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Groups demand junking of TRAIN Law

Progressive organizations and Partylist groups held protested at the office of Bureau of Internal Revenue in Quezon City Wednesday, February 12, demanding the junking of the Tax Reform for Acceleration and Inclusion Law (TRAIN) and Oil Deregulation Law.

Saying both laws have severely eroded the people’s economic wellbeing, the protesters also demanded an increase in the wages of both private (P750 per day) and public (P16,000 per month) workers.

In his speech, Bagong Alyansang Makabayan secretary general Renato Reyes Jr urged candidates in the coming local and national elections in May to fight for people’s issues.

Makabayan senatorial candidate Atty. Neri Colmenares for his part vowed to push what he calls the people’s agenda if elected in the Senate. He added that he will protect ordinary Filipinos against high prices and taxes. (Video by Joseph Cuevas)

High prices still burden poor despite inflation slowdown

On the release of the November 2018 inflation rate, research group IBON said that prices are still high and rising even with the reported slowdown.

This remains a burden on poor families trying to live off low and precarious incomes. Substantial and longer-term solutions are still needed, said the group.

Headline inflation slowed to 6.0 percent in November from 6.7 percent last month.

Inflation slowed in food and non-alcoholic beverages; housing, water, electricity, gas, and other fuels; and communication.

Inflation however worsened in the rest of the commodity groups. Additionally, year-on-year inflation is still double the 3.0 percent rate in November 2017.

IBON stressed that prices are still higher than before due to the inflationary impact of the Tax Reform for Acceleration and Inclusion’s (TRAIN) consumption taxes, rising global oil prices and the peso depreciation.

Rice, fish, meats, fruits, vegetables and other basic commodities are still more expensive now than a year ago.

The majority of Filipino families who have low incomes are burdened the most. Inflation has eroded the incomes of the poorest 60 percent households by a total of Php2,650 to as much as Php7,000 from January to November of this year.

The Php537 minimum wage in the National Capital Region is the highest nationwide but even this falls far short of the estimated family living wage of Php1,002 for a family of five.

Meanwhile, some 2.5 million of the target 10 million beneficiaries of TRAIN’s unconditional cash transfers (UCT) have still not received anything almost a year into TRAIN.

The Duterte administration’s economic managers said that slowing inflation “suggests” the effectiveness of government’s anti-inflationary measures such as Administrative Order No. 13 removing barriers to agricultural imports.

IBON executive director Sonny Africa disputes this: “The government is too quick to take credit and too dishonest to accept blame.”

“The inflation slowdown may even be due more to falling global oil prices since October than the Duterte administration’s half-hearted anti-inflation measures,” he said. “On the other hand, government refuses to accept how the higher taxes from TRAIN have driven prices up and will do so again in less than a month.”

Africa said that government’s decision to push through with the next tranche of fuel excise taxes next month in January 2019 shows its insensitivity to the plight of millions of poor Filipinos.

He said that real steps to curb inflation begin with stopping TRAIN, and giving meaningful support to domestic agriculture and Filipino industry. #

 

TRAIN Package 1A: From the poor to the rich

Government’s continued implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) means that TRAIN’s taxes will keep raising prices next year and make inflation higher than it should be.

Read: TRAIN still inflationary with lifting of fuel excise suspension

‘Sobra ang dagok’

“Dati, itong pechay-baguio, ang kuha namin ay nasa P90 lang. Ngayon, nasa P150 na. ‘Yung repolyo, dati P80. Ngayon, P180 na. Sobrang laki ang itinaas, kaya sobra rin ang nararamdaman namin na dagok.”–Mang Ricky, tindero ng gulay, Sitio San Roque, Quezon City

Government losing control of economy –IBON

The Duterte administration is losing control over the Philippine economy and the poorest Filipinos are suffering for this, research group IBON said upon the release of the August inflation rate.

The greatly accelerating inflation is only the latest in a series of bad economic news about the economy’s so-called fundamentals.

The Philippine Statistics Authority (PSA) reported that the headline inflation rate in August 2018 accelerated to 6.4 percent or its highest in almost a decade from 5.7 percent in July.

This is more than double the 2.6 percent inflation in August 2017.

