Philippines: ‘TRAIN effects to be felt in May 18’: Senate panel

  • Households will have to brace for higher prices of consumer goods as economic managers told a Senate inquiry on 26 Feb 18 that inflationary effects of the Tax Reform for Acceleration and Inclusion (TRAIN) law might be felt from May 18 to Aug 18.
  • At the hearing of the Senate committee on economic affairs, officials of the Department of Finance (DOF) and Bangko Sentral ng Pilipinas (BSP) pointed out that the current spike in prices was not caused by the new tax law but by peso depreciation, fluctuating oil prices and lower agricultural production due to bad weather conditions.
  • “We will see the full effect of TRAIN in terms of inflation come May 18. All the way until Aug 18, this is really the timetable wherein we will feel the effects of tax reform but as of now we don’t feel it yet,” said Sen. Sherwin Gatchalian, committee chairman.
  • “We don’t foresee a surge in prices (due to TRAIN),” Dakila told the panel, adding that the government maintains its forecast of 4.3% inflation for 2018.
  • He believes that the increase in prices is transitory and inflation will stabilize at 3.5% in the 1Q19.
  • To minimize the impact, Gatchalian prodded the DOF and other agencies to hasten the implementation of mitigating measures of TRAIN, including the PHP200 monthly subsidy for the 10 million poorest families in the country. He also pushed for discounts in fares and rice for poor families.

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