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FinalDraft_TRAINPoorFaceHigherPrices

Though welcome, the recent wage hike in the National Capital Region (NCR) does not increase the minimum wage earners’ purchasing power. The real value of the minimum wage is even falling while the people face higher taxes under government’s proposed tax reforms, said the group.

The NCR Regional Wage Board recently announced a Php21 wage hike, raising the nominal value of the NCR minimum wage, the highest in the land, to Php512. IBON said that despite the hike, the NCR minimum wage today is actually worth less than the Php491 minimum wage in June 2016. This is because its value has been eroded by inflation that has averaged 2.7% monthly since June last year. Measured at 2006 prices, the minimum wage today is worth just Php368, which is even less than its Php369 value in June 2016. The eroding real value of the minimum wage weakens working Filipinos’ purchasing power, said IBON.

IBON also pointed out that this amount is not even half of the Php1,145 family living wage (FLW). The FLW is the amount needed by a family of six, the average size of low-income families,  to get by decently every day.

The working people’s low-value incomes will even be aggravated by the Duterte administration’s Tax Reform for Acceleration and Inclusion (TRAIN), said IBON, which will impose more consumption taxes. These include additional items to be charged with 12% value added tax or VAT such as power, low-cost housing, shipping and cooperatives; additional Php3-10/liter of various oil products fom 2018-2021; and an additional Php 10/liter volume capacity of sweetened beverages using locally-produced sugar.

The group said that the poor are doubly disadvantaged by insufficient minimum wages and a tax program that will take away from the poor who already have little as it is. Government should be bolder in crafting a wage policy that will demand employers to raise the minimum wage to a sufficient level, said IBON. Government should also stop taxing the poor and generate much-needed revenues for public and social services by taxing the wealthiest.###

FinalDraft_TRAINPoorFaceHigherPrices

 

 

 

From nationmultimedia.com

Research group IBON said that the Department of Finance’s (DOF) resistance to even minor changes in its proposed tax reform program confirms the anti-poor and pro-rich character of the Duterte administration’s economic policies.

The Senate Ways and Means Committee proposed minor changes to shift some tax burden from the poor to the rich at its final hearing on the DOF’s Tax Reform for Acceleration and Inclusion (TRAIN) bill. But the DOF said that it would insist on its original proposal during plenary deliberations and the bicameral conference.

Committee chair Sen. Juan Edgardo M. Angara said that the committee’s counter-proposal will be “maybe 50 to 60 or 70% of what the DOF proposed”. According to Angara, changes to lessen what the poor pay include lowering the sugar-sweetened beverage excise tax and retaining VAT exemptions on socialized housing, cooperatives, senior citizens and persons with disabilities. Meanwhile, the rich will pay more from higher taxes on foreign currency deposit unit interest income, dividend income and cosmetics and perhaps from re-bracketing of auto excise taxes. There will be additional taxes on plastic bags, but the only changes in the petroleum excise tax will be its phasing.

IBON executive director Sonny Africa said that the Senate’s proposed changes are a welcome effort but still not enough to change the inequitable and unfair character of TRAIN. The TRAIN’s most anti-poor aspect is that it increases consumption taxes on a population where the income of the majority is too low for decent living and its most pro-rich aspect is that it avoids greater income and wealth taxes on the highest-income and super-rich Filipinos, Africa said.

According to Africa, in the Philippines the lowest income groups struggle with incomes of just Php5,100-15,800 monthly compared to the richest Filipinos who have Php303,000 to as much as Php6 million monthly.

“For all of Pres. Rodrigo Duterte’s tough talk against oligarchs, the administration is apparently still afraid to more correctly tax the few super-rich,” Africa said. Taxation has to be genuinely progressive taxation where the consumption taxes the DOF prefers for being easy to collect from the poor majority are replaced with direct income and wealth taxes on the few super-rich who, having so much, can also afford to pay so much more, concluded Africa.

Photo from marketing-interactive.com

The latest survey of research group IBON showed that majority of Filipinos do not approve of almost all proposals under the first package of the Duterte administration’s proposed tax reform program.

Survey respondents were informed that the government has a proposed tax reform package. They were presented with a list of some of the tax proposals and asked which of these they favor.

Majority of the respondents did not favor the following: the expansion of the value-added tax (VAT) coverage (83.6%); raising of taxes on petroleum products (87.7%); charging of Php10 per liter tax on sugary drinks and increasing annually thereafter (82.2%); imposition of 12% tax on rented dwelling with monthly rate of Php10,000 and below (77.5%); and imposition of 12% tax on remittance fees, such as those from overseas Filipino workers (77%).

