By Butch Fernandez & Jovee Marie N. dela Cruz
SENATORS seek to hear on Wednesday from finance, economic and other top-ranked Duterte Cabinet officials, as well as members of academe, to help them craft remedial legislation ostensibly blunting the inflationary impact of the Tax Reform for Acceleration and Inclusion or TRAIN law.
At the House of Representatives, a lawmaker on Tuesday filed a resolution to revisit the same legislation and soon after Party-list Rep. Carlos Isagani T. Zarate of Bayan Muna vowed to file a repeal initiative.
Acting on the Senate Resolution, the Economic Affairs Committee chaired by Sen. Sherwin T. Gatchalian moved to conduct an inquiry to also look into the status of implementation and effectivity of the social mitigating measures under the TRAIN law, as well as other counter-inflationary measures taken by the government.
Gatchalian confirmed that among the resource persons invited to the hearing were: Finance Secretary Carlos G. Dominguez III, Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr., National Economic Development Authority (Neda) Secretary Ernesto M. Pernia, Social Welfare Secretary Emmanuel A. Leyco, Trade Undersecretary Ruth Castelo and National Food Authority Administrator Jason L.Y. Aquino.
This developed as the five-year inflation high has sparked speculation that the BSP will raise key rates soon. It last raised the policy rates in September 2014 after inflation stood above the then 3-percent to 5-percent target for that year. This time, the January to April 2018 average of 4.1 percent and has breached the BSP target range of just 2 to 4 percent.
In House Resolution 1838, Party-list Rep. Gary C. Alejano of Magdalo urged the lower chamber to review the impact of Republic Act (RA) 10963 or TRAIN Act, particularly its impact on Filipinos purportedly reeling from unreasonable increases in the price of basic commodities.
“Barely six months into the implementation of the TRAIN law, Filipinos contend with the hike on the rate of inflation which as of April 2018 was pegged at 4.5 percent [or higher] than the government’s target range for 2018 of 2 percent to 4 percent,” Alejano said.
“The continued increase in inflation would likely lead to decreasing amounts of goods or service that an individual would be able to purchase, offsetting the higher take home pay that the TRAIN law afforded Filipinos,” he added.
Alejano wants to find out if there is a need for the continued implementation of the tax law or if Congress needs to suspend it due to its impact on poor Filipinos.
He also wants to find out if there are measures in place to cushion the effects of the TRAIN law.
“It is the poor who are hard-hit in the increases. This is contrary to what the Duterte administration promised and projected. The common Filipino now suffers under the weight of the new TRAIN law. And it has only been four months since it took effect. And yet, we see the results totally inimical to its objectives,” the lawmaker said.
A little earlier, Zarate vowed to file a bill repealing the TRAIN law.
President Duterte signed into law RA 10963, on December 19, 2017 ostensibly to create a simple, fair, and more efficient system that will make the rich contribute more to services and programs that benefit the poor.
The law was also designed to help finance the country’s infrastructure backbone under the “Build, Build, Build” (BBB) program seen to create 1.7 million jobs by 2022.
Alejano said only about one-fourth or even less of the funds needed by the BBB program would come from the TRAIN as most will be funded by loans from China.
In passing the new tax law, Alejano added the government failed to consider that most of the Filipinos rely on mass-transport systems
affected by the hike in the excise tax on fuel products.
“Though there are no adjustments to jeepney fares yet, there already is petition from transport groups to adjust the minimum fare from P8 to P10 which most likely affect 3.2 million minimum-wage earners to middle class passengers,” Alejano said.
Alejano added the price on fuel has also increased significantly due to the implementation of the tax law.
“Prices of diesel in Metro Manila increased from only P36.35 last December to P43.30 in April,” he said.
He also cited a recent Pulse Asia survey showing the bulk of Filipinos or 86 percent were strongly affected by the increases.
According to the survey, 98 percent believed there were increases in the costs of the commodities they usually buy, like food (92 percent of participants), nonrice items (67 percent), rice (81 percent), and sugar-sweetened beverages (56 percent).
Electricity bills also increased (30 percent), fares (7 percent), transportation-related items such as fuel (22 percent), medicine and other health-related needs (9 percent), alcoholic drinks (4 percent), cigarettes (5 percent), water (2 percent), cell-phone load (3 percent), and recreation-related expenses (1 percent).
“What is also telling in this survey is that while 86 percent were strongly affected, only 1 percent registered that they are not affected at all, as some 13 percent were somewhat affected. So all in all, a total of 99 percent were affected and, again, this is only after three months of the law’s implementation,” Alejano said.