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Editorial

Feeling the pinch

/ 05:12 AM January 21, 2018

Is there anyone not feeling the pinch these days, with the costs of fuel rising due to not only movements in world crude prices but also the newly enacted TRAIN (Tax Reform for Acceleration and Inclusion) Law? The fuel price increases have been relentless since the new year began — as though these were punishment for the holiday revelry.

When this happens, can price increases in basic goods — including rice, the all-important Philippine staple — be far behind?

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The average Juan has in fact noted a change (upward) in the prices at the neighborhood carinderia. And quite on cue, higher transportation fares are now being sought.

The administration has been touting the decrease, under the TRAIN, in the personal income tax of certain salary earners, claiming that it would boost purchasing power and that the law’s mandate to raise taxes on virtually everything would not negatively affect consumers. But ordinary folk, especially the poorest 15 million Filipino households seen to bear the brunt of the TRAIN’s passage, are expectedly anxious.

No amount of hand-holding or spin, or even the dangled dole of cash transfers, would serve to offset the looming spike in prices.

The TRAIN, after all, mandates that excise taxes on gasoline, including the value-added tax (VAT), would be raised P2.97 a liter on the first day of the new year; diesel P2.80 a liter; and kerosene P3.36 a liter. As of this writing, oil firms have raised prices for diesel and kerosene for the fifth consecutive week.

The Department of Energy reported last week that diesel prices in Metro Manila were now ranging from P34.10 to P39.20 per liter, and kerosene from P38.71 to P48.35 per liter. Last Tuesday, gasoline prices went up a whopping 80 centavos per liter.

And this is just the beginning. Under the TRAIN, the total increase in taxes will be P11.20 per liter of gasoline, P6.72 per liter of diesel, and P3.36 per liter of kerosene by 2020.

All these numbers may seem like abstractions until you pull up at the gas station to fill up. In the midst of your horror at seeing the figures swiftly adding up, spare a thought for public utility vehicles and the people who depend on them to get to and from work on the seething streets of the metro.

The UV Express group Code-C has petitioned the Land Transportation Franchising and Regulatory Board to double the rate passengers pay per kilometer from P2 to P4.

Operators of airport taxis have similarly sought an increase in the flag-down rate from P70 to P100.

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Jeepney drivers have already been clamoring to raise the basic rate from P8 to P12.

In the scheme of things, anxious consumers might ask, would not these petitions be granted — ushering in the so-called domino effect?

The signs are there to see. Meralco has announced that power consumers will see an increase of 8 centavos per kilowatt-hour as early as next month, with many households experiencing an increase of P16 per month.

As far afield as Benguet, farmers are foreseeing increases in the prices of vegetables due to the higher costs of fuel, fertilizers and pesticides.

The progressive bloc in Congress assails the TRAIN as a “grand deception” that “will be felt by those who do not even have pay slips, but the farmer or fisherman who have to contend with higher costs of production, and even by the unsalaried, like a student or simple commuter.”

But Finance Secretary Carlos Dominguez III denies that the TRAIN will penalize the poor, saying that “overall inflation might be increased by seven-tenths of 1 percent in 2018” due to the expected higher oil prices, that the costs of food might rise by up to “three-tenths of 1 percent, and transportation will be up probably one-tenth of 1 percent.”

He pronounced these “rather manageable, especially when compared to the savings from the lower personal income tax.”

Ascent, or the Assert Socioeconomic Initiatives Network, takes a different perspective in assessing the inflation resulting from the increased taxes on petroleum products and the additional 12 percent VAT on socialized housing.

Ascent points out that, under the TRAIN, “the economic and social rights of Filipinos are largely being compromised, such as the right to an adequate standard of living, including the rights to food … and to adequate housing.”

In the days ahead, in more ways than one, it does look like things will get worse before they get better.

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TAGS: Fuel Prices, Inquirer editorial, price increases, tax reform law, train
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