Prices seen rising further if gov't won't suspend TRAIN

Despite the government's effort to tame inflation, the continuous implementation of Tax Reform for Acceleration and Inclusion (TRAIN) law — the first tax reform to be implemented in the Philippines in two decades —

will only send prices of goods higher in the next years to come.

Laban Konsyumer President Vic Dimagiba said the worst is yet to come for Filipino consumers when it comes to prices of basic food items such as rice, vegetables, and meat, which are all getting more and more expensive each day.

And what the government should do first is to admit that it is the TRAIN law that has been driving inflation at an extreme pace.

To recall, inflation hits another fresh high of 5.7 percent in July.

"Every time you would ask the economic managers, their tone is always argumentative, wanting to leave TRAIN out of this. But TRAIN is the primary reason why prices have been going up," Dimagiba said in an interview on Wednesday.

Dimagiba, who is also a former Trade Undersecretary, said the current administration can't just blame higher inflation to rising price of gas in the world market because there was a time in 2012 when Dubai crude oil prices surged to US$109 per barrel and inflation only increased by 3.2 percent.

From January to April this year, crude oil prices only traded at a US$66 per barrel to US$68 per barrel range.

For his part, IBON Foundation Executive Director Jose Enrique A. Africa said the increase in the prices of goods being experienced now by the consumers is just the "first round effect" of TRAIN.

This, as the excise tax on gasoline will further go up by P9 a liter in 2019 and P10 in 2020 as part of the less than one year old tax reform.

Africa suggested the government to suspend the implementation of TRAIN and to halt discussions on the implementation of TRAIN 2, the next phase of the administration's tax reform program.

"It's a matter of policy choice. They can do it as an emergency measure, citing extreme increase in prices," Africa said.

"They can repeal the law if they want to," he added.