Palace: Too early to conclude TRAIN behind surge in January inflation
February 7, 2018 | 5:07pm
Presidential spokesperson Harry Roque said it might be too early to attribute the January inflation to the tax reform law. File
MANILA, Philippines — Malacañang Wednesday contested the claim that the Tax Reform for Acceleration and Inclusion caused the higher consumer prices in January.
Presidential spokesperson Harry Roque said it might be too early to attribute the January inflation, which jumped to its highest level in more than three years, to the tax reform law.
"It may be too early to come up with that conclusion. It (TRAIN) was just implemented last January and not all taxes have been imposed," Roque said in a phone patch interview with reporters.
Roque said the TRAIN provisions on oil were only implemented after the old inventories were sold.
"I think there are other reasons for that. One of them is the high prices of oil in the world market," he added.
Inflation hit 4 percent in January, the highest level for the consumer price index since averaging 4.3 percent in October 2014. Core inflation, which does not include food and energy items, rose to 3.9 percent in January from 3 percent in December.
Socioeconomic Planning Secretary Ernesto Pernia has said the push in inflation was partly caused by TRAIN, specifically the excise taxes on fuel and additional sin taxes.
Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. has also cited TRAIN as one of the factors that led to higher consumer prices. But Pernia and Espenilla believe that the effects of TRAIN are just temporary.
Finance Secretary Carlos Dominguez III has said it was hard to believe that TRAIN had a significant impact on prices unless "merchants took advantage of the law and raised prices on old inventories."
The first package of the TRAIN is expected to generate P120 billion in additional revenues.
The law exempts those earning an annual taxable income of P250,000 and below from paying personal income tax and raised the tax exemption for 13th month pay and other bonuses to P90,000.
But it also imposes new taxes on diesel, liquefied petroleum gas, kerosene and bunker fuel for electricity generation and higher taxes on other oil products.
Roque said the government has stepped up measures to cushion the impact of TRAIN including a monthly cash assistance for the country's poorest households.
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