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Philippine government eyes wage hike, lower VAT

Apr 7, 2011

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Vittorio Hernandez - AHN News
Manila, Metro Manila, Philippines (AHN) - To help Filipino families cope with the non-stop rise in prices of goods and services, Philippine President Benigno Aquino III said Wednesday the government is considering a wage hike and reducing the 12 percent rate of value added tax.
Aquino has ordered the country's economic officials to study all ways that the government could ease the impact of high fuel prices, particularly on the poor and minimum wage earners.
Because of the weekly increase in pump prices due to the political instability in the Middle East and North Africa, transportation fares, electric bills, food prices and toll fees have gone up.
On Thursday, independent liquefied petroleum gas dealers hinted they would increase anew the price of cooking fuel in May due to the Middle East instability.
Philippine think tank IBON Foundation suggested the removal of VAT on fuel products, which the foundation estimated would cut gasoline prices by up to $0.15 (PHP 6.60) per liter. If the VAT was removed, pump prices would go down to $1.12 (PHP 48.26) per liter from S1.27 (PHP 54.85) for gasoline and $0.96 (PHP 41.44) from $1.09 (PHP 47.10) for diesel.
However, it would mean the government would have to forego an average of $1.11 billion (PHP 48 billion) collection on VAT for petroleum products - which is one of the largest sources of revenue for the government.
Ahead of a decision to increase salaries and lower VAT, Aquino said the government would provide fuel subsidy to jeepney and tricycle operators.
Philippine labor laws do not allow a wage hike after one was granted the past 12 months, but Aquino said the regulation could be addressed if there are mitigating circumstances, such as if the country's inflation rate would go beyond 5 percent.
Despite the president's statement, Budget Secretary Florencio Abad hinted there would likely be no reduction in VAT rates because of the impact of a rate cut on the government's fiscal position or placing price controls. Instead, the economic team would propose measures that would provide assistance directed at the poor.
Copyright 2011 by (AHN)

REACTION:
             At last, I have heard good news towards the inflation which was one of the chronic problems in our economy today. I, on the other hand, somewhat doubt about the government's plans for the poor people. Yes, they wanted to help Filipino families cope with the non-stop rise in prices of goods and services, so they started considering a wage hike and reducing the 12 percent rate of value added tax. But are we sure that the government would reduce the VAT if other politicians continue to promote the increase of value added tax?

Regarding on the gasoline problem today, I think that when gasoline rises expect that other products will rise too. Lately, the transportation companies decided to add 1 peso fare for passengers. Products have been transported to any part of the country and of course fare or freight is involved. So when oil increases fare increases as well. But not only are the drivers complaining about this problem, the commuters of public transport also especially the students. Most of the public transport drivers are distress with this continuous oil price increase. So the transport groups notify about one big hike.

The government confers solutions about this problem, one is to increase wages second is to take out the VAT. They stressed out here the effect of this nonstop increasing of oil price to those who earn at the minimum wage.  Well let us see how these solutions will be given action.

Metal or Food?

 http://www.abs-cbnnews.com/current-affairs-programs/04/13/11/krusada-mining-palawan

Some locations in Philippines, particularly in Palawan is now facing a dilemma that will probably affect not only their economy but the whole nation as well. Transportation, telecommunication and other companies that are manufacturing products that needs metals or gold, are benefiting with the resources from Palawan. Yes, transportation, cellphones, television is necessary in today’s economy especially we are now globalize. We need advanced technologies to compete and be like progressive countries not just named as developing country. Advanced technologies help the economy produce products and goods that will supply the demand of the consumers. Example of this is transportation. With transportation, it is easy to transfer and deliver the products from different distant location especially those who are in remote areas. Most of these products are coming from mining. Mining companies occupy the some of the area in our country to get mine, and it is needed not only small area but a vast area like hills, mountains and other potential mining areas. They not only dig small holes from it, they excavate a big part of land area that leads to different inconvenience to other people.

Do we need to sacrifice some area in our country like in Palawan just for this advancement? Are all families in our nation can eat three times a day if they produce this? Can we assure safety sanctuary for our future generation? Today, we can experience, a lot of family here in our country couldn’t give good nutrition, or just enough food for their young ones. We are in Philippines, tropical country, blessed with abundant resources, given with vast agricultural supplies including wild forests, fisheries, farms and many more. Again and again, why are there still people that are hungry? Not only one but millions of them, according to the survey of Social Weather Stations 20.5% if Filipinos which is about of 4.1 million families that are encountering starvation and this was taken in November of 2010.  People need food, people need work, people need shelter, and these are the basic needs of human. One of the advertisement on television with a man challenging angrily the mining company, “I will not use cellphone but you will not eat the products coming from farms too.” Farmers are the ones who are affected with this mining activity, because of the area of land that was destructed. Siltation is one of the problem too because it pollutes the water sources.

All of us are victims of the circumstances, we wanted to help the common good but instead of helping we make things worst. But of course we must consider some factors affecting our economy’s development also. Let us see what our government will do for this dilemma. Will they allow mining to make a fast development for our country and be like one of the elite nations? Or will they start giving solution to this starvation?