MANILA — Government’s top economic managers and leading economists agreed that the implementation of tax reform program has minimal impact on prices of goods.
National Economic and Development Authority (NEDA) Director-General and Socioeconomic Planning Secretary Ernesto M. Pernia noted that based on the agency’s calculations, only 0.7 percent of inflation for 2018 is attributable to the effects of the Tax Reform for Acceleration and Inclusion (TRAIN) law.
At the Senate hearing, the Department of Finance (DOF) attributed higher prices also to the increase in the prices of crude oil in the international market and the drop in the exchange rate.
NEDA also cited the rise in the price of rice which accounts for around 23 percent of the poor consumers’ basket.
“We have to closely monitor the buffer system of rice to ensure that there is no considerable spike in the price of rice,” Pernia said.
Officials of the NEDA, DOF, Bangko Sentral ng Pilipinas and the country’s leading economists recently attended the meeting of the Senate Committee on Economic Affairs, led by Sen. Win Gatchalian.
For her part, NEDA Undersecretary for Policy and Planning Rosemarie G. Edillon also attributed the increase in the prices of food commodities, such as corn and meat, to typhoons that hit the country in December last year.
“Part of the reason for the recent inflation is expectations that the tax reform would indeed increase prices. These inflationary expectations can be tempered by further increasing the supply of goods and services,” Edillon said.
“It is also possible that certain merchants have taken advantage of the situation by raising the prices of their goods prematurely. It is so easy to point a finger at TRAIN,” Pernia pointed out.
The country’s inflation rate increased to 4 percent in January 2018 from previous month’s 3.3 percent. The TRAIN law took effect on Jan. 1. (PR)
