Bam Aquino: People in tears over higher prices of fuel, goods

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Metro Manila (CNN Philippines, June 4) — The people are literally crying due to the rising prices of basic goods that are compounded by higher fuel excise taxes, Senator Bam Aquino said on Monday.

"Sa kakaikot ko in different areas, umiiyak talaga ang mga tao. It's true," Aquino told CNN Philippines' The Source. "May kausap kang nanay, dala dala ang anak niya, sasabihin niya, 'Sen, hindi na ako makakain nang tatlong beses. Ano ang gagawin ng anak ko?'"

[Translation: From going around different areas, it's true that people are crying. You'd be talking to a mother carrying her child, and she'll say, 'Sen, I can't even eat three times a day. What will I do about my child?]

The senator was responding to controversial remarks by Budget Secretary Benjamin Diokno, who dismissed complaints about rising prices of fuel in a forum last May 30.

Diokno said prices were even higher under former President Gloria Macapagal Arroyo's term, when oil hit $135 per barrel in the international market.

"We should be less of a crybaby," he added. The remark did not sit well with labor groups and some lawmakers, but Diokno defended it anew two days later.

Aquino, a member of the Senate Finance and Trade Committees, is among lawmakers pushing for a suspension of the excise tax pending the full implementation of financial assistance from government. Aquino noted that a big chunk of the financial aid measures stipulated in the law to cushion the effects of higher taxes have yet to be fully implemented, including unconditional cash transfers for the country's poorest families and subsidies for the public transport sector.

Under the current law,  fuel excise tax can only be suspended if the price of international oil averages at $80 a barrel in a period of three months under the current law. Current prices for both Brent crude oil and Dubai crude oil — benchmarks of global oil averages — teeter around the $75 per barrel mark.

A suspension from Congress also can only take effect during the next scheduled increase, which is set for January 2019.

Aquino authored Senate Bill 1798, which automatically suspends excise tax if the inflation rate exceeds the target range set by government for three months. The range is set by the Bangko Sentral ng Pilipinas and Development Budget Coordination Committee.

He said this provision for suspension was previously included in the Senate version of the tax reform law, but it was taken out during the bicameral session.

"Nakakatatlong buwan na tayo na lumalampas tayo sa inflation rate target range," said Aquino, referring to the Department of Finance's earlier projection that inflation would not breach 4 percent. "If that safeguard was there, hindi natanggal sa bicam, we would be suspending excise taxes now."

[Translation: We've hit three months where we're past inflation rate target range. If that safeguard was there, and it wasn't removed at the bicam, we would be suspending excise taxes now.]

Aquino said he did not want to point fingers but just wanted to act on the matter.

Since his bill was filed last May, the measure has been pending at the committee level. Aquino hopes it will be heard over the Congress break.

At the lower house, similar efforts to suspend the fuel excise tax increase are underway. House Ways and Means Committee Chair Rep. Dakila Cua says congressmen might give the President powers to temporarily suspend the tax.

However, the DOF maintains that tax hikes only account for ₱2.80 out of the ₱10.20 rise in fuel, as well as only 0.4 of the 4.5 percent inflation rate.

Aquino argued that nonetheless, it was the only aspect of the hike that the government could control.

"Wala tayong magagawa sa price of crude (oil). Wala tayong magagawa sa (peso-dollar) exchange rate," Aquino said, "But itong (tax reform) law may magagawa tayo."

[Translation: We can't do anything about the price of crude (oil). We can't do anything about the (peso-dollar) exchange rate, but we can do something about the (tax reform) Law.]

The DOF also previously warned that a suspension would affect government programs such as Build, Build, Build, and free tuition for state universities and colleges.

However, Aquino doubts these effects will last.

"Hindi naman to [This won't last] forever. We're looking at a suspension for prices to stabilize," said Aquino. "Pag bumaba ulit iyan [When inflation goes down], maybe we can look at putting it back again."

He added that the government could still make up for the ₱70 billion it is expecting to collect from excise taxes by fixing the efficiency of government spending and the efficiency of collection by the Bureau of Internal Revenue and the Bureau of Customs.

"Yung pagtaas ng presyo, hindi na dapat politicized iyan," said Aquino. "It affects everyone... All parts of the Philippines, all socioeconomic classes, all colors, ito ang number one na problema."

[Translation: Rising prices shouldn't be politicized. It affects everyone... All parts of the Philippines, all socioeconomic classes, all colors, have this is as their number one problem.]

Watch the full interview with Aquino here.