‘Gird for domino effect of TRAIN’

by Rhick Lars Vladimer Albay

February 12, 2018

Biz club exec sees Ilonggos changing their ‘spending habits’

ILOILO City – Amid a deluge of price hikes for basic and prime commodities, an Iloilo Business Club (IBC) executive believes we have yet to see the full impact of the Tax Reform for Acceleration and Inclusion (TRAIN) Law and its excise tax on petroleum products.

Yung TRAIN kase is still in its first phase,” executive director of Iloilo Business Club Lea Lara told Panay News. “And may domino effect yansa presyong gasoline, sa logistical cost on goods, sa operations, especially here in Iloilo which is a high volume service and commercial area. We still have to observe and see.”

Lara said the business sector hopes to get a clearer picture of the full impact of TRAIN to Ilonggos and local industries by the end of March this year, rounding out the first quarter of 2018.

“At this time in its first phase, TRAIN’s impacts are basically four: on petroleum, on the cost of cars, on sweetened beverages, and wages and income tax,” explained the IBC official. “For Iloilo, we may be highly benefited due to our large population of middle income earners. Yung tradeoff of course is the higher costs. You’re getting people with more spending capacity but bawion niya gihapon sa higher pricessing goods.”

Ilonggo vendors in the city have begun increasing the prices of their products as they seek to offset the impact of TRAIN on their daily earnings – with fisherfolk rethinking their use of motorboats and vegetable vendors reconsidering how they’ll transport their goods from the farm to the market amid the higher gasoline and diesel prices.

The 44-year-old fisherman Armando Alolortold Panay News that he plans to buy a non-engine-operated boat rather than a motorboat to lessen his expenses, as buying gasoline to operate a motorboat would prove too expensive.

Meanwhile, 43-year-old fish vendor Winston Lucero said he’s seen an increase in prices of fish these past few weeks after the rollout of TRAIN. Tuloy fish – a locally popular type of saltwater sardine – went up from P80 to P120 per kilo. Meanwhile, milkfish or bangus has seen a P20 hike – from P160 to P180 per kilo. He’s also noted slower business as fewer customers approach him to buy large quantities of fish.

Three of the largest transport groups in Iloilo are also calling to increase the basic fare to P10 for public utility jeepneys (PUJ) plying routes in both the city and the province, as local drivers bear the brunt TRAIN’s additional excise tax on petroleum products.

“[The] spending pattern and habit of Ilonggos will definitely be affected,” shared Lara, noting that Ilonggo families and consumers will most likely consider fewer trips to markets and grocery stores weekly due to the higher prices.

“We will see pa these first few months,” she added. “We also have to see how, from our end, the businessmen could cope with the increases without hurting their operations. Because from what I know and experience, making customers bear the brunt of these hikes is the last thing businessmen will want to do given Iloilo’s very competitive climate.”

The newly approved TRAIN law seeks to lower personal income taxes, increase excise tax on fuel products, and impose tax on sweetened beverages, among others.

Sweetened beverages such as juice drinks, sweetened tea, all-carbonated beverages, flavored water, energy and sports drinks, cereal and grain beverages, and other non alcoholic drinks that use caloric or non-caloric sweeteners will be taxed P6 per liter. Meanwhile, P12 per liter will be taxed for those that contain high fructose corn syrup (HFCS).

Under the TRAIN Law, the excise tax on oil and fuel products is set to be increased in increments until 2020. For diesel, TRAIN is set to hike prices by P2.50 per liter this 2018, by P4.50 per liter in 2019, and by P6 per liter in 2020 onwards.

Meanwhile, for regular and unleaded premium gasoline, TRAIN mandates a P7 per liter excise tax this 2018, a by P9 per liter increase in 2019, and by P10 per liter starting 2020./PN