As Train moves

Ihave been skipping soda in the past 2018 days, so I didn’t know the impact of Train (Tax Reform for Acceleration and Inclusion) on my favorite appetizer until I read some of the posts of my Facebook friends. I didn’t even know the prices of bread had been affected until I read my former The Freeman colleague Jose “Pepe” Sollano’s post on FB on the price hike of his favorite “bahug-bahug” he regularly buys from a bakery along Colon St. From P5, it is now P10.

Don Pepe said that instead of pairing the bread with soda, he bought iced water instead. Which brought me to another FB friend, a lawyer, who posted about his experience eating in a “pungko-pungko” where the price of a brand of soda has increased from P15 to P20. As for another sugary product, juice? “Ang juice gani Pe nga tag-P100 ang dozen, tag P180 na,” said one reactor.

Okay, Train may not only be the culprit in the hike in the prices of bread considering that since late last year bakers have been complaining about the rise in the prices of wheat globally. But Train could compund the bakers’ problem, which is my worry about the excise tax on fuel compounding the rising prices of petroleum products in the global market. But let us leave that point for now and go to the soda.

When Don Pepe bought iced water instead of soda, he actually became a model for the argument of Train sponsors that higher taxes on sugary products could force consumers to shift to a lifestyle bereft of sweets, which supposedly afflicts people with diabetes (I won’t say that is totally true). I doubt, however, if ordinary Pinoys would abandon soda altogether. Cebuanos would probably say of the government: “small business very hot.” “Gamay’ng negosyo initan pa.”

Consider the higher tax impositions on cigarette and alcoholic drinks. The government increased the revenues generated from those two items but the tobacco and beer/rum businesses have remained brisk. The government got the higher revenues it wanted but nothing changed much as far as consumption is concerned. Tobacco and liquor firms also continued to earn. The losers? The consumers, as usual, because the spending on those products—higher this time—eats up a chunk of their budget.

Which could happen, too, on sugary products like soda and, yes, juice, in relation to Train. The government will get higher revenues from those products, the capitalists will continue to get high profits from their sale. The losers? The consumers, as the higher taxes would cut deeper into their family budgets.

Back to fuel products, whose prices (P7 for gasoline and P2.50 for diesel) are expected to go up in the middle of this month bringing gasoline prices to the vicinity of P50 and diesel to the vicinity of P40. Those taxes would go still higher every year thereafter until 2020 because of additional tax burdens. But note that the prices of fuel in the world market are volatile, mostly affected by peace and order situations. With the high taxes already in place plus a possible surge of fuel prices in the world market, a crisis could be sparked there.

I mean, let us just pray that all the good things government talked about Train is what would happen as it moves full speed ahead.