Economic managers hit once more for “kid’s gloves approach” to inflation

Press Release

17 October 2018

Economic managers hit once more for “kid’s gloves approach” to inflation

Progressive organizations lashed out today at the Development Budget Coordination Committee for not taking measures bold and decisive enough to combat imminent price hikes as Filipinos prepare for the yuletide season.

They likewise criticized them for prescribing “the same, worn-out developmental strategy” without addressing the main causes that gave way to runaway inflation.

The groups Bukluran ng Manggagawang Pilipino (BMP) and Partido Lakas ng Masa (PLM) said that the country’s economic managers need not to look far to curb inflation. The solution, they said, is “staring at them all this time. Of all the commodities that can impact the prices of basic commodities at multiple levels, oil prices must be checked”.

They strongly demanded for the immediate scrapping of the entire excise tax package on crude oil as well as the collection of value added tax (VAT) on petroleum and petroleum products to unburden consumers with overtaxation.

BMP President, Luke Espiritu said that, the economic managers are “deliberately acting naive” to the impacts of a continued collection of excise taxes and VAT on oil. “It is an historical fact that the demand for oil increases as winter sets in on the Global North. Such demand will inevitably push commodity prices upward as global petroleum prices rise”.

“Defering on the oil excise tax collection for 2019 does not alleviate the yoke on the shoulders of daily wage earners and those belonging to the infomal labor sector who did not benefit from income tax exemptions,” he added.

The labor group decried that the economic managers are more concerned with the loss of revenue if they suspend all levies mandated by the TRAIN Law.

“Again, these economists are looking at the wrong place if they seek for revenue. The disposable income of the poor is already close to nil after being overtaxed. The logical choice for them is to levy the multi-billionaires who have acquired so much wealth, not the poor,” he explained.

Meaniwihle, the groups also welcomed recent statements by Senator Cynthia Villar who regretted to have supported the TRAIN Law that led to inflation. Villar joins Senators JV Ejercito, Grace Poe and Nancy Binay who have called for the suspension of the TRAIN Law and Senators Ping Lacson, Risa Hontiveros, Antonio Trillanes III and Bam Aquino who voted against it.

Espiritu declared, “The harm and damage has been done and all the workers and the poor got was a simple sorry, which may be better than callous indifference but won’t make a difference until words are matched up with concrete actions”.

On Tuesday, the country’s economic managers revised the country’s economic outlook by adjusting its inflation forecast for the year to a range of 4.8% to 5.2%, from the previous 2% to 4%.

They also planned to employ tax reform law's social mitigating measures, and policy interventions in the education and labor sectors towards job generation, enticing investors by accelerating its infrastructure program, reducing the corporate income tax rate, restrictions on foreign investments, and the cost of doing business.

Meanwhile, Sonny Melencio, chairperson of PLM chastised the bourgeois economists for the lack of bolder and more decisive measures they have set to curb inflation.

“Their prescription, which caused the malady in prices, has not changed. They still subscribe to the market-driven economics in a period of monopoly and regulatory capture. What is needed is price control and greater regulation,” he said.

PLM asserts the recommendations of the economic managers must be felt by the poor. It must reach the talipapa level in order to have a substantial impact on the Filipino household.

“It is imperative that the Duterte administration address overtaxation of fuel to mitigate the impacts on the measly incomes of the poor in the months to come,” he concluded. ###