Editorial: Tightening an already tight belt

WITH the imposition of Train (Tax Reform for Acceleration and Inclusion), higher taxes would be imposed on fuel, sugary beverages and cars, among others. For fuel, the excise tax imposed starting this month is P7 for gasoline and P2.50 for diesel. That wouldn’t be felt until January 15 when the old inventory of oil companies would be used up, according to the Department of Energy (DOE).

That’s small respite. Now the transport sector is restive, with the Pasang Masda, a transport group in Manila, demanding the raising of the minimum fare of public utility jeepneys (PUJs) to P12. The Cebu Integrated Transport Service Cooperative (Citrasco) wants a P6 increase in minimum fare, or from P6.50 to P12.50 (rounded off to P12). PUJs mostly use diesel for fuel.

Fare rates would be an interesting first arena of battle for Train because any movement there would have an impact on the prices of prime commodities. In this arena, the assurance by the government that the tax reform would not have an impact on the common people would be tested.

Pressure would be on the Land Transportation Franchising and Regulatory Board (LTFRB) to limit the effect of the fuel taxes on minimum fare, if only to show that Train would have a minimal impact on people’s lives. But how low can the LTFRB get and not put the transport industry on sick bay?

Minimum fare of PUJs is but one aspect of the problem. Fees for the transport of goods, especially vegetables and other farm products, would also be jacked up affecting their prices. Here, the power of government regulators like the Department of Trade and Industry, is not strong and encompassing. The hike in the prices of commodities may be subtle at first, but it would manifest soon.

Of all the Train impositions, it is the taxes on petroleum products that would have the most impact on the lives of the common people. In the old days, when things like this happen, the call is always to tighten the belt, meaning to prepare to accept a difficult reality and consume or use less of what we normally do. This might be the time to make the call again, like in the old days. But how tight are our belts already are?
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