2018 prosperity by Duterte policies not for all—IBON

January 2, 2018

by IBON Foundation

Admin’s avid push for market-driven measures will run over the poor majority

The new year seems to usher in more difficulties for Filipinos in accessing basic goods, public utilities, and services amid government’s exclusionary policies, research group IBON said. The market-driven policies that have been prioritized by the Duterte government such as the Tax Reform for Acceleration and Inclusion (TRAIN), Build, Build, Build, amendments to the Public Services Act, and easing restrictions on foreign ownership and participation will hugely benefit only oligarchs, foreign investors and their allies in the bureaucracy, said the group.

IBON said that the newly-enacted first package of TRAIN relieves the rich by lowering personal income, estate, and donor taxes. The second package, which Congress is set to tackle soon, will propose to lower corporate income taxes as well. But the poorest 10 million Filipino families whose incomes fall way below the family living wage of Php1,039 per day will soon bear the brunt of TRAIN-triggered higher prices of food and goods,and service fees, said the group. It noted that TRAIN’s measly Php200 monthly social protection is slated only for 2018 and will be insufficient to cushion the impact of added taxes on oil and sweetened beverages, electricity, and shipping.

In terms of government’s infrastructure program that will be funded by foreign and private sector loans, public-private partnerships (PPPs), and unsolicited proposals, IBON added, contracts stipulate that the State will ensure interest and risk guarantee payments to the lenders and corporations for largely transportation infrastructure. But on the other hand, the public will be obliged by the ‘user pays principle’ with the likes of higher toll fees and more expensive fares.

IBON also said that proposed amendments to the Public Service Act will open up services such as transportation and telecommunications to foreign ownership. This will purportedly lower the prices of these services due to competition. Based on experience, however, monopolies or only a few companies instead prevailed and dictated the prices due to the absence of strong and genuine government regulation that upholds public interest. Proposed amendments will also allow ‘public utilities’ such as water and power service providers to treat corporate income tax as an expense. According to IBON, this will mean higher rates as consumers will be made to shoulder the companies’ tax obligations.

Relatedly, said IBON, more foreign corporations may be enticed to do business in the Philippines upon the modification of the foreign investment negative list (FINL) even before foreign restrictions could be removed through a more cumbersome Charter change. The FINL is a mechanism to limit foreign ownership in and protect Philippine industries, stressed IBON. However, the Duterte administration’s proposed modification will allow foreigners to further enroach on local professions, construction, retail trade, businesses, media, and education. Once government steps aside from its duty to provide goods and services, people’s access and capacity to afford these will be left at the mercy of corporations.

The Duterte government’s prioritization of the above-mentioned measures shows its determination in completely opening up the Philippine economy to big business and foreign corporate plunder at the cost of people’s welfare and national sovereignty, IBON said. This year onward, these State-facilitated neoliberal policies will further attack the people’s lives and livelihood,  and undermine the public’s rightful control and access of the country’s  resources. These social and economic woes will most likely increasingly face public scrutiny and opposition for now and the years to come, said IBON.