Duterte cool to TRAIN suspension

MANILA, Philippines — Congressmen are pushing for the suspension of the Tax Reform for Acceleration and Inclusion (TRAIN) law, which they blame for the increased prices of goods and services.

But President Duterte, while acknowledging the impact on inflation of TRAIN, said last night he likely would not suspend it.

“All the while, we are having problems because inflation is always there. There are many reasons. Actually, one of them is TRAIN. But I need money also to run the country,” Duterte said in a speech at the change of command ceremonies of the Presidential Security Group in Malacañang Park.

Opposition Rep. Edcel Lagman of Albay is drafting a joint House of Representatives-Senate resolution suspending TRAIN, while Rep. Michael Romero of party-list group 1-Pacman filed Resolution 1919 yesterday.

The Romero resolution urges President Duterte to suspend the collection of taxes on diesel, gasoline and other oil products from June to August this year to arrest the rise in consumer prices.

In a television interview, Lagman said he agrees with the Department of Finance that the executive branch could not temporarily halt the enforcement of the TRAIN law even if it wants to without Congress passing another law.

“That is why we will introduce the joint resolution, which we hope would gain bipartisan support among lawmakers. If it is approved by the House and the Senate and signed by President Duterte, it would have the force and effect of a law,” he said.

Lagman said a large part of the increase in consumer prices is due to new and higher taxes the law imposed.

In his resolution, Romero, who is an economist-businessman, said his three-month suspension proposal aims “to ease inflation pressures, slow down the decline in the purchasing power of the peso and preserve the country’s economic gains.”

From January 2017 to this month, he said the peso has lost about six percent of its value, while inflation rose from four percent in January to 5.1 percent in April.

“We must preserve and sustain our economic gains. The economy grew by 6.8 percent in the first quarter of this year and we are on track in sustaining this growth. What could spoil it is inflation,” he said.

He urged concerned House committees to study where additional funds could be raised if TRAIN were suspended as well as the grant of additional financial assistance to the most adversely affected sectors and the approval of legislation that would expand the powers of the Bangko Sentral ng Pilipinas to control inflation.

Quirino Rep. Dakila Cua, ways and means committee chairman, said he was open to reviewing TRAIN but not suspending it.

“Suspending the law would affect the national coffers. That is an irresponsible thing to do,” he said.

Finance Secretary Carlos Dominguez III has claimed that halting collection of taxes under TRAIN would deprive the government of funds for vital public services.

He claimed that the law has only a 0.4 percent impact on the increase in consumer prices, while Department of Labor and Employment Undersecretary Ciriaco Lagunzad III said its impact was 25 percent.

With rising fuel prices putting greater pressure on inflation, the Department of Energy (DOE) is eyeing the establishment of a strategic petroleum reserve (SPR) with stocks sourced from Russia and other non-OPEC countries.

“The government is aware of the country’s vulnerabilities to abrupt changes in the international oil situation and impending threats on the same, hence we are formulating various strategies to address those vulnerabilities to cushion the impact for our consumers,” Energy Secretary Alfonso Cusi said. –  With Christina Mendez, Marvin Sy, Danessa Rivera

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