MANILA, Philippines -- In an effort to ease the impact of high oil prices on the poor, President Gloria Macapagal-Arroyo gave the go-signal for the Department of Finance to tap the coconut levy funds and royalties from the Malampaya gas exploration project to subsidize cash coupons for poor families, her spokesman Ignacio Bunye announced Thursday.

Bunye said the President was adopting this measure as a counterproposal to the suggestion of Consumer and Oil Price Watch president Raul Concepcion to cut by half the 12 percent value added tax (VAT) on diesel products after prices surged to an all-time high this month, resulting to a P1-increase per liter in prices of fuel products.

"It was estimated that from these two sources ay kayang tapatan ang 6.0 percent reduction ng VAT on diesel products," he told reporters Thursday.

The move would not affect the projected revenues of the government, while at the same time address the needs of affected sectors, he added.

"The concept is let's not touch revenue from the EVAT. Let us collect them, and use other funds to provide for the needs of those who really need them," he said.

At least P4.0 billion in revenue would be lost per quarter if the VAT on all petroleum products is reduced from the present 12 percent to 6.0 percent, Bunye said quoting estimates by Finance Secretary Margarito Teves.

The Department of Social Welfare and Development and other concerned agencies will hammer out the guidelines for the implementation of the subsidy as well as identify the target beneficiaries, he said.