While waiting for tropical cyclone Mangkhut to enter the Philippine area of responsibility as Ompong, it occurred to me that a more powerful storm is about to disrupt the lives of Filipinos.
I’m not referring to the ongoing debate whether this weekend’s storm will be classified as category 5 super typhoon based on trackers of the US Joint Typhoon Warning Center (JTWC) in Hawaii and the Hong Kong Observatory, or a category 4 typhoon according to the Japan Meteorological Agency (JMA) and our own Philippine Atmospheric, Geophysical, and Astronomical Services Administration (PAGASA).
Although PAGASA’s cyclone forecasts mostly mirror those of JMA, the track record of JTWC in terms of accuracy has been spot-on when it comes to super typhoons such as Yolanda or Haiyan in November 2013, and Lawin or Haima in October 2016.
But a more pressing concern is the economic and political storm that threatens to engulf the Philippines in the near-term. Everyone is concerned about the 6.4% inflation recorded last month, the highest in almost a decade.
Suddenly, self-appointed economists are coming out of the woodwork and voicing their takes on this issue to anyone who cares to listen.
The administration’s critics and even some of its supporters are pointing their fingers at the Tax Reform for Acceleration and Inclusion (TRAIN) Act of 2017, which took effect in January 2018. The TRAIN law is being blamed for higher prices triggered by the new excise taxes on petroleum, automobiles, and sugar-sweetened beverages with their ripple effect on the rest of the economy.
Aggravating this volatile situation is the practice of profiteering by unscrupulous businessmen as well as the confluence of international factors, namely the rising world prices of oil and the weakening of the peso vis-à-vis the US dollar due to trade wars between global powers.
TRAIN’s sequel, the Tax Reform for Attracting Better and High Quality Opportunities or the TRABAHO bill, is seen to remove or reduce many tax incentives for businesses registered with such investment promotion agencies as the Philippine Economic Zone Authority (PEZA). An official from the Joint Foreign Chambers (JFC) has been quoted as saying: “Leave PEZA alone.”
Semiconductors and Electronics Industries in the Philippines Inc. (SEIPI) president Dan Lachica estimates that over $1 billion in expansion plans have been diverted in anticipation of the TRABAHO bill’s passage. He lamented that the bill in its present form does not carry the provisions proposed by SEIPI during the public hearings.
However, both JFC and SEIPI made it clear that they support the TRABAHO bill’s provisions lowering the corporate income tax rate and giving additional perks to companies creating new technologies that generate jobs.
Meanwhile, a political crisis is brewing after a presidential proclamation was issued last week revoking the amnesty granted seven years ago to an incumbent senator.
How this would play out in the end is causing uncertainties and anxieties in the body politic. Can our nation withstand this gathering storm?
The author is CFO of the Asian Center for Legal Excellence and Chairman of the FINEX Golden Jubilee Book Project.