Will prices start rising again?

CONSUMER prices started rising in January, 2018, as a new 12 tariff on diesel imports took effect along with a rise in global oil prices. For months, the government insisted the inflation was principally due to the world oil price situation, not its new tax. It concentrated its price efforts on rice, ordering “unimpeded” importation from Vietnam and Thailand.

Early this month, the government‘s economic managers conceded that the 12 tariff imposed by the TRAIN tax law may have played a key role in the inflation and recommended that a new tariff increase provided by the TRAIN law of 12 per liter of diesel for 2019 plus 24 centavos Value-Added Tax (VAT) be suspended.

It was a welcome respite for the country’s housewives who have had to suffer continuous price increases all these months. Jeepney drivers were given their own special assistance – their basic 19 fare was increased to 110.

Then last Monday, presidential spokesman Salvador Panelo said Malacañang was consideing the economic managers’ recommendation to go ahead with the additional tariff-plus-VAT of 12.24 on diesel imports, since global oil prices have now started going down again. The President said he would ask the Cabinet to decide.

Sen. Sherwin Gatchalian, chairman of the Senate Committee on Economic Affairs, and several other senators warned that raising fuel taxes again in 2019 may well lead to a new wave of inflation. The Nagkaisa labor coalition said that they had been looking forward to a period of lower prices, a little breathing space after months of rising prices. But now prices may start rising again in 2019 as the new tariff and VAT are enforced.

As for jeepney drivers, they faced a rollback of jeepney fares. The Land Transportation Franchising and Regulatory Board (LTFRB) issued the rollback order last Monday. Jeepney drivers were able to enjoy the 11 fare increase for only two months.

This year of 2018 will be remembered as a year of high prices and a rice shortage. It took months before the people started seeing the results of government efforts to improve the situation. But now fears have returned that prices will soon be rising again, because after only a few weeks of improvement in the economic situation, our government economic planners want to proceed with their original plan for additional taxes and thus additional government revenue.