(This article was also published by the Philippine Daily Inquirer on January 23, 2018 http://opinion.inquirer.net/110472/train-violates-peoples-economic-social-rights)
The Assert Socio-Economic Initiatives Network slams the Duterte administration’s Tax Reform for Acceleration and Inclusion (TRAIN) Act which has already taken effect at the start of 2018.
President Duterte’s goal of building massive infrastructure projects under its “Build, build, build” program will not lead to its hoped-for poverty reduction by the year 2022. In fact, it is even more likely that a greater number of Filipinos will experience hardships in the following months and years due to inflation brought about by the increase in excise taxes on petroleum products and the added 12 percent value-added tax on socialized housing.
Malacañang and several government agencies, namely the Department of Trade and Industry, Department of Finance (DOF), are trying to downplay the inevitable effects of TRAIN on the prices of many goods and services. However, the truth is that petroleum products are necessary in almost all basic commodities, either as a fuel for machineries during the manufacturing process or for the transport of goods.
In a research done by the National Food Authority Employees Association in 2011, it was found that 18 percent of the cost of rice production comes from oil-based products and inputs such as fertilizers, pesticides, machine fuel and transportation cost. This clearly shows that price surge in petroleum products will inevitably result in the price increase of the country’s staple. More incidences of hunger and food insecurity are sure to follow.
The government must realize that for any poverty alleviation program to be truly effective, it must be in the framework of empowering the poor people. This means enhancing their capabilities so that they are in a position to become productive forces of society, instead of depending largely on dole-outs. The government’s targeted cash transfers of P200 per month for this year and P300 for 2019 and 2020 to poor families are not enough to offset the domino effect of the price increases due to the excise tax on petroleum products.
Moreover, with the new tax law, the economic and social rights of Filipinos are largely being compromised, such as the right to an adequate standard of living, including the rights to food and to be free from hunger, and the right to adequate housing. The DOF’s claim that the tax reforms “will result in more and better jobs, lower prices” is thus illogical, since the TRAIN is seen to negatively impact the poorest 15 million Filipino households.