IT WOULD not be correct to say that the current year is ending well. That would be like denying the 28 deaths and massive destructions to crops, livestock and property wrought by typhoon “Ursula” across Western Visayas, Central Visayas, and Eastern Visayas.
The New Year is not without sad forecast on higher excise taxes, notably on fuel products, with the enforcement of the third annual tier of the Tax Reform for Acceleration and Inclusion (TRAIN) law.
Since 2017, for example, excise tax on gasoline, has jumped from P4.35 to P7 per liter in 2018, to P9 this year and P10 in January 2020. This could drive pump prices to an average of P55 per liter.
This corner remembers that in 2014 or five years ago, unleaded gasoline cost an average of P40 per liter in Iloilo, or cheaper by P5 in Metro Manila.
Without added government-imposed taxes, oil products might have remained steady because of the loosening grip of the oil cartel on energy consumers, giving it no choice but bow to the law of supply and demand.
The shift of energy producers to cheaper coal and to various forms of renewable energy like, solar, wind and geothermal has tremendously cut demand for oil worldwide.
Our friend Engr. Joseph Teruel – chief executive officer of PEAK Power, which installs solar panels on Iloilo City rooftops – told us about the growing popularity of solar energy as threat to the oil cartel’s one-upmanship. Competition among manufacturers of solar panels in eight countries – including Malaysia where they enjoy a 10-year exemption from corporate tax – has allegedly lowered by half the cost of the product. And because of lowered cost, energy producers now look up to solar power as a viable alternative.
Take it from comedian/broadcaster Ompoy Pastrana, who now makes do with a portable solar generator to “fight” Panay Electric Company.
Unfortunately, the prices of everything else in the Philippines still tend to go up. We wonder whether, as in the previous years, New Year would mean higher prices for basic needs. Watch your favorite fast-food restaurants; they have the habit of adding “value” to their value meals with each crossover from the old to the New Year.
The trouble with the traditional price hike in the beginning of the year is that it actually saps the value of money. Even money in the bank weakens, what with interest rates falling behind inflation.
In other words, the increase in the cost of a product decreases the value of the same amount of money. If the shirt you bought for P300 last year now costs P400, that particular item sinks you poorer by P100.
Therefore, wage earners who gain no wage increase have to lower their standard of living for survival. They will be forced to downsize their wants and needs.
This writer has found ways to adjust with inflation. I have ceased subscribing to cable TV. I have switched back to regular antenna-dependent TV.
Those with both landline and cellular phones may be forced to eliminate landline. Thanks to competition that has forced cell phone networks to offer free “promo” calls.
We may abhor China-made products because of political issues, but that has hardly prevented China, which used to be called “the sleeping giant,” from gaining increased patronage. For while Western nations jack up prices, she goes the other way.
“Survival” is the name of the game. When prices go high but one’s income stays the same, one must find a way to keep nose above water. ([email protected]/PN)