OpinionsEcon 101Cancer of the pocket

Cancer of the pocket

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Are you one of those afflicted with “cancer” of the pocket? There is no end in sight as the dire predictions about the impact of taxation, and the increasing prices of oil in the world market are clear and present in our current reality.

What happened to government assurances that the impact of the higher excise tax, the Tax Reform for Acceleration and Inclusion (TRAIn Law), will be short- term and minimal?

Why is it that consumers in all economic classes, including the marginalized and those in the laylayan (fringes) bear the brunt of taxation?

What about the data noting fast economic growth of six to seven percent? It is impressive and beneficial for the country, which means higher incomes for many Filipinos.

But are Filipinos benefiting from this economic growth? Are you feeling the pinch on your purchasing power?

The truth is that these growth figures are nearly meaningless, especially for the poor. “What matters more to them is that they have a job, and that prices do not rise fast” — that was the working premise.

Experts opine that economic statistics impact people’s lives directly in the form of the inflation rate and the unemployment rate. Inflation simply refers to how fast the prices of commonly-bought items are rising. Higher inflation (a faster rise of prices) eats away at the purchasing power of every peso we earn.

On the other hand, unemployment measures how many people are without work, but are available for work and are seeking work.

Unemployment brings not just lost incomes, but also so much stress and uncertainty.

When both inflation and unemployment go up, people can feel more miserable in economic terms.

President Duterte rose to the Presidency to eliminate poverty through his crime -reduction and elimination of corruption strategies.

Since 2017 however, there has been a continued decline in the purchasing power due more to higher inflation than unemployment.

As published, the latest jobs data are no less troubling: in October 2017, there were 134,000 fewer employed Filipinos from the last year, owing to the 1.43 million jobs lost in the agricultural sector.

What happened to all of them? In this context, the government should focus on the inflation rate experience of the poorest 30 percent of households who are more sensitive to food inflation than anyone else.

Regardless of all the economic statistics, there’s reason to believe the basis to predict to higher expected inflation due to factors like: robust economic growth; the rollout of the government’s “Build, Build, Build” program; and the implementation of the tax reform law which features (necessarily) higher taxes on petroleum, automobiles, and tobacco.

The International Monetary Fund had warned earlier that the economy risks “overheating” due to strong credit growth, and this could manifest in higher inflation.

Maybe you can even assess your own situation or degree of economic hardship by looking at how you perceive your own degree of poverty and purchasing power.

Malacanang has blamed it on higher inflation and the peso’s depreciation, where the depreciation increases the prices of imported goods (say, petroleum products), and which feeds directly into domestic inflation.

Unfazed, Palace spokesperson Harry Roque said: “It is for this reason that while the Administration is building a strong and sustainable domestic economy, growth must be inclusive, and must be translated to a more comfortable life for all.”

Are they really getting ready to implement the Second Package of the TRAIn Law? Should government reconsider? Can the proposed development projects (build, build, build) be financed by other means?

Remember: Economic woes, if left unabated, could lead to social unrest.

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Author’s email: [email protected]

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