of legislators will recognize the importance and urgency of these measures and implement them at the soonest time possible,” Dominguez said.

    “Pursuing the fiscal consolidation and resource mobilization program as proposed will help us continue to spend on socioeconomic programs, maintain our credit ratings, and grow out of our debt,” he added.

    Meanwhile, Bayan partylist described the proposal in a separate statement that 

    Meanwhile, Bayan partylist described the plan in a separate statement as unjust, saying that the proposed tax measures will greatly affect ordinary people.

    Photos from Ruben D. Manahan IV, Department of Finance

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