Inflation was highest in alcoholic beverages, tobacco and narcotics at 21.6 percent year-on-year but inflation also worsened among food and non-alcoholic beverages, especially vegetables (19.2 percent), corn (12.6 percent), and fish (12.4 percent).

Meanwhile, from July to August 2018, steepest inflation occurred in vegetables (4.9 percent) and rice (2.1 percent).

IBON said that the rapid rise in food prices hits poor families the worst because food takes up a greater portion of their expenditure compared to higher income families.

The bottom 30 percent income group spends 59.7 percent of their expenditures on food, compared to just 30 percent for the upper 70 percent income group based on the 2015 Family Income and Expenditure Survey.

IBON estimates that the poorest six deciles of Filipino families with monthly incomes ranging from Php7,724 to Php21,119 have suffered income losses of around Php1,455 to Php3,781 due to inflation from January to August this year.

Other indicators of macroeconomic fundamentals are no better, IBON said.

The high August inflation comes on the heels of second quarter gross domestic product (GDP) growth which was the slowest in 12 quarters, the peso falling to its lowest in 13 years, first semester remittance growth the slowest in 17 years, trade and balance of payments deficits the worst in the country’s history, and gross international reserves (GIR) that are the lowest in nine years.

IBON added that the more rapid inflation means that prices are higher than ever and will remain high even if inflation tapers off in the coming months as government projects.

The government needs to become more decisive in addressing increasingly unaffordable goods and services, IBON said, adding immediate and longer term measures can be taken.

The most immediate is to stop implementation of the TRAIN law and particularly its inflationary consumption taxes, IBON stressed.

This will not arrest inflation completely but it will take away the most recent inflationary pressure that is also the one most directly within the government’s control. The government can also consider price controls, said the group.

The president has the authority to impose price controls not just in the case of calamities but also when there is illegal price manipulation and if prices of basic commodities are already deemed at unreasonable levels, it said.

The long-term solution however, IBON underscored, is to strengthen domestic agriculture and Filipino industry. These are essential to provide cheaper food, goods and services in the domestic market. This will also lessen imports and lower pressure on the peso to depreciate.

The group also said that another solution is to reverse the privatization or commercialization of water, power, education and health to take away the profit premium making these services more expensive.

These are steps that the Duterte administration’s economic managers hinder due to their stubborn adherence to failed neoliberal policies, said IBON.#

‘Hindi maiwasang mangutang’

“Ngayon pa nga lang, hirap na e. Paano pa ‘pag tumaas ‘yung presyo ng bigas? Lalo na high school na ‘yung mga anak ko, may mga panahon talagang hindi maiiwasang mangutang.” – Florenda Biagatindera ng kanin

Citizens speak against TRAIN law

Ordinary citizens speak on the Rodrigo Duterte’s Tax Reform for Acceleration and Inclusion Law, explaining the poor are affected the most by the inflation caused by the measure.

TRAIN was among the issues condemned by activists as they commemorated Philippine Independence Day with a protest action last June 12.

TRAIN-induced price increases are permanent—IBON

The inflation spike marks the start of increases​ driven by the Tax Reform for Acceleration and Inclusion (TRAIN)​ in the prices of basic goods and services for the next three years, research group IBON said.

Further inflationary surges are likely to happen in 2019 and 2020 when the next two rounds of additional taxes on oil products take effect.

The Duterte administration’s banner TRAIN is among the biggest factors driving the inflation rate to its highest in over six years, said the group.

IBON noted that the headline inflation rate of 4.5 percent year-on-year in April is the highest since late 2011, bringing the year-to-date average inflation rate to 4.1 percent.

This already breaches government’s inflation target for 2018.

As it is, food, vegetable and fuel prices are already higher from a year ago, IBON observed.

The price of regular milled rice has increased from Php35 to Php40 per kilo, of galunggong from P140 to Php160, of pork liempo from Php225 to Php240, sitao from Php60 to Php100 per bundle, and red onions from Php50 to Php80.

Just since January, the price in Metro Manila of diesel has gone up by over Php7 per liter to Php44.35 and of gasoline by some Php6.80 to Php55.37.

LPG is also already much more expensive at some Php650-750 for an 11-kg cylinder.

