Last September 2018, Philippines’ Inflation rate has reached a record high 6.7%.

Some attribute
the inflation to the combined increase in demand, increased taxes, and peso depreciation among
others. Yet the idea of inflation, its many causes and effects, continue to elude most of the
population. For students, the country’s economic status is a topic mostly heard from the news,
often left for the adults to discuss. In truth, most youth find the terms GDP, taxation and interest
rates offputtingly complex. But students would surely agree that the economy’s current situation
affects not only the bread winners and the budget managers in the family but also them as
individuals. Understanding one of the supposed causes of this inflation and how it affects the daily
lives of a common Filipino family would surely lessen the bittersweet feeling of drawing an
additional peso or two to pay for a cola or a jeepney ride.
The rise in inflation was first observed starting January 2018, the same month that the Tax Reform
for Acceleration and Inclusion Law or commonly known as TRAIN law was enacted. Thus, it was
one of the suspects in the sudden increase in inflation. The law boasts of increasing the take home
pay of the workers as it exempted people who are earning 25000 pesos and below monthly from
income tax. This means that compared to the old tax computation, which exempts Minimum Wage
Earners among others, with the TRAIN law, an employee may now take home an additional 2000
pesos.
Taxes are an essential part in funding government projects such as bridges and roads and so instead
of putting taxes on incomes, the TRAIN law taxed the expenditures or the people’s consumption.
This was done by raising taxes on car purchases. This was done by adding ‘SIN’ taxes or taxes on
cigarettes and alcoholic beverages. This was done by adding taxes on sweetened drinks. This was
done by adding taxes on fuel and gas prices. It all seems fair, since the additional take home of
2000 pesos would cover the addition tax from purchased goods. And since most people in the
poverty line do not have their own cars, they would not be greatly affected by the fuel price
increase.
Of all the taxes added by the TRAIN law, it is the fuel excise that had affected the prices of goods.
This was because increase in fuel prices means increase in cost of transportation of goods for
sellers of these prime commodities such as rice, sugar etc. They had no choice but to increase their
product prices since their production and logistic costs had increased. In addition, although TRAIN
law aims to tax those who are more affluent by taxing them on their gas purchase, the poor were
also affected as the minimum fair for public vehicles such as jeepneys were increased.
If a student would take a closer look he or she may observe that most students in their public
schools belong to families who were already exempted from the tax as mandated by the old tax
laws. These are families with parents who are minimum wage earners. These are families who
have parents who sell homemade goods for a living. These are families who barely get by with the
usual prices. The additional take home pay would not be felt by these families, but surely they
would feel the additional taxes, may it be in the form of the jeepney ride they take to go to work
every morning or the rice they shared as a family every night. The tax was meant to lessen he
burden of those who are earning less. Yet in the end, it was still the poor who were left to adjust.