Senate panel to probe hike in prices of goods

MANILA, Philippines — A Senate panel will investigate if the Tax Reform for Acceleration and Inclusion (TRAIN) law is the main cause of the continued rise in the prices of basic goods.

Sen. Aquilino Pimentel III, chairman of the Senate committee on trade, commerce and entrepreneurship, said it is the “call of the times” that a public hearing be held to address concerns over rising inflation, or the rate of increase in the prices of goods.

Consumers have been complaining about the continued increase in the prices of fuel and other basic goods, and many are blaming the TRAIN law for the increases.

Interviewed over dwIZ, Pimentel said his committee will conduct a hearing during the break in plenary sessions. He expressed hope his committee would be able to muster a quorum and secure the attendance of pertinent resource persons.

In particular, Pimentel said he is interested to get word from the Department of Trade and Industry (DTI) regarding its monitoring of prices of basic goods in the market.

He said the DTI would be in the best position to say if price hikes are justified or just caused by retailers’ taking advantage of the TRAIN.

Pimentel said his committee will also check if there are other factors that could explain the steady rise in the costs of goods, such as the spike in crude prices in the world market.

His committee would then compare notes with the committees on economic affairs and on ways and means, which have announced plans to hold their own hearings on the issue.

If in the hearing it is established that the TRAIN law is the major reason for the continued price hikes, Pimentel said he would recommend the necessary amendments to the law.

Sen. Grace Poe, for her part, reiterated her call for the government to roll out the subsidies provided under the TRAIN to help ease the burden of the poor and low-income families.

These include the unconditional cash transfer of P200 per month, the discount in fares and fuel vouchers for public utility vehicle drivers and operators. 

Tax suspension

Rep. Gary Alejano of party-list group Magdalo, meanwhile, said Malacañang can afford to suspend new and higher excise taxes on diesel, gasoline and other oil products in the light of an increase in revenue collection this year.

Citing a Department of Finance (DOF) report, he said collections for January to April amounted to P927.4 billion, P58.2 billion more than the target of P869.2 billion.

He said the P58.2-billion increase is nearly half of the P130-billion net revenue the DOF expects to raise from the controversial TRAIN law.

“As crude oil prices rise dangerously in the world market, so did our revenues. Since we collected more than the projected values, we can afford to slash excise taxes to mitigate the damaging effects of TRAIN on the people,” he added.

Alejano pointed out that the government would continue to post an increase in the collection of taxes on oil products because the price of crude oil in the world market remains high.

Since the cost of crude and local refined products is still high, naturally, the government’s tax take is also high, he pointed out.

The price of crude is in the $77-$78-per-barrel level. When it reaches an average of $80 over a three-month period this year, the TRAIN law mandates that next year’s installment of the increases in oil taxes would be suspended.

The DOF has insisted that this year’s first installment would still be collected. 

TRAIN imposed an excise tax of P6 per liter on diesel, cooking gas, kerosene and bunker fuel, which is used to generate electricity. The levy is spread over three years starting this year.

The 2018 increase varies on the product. In the case of diesel, it is P2.50 per liter.

In addition to the levy, the law imposed a 12-percent value added tax based on the excise tax. Thus, the total impost on diesel starting in January was nearly P3 per liter.

In the case of other oil products, TRAIN increased previous excise taxes to P10 per liter. 

The adjustment was also spread over three years. In the case of gasoline, the tax went up from P4.35 per liter to P7 starting this year.

Alejano said if the administration decides to suspend oil taxes, it could still generate additional collections from taxes TRAIN has imposed on other products and services, and from the old levies on fuel.

However, he lamented that the Duterte administration “chooses to be passive and insensitive to the Filipino people when it should be actively seeking ways to ease the burden of the increasing cost of living.”

He also criticized Budget Secretary Benjamin Diokno for asking Filipinos to be “less of a crybaby” amid rising consumer prices attributed partly to the TRAIN law.

“Secretary Diokno should try stepping out of the comfortable bubble he is living in and take a good hard look at the realities the poor have to face everyday because of the price surges,” he said.