Currently, the SE Asian nation’s deficit stands at US$1.37 billion.

According to the Economic Managers Group, the body which is advising President Gloria Arroyo on economic issues, “[We are] finalising details of the tax hike. The hike will apply to imports of crude and petroleum products, except liquefied petroleum gas.”

“The group is still discussing what the percentage increase should be, but an estimate is it would raise taxes up to around 6% from the current 3%. [We are also] confident the tax hike [will] not result in higher retail prices, as the slightly weaker global oil prices [will] offset the impact,” it added.

It is believed Arroyo will issue the executive order to raise taxes before the Philippines Congress reconvenes on 26 July from its summer break.