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Editorial

‘Wala tayong magawa’

/ 05:09 AM October 30, 2018

In a speech last week, President Duterte — the one man in the country who has the entire arsenal of government at his disposal — said about the problem of runaway inflation: “Wala, wala tayong magawa (There’s nothing we can do).”

“I have assembled all of the talents available… low-key but brilliant minds,” he added. “’Yun ba namang inflation na ’yan,
kung sa mga utak na ’yan hindi kaya, hindi talaga kaya eh (Even the brilliant minds I’ve assembled can’t do anything about it).”

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Mr. Duterte blamed a number of factors for the economic squeeze. “Trade balance is not really even. We pay more buying outside than we export,” he said.

The country is also not an oil producer: “You can crucify me, behead me, I cannot do anything [about] oil,” he declared in yet another speech about the economic winds now buffeting the country.

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And such monsoon winds they’ve been: The country posted a nine-year high inflation rate of 6.7 percent in September, much worse than the government expectation of 4.5 percent since last June. Inflation, according to a Pulse Asia survey in September, was the top concern among 53 percent of Filipinos.

Another survey, from the Social Weather Stations (SWS) also in September, revealed that most Filipinos experienced involuntary hunger in the third quarter of the year, with government itself saying in August that high food prices had pushed up inflation up to 8 percent among the country’s poorest families.

The SWS survey, conducted Sept. 15-23, 2018, reported that 13.3 percent of its respondents, equivalent to an estimated 3.1 million Filipino families, involuntarily suffered from lack of food from July to September 2018.

Amid such grim figures, it is disappointing to hear not only the President’s confessed helplessness at the problem, but also his failure to see how his team of “brilliant but low-key minds” appeared, in fact, to have failed to anticipate, and prepare for, the most adverse effects of the controversial Tax Reform for Acceleration and Inclusion (TRAIN) Act.

TRAIN’s excise tax on fuel led to a spike in transport and other costs that, in turn, resulted in higher food prices. Meanwhile, despite the rosy projections of government economists, TRAIN has failed to deliver its expected revenues in the first eight months of the year.

According to the Department of Finance, TRAIN missed its January to August collection goal of P41 billion by a startling 74 percent.

At end-August, TRAIN’s gross revenues amounted to P112.1 billion, but substantially reduced after taking into account the P101.6-billion losses from the lowering of personal income taxes and the retention of value added tax exemptions.

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By the end of August, TRAIN’s excise tax collections stood at P76.7 billion, missing the P92.1 billion target by 17 percent, owing to weak revenues from petroleum, sugar-sweetened beverages, coal and cosmetic procedures. Only the higher excise taxes on tobacco and automobiles exceeded targets.

To compound the situation, inflation was further stoked by the rice shortage that was triggered by the turf wars among the President’s men in the National Food Authority and the Department of Agriculture.

In the face of such misjudgments that have led to terrible hunger, how is the President’s act of waving the white flag, so to speak, in any way useful?

Sen. Risa Hontiveros is right: Mr. Duterte’s defeatist stance is unfortunate and “unacceptable,” since a number of steps can still be done to tame the oppressive inflation rate.

Hontiveros suggested suspending and reviewing TRAIN; lowering VAT from 12 to 10 percent; hastening the infrastructure program and ensuring that it generates more jobs for Filipinos; increasing the minimum wage of workers, and continuing the roll-out of cash transfers to the 10 million poorest Filipino families.

Economist JC Punongbayan from the UP School of Economics has also proposed that the rice situation be stabilized and that the Bangko Sentral ng Pilipinas further raise interest rates, while another economist, Andrew J. Masigan, sees “the need to develop new industries,” with experts suggesting that the Philippines “can be competitive in agro-industrial products, shipbuilding, household appliances, and chemicals, among others.”

Mr. Duterte and Malacañang are not above blame for the country’s (largely self-inflicted) economic woes, and they cannot shirk the responsibility of doing everything necessary to turn things around and ease the pain of ordinary Filipinos.

To say that nothing more can be done would be plain dereliction of duty.

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TAGS: inflation, Inquirer editorial, Risa Hontiveros, Rodrigo Duterte, tax reforms, TRAIN Act
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