On the other hand, 4 out of 10 respondents (41.1%) said that they were in favor of lowering the income tax paid by individuals earning Php21,000-650,000 monthly, while almost the same number (41.3%) were not in favor. Nearly half or 46.6% of respondents said they favor the removal of income tax exemption of minimum wage earners, while 38.3% did not.

The latest IBON Nationwide Opinion Survey was conducted from June 24-30 among 1,420 respondents in 16 regions. The survey employed field interviews and a multi-stage probability sampling scheme with a plus or minus 3% margin of error.

Due to difficulties conducting field interviews in certain areas affected by the Martial Law situation in Mindanao, results do not include the Southern Mindanao Region (Region XI), and 4 out 6 towns in Lanao del Sur province in the Autonomous Region of Muslim Mindanao (ARMM).###

 

The government has a proposed tax reform package wherein the following are some of the proposals. Are you in favor of these proposals?

Expanding the coverage of value-added tax (VAT), which will increase the prices of many goods and services
Yes

 9.3

No

 83.6

Don’t know

 7.1

Total

100.0

Raise taxes on petroleum products, which will increase the prices of many goods and services
Yes

 7.6

No

 87.7

Don’t know

 4.5

No answer

 0.1

Total

 100.0

Charge tax of Php10 per liter of sugary drinks like juice and softdrinks, increasing annually thereafter
Yes

 11.7

No

 82.2

Don’t know

 6.0

No answer

 0.1

Total

 100.0

Impose 12% tax on rented dwelling with monthly rate of Php10,000 and below
Yes

 7.1

No

 77.5

Don’t know

 14.9

No answer

 0.5

Total

 100.0

Impose 12% tax on remittance fee on remittances such as those from overseas Filipino workers
Yes

 9.4

No

 77.0

Don’t know

 13.2

No answer

 0.4

Total

 100.0

Lowering of income tax paid by individuals earning Php21,000-650,000 monthly
Yes

 41.1

No

 41.3

Don’t know

 17.3

No answer

 0.2

Total

 100.0

Removal of income tax exemption for minimum wage earners
Yes

 46.6

No

 38.3

Don’t know

 14.0

No answer

 1.1

Total

 100.0

 

Final_TRAINPoorDontGain

The DOF’s estimates of personal income tax gains for the poorest Filipinos erroneously assumes that the poorest Filipinos currently pay income tax.

This is untrue because the BIR’s records indicate only some 5.6 million taxpayers at present who are wholly from the highest income brackets.

The poorest Filipinos do not pay income tax now so, contrary to the DOF’s claims, they have nothing to gain from the income tax reforms. They will however pay an additional Php47.0 billion in additional VAT, petroleum, and sweet beverages taxes. This does not include further inflationary effects.

Final_TRAINPoorDontGain

From International  Business Times Philippines

Research group IBON said that the plan of the Chamber of Mines of the Philippines (COMP) to adopt a Canadian mining organization’s sustainable mining measures indicates that it is trying to greenwash the Philippine mining industry’s negative image. But Canadian mining corporations are notorious for their dirty operations globally, IBON pointed out, which have led to several incidents of social and environmental devastation.

COMP recently announced that it will study and adopt the Mining Association of Canada (MAC)’s Towards Sustainable Mining (TSM) initiative. It will also form an oversight committee to investigate its member-companies accused of mining law violations. This comes after former Department of Environment and Natural Resources (DENR) secretary Gina Lopez ordered the suspension of several mining operations based on findings of environmental destruction.

Under the TSM, MAC member-companies self-assess or self-regulate in key areas such as operations, biodiversity, indigenous people initiatives and crisis management to ensure socially, economically and environmentally responsible mining.

IBON said, however, that COMP is trying to greenwash or superficially implement corporate social responsibility (CSR) initiatives like TSM to clean up the Philippine mining industry’s worsening reputation. Mining companies in the Philippines will use this to avoid answering for their long records of environmental and social abuses, and to evade mandatory requirements and regulation. Industry watchdogs report that this has long been the practice of Canadian mining firms.

IBON noted that MAC member-companies have been lukewarm or outright opposed to government attempts to regulate and apply mandatory requirements on the Canadian mining industry.  MAC participated in a multistakeholder roundtable that came up with recommendations to improve environmental practices and possibly impose sanctions, to which it reluctantly agreed. Some mining firms like Barrick Gold, a MAC member and controversial mine operator, successfully lobbied for the rejection of the recommendations.

