As prices of basic goods and services rose nationwide to 4.6 percent in May, a new high in more than five years, lawmakers on Tuesday prodded the Duterte administration to activate the social welfare component of the Tax Reform for Acceleration and Inclusion (TRAIN) Act.
The component provides discounts and benefits for poor families and low-wage earners.
In Metro Manila, the inflation rate was even higher, hitting 5.2 percent, according to the Philippine Statistics Authority.
The high inflation rate was mostly driven by increases in prices of fish and seafood, fuel and lubricants, as well as bread and cereals, according to the National Economic and Development Authority (Neda).
Neda Undersecretary Rosemarie G. Edillon attributed the higher fuel, fish, meat and rice prices, respectively, to rising international crude prices, declining catch, high cost of feeds, and “market panic” amid reports of supply shortage of cheap grain imported by the National Food Authority (NFA).
Sen. Grace Poe, chair of the public services committee, wrote letters to Cabinet members, including Finance Secretary Carlos Dominguez III, Labor Secretary Silvestre Bello III and acting Social Welfare Secretary Virginia Orogo, to implement social welfare and benefit programs under the TRAIN law.
Cash transfers, discounts
In her letter dated June 4, Poe asked the Cabinet members to take steps to release the benefits for the poor, including the P300 monthly unconditional cash transfers, fuel vouchers for jeepney drivers, a 10-percent fare discount for the unemployed and minimum wage earners, and a 10-percent discount on NFA rice.
“As swift as we had passed the TRAIN law, it is only right that we immediately implement the mitigating measures, which we have designed for the poorest of the poor,” she said.
Without the social welfare component, Poe said she feared that the TRAIN law “would result [in] more harm than good.”
Since Jan. 1, the TRAIN law jacked up or slapped new excise taxes on cigarettes, oil, sugary drinks and vehicles, among other goods, to compensate for the restructured personal income tax that raised the tax-exempt cap to an annual salary of P250,000.
Minimum wage
Workers blamed the new tax measure for the soaring prices of basic goods and commodities, prompting the Makabayan bloc of lawmakers to file last week a bill setting a daily minimum wage of P750 nationwide.
The party-list group Trade Union Congress of the Philippines filed days later another bill that would raise the daily minimum wage to between P576 and P832 to enable workers to keep body and soul together.
In Seoul, Dominguez was quoted by the Department of Finance as saying that the tax law accounted for only 0.4 percentage point of the inflation rate in May.
Dominguez said the government was “fast-tracking the release of the unconditional cash transfers for the country’s poorest households, along with other social mitigation measures to stay ahead of the temporary elevated inflation rate.”
‘Disappointed’
Sen. Sherwin Gatchalian, chair of the economic affairs panel, said he was “very disappointed” in the country’s economic managers for not immediately implementing the social benefit program despite earlier assurances to the Senate.
“We already put P24 billion in the budget, so that should be implemented. As early as January, the mitigating measures should have been implemented … and at the latest March,” Gatchalian told reporters.
Sen. Bam Aquino, one of four senators who voted against the TRAIN measure in the Senate, said there should be other mechanisms for the rollback of fuel prices on top of the social mitigating measures.
At the House of Representatives, Quirino Rep. Dakila Carlo Cua also called on government agencies to help hasten the implementation of social benefits included in the new tax law.
Cua, chair of the ways and means committee, said the effects of price increases were more pronounced on the poor.
He noted that during the deliberations on the TRAIN bill, economic managers assured Congress that programs would be in place to help Filipinos cope with rising commodity prices.
Stop TRAIN
Akbayan Rep. Tom Villarin said the “right move” would be to stop the implementation of the TRAIN law and not to wait for runaway inflation to happen or for oil prices to hit $80 per barrel.
Budget Secretary Benjamin E. Diokno said the country’s economic managers were against putting the brakes on the TRAIN law.
“Suspending the TRAIN law and adopting other band-aid solutions will only have a minimal and short-term impact on inflation and will stifle our growth, further delaying our nation’s progress toward becoming an upper middle-income country by 2019, such that around six million Filipinos would be lifted out of poverty by 2022,” said a statement issued jointly by Diokno, Dominguez and Socioeconomic Planning Secretary Ernesto Pernia.
Gov. Nestor Espenilla Jr. of the Bangko Sentral ng Pilipinas said the “inflation outlook continues to be a concern and requires close attention.” —With reports from Daxim L. Lucas and Christine O. Avendaño