While there are many elements contributing to the increase in prices of goods and services, Senator Bam Aquino stressed the need to focus on factors under the government’s control, like the excise tax on fuel under the Tax Reform for Acceleration and Inclusion Law.
Aquino said the imposition of TRAIN and taxes on petroleum can be controlled.
“Let us give the Filipino families small comfort, let us suspend excise tax, Aquino said, referring to his measure to stop the collection of excise tax on fuel under TRAIN once the inflation rate breaches “target range.”
Aquino filed Senate Bill No. 1798, the excise tax on fuel under TRAIN will be suspended when the average inflation rate surpasses the annual inflation target over a three-month period.
During the TRAIN’s deliberation, he introduced an amendment to include a safeguard where the implementation of TRAIN Law will be stopped once inflation rate breaches the “target range.”
Fellow senators approved Aquino’s amendment but the provision was not included in the bicameral conference committee and the approved version of the measure.
Aquino expects his colleagues to support his measure since many of them approved it during the deliberation of the TRAIN Law.
The Philippine Statistical Authority inflation figures showed a three-year high increase in prices by 4.5 percent as of end-April 2018.
If further reported that inflation disproportionately affected the poor, with low-income households carrying the burden of a record-high 5.3 percent price hike.
Pulse Asia also previously released the results of two polls—one indicating that 45 percent of Filipinos view inflation as an urgent concern and another stating that an “overwhelming” 86 percent of Filipinos were “strongly affected” by price hikes on food, topped by rice; sugar-sweetened beverages; electricity; fuel and transportation, among others.
These strongly confirm fears of many Filipinos and civil society groups that the TRAIN Law, specifically the range of fuel excises, would lead to cascading price hikes and heavily impact the poor.
Even limited relief from the Finance Department’s much vaunted cash transfers of P200/month, supposedly to soften inflationary impacts on the poor and low income, has not been released since March 2018.
As the Department of Finance (DOF) and other economic policymakers conveniently trivialize TRAIN’s regressive and anti-poor effects law, the Freedom from Debt Coalition (FDC) asserted that TRAIN is an ill-conceived tax reform law without benefit of adequate public scrutiny, which grossly underestimated the adverse consequences for the public at large and the poor in particular.
“We thus wholly support the Senate inquiry into the inflationary effects of the TRAIN Law, and urge in the meantime, that the imposition of fuel excises be suspended, pending the results of a more comprehensive and participatory review,” said FDC.
On the most basic level, the FDC said the economic forecasts behind TRAIN carelessly ignored the increase in production and transportation costs of commodities due to higher excise taxes. Contrary to unrealistic projections by economic policymakers that only the rich will be hit by taxes on fuel, we now know that petroleum excises are multiplying their impacts across fuel-dependent production processes and are now being passed on as additional burdens to all consumers.
