A Department of Finance executive on Thursday described the government’s implementation of the first package of the Tax Reform for Acceleration and Inclusion (TRAIN) as “quite successful.”
DOF Undersecretary Karl Kendrick Chua said the first tax reform package helped increase Filipino workers’ take-home pay, kept revenue collections on target, and held inflation rates manageable in the first two months of its implementation.
“Well, I think in general, it was quite successful. We give PHP 10 billion per month at least to working people and that’s fuelling a lot of the positive consumer expectation,” Chua said in a Palace briefing.
“The revenue collections in the first two months are on target, and our inflation has remained manageable,” he added.
Chua said his agency would continue to monitor and ensure that the fruits of TRAIN would be “well-spent.”
He also said that TRAIN is unlikely to be the reason for the higher inflation because most firms selling alcohol, tobacco, sugar sweetened beverage, oil, are still selling old stocks which they bought in 2017, and should not be levied on the higher excise.
If there is any higher inflation seen, Chua said it’s “probably due to other reasons”.
No big challenges
Chua said there were no “big challenges” on the implementation of TRAIN’s first package, noting that it took 18 months to prepare the program and was properly consulted to all sectors involved.
If there were challenges then, Chua assured they would be “easy to address”.
“I would like to assure the public that this TRAIN has been well studied, well consulted, and the inflation is very well manageable,” Chua said.
“Well, kung walang challenge ang isang reform, hindi siya tunay na reporma. So, may challenge talaga. Pero ang nakikita namin ay balanse kasi iyong aming mungkahi (Well, if a reform doesn’t have challenges, it’s not real reform. So, there are challenges. But we can see that our proposal is balanced),” he added.
Chua assured that there were “other ways” to help the poor in case inflation increases such as the conditional cash transfer (CCT), rice subsidy, and pledged pursuing rice tariffication so that rice price will fall by up to PHP7 per kilogram.
The DOF official said that overall food inflation is higher at 4.52 percent.
However, rice is still low as of January at 1.4 percent.
At present, he said the only product in the food basket higher than 10 percent which is a cause for concern is fish, attributing its effect to the inclement weather experienced last December.
Chua said the finance department considers the real driver of higher inflation, aside from possible profiteering, is the tobacco industry’s payment of right taxes.
“Tobacco inflation actually in January was 17.4 percent when we expect it only to increase by 8 percent,” Chua said.
Moreover, he also cited “a period of very high oil price” as another factor.
“Oil price went down and started to go up in the last three years. What really happened was when diesel increased from 18 pesos to 32 pesos between January of 2016 and January of 2017, that 14 pesos is at 76 percent increase in the diesel price, we did not see any of the key commodity items skyrocket,” Chua said.
Chua, meanwhile, expressed high hopes that the second TRAIN package will be passed this year.
The DOF expects the second package to be passed in the first quarter of 2018.
“Well, iyong Kongreso kasi dadaan sa mahabang hearing eh. So, siguro ang gusto po namin sana ay bago magtapos po iyong taon ay maipasa na po iyong second package (Well, this will go through a series of hearings in the Congress. So, maybe we hope that the second package will be passed before the year ends),” Chua said.
Chua assured that the government will listen to various sectors to gain more insights. (Azer Parrocha/PNA)