When technocrats fail

Cesar Gorillo .

PRESIDENT Rodrigo Duterte has, on numerous times, told his audiences that the most that he hates are figures because he hates mathematics very much.

With this pronouncements, he has virtually given the free reign on Finance Secretary Carlos Dominguez II to man the way we plan to increase the country’s finances no matter whether they bring disaster to the country or not.

I am talking about this dangerous “Train” law of the Finance secretary. This is supposed to free six million workers from paying their personal income taxes and recover the billions in losses from the 100-percent collectible income taxes and slap this on oil, sugary drinks and other commodities.

But how about the other 94 million of the population that do not have fixed incomes? They will be the ones to bear the brunt of the losses of the income tax because the taxes that will have to be recovered will be imposed on the most important product which is oil and any increase in taxes on this very important product will definitely drive the prices of basic commodities upward.

In other words, inflation will definitely result. Why? Because transportation means the basic movement of goods, people and services and any increase in oil will result in increases in fares, trucking and shipping costs and eventually, on the goods carried by these trucks and ships.

Simple arithmetic. You cannot simply throw a basket of eggplants in the air from Lantapan, Bukidnon, so that it will land in Cogon, Cagayan de Oro City.  You will load them in trucks, travel up to 130 kilometers and every increase in cost per kilometer will mean increase in the price per kilo of that eggplant. And so with other vegetables. And so with rice. And so with flour. Increase in the price of oil equals inflation.

Not only that, workers will have to pay additional fares. Electric companies will increase their costs of oil and impose higher rates on consumers, and so with water companies. And so with construction suppliers. Then follows the increase in house rentals. In other words, what the government eliminated in income taxes from workers, the resulting inflation would be definitely higher in additional costs of living than the taxes that the government exempted them to pay. Wrong arithmetic!

And here comes government agents inspecting fuel retailers. Of course, they have to increase their prices because they will stop their business if they incur losses.

Some government officials are coming out on TV that the government is ready with doleouts to poor Filipinos who may be affected by the Train law. But here comes people from the Department of Social Welfare and Development (DSWD) asking more understanding because about eight million recipients did not receive their share yet.

What kind of idea is this? You impose higher costs of living and then give back to compensate them? This idea is impossible to implement because it is very hard to pinpoint who are really affected given the 7,100 islands that we have. We simply have no personnel to make the survey.

And the funny thing is that there are proposals to suspend the implementation of the Train Law. This another crazy idea. You cannot do it. Train is already a law and the implementing rules and regulations have come out and it is very hard to untangle the whole implemented system.

Here comes Diokno of the Department of Budget and Management (DBM) saying that it is at the great disadvantage for the Philippine economy to suspend it. That is right because the income resulting from the Train Law has already been programmed to cover to the costs of so many government programs that need billions and billions of pesos such as the free college education in state universities, the doubling of salaries in the Armed services and the “Build Build Build” program.

With these huge need for government funds for a government that programs billions of cash needs, all of us must already expect massive inflation in the coming months and years.

We dreamed so much beyond our means and we are now starting to pay the price for those impossible dreams.

I am getting very afraid!