Economists are expecting the full-blown effect of the Tax Reform for Acceleration and Inclusion, otherwise known as TRAIN law, would be felt in May to June period coinciding with schools opening in the Philippines.
The Department of Finance said Sunday consumer prices in May likely rose 4.9 percent, with inflation slowed at 0.3 percent against 0.5 percent in March to April period.
Since the first phase of the implementation of TRAIN law, an unprecedented hike in basic goods and services was noted.
Professor Alvin Ang of Ateneo de Manila told Philippine Star in a report that inflation for 2018 is expected to peak in May to June period, during which inflation is expected to peak “close to six percent”.
“The effect of TRAIN is still not fully felt, so this is a continuing impact of TRAIN. The full-blown impact of TRAIN will be in May to June so there will be two more months of adjustments,” the report quoted Ang as saying.
Aside from the fact that this could be brought about by the transition or adjustment period, Ang told the report that higher inflation as a result of the TRAIN law can be attributed to the “failure of the government to communicate to the public the benefits of TRAIN beyond having higher disposable income for consumption”.
He advised: “If I’m the government, I will tell the people, you will have this much money, I encourage you to save or invest it because the country needs more investments.”
President Rodrigo Duterte said he would like to leave it up to Congress to modify or suspend the TRAIN law.
“Well, the law was enacted by Congress, I’ll leave it to Congress to decide whether or not to amend or suspend or modify the law,” PNA quoted the President as saying in a press conference at the Ninoy Aquino International Airport (NAIA), Terminal 2 before his departure to South Korea from June 3 to 5.
If Congress deems necessary to suspend the TRAIN law, the President said he would “bite the bullet” and go on.
The administration believes that the new tax law would be a vehicle to drive more funds to implement the “Build Build Build” program, which is meant to sustain the economy’s high-growth momentum.
“There’s no value in giving much of what I want. Because even if I say that we need it for the Build, Build, Build, I can’t do anything about it,” Duterte said.
