The Market Monitor Minding the Nation's Business
By Jinky Jorgio
Earlier on May 2, while president Duterte kept the Filipino people distracted with his regular ramblings against the New People’s Army, Executive Order No. 113 was silently passed implementing the following strange economic measure: a 10% increase in prices of imported petroleum. As a basis for increasing prices, the executive order cited the state of emergency, the Bayanihan to Heal as One Act (BAHO Law) authorizing emergency powers for president Duterte, and the dire need to ensure funding for COVID-19 responses of the government.
When petroleum prices increase, the prices of all commodities increase in order for businesses to keep up profit margins, depriving the poorest citizens of the country from being able to purchase basic necessities, on top of the absence of incomes due to the lockdown. It is therefore ironic that the government claims that such a revenue generating measure for the COVID-19 response would actually be beneficial to the poor.
On the contrary, the poor are always the first to be affected by increases in petroleum prices due to its effects on all commodity prices; an effect made worse by the utter failure of government social programs to compensate. Even if the government were able to redirect funds gained from the excise taxes on petroleum to the COVID-19 response, the resulting utterly depressed purchasing power of ordinary Filipinos will cancel out any short term gains in battling COVID-19. All this maneuver has proven is that the government has not learnt anything from its last attempt to play with oil prices with the TRAIN Law, which is still in effect, which increased fuel excise taxes resulting in rampant inflation which continues to affect the poorest citizens by entrenching them further in crippling poverty.
So what is it really, Duterte? Are we short on cash, or do we have enough money? Stick to one script, because your “pang-masa” veneer is unraveling before our very eyes. At this point it would be ridiculous for the government to even pretend that it is pro-poor. One need not look further than the failed Social Amelioration Program (SAP) of the DSWD, which remains insufficient for a vast majority of Filipinos who only receive five to eight thousand pesos per month. The administration even discontinued it in areas transitioning to GCQ, meaning that even a grossly inadequate social program would no longer be an option for people in these areas. Such a practice violates Duterte’s own BAHO law, which stipulates the continuation of social programs for at least two months, but then again, keeping promises is not exactly this administration’s strong suit.
Samahan ng Progresibong Kabataan (SPARK) challenges the government to prove that its greater than one trillion pesos worth war chest for combatting COVID-19 has already completely run out. Without proving this, such a measure of increasing petroleum prices is totally arbitrary and but another in a long list of anti-poor programs of the failed elite government of Duterte. Doing so would only put additional burden on millions of ordinary Filipinos whose purchasing powers were already depressed from the last attempt of the government to play with oil prices.
SPARK also challenges the government to listen to common sense and take the “radical measure” of aggressively taxing the rich to fund the COVID-19 response. If the government is truly cash-strapped, then surely the government can rely on the “benevolence” of the ultra rich of the country in the form of greater taxes for funding the COVID-19 response. Let them prove their benevolence by taking their heaps of wealth and using it to feed the nation amid the global pandemic.