‘Who’s guilty of inflating prices? All in government’

A former dean of the University of the Philippines School of Economics on Friday said everybody in government is to blame for the rising prices of goods in the country, even as opposition lawmakers warned that the record-high inflation rate would continue to climb if the Duterte administration did not repeal its pet tax reform law.

PATHETICALLY POWERLESS. Market vendors and consumers in Pasay City in the country’s national capital region are disturbingly helpless Friday after inflation accelerated by 4.6 percent in May, the fastest in more than five years and faster than the 4.5 percent reported in April. Prices of goods and services in the country have increased by 2.9 percent in May 2017. Norman Cruz
Emmanuel de Dios, who is still a professor at the UP economics school, told the news website Rappler that the country’s economic managers should at least acknowledge that the Tax Reform for Acceleration and Inclusion Act or Train had something to do with the 5.2-percent inflation rate recorded in June.

He called out the government for not taking the blame for the high prices of commodities and compared the situation to the “Murder on the Orient Express”—the novel by Agatha Christie—where all passengers on the fictional train were pointing fingers at each other “but all of them are guilty.”

“And the sad part about it is there has been no coordination among these government agencies,” De Dios said.

The UP professor also criticized the government for collecting money through tax reform but being unable to spend it as quickly as planned.

“Once the government gets the priorities wrong, you might end up wasting [funds],” De Dios told Rappler.

Meanwhile, Senator Bam Aquino hit back at government’s claim that the 5.2-percent inflation rate in June is “not alarming,” saying the administration should be concerned about the suffering of the Filipinos on the high prices of goods due to the Train law.

Aquino insisted the government should be alarmed with the “intense spike” in the prices of goods.

“Let us not simply ignore this because it burdens our countrymen,” said Aquino, who has been pushing for the suspension of the excise tax on petroleum products under the Train Law, as it could help lower prices of goods and services.

The senator also called for the full implementation of mitigating measures under the Train, such as the unconditional cash transfer program for poor families and the “Pantawid Pasada” fund for jeepney operators and drivers.

In the House of Representatives, the opposition Makabayan Bloc warned new inflation records would be set if President Rodrigo Duterte and his economic team continue to ignore calls to repeal the tax reform law.

“It may even reach 6 percent before the year ends, and the price shocks then would be more shocking. The prices of basic goods and services continue to rise,” Bayan Muna party-list Rep. Carlos Zarate said.

“The prices of sugar, bread and rice have risen last week, and a provisional fare hike for public utility jeeps may be implemented tomorrow [Saturday],” he noted

“But this is just the beginning of our burdens because based on the TRAIN Law the excise tax of P2.50 a liter is imposed on diesel and bunker fuel starting January this year, but this rate will go up to P4.50 in 2019 and P6 in 2020,” Zarate noted.

“This means that the excise tax on gasoline has already increased from P4.35 a liter to P7. It will go up to P9 in 2019 and P10 in 2020,” he explained

ACT Teachers Party-list Representatives Antonio Tinio and France Castro slammed the Duterte administration for saying the June inflation rate is not something the Filipinos should worry about.

“The soaring high prices of basic goods and utilities [are] due to Train, while salaries and wages of Filipinos remain stagnant, and has been the first of many hurdles endured by the Filipino people experiencing economic downfall,” Tinio said.

“Wages of the people remain low while prices of all basic commodities have hiked and social services provided by government remain inaccessible to the poorest families. The ordinary Filipino family have close to nothing to spend for their daily needs,” Castro said.

Senator Risa Hontiveros also urged the upper chamber to suspend the Train, saying she felt more vindicated more of her peers were calling for the same.

“When I voted ‘No’ to Train, I felt that it didn’t have enough safeguards to protect the poor. I am happy that my colleagues have added their voices to mitigating the negative impact of this new tax law,” she added.

Magdalo Party-list Rep. Gary Alejano said the Train “is the main culprit” for the inflation mark in June.

“The Duterte administration can no longer deny how much of a punishment the Train Law is to the people. High prices of rice, other staple food, water, electricity, gas, fuel, and even sin products have sustained,” Alejano said.

“In failing to fully appreciate the complications that may arise because of the tax reform law, the Duterte administration has done another great disservice to the Filipino people, most especially the poor,” Alejano said.

Alejano renewed his call for review of the TRAIN law, and if necessary suspend the implementation of the excise tax.

Topics: University of the Philippines School of Economics , Duterte administration , Tax Reform for Acceleration and Inclusion Act
COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.
AdvertisementGMA-Working Pillars of the House