Senate economic panel tracking TRAIN effects and mitigating measures

Published August 16, 2018, 7:29 PM

by Roel Tibay

By Hannah Torregoza

Senator Sherwin Gatchalian on Thursday said he is open to move for the suspension of excise tax under the Tax Reform for Acceleration and Inclusion (TRAIN) law only in the event of a runaway inflation.

Sen. Sherwin T. Gatchalian (Facebook / MANILA BULLETIN)
Sen. Sherwin T. Gatchalian
(Facebook / MANILA BULLETIN)

That is why, Gatchalian, chair of the Senate economic affairs committee, said he is open to Sen. Paolo “Bam” Aquino IV ‘s proposal of suspending the excise tax on fuel, but would first monitor average inflation rates in the few months before the next schedule of increase in excise tax is slated, which is on January 2019.

“We will monitor it carefully and we will see the momentum of inflation. If it goes down in the next few months then definitely there is no need to suspend the second tranche of excise tax (under TRAIN),” Gatchalian told reporters after the committee hearing on the inflationary effects of the TRAIN law and the status of the social mitigating measures under it.

“And one of the measures we are thinking is suspension (of excise tax) on the second tranche (of TRAIN). That is up on the table,” Gatchalian said.

The senator also said he is keeping track of the mitigating measures under the TRAIN law, particularly the Pantawid Pasada program for jeepney drivers and operators and the unconditional cash transfer program for the poor.

“What we are expecting at the minimum is the delivery of social mitigating measures,” Gatchalian said adding that they are also looking at lowering tariffs outside of TRAIN.

“But if (inflation is) still high up until fourth quarter of this year, then we will need a drastic measure to address this continuous rise in inflation. And one of the measures we are thinking is suspension of excise tax in the second tranche,” he said.

Congress, he said, have until the end of the year to pass legislation to address this particular concern. “We still have a few months to do that,” Gatchalian said.

His committee, he said, will continue its public hearings on the TRAIN law to observe the movement of prices of basic goods and services so it can have a clearer picture on the over-all impact of the Duterte administration’s tax reform program to the economy.

“Hopefully by the fourth quarter, hopefully (we can come up with recommendations). That’s why these hearings are very important because it gives us blow-by-blow report kung nasaan na tayo pagdating sa (where we are when it comes to) inflation,” he said.

During the hearing, top officials of the National Economic Development Authority (NEDA) and the Departments of Trade and Industry (DTI), Budget (DBM), Trade and Industry (DTI), Social Welfare and Development (DSWD), Agriculture (DA), Transportation (DOTr) and the Philippine Statistics Authority, Landbank, Sugar Regulatory Authority, National food Authority and the Tariff Commission, assured senators they are already “working on” the immediate implementation of the mitigating measures under the TRAIN law.

This after Aquino pressed the Senate for a closer scrutiny of the status of these mitigating measures.

Aquino lamented that all he hears from the government’s economic managers are promises on how to address the high inflation rates but nothing has really changed.

“The people are unaware that excise tax under TRAIN 1 will be imposed three times: January 2018, January 2019, and January 2020.

“The ‘Ber’ months is near. By January (2019) there would be another increase in the excise tax of diesel and gasoline,”

“That is why we are pressing for the passage of bill suspending the excise tax on fuel,” Aquino said.

 
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