IBON also observed that so-called sustainable mining measures like the TSM has done little to curb MAC member-companies’ dirty or environmentally and socially destructive mining practices.  In 2014, Rio Tinto was accused of landgrabbing and environmental destruction from its majority-owned operations at a highly endangered coastal forest in Madagascar. The tailings dam of the Samarco mine, a joint-venture of BHP Billiton and Vale in Brazil, collapsed reportedly due to lax safety regulations. This resulted in 12 deaths, 11 missing, and 500 homeless people, and the killing of fish and aquatic life.

Some of the MAC member-companies like B2Gold and BHP Billiton are linked to mining operations in the Philippines, said the group. Meanwhile, Barrick Gold is the current owner of Placerdome, the mining company responsible for the Marcopper mining disaster, which destroyed the Boac River in Marinduque.

IBON said that the Duterte administration should not be fooled by COMP’s greenwashing maneuvers. It should stand firm on measures that genuinely protect the environment and public interest such as the suspension of destructive mining operations and ban on open-pit mining.###

From English CCTV

Research group IBON expressed concern about the secretive and undemocratic proceedings of the Regional Comprehensive Economic Partnership (RCEP) especially considering its apparent significant impact on the country’s economy, economic sovereignty and people’s welfare. The group said that it is the Duterte administration’s responsibility to ensure genuine transparency and public consultation to uphold the interests of the country and prioritize the Filipino people.

IBON raised these concerns as stakeholders participated in a dialogue regarding the new generation free trade agreement (FTA) with the Bureau of International Trade Relations (BITR) under the Department of Trade and Industry (DTI). An intersessional RCEP meeting is among the events during the upcoming Association of Southeast Asian Nations (ASEAN) Economic Ministers Meeting.

Since RCEP negotiations began in May 2013, very little has been revealed, mainly through three leaked chapters, about the sixteen-chapter agreement. Governments involved remain mum on the actual proceedings and outcomes of these rounds, said IBON. RCEP talks aim to further liberalize markets by institutionalizing rules on dispute settlement and investment protection, investments, intellectual property, and migration, among others. These rules are detrimental to underdeveloped countries like the Philippines.

IBON said that among the leaked contentious RCEP rules is the investor-state dispute settlement (ISDS) provision that rich countries like Japan and Australia have reportedly been pushing in the negotiations. Under this provision, foreign investors of RCEP member countries can sue the Philippine government at an international tribunal should it undertake measures they deem unfavorable to their commercial interests. This impinges on the country’s sovereignty to regulate investments and protect the public’s interests, aside from the burden of exorbitant litigation costs.

Another RCEP provision unfavorable to Filipinos is on intellectual property rights (IPR), said the group. This IPR provision will allow extended patents on important and life-saving medicines, resulting in even higher medicine costs. Filipino farmers will also be affected since the IPR provision translates into more expensive seeds and could lead to their bankruptcy. The Philippines, once RCEP is approved, will be required to join the 1991 Union for the Protection of New Varieties of Plants (UPOV) Convention which privatizes seeds, and requires farmers to pay royalties on commercial seeds. Farmers will be prohibited from exchanging with each other commercial seeds saved from a harvest.

The RCEP prohibition on performance requirements for foreign investors that China is pushing also prevents the country from implementing policies to develop local industries and advance the public welfare. Yet these local content, technology transfer, and trade controls and requirements are essential policy tools to get real benefits from foreign investments and to build Filipino industry.

IBON said that meaningful public debate and engagement on these controversial provisions are hindered due to the secrecy of the RCEP negotiations. The group said that the Duterte administration should not sign onto an FTA that advances foreign investor and big business interests at the expense of genuine domestic development and public welfare. ###

June

Research group IBON said that the Department of Finance (DOF) should not use free education as a pretext for the Philippine Senate to pass a full version of the administration’s anti-poor tax reform package. The group also said that the administration should instead decisively tax the country’s wealthiest for national development needs.

Finance secretary Carlos Dominguez recently warned that his department may ask the President to veto the Philippine Senate version of the Tax Reform for Acceleration and Inclusion (TRAIN) should it turn out to have been watered down. Dominguez further said that a watered down version will prevent government from raising enough amounts for government’s programs for the poor including free education. The Duterte administration plans to raise Php133.8 billion from TRAIN in 2018 alone.

