Bam Aquino warns public to brace itself for price hikes in 2018
Sen. Paolo Benigno "Bam" Aquino warned the public that prices of goods and services would rise next year due to the tax reform program of the government. Combination Phot, File
MANILA, Philippines — The public should brace itself for increases in the prices of basic commodities that will greet it in the New Year after the first package of tax reform measures was signed into law by President Rodrigo Duterte, Sen. Paolo Benigno "Bam" Aquino said on Thursday.
According to Aquino, poorer Filipinos will be the hardest hit by these price increases as the government has not yet put in place cash transfer programs that will cushion the effect of the additional taxes on some goods and services contained in the law.
"We won't be surprised by the increase in prices in 2018. This was the reason why we voted against the passage of TRAIN (Tax Reform for Acceleration and Inclusion) because this would hit our poor countrymen," Aquino said in a mix of Filipino and English.
READ: Winners and losers: How the TRAIN law affects rich, poor Filipinos
Aquino's reaction came after the Industrial Group of Zamboanga warned of increases in the price of sardines starting in 2018 due to additional taxes on petroleum products.
"This is just one of the expected price increases of products that will be shouldered by poor Filipinos," he said.
Aquino said that during deliberations of the measure in the Senate and the presentations made by the Department of Finance it emerged that the government office could not immediately implement the tax reform provisions and the financial assistance program at the same time.
The DOF proposed monthly cash transfers of P200 in the first year of TRAIN's implementation and P300 monthly aid for the second and third years to help shield poorer Filipinos from the law's inflationary effects.
"In the end, poor Filipinos will bear the brunt of this tax reform program as it will increase the prices of basic commodities without the immediate cash transfer assistance to the poor," he said.
The Senate, voting 16-4, ratified the final version of the TRAIN bill after lengthy deliberations that stretched well into the night. Aside from Aquino, Sens. Panfilo "Ping" Lacson, Risa Hontiveros and Antonio Trillanes IV voted against Duterte administration's tax reform measure aimed at raising enough revenues to fund its ambitious infrastructure and social services program.
Duterte signed the TRAIN measure into law on December 19 together with the budget for 2018.
TRAIN increases the take-home pay of workers by exempting millions from paying income tax. It however hikes taxes on fuel, vehicles and sugar-sweetened beverages and expands the base of the value-added tax.
Under the new income taxation regime, those earning P250,000 or below would be exempted from paying taxes as well as those whose 13th month pay and other bonuses do not amount to more than P90,000.
DOF Secretary Carlos Dominguez III said that the law was expected to generate almost P150 billion, lower than the P162 billion that Duterte's government initially sought.
Aquino also urged that government to improve the performance of its revenue-generating agencies such as the Bureau of Customs and the Bureau of Internal Revenue.
He said that DOF data showed that addressing inefficiencies and loopholes in the BIR could generate an additional P726 billion. Addressing importation gaps and smuggling at the BOC meanwhile would provide at least P231 billion in fresh funds to the government, according to Aquino.
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