Budget Secretary Benjamin Diokno’s remark that Filipinos should not be “crybabies” in response to rising prices caused by the government’s Tax Reform for Acceleration and Inclusion (TRAIN) law comes from a confidence shored up by surveys showing that the administration still enjoys a high popularity rating among the populace.
But that popularity will only erode in time once the second phase of the TRAIN law comes into effect which includes among other provisions the removal of incentives to business process outsourcing (BPOs) companies.
That was the source of concern in the BPO sector, long a major contributor to employment and the country’s dollar reserves. Through the BPO sector, related industries such as restaurants, developers that build housing for employees, vendors that sell food and other knick knacks and the local transport sector earn income and livelihood. That will soon be threatened should these companies decide to close shop due to unprofitability.
Yet Secretary Diokno somehow found the gumption to face those moving to amend the TRAIN law and its critics and tell them not to stop its implementation lest it places at risk the government’s “Build, Build, Build” infrastructure program.
According to the administration’s rationale, the government will source most of the revenue generated from TRAIN to fund these ambitious infrastructure projects without having to contract loans from domestic and foreign banks.
The TRAIN law is also supposed to cover the deficit caused by granting personal income tax exemption to minimum wage earners, who are trusted to come up with creative ways to stretch their budget due to this unexpected windfall that is offset by higher prices of commodities and higher fare rates.
Caused by the higher tax on fuel, its inflationary effect was belittled by Diokno who told the public in no uncertain terms that they should tighten their belt further since these taxes will benefit the poor courtesy of the conditional cash transfer program.
Granted that there is a point to Diokno’s argument, he should try to convince those hardest hit by TRAIN, the average household, that their taxes will soon go into funding projects that may likely not be completed within the President’s term if at all.
Unless the government cuts corners and expedites the processes to bid out the projects—which will open it to corruption, a disturbing trend as evidenced by the number of top officials that get sacked and the millions of pesos in funds that were unaccounted for—the Filipino taxpayers won’t see, much less feel the benefits promised by this administration.
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