IBON’s executive director Sonny Africa said that this is a crude tactic to pressure the Senate Ways and Means Committee to rubber-stamp the anti-poor tax package. “This is the neoliberal DOF, the President’s alter-ego on finance matters, opposing apparent Senate attempts to temper the brazenly anti-poor aspects of the Dutere administration’s proposed tax reforms”, said Africa.

Africa added that the Universal Access to Quality Tertiary Education Act of 2017 or Republic Act (RA) 10931 requires the government to fund implementation of the law, thus the DOF cannot make this contingent on the TRAIN or other revenue measures.

“RA 10931 has Sec. 15 Appropriations that obliges the government to include funds for free tuition, fees, other educational expenses and cost of living in the annual General Appropriations Act (GAA),” Africa noted.  “If the government does not push such an item in the GAA then this can be questioned in the courts as the government violating the law,” he said.

Africa said that the DOF’s statement is irrelevant to TRAIN because government is obliged to raise funds for quality tertiary education with or without tax reform.

“Moreover, government’s considerable coercive powers are better spent on raising revenues for national development from the huge idle socially unproductive wealth of the oligarchs and other super-rich families,” Africa concluded.

IBON 2017 0830 TRAIN vs poor

That the Duterte administration’s Tax Reform for Acceleration and Inclusion (TRAIN) is progressive and pro-poor is all hype.

Under TRAIN the highest-earning 40% including the richest will have more money in their pockets every year, while the poorest 60% of Filipino households will have less money due to changes in personal income tax, VAT, oil excise tax, automobile excise tax, and sugar-sweetened beverage tax.

The following infographic summarizes the effect of these changes.

TRAIN is currently being deliberated by the Philippine Senate.

 

IBON 2017 0830 TRAIN vs poor

 

IBON 2017 0823 20YrsMWSS

Did water privatization result in solving the water crisis, affordable water rates?

IBON 2017 0823 20YrsMWSS

 

 

 

Photo from www.news.cn

Advocacy group Water for the People Network (WPN) said that the decision by the International Arbitration Court (IAC) requiring the Philippine government to pay Php3.4 billion to Maynilad Water Services, Inc. reflects the corporate bias of international mechanisms for resolving disputes between governments and private corporations. The Philippine government should learn from the public’s negative experience under 20 years of water privatization and rescind onerous and business-biased concession agreements (CAs) that undermine public welfare, said WPN.

The IAC’s recent ruling on the Php3.4 billion compensation to Maynilad is supposedly for the losses the latter incurred between March 11, 2015 to August 16, 2016 after the Metropolitan Waterworks and Sewerage System – Regulatory Office (MWSS – RO) denied the water firm’s petition for a rate hike. The IAC also decided that Maynilad may recover from the government its losses from September 1, 2016 onwards. Government could be compelled to pay more should Maynilad further seek the IAC’s ruling to reverse the MWSS’s continued deferment of implementing the IAC’s previous decision favoring Maynilad’s petition for a Php3.06 rate increase. This covers purported monthly losses of Php180 million to 200 million from January 1, 2013 to March 10, 2015.

WPN said that under the CA, rate rebasing or adjustment of basic water rates is determined every five years so that water firms can recover their expenses and ensure their rate of profit. In 2013, Maynilad and Manila Water Service, Inc. sought rate rebasing increases of Php8.58 and Php5.83, respectively, for the 2013-2018 period. However, the MWSS-RO rejected the rate hike petitions due to mounting public pressure after it was revealed that the water firms were passing on questionable charges to consumers, such as corporate income tax recovery, donations, advertising, rest and recreation, the cost of future projects, etc.

According to WPN, corporate income tax recovery comprised 31% and 26% of the rates charged to consumers by Manila Water and Maynilad, respectively, in 2008 and 2012. The group noted however that the CAs with the two firms did not mention corporate income tax as part of the “Philippine business taxes” listed among the recoverable expenses entitled to them. Both corporations should thus give back to consumers the amount of corporate income taxes collected from 2007 to 2012, said WPN.

The IAC decision, said the group, is detrimental to the millions of Filipino consumers who have been increasingly burdened by expensive water rates since water privatization in 1997. Water rates have since gone up by 973% for Manila Water and 583% for Maynilad. Filipino consumers are even made to shoulder millions-of pesos of IAC arbitral costs for the cases filed by the private concessionaires.

WPN stated that the latest decision of the IAC further proves that the CA undermines public welfare and interest, and should be rescinded immediately in line with a strategic reversal of the MWSS’ 20 years of privatization. The group said that instead of paying billions to Maynilad, government should start putting capital into regaining control of water service that is genuinely publicly accessible and affordable.(end)

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