Poe, Bam urge gov't to roll out mitigating measures under TRAIN

MANILA, Philippines (Updated 6:34 p.m.) — Senators are urging the government to hasten the implementation of measures to cushion the inflationary impact of the government’s tax reform law, with Sen. Grace Poe warning that without these, the measure would do more harm than good.

Poe and Sen. Paolo Benigno “Bam” Aquino IV issued their plea for the government to immediately roll out social protection measures as the country registers its highest inflation rate in the last five years at 4.6 percent last month.

In a letter, Poe urged Finance Secretary Carlos Dominguez III, Transportation Secretary Arthur Tugade, Labor Secretary Silvestre Bello III, Social Welfare Secretary Virginia Orogo and Land Transportation Franchising and Regulatory Board chairman Martin Delgra III to immediately implement the mitigating measures designed for the poor under the law.

She said that these social welfare and benefits program was an “indispensable part” of the Tax Reform for Acceleration and Inclusion law which widened exemptions from income taxes and imposed additional taxes on petrol and sugar-sweetened drinks.

“[W]e respectfully urge your agency to take steps towards the immediate implementation of the social welfare and benefits program of the [TRAIN] law,” Poe, a member of the Senate majority, said in the letter.

“Without this program, I fear that TRAIN would result in more harm than good,” she added.

Cash transfers, fuel vouchers

Poe said that the sentiments expressed by people they had talked to during hearings on TRAIN’s effects highlighted the urgency of implementing the unconditional cash transfer to poor households, fuel vouchers for jeepney drivers, and fare discounts for commuters, subsidized National Food Authority rice and free skills training for minimum wage earners, the unemployed and the poorest 50 percent of the population.

Aquino also urged the government to hasten the roll out of the mitigating measures.

The Liberal Party senator also reiterated his call for the excise tax on fuel under the TRAIN law to be suspended if inflation for the past three months exceeded government expectations.

“We are calling on [the government] to implement programs that will help the poor [cope with rising prices]. While this has not been implemented, we should stop the rise in prices in the country,” he said in Filipino during an interview with reporters.

Aquino, who is one of four senators who voted against the tax measure last year, dismissed government arguments that suspending the law would result in its inability to fund programs such as free tuition in state universities and colleges.

In an interview with reporters, Sen. Sherwin Gatchalian also said there would be a lot of complications if the TRAIN law is suspended.

"That's why the first option is to implement the mitigating measures of the TRAIN law. There are a lot of mitigating measures that have yet to be implemented," he said, pointing out that a P300 unconditional cash transfer has not been fully implemented. 

"We really have to implement the mitigating measures because there are funds for that. We put P24 billion in the budget allocated specifically for UCT," he said.

He said that the government recorded an underspending of P390 billion last year and should increase in revenue collection efficiency.

Inflation for May hit a five-year high at 4.6 percent, pushing the year-to-date average to 4.1 percent and exceeding the 2 to 4 percent government target for 2018.

Despite the rising prices of goods and services, Dominguez, Budget Secretary Benjamin Diokno and Socioeconomic Planning Secretary Ernesto Pernia all rejected calls for the suspension of the petrol excise tax.

They stressed that the law’s revenues are needed for the government’s infrastructure plan, which would bolster economic growth.

Suspending the TRAIN law and adopting band-aid solutions would have only minimal and short-term impact on inflation and could stifle growth, they said.

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