Price hikes ‘minimal,’ poor to get P24.5-B cushion, gov’t says

by ABS-CBN News, Jan 10, 2018

MANILA – Higher taxes on fuel will result in a “minimal” increase in commodity prices and P24.5 billion will be given to the poor to help them cope, President Rodrigo Duterte’s economic managers said Wednesday.

Prices of agricultural products are determined mostly by supply and demand, said Trade Secretary Ramon Lopez, who had repeatedly warned businessmen against unnecessarily raising prices due to new taxes.

Poor households will be given P200 a month under the P24.5-billion “unconditional” cash transfers while a P2.3-billion loan facility will be made a available to public utility drivers to help them switch to more fuel efficient vehicles, said Budget Secretary Benjamin Diokno.

The Department of Social Welfare and Development will help identify the beneficiaries, Diokno said. Poor families identified under the conditional cash transfer program get P500 per month and an additional P300 to P500 for every child who is in school.

The first package of the President’s tax reforms took effect last Jan. 1, raising duties on fuel, cars and sugar-sweetened drinks to offset a reduction in personal income tax rates and help raise funds for his P8-trillion infrastructure program.

“If at all, there will be a minimal change, but that’s nothing compared to the vast variation in prices due to the raw material price kung manufactured or the prices at farm gate of all these agriculture produce,” Lopez told ANC’s Headstart.

The effect of higher fuel prices on grocery items should only be around 5 centavos, since transportation accounts for no more than 5 percent of production cost, he said.

Manufacturers have not asked for an increase in suggested retail prices, he said.