Feeling the pain

Revolutions have been staged over taxation. When the masses are feeling the pain of higher taxes, the government must show that the money is being put to good use and the suffering is worth it.

President Duterte is making the right noises about giving priority to fighting corruption. This is one of the major fears in his tax reform program – that all the additional billions in revenue will simply be pocketed by crooks in government, and bankroll the perks and excesses of his officials and political allies.

An anti-corruption campaign, however, gains credibility and succeeds if it is supported by solid evidence of wrongdoing, and if it is fair and impartial. No one can be exempted. 

Duterte can consider what happened to his predecessor’s touted tuwid na daan or straight path. Today, with the disaster that is the Metro Rail Transit 3 and the Dengvaxia fiasco on top of the pork barrel and Disbursement Acceleration Program scandals, daang matuwid is seen as the classic road to hell, paved with good intentions.

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The President surely understands the perils of selectiveness: he has accused the constitutionally mandated chief graft-buster, the ombudsman, of selective justice.

The jury is still out, to put it kindly, on the fairness of the current anti-corruption campaign. The President’s firing spree on the basis of shameless propensity for foreign travels is starting to look wobbly.

Duterte rarely bothers with presenting a solid case for firing officials, possibly because he believes that they serve at the pleasure of the president. And there have been several glaring “ay mali” moments, when the reasons cited for firing an official turned out to be patently wrong.

While the President has sacked even his former campaign supporters, he has also injected personal motives in his fight against graft. And there are persons in his inner circle or official family who it seems can do no wrong; he has looked the other way even when presented with documented cases of violations of the anti-graft law and the Code of Conduct and Ethical Standards for Public Officials and Employees.

Perhaps there are still several other officials in his crosshairs, whose sacking will persuade skeptics that his crackdown on corruption doesn’t target only those who have crossed him or his close aides.

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A fair and credible effort to fight graft and promote good governance will make it easier for the nation to swallow the bitter pill of higher taxes. Only Duterte’s economic managers are still in denial about the reality of the consequent price increases. 

There’s a yawning difference between the projected minimal impact of the tax reform law on consumer prices and what’s actually happening as everyone adjusts especially to higher fuel and energy costs.

Thanks to a cut in withholding tax, my take-home pay has increased at the start of the Year of the Dog. The slight increase, however, has been swallowed up by hefty hikes in all the items on my regular grocery list. 

Prices of all meat products are up. The rice I buy regularly is now P100 more expensive per sack. Sugar prices went up as early as last month. Prices of Anchor and Magnolia butter are up by 20 to 25 percent depending on the supermarket chain.

Over a week ago when I dropped by one of the supermarkets where I shop regularly, the product price tags on the shelves were gone and I had to keep asking for the price of each item that I wanted to buy. Employees told me they were in the process of replacing the prices. Obviously it wasn’t for any price reduction.

As expected, galloping fuel prices triggered the price hikes. There have been price rollbacks in recent days, but the figures are still a long way from the pump prices in 2017. People don’t care if the price increases were due to movements in world crude prices or the Tax Reform for Acceleration and Inclusion. With prices rising all around, people feel they’re being run over by the TRAIN.

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Government officials insist that the tax reform package has minimal impact on consumer prices. Maybe they think if they say it often enough, it will come true. Only folks who don’t bother looking at the prices of goods they buy, or who have others doing the marketing for them, can say this and believe it.

Even in the wet markets, prices of most products are up. With the approach of summer, I’ve been waiting for prices of my favorite fruit, the carabao mango, to go down from the stratospheric, off-season high of P160 to P190 a kilo. With the impact of TRAIN, however, what goes up stays up, and will likely even go higher.

Minimum wage earners rarely splurge on a ripe carabao mango costing P50 a pop. Instead they may settle for Indian mango, which is still at pre-TRAIN prices of about P40 to P70 per kilo in the wet market. But mango, whether carabao or Indian, is not a basic need. For basic necessities, low-income earners are feeling the pain of TRAIN. And the agony, like Lent, is just starting.

The government will soon get the blame, so it should move to persuade the public that tax money is being used judiciously, and the ambitious “Build, Build, Build” infrastructure program – the principal reason given for TRAIN – is underway. 

Selling these ideas can be daunting. With people feeling the bite of taxes, there is greater concern over the misuse of public funds by crooks in government. And with 2019 being an election year, there is also concern that the administration’s political allies will find creative ways of using people’s money for partisan purposes, for patronage in aid of re-election bids. 

This TRAIN must not become a vehicle for graft and abuse of power, doomed to become just another failed experiment in achieving inclusive growth.