Egay Uy
“WHAT could be the effect of the Tax Reform for Acceleration and Inclusion (Train) on the prices of basic goods and prime commodities,” was the question I posed along with a request for a briefing from the Provincial Office of the DTI.
Your City Price Coordinating Council (CDO-CPCC) which is chaired by Mayor Oscar Moreno and which I co-chair, met last Friday so that its members will have a common understanding specifically of how Train will impact on the prices of common goods.
As presented by Ms. Almer Masillones of the DTI, discussions on the Train was focused on the new excise tax on beverages that use sugar as sweeteners and on LPG and diesel fuel, and on the increased excise tax on gasoline and other petroleum products and on cars and automobiles.
We ask, “What is the impact of the tax reform to the prices of basic necessities and prime commodities?”
The DTI Secretary issued a statement that the DTI, as the lead agency of the National Price Coordinating Council, together with the public and private stakeholders, is closely monitoring the correct implementation of the tax reform law.
He said the impact of Train on inflation is minimal at only less than one percent. Validating this, Secretary Lopez said the effect could only be 0.4 percent because the increase due to the excise tax is about seven to eight percent and transport cost as a percentage of production is less than five percent.
DTI’s consumer protection and advocacy bureau said the effect of excise tax on fuel on suggested retail prices (SRP) of common goods would only be a few centavos. Only cement would have an increase of about P1.57 per 40-kilo bag.
In the case of a 155-gram can of sardines with an SRP of P13.45, the new tax will only mean an increase of four centavos, hence should be absorbed by manufacturers.
In sum, according to the DTI, basic necessities will have a very minimal increase of P0.04 to P0.14 while as prime commodities, only cement will have an increase exceeding one peso.
Along all these, the DTI Secretary said, “That’s why we are calling on manufacturers and retailers not to increase their prices outside the parameters of the government’s new tax reform program” and that the government is closely monitoring the effects of the program.
Meanwhile, on Dec. 29, 2017, in conjunction with the declaration of a state of calamity in the city because of the effects of tropical storm Vinta, the DTI issued a 60-day freeze on the prices of basic necessities in Cagayan de Oro.
The DTI provincial office under director Ma. Eliza Pabillore has, on a daily basis, been monitoring compliance by retailers of the frozen prices. On the good side, no violator was reported by the monitors as of Jan. 11, 2018.
On the part of the CDO-CPCC, your council will physically inspect the prices and shelf displays of retailers next week to check on their compliance with the price freeze and check on the effect of Train on their respective prices.
Given the foregoing, it may not yet be time to sing “Train, Train, go away.”
(Lawyer Egay Uy is a city hall consultant.)
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