MANILA – Amidst complaints about the additional excise tax that goes with the Tax Reform Acceleration and Inclusion (TRAIN), Department of Budget and Management Secretary Benjamin E. Diokno said the new law is expected to yield PHP130 billion revenues in 2018.
Speaking before members of the Italian Chamber of Commerce in the Philippines, Inc (ICCPi) in a meeting entitled, “TRAIN: Driving the Philippine Economy in 2018”, held in Makati City on Feb. 22, Diokno said the expected revenue will steadily rise to as much as PHP220 billion annually and will generate close to PHP1 trillion in revenues over a five-year period from 2018 to 2022.
“TRAIN is an essential tool in our expansionary fiscal strategy. It will not only generate additional resources for priority programs and projects but also make our fiscal program more sustainable,” Diokno said.
In his presentation, Diokno discussed the Philippine economic outlook for 2018 and how the Tax Reform for Acceleration and Inclusion (TRAIN) Law fits in the development agenda of the Duterte Administration.
He added that the full effects of TRAIN will only be appreciated in the medium to long-term.
“We are sure that the criticisms will die down once they see the impressive infrastructures built and the social services programs implemented,” Diokno said.
To finance the higher requirement for infrastructure spending, he said, seventy percent of the TRAIN revenues will be earmarked for the “Build Build Build” program while the remaining will be allotted for social services.
Diokno reiterated that the government ensures mitigating measures to offset the inflationary impact of TRAIN Law.
“In order to compensate for the inflationary impact of TRAIN, we have set aside PHP200 per month per household to the poorest 50 percent of households. Some PHP24.5 billion for the unconditional cash grant has been included in the 2018 National Budget,” he added.
The unconditional cash transfers for the poorest of the poor will be increased to PHP300 per month in 2019 and 2020 benefitting 10 million Filipino households, he said.
TRAIN is not a perfect law, he said, but on balance it is a big plus for the economy.
“TRAIN takes into consideration the immediate, the medium, and the long-run effects of the law,” he added.
Diokno said the passage of Package 1 of TRAIN shows the commitment of the Duterte Administration in improving the economic conditions of the country and the general welfare of its people.
The Budget chief also participated in the open forum moderated by lawyer Tony Abad and was joined by his co-speakers – Congressman Dakila Carlo Cua, Finance Undersecretary Atonette Tionko, and lawyer Amanda Carpo of Kittelson & Carpo Consulting.
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