Farmer, labor groups air fears on tax-reform implementation

In Photo: A family shops at a Makati supermarket over the weekend. Consumers are starting to worry about the possible effect of the Tax Reform for Acceleration and Inclusion law on the prices of fuel and, consequently, basic commodities.

Aside from fishermen, farmers, especially those with small landholdings, will pay the price of the tax-reform measure introduced by the Duterte administration.

The “burdensome” tax measure will severely affect rice farmers and threaten the country’s rice production and food security.

“TRAIN [Tax Reform for Acceleration and Inclusion] will definitely wreck our livelihood and drive us into a state of hunger,” according to the group Kilusang Magbubukid ng Pilipinas (KMP).

“The overall rice production and consumption will be affected by TRAIN. TRAIN will cause worsening hunger among the poorest of the poor. Whatever minimal gain that low to middle employees will get from TRAIN will be easily offset and swept by rising prices of commodities, services and public utilities,” said Danilo Ramos, KMP chairman.

For one, KMP said the new excise tax on oil products will result to a minimum 20-percent additional cost in the use of fuel-run farm equipment.

This means farmers will have to shell out more money out of their pockets for the added cost on production brought about by TRAIN.

In 2017 prices of diesel average at P33 per liter. Now, diesel prices have gone up to at least P40 per liter. Meanwhile, cost of fuel prices are higher in the provinces.

In a sample case study by KMP, a rice farmer in Bulacan province tilling 1 hectare of rice land will have to shell out additional P294 per hectare per cropping for the use of mechanized hand tractor to pull and harrow rice lands during land preparation. This does not include added cost for the use of water pump for irrigation, use of dryer, payment for rice milling, transportation of rice produce and other daily expenses.

According to government data, the country has 4 million hectares of rice-harvested lands. This minimum sample computation would translate to a P1.176-billion additional cost for land preparation alone.

Other farm inputs, such as seedlings, fertilizer and pesticides are also expected to increase. Food prices and commodities will increase, too, under TRAIN.

“This situation will have a domino effect on rice prices. Rice marketers and retailers are also expected to pass on added cost to consumers, resulting in hike in rice prices. We see prices of commercial rice increasing up to as much as P58 to P60 per kilo at the minimum in the coming months,” Ramos said. The current average price of commercial rice per kilo in retailers is P50 to P55 per kilo. National Food Authority (NFA) rice price averages at P38 to P40 with reported increase in some areas.

The National Economic and Development Authority has already rejected the NFA’s proposal to increase the buying price of rice from local farmers by P5 per kilo from P17 to P22. The NFA is also poised to import 250,000 metric tons of rice this year.

“These factors will affect severely the livelihood and economic state of rice farmers, and TRAIN will make it worse,” Ramos said.

The Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP), for its part, said the government has failed to put in place safety nets for the poor and adequate protection mechanism against profiteering activities in the light of the tax-reform measure’s implementation.

“We are greatly concerned over the government’s inadequate response to provide social safety nets to millions of poor Filipinos, who are about to fall into deeper poverty due to inflation brought about by the implementation of TRAIN’s excise tax on fuel and sweetened beverages,” ALU-TUCP Spokesman Alan Tanjusay said.

The group is looking for the mechanics and the implementing rules and regulations of the TRAIN and plan a dole out of P200 a month to the poor and for those economically affected by an anticipated spike in inflation.

“This TRAIN is a strategic project of the Duterte administration, yet it looks like the implementing rules are not ready and the government institution that would actualize the social safety net program for the poor is unprepared. Is TRAIN a big joke being played on poor Filipinos? Tanjusay said.

The ALU-TUCP also criticized the Trade Secretary Ramon M. Lopez on his statement on profiteering in light of TRAIN’s implementation.

“Stores and local markets have already irresponsibly increased the prices of basic and prime commodities, even before their old inventories are used up. The government must step in [and] impose the consumer-protection laws and regulations, but we don’t see them, we don’t feel the government is protecting us from profiteers and profiteering,’’ Tanjusay added.

Tanjusay said millions of Filipinos will fall further below deeper poverty if government safety nets are not ready and its institutions are ill-prepared to protect those affected by rising inflation caused by TRAIN excise tax. - By Jonathan L. Mayuga



Image Credits: Nonie Reyes