Train Law ‘hits poor hardest’

Rising inflation because of the Tax Reform Acceleration and Inclusion (Train) Law implemented last January will hit the poor hardest, a senator warned.

Sen. Paolo Benigno “Bam” Aquino said this in an interview after his speech during the general assembly of the Cebu News Workers Multipurpose Cooperative yesterday.

The Bangko Sentral ng Pilipinas reported that headline inflation rose to 4.5 percent in February from four percent in January, and that the average so far of 4.2 percent is higher than Government’s inflation target of two to four percent for 2018.

Aquino recalled government economic managers forecasting that with the Train Law, the worst-case scenario by the end of March 2018 was 3.9 percent inflation. However, he said, the real inflation rate now is 4.8 percent.

He is one of four senators who voted against the Train Law.

He recalled that officials of the Department of Finance (DOF) told the Senate that any increase from the tax reform’s implementation, which included higher excise taxes on fuel, would be minimal.

“I told them the inflation would be four or five percent. And it happened fast, within three months,” Aquino said.

The senator explained that inflation is caused not only by the Train Law but also by the peso’s devaluation against the dollar. The central bank had cited faster increases in the prices of some food items, as well as in gasoline and diesel prices.