“The higher prices of basic commodities hit the country’s poorest 17.2 million families who do not get any personal income tax (PIT) benefits the worst. This burden belies the Department of Finance’s (DOF) fake news claim that ’99 percent of taxpayers’ will benefit from TRAIN,” IBON executive director Sonny Africa said.

Africa also said that government economic managers are being dishonest and insensitive when they downplay the impact on prices by saying that the inflation spike is only temporary.

“The price increases from TRAIN are very permanent and even if inflation rates moderate this does not mean that prices will be lower,” Africa said.

“It is grossly deceitful for economic managers to give the impression or claim otherwise. Prices will continue to rise for the poor from TRAIN’s new and higher taxes unless the government says that the inflation rate will turn negative, which is unlikely,” he added.

According to Africa, while there are many reasons for inflation the government only seeks to divert from its direct accountability for TRAIN-induced higher prices by exaggerating the effects of global oil price and the peso depreciation.

Dubai crude has been at US$62-66 per barrel and the peso at up to Php52.10 per US$1 since the start of the year.

However, even when the price of Dubai crude reached US$105 per barrel in 2013 inflation only averaged 2.6 percent.

Similarly, when the peso was at over Php54 per US$1 from late 2002 to mid-2004 inflation only averaged 2.5 percent , Africa explained.

Africa said that among all the major factors driving high prices, the government has the most control over the taxes it charges.

“If government wants to it can immediately lower inflation and prices for the people by suspending implementation and then repealing the grossly regressive TRAIN law,” he said.

Revenues can and should instead be raised with progressive tax reforms that increase the burden on the country’s super-rich and that relieve the poor majority while their incomes are still so low, Africa concluded.​# (IBON.org)

 

AGAW WEN Episode 2: TRAIN to Bankerohan Market

by Kilab Multimedia

Panoorin ang spectacular na pagdiskubre ni Agaw kung bakit mas matamis pa ang asin kaysa asukal.

Read more

Slow TRAIN cash transfers highlight govt’s insensitivity–IBON

“The poor will get relief about three months into suffering TRAIN-induced price increases with millions of others only getting it much later.”

 Research group IBON said that the slow implementation of the Duterte administration’s social mitigation measures including its cash subsidies highlights how these are just an afterthought to cover up how the Tax Reform for Acceleration and Inclusion’s (TRAIN) program is anti-poor and pro-rich. TRAIN was railroaded last year to already be able to raise revenues starting January 2018 even if the supposed mitigation measures were not yet clear.

This is in reaction to the Department of Finance (DOF) announcement about the looming implementation of the government’s unconditional cash transfer (UCT) to supposedly help the 10 million poorest Filipino families cope with the impact of TRAIN. The DOF said that the 4.4 million existing Pantawid Pamilyang Pilipino Program (4Ps) beneficiaries and three (3) million indigent senior citizens will start receiving the Php200 per month cash subsidy in March. The balance of 2.6 million households are supposed to start receiving theirs in August.

IBON executive director Sonny Africa noted that the DOF was last year quick to undertake the staff work for raising taxes on the poor and giving income tax relief to the rich. Yet, in contrast, it was grossly unprepared to implement any of the supposed social mitigation measures even nearly two months into the law’s effectivity. As it is, the poor will get relief about three months into suffering TRAIN-induced price increases with millions of others only getting it much later in August or after eight months.

Africa also said that the DOF was merely scrambling to report 10 million helped “no matter how sloppy the figures.” “The numbers don’t even add up,” he said, “because many of the 3.3 million poor elderly will likely already be among the 4.4 million CCT beneficiary households so double-counting is already happening, more so two or more elderly are in these poor households.”

Meanwhile, TRAIN’s promised fuel subsidies for public utility vehicles (PUVs), fare discounts for the poor and other social mitigation measures still remain unrealized, said Africa.

Lastly, Africa said, it is worth repeating that the cash subsidies are temporary and only from 2018 to 2020. “These are also the three years when oil taxes keep rising and prices keep getting pushed up higher and higher,” Africa noted. “The real TRAIN shock happens in 2021 when the UCT gimmick is gone but the prices that the poor pay for their basic goods and services will be immensely higher,” he said. (IBON News / February 27, 2018)