DESPITE the five-year-high 5.2-percent inflation rate recorded in June, the Department of Finance (DOF) over the weekend said the implementation of the tax reform law will not be suspended.
DOF assistant secretary for the Strategy Economics and Results Group Antonio Joselito Lambino II said suspending the implementation of the Tax Reform for Acceleration and Inclusion (Train) law will only slightly bring down inflation.
“Mga nagsasabi i-suspend and Train. Ang problema diyan, kapag sinuspend ang Train bababa ang inflation pero kaunti lang. For every additional one peso of spending, the Train effect is only eight centavos,” said Lambino after gracing an event in La Trinidad, Benguet on July 7.
(Some people say we should suspend Train law. The problem is that its suspension will result in a minimal decline in inflation. For every additional one peso of spending, the Train effect is only eight centavos.)
Lawmakers and various groups have called for the suspension of the law which mandated an increase in excise tax imposed on petroleum products.
Without Train law, the DOF official said P12 billion would be lost from the collected 99 percent income taxpayers. Also, P90 billion collection of the government from social services with P27 million and P63 billion from infrastructure.
More than 93,000 jobs will be lessened from the construction activities this 2018.
“We strongly believe the Train should be implemented fully given its strong positive benefits to the people and economy,” added Lambino.
Lambino added the economic team of the Duterte administration have recommended to remove quantitave restrictions on rice imports and impose tariff on rice as one of the measures to lower inflation rate.
The DOF official explained the impact of inflation would be down to 0.4 to 0.6 percent and the prices of rice would go down by at least P7 per kilo.
During his visit to Baguio City, Department of Agriculture Assistant Secretary Andrew Villacorta said the agricultural sector is waiting for the rice tariffication measure.
The Lower House and the Senate are working double time to come up with a feasible and appropriate tariff of about 35 percent.
To ensure prices among basic commodities do not exceed the suggested retail prices, Lambino added the Department of Trade Industry has 1,500 monitoring teams that regularly check establishments.