It was December 19, 2017 when I’ve read a short article from Inquirer about Angara’s punch line statement. ”TRAIN Law is the biggest Christmas Gift government to the Filipinos”. It was made with such exorbitant confidence and candor which makes you think that he’s really into this. He wants to convince the masses to rally up their support behind this controversial tax-reform law which will impose hefty excise taxes on consumer products including fuel while removing income taxes on those earning above the minimum wage. However, this isn’t exactly what happened.
From biggest Christmas Gift to biggest Pahirap Gift
It’s purely evident that after the excise taxes were implemented during the first few months of 2018. The prices of fuel increased considerably which in turn also affected the prices of goods and basic commodities due to higher operational cost in moving goods to different parts of the country. This has hampered economic growth which sluggered down the country’s GDP (Gross Domestic Product) Gross which was 6.7% in 2016, slowed to 6.6% in 2017, and is down to 6.3% in the first three quarters of 2018. So you can see the far-reaching consequences when the government imposes poorly thought out tax reforms simply to increased its tax-collections by mere collateral imposition of excise taxes on commodities that is vitally important for an economy dependent on logistics. Owing from the fact that the Philippines is an archipelago and that moving goods from here and there will always require the use of fuel. Higher fuel prices will mean higher prices of goods.
My take and personal experience of TRAIN Law
I have lived in the mountainous areas of Ronda, Cebu. And in most times I travel there to come and visit my wife. I know the plight of the farmers and ordinary people living in those far flung areas. The effects of higher prices of fuel does have a significant impact on how these people travel. Some would simply walk for miles to get to the town ‘Poblacion’ and buy consumables. According to them, walking makes their soles hurt but it saves them with paying for ‘Habal habal’ so they can add their savings to compensate with the price increase on basic commodities that they’ll be purchasing in town. These are hardworking people who tills their land and plant corn. They took care of their livestock and sells them for profit. They plant and they work with their bare hands and feet. Yet, for many — they see that those suffering from TRAIN Law must’ve been lazy or unproductive. Screw that. This is wrong and inaccurate.
For the entirety of 2018. We’ve experienced extreme inflation which puts the prices of goods highest in past 10 years.
I think the simplest fact and downsides of TRAIN Law is that many people actually isn’t benefiting from income tax exemptions owing from the fact that they’re not even paying them in the first place. Especially those working for unregulated jobs or perhaps those paying below the minimum wage. Those people won’t be getting the extra compensation brought about by income tax-exemptions. However, many people really don’t see this picture and until now Duterte’s well-funded troll army in ‘Social Media’ had been consistently inventing stories to prop up and manipulate peoples minds.
I even doubt the conditional cash transfers will actually help ease the impact of TRAIN Law on the poor. Given the fact that the proposed cash transfers will only be given during the first three years while oil excise taxes continue toSo increase. The poor will no longer receive the temporary cash transfers after 2020 yet have the permanent burden of higher prices on their basic goods and services.
Duterte’s economists has since been very vocal about the effects of TRAIN Law and its alarming effect in the surge of prices. And had been consistently asking the government to make necessary measures to lessen the economic burden imposed upon the poorest people of the Philippine society.