It is our money
In less than two weeks, President Duterte will deliver his third State-of-the-Nation Address (SONA) since he assumed the highest post in the land in 2016.
Of course, we can expect him to make a pitch for the proposed Constitution that will pave the way for the shift from a unitary to a federal form of government.
Probably he will also mention about Package 2 of the Comprehensive Tax Reform Program that will reduce corporate income taxes from 30 to 25 percent and rationalize fiscal incentives being enjoyed by investors.
He may also push for the approval of a bill seeking the creation of a national ID system which is one of the priority legislative measures being pushed by the Department of Finance.
And then it goes without saying that the President will talk about his accomplishments in the areas of fighting graft and corruption and improving the peace and order situation in the country.
But then, people are going to expect him to give his honest-to-goodness assessment as to whether or not the Filipinos are better off now than they were before he became President.
This year, his administration launched the tax reform program which aims to fund military infrastructure and boost government spending under the “Build Build Build” program. This five-package tax program, according to his economic managers, will make the Philippines enter the golden age of development since the Marcos regime when some of our infrastructures were built.
Let’s face it: If not for our vibrant private sector spending, which happened inspite of the absence of government support not only in terms of financing but also in terms of making it easier to do business, where would our country be?
The likes of Metro Pacific Investments Corp. (MPIC), the San Miguel Corp. (SMC) Group, the Ayala Group made all these new toll roads, commuter train projects, possible, again inspite of government. It was in 2010 when MPIC submitted an unsolicited proposal to build the NLEX-SLEX Connector Road, a project which many of us who have to repeatedly endure and suffer the horrors of travelling from North to South of Luzon and vice-versa are eagerly awaiting. It was government’s fault that the project will only begin construction by late this year to first quarter of next year.
It doesn’t help, not only for this MPIC project but also other infrastructure projects, that it takes forever for the Department of Public Works and Highways to secure the necessary rightof-way.
Another project which commuters are eagerly awaiting is the MRT-7 project of San Miguel Holdings Corp. which is a 22-km long rail line from San Jose Del Monte in Bulacan to North Avenue in Quezon City.
But what has this government done to give Filipinos a better way of life? In terms of high-impact, high-profile public infrastructure projects, I don’t think there is any, despite government’s attempt to reduce underspending.
The Department of Budget and Management (DBM) may argue by saying that public infrastructure in 2017 reached P568.8 billion which is 15.4 percent more than the previous year ’s. And that bulk of this went to DPWH road infrastructure projects, those under the AFP modernization program, repair and rehabilitation of public school facilities, among others.
Unfortunately, we do not see nor feel the impact of these projects. This is probably why this tax reform program is hard to swallow.
The first tranche, called the Tax Reform for Acceleration and Inclusion (TRAIN) measure, lowered personal income taxes while raising those on fuel, cars, coal, and sugar-sweetened beverages in order to raise revenues to fund President Duterte’s P8-trillion infrastructure program. It also imposed a flat rate of six percent on estate and donor’s taxes and raised the threshold for VAT exemption.
But the euphoria brought about by the lowered income tax rates was short-lived as the impact of higher taxes on petroleum products started to set in.
Unfortunately, the imposition of higher excise taxes on diesel and gasoline came at a time when oil prices were on the rise. Sen. Bam Aquino filed a resolution in April seeking an inquiry into the impact and effect of TRAIN on the economy as well as a bill suspending the excise tax on fuel in case the average inflation rate surpasses the annual target over a three-month period.
However, the finance department has maintained that the government cannot suspend the increased excise tax rates since this is not the mechanism sanctioned by the law. It said that suspension is allowed when Dubai crude oil prices based on the Means of Platts Singapore (MOPS) average $80 per barrel for three consecutive months preceding the next scheduled increase.
In order to mitigate the effects of rising oil prices, the DOF said that the law gives social grants such as unconditional cash transfer and fuel vouchers for public utility vehicles. But DOF also admits that the release of many of these social grants has been delayed.
Haven’t we just provisionally increased jeepney fares by P1 for the first four kilometers, or from P8 to P9, inspite of these so-called fuel vouchers?
What about the middle class? Aren’t we also entitled to some form of relief? In this country, the rich become richer and the poor become poorer. And the middle class now belongs to this poor segment of society.
The country’s inflation has reached a five-year high this June of 5.2 percent, up from May’s 4.6 percent. Year to date, inflation has averaged 4.3 percent. According to the Bangko Sentral ng Pilipinas, this was driven by a surge in prices of alcohol and tobacco, transport, and food.
People are blaming the TRAIN law as well as higher global oil prices for the increase in prices of basic commodities.
In short, the increase in net take home pay is not enough to compensate for hike in prices of basic commodities, transport fares, and even electricity rates.
Budget Secretary Ben Diokno says there is no way the second package of the tax reform program will be postponed or set aside.
Filipinos have become cynical about government attempts to raise revenues by increasing taxes because of issues of graft and corruption. After all, raising taxes is easier to do than plugging the loopholes in terms of uncollected taxes and duties brought about by tax evasion and smuggling, and making sure that any tax or duty collected goes straight to the public coffers instead of to the pockets of corrupt government officials.
Yes, the Duterte administration has accomplished a lot in terms of ridding government of graft and corruption but a lot remains to be done.
We have high-profile cases involving people close to the President that remain unresolved – the unreturned P60 million that was paid by government network PTV 4 to the Tulfo brothers for advertising in their TV program; the government contracts obtained by Vigilant Investigative and Security Agency Inc. (VISAI), a company owned by the family of Solicitor General Jose Calida who has admitted that he yet to divest in VISAI despite his current government post; to name a few.
This administration, and every administration thereafter, must account for each and every centavo collected from all of us. After all, this is our hard-earned money.