In his upcoming State of the Nation Address (SONA) this July 27, expect Duterte to once again aggressively push for the implementation of neoliberal economic reforms to further squeeze the already overburdened Filipinos. As what happened with the Anti-Terror Law, the granting of Covid-19 emergency powers to Duterte and the shutdown of ABS-CBN, these schemes will surely be railroaded as congress resumes its sessions.
The measures are being pushed by Duterte’s World Bank-trained technocrats under the guise of boosting the economy which has seen a sharp downturn due to the Covid-19 pandemic. There is, however, nothing new in its focus of “attracting foreign investments,” borrowing money from foreign creditors and passing the burden on the people in the form of a slew of new taxes.
Duterte’s economic managers have recently set on a media campaign to aggressively push for the implementation of an utterly regressive “Junk Food Tax” which aims to levy additional excise taxes on almost all food products. This includes taxing dried fish, noodles and canned goods that are staple to many households and blue-collar workers. Excise tax will also be levied on deep-fried and salty snacks; candies, sugary desserts and sweetened beverages; and fastfood products. The fiscal reform is justified as “sin tax” purportedly to discourage Filipinos from eating unhealthy food. Filipinos will be set back by at least P72.97 billion in should the tax be implemented. The tax burden is heavier for the poor majority who pay proportionally more out of their already meager incomes. This is doubly reprehensible especially now that majority of workers have lost their jobs to the pandemic.
Duterte’s economic managers are busy finding other things to tax. The Department of Trade and Industry (DTI) recently compelled small online sellers to register their businesses in order to impose taxes on them under pain of facing criminal charges. It recently drew more flak after stating that barter trading is illegal and must be taxed. New barter arrangements such as “online barter trading” have emerged as these have provided people with an alternative source of food and other basic needs amid the pandemic and imposition of work restrictions.
Because of disagreements between various government agencies and Congress over which project should be prioritized and problems of funding, the so-called “Covid-19 stimulus package” was not passed before congress went on recess last month. Last July 9, Presidential Spokesman Harry Roque announced that the legislative and executive branches have also already agreed on implementing the so-called “Covid-19 stimulus package” and Bayanihan 2.
The stimulus package includes the Corporate Recovery and Tax Incentives for Enterprises (Create) Bill which aims to lower corporate income tax from 30% to 25% and give Duterte the authority to tailor-fit tax incentives and exemptions for big companies. This purportedly aims to attract foreign investments to create jobs for Filipinos. Only multinationals and companies that rake in billions of profits in the country will primarily benefit from this reform. The reactionary state will lose about P259 billion in corporate taxes until 2022 should the tax cuts be implemented.
Duterte’s stimulus package also includes the Covid-19 Unemployment Reduction Economic Stimulus (CURES) Bill which aims to give a new push to the slow implementation infrastructure projects under the regime’s Build, Build, Build program to purportedly create jobs to address the unemployment crisis. Contrarily, however, these projects will not create sufficient and long-term employment opportunities. In the past years, the much touted program has only contributed one-fourth of the total employment in the construction sector. Majority of the jobs created by these projects are contractual.
Duterte is also expected to push for the extension of his emergency powers under the Bayanihan Act which expired on June 25. In the past months, Duterte invoked the said power to arbitrarily impose a 10% tax increase on imported crude and petroleum products which has translated into higher prices of goods and services in the past months.
Simultaneously, his henchmen are aggressively pushing to expedite the privatization of government properties and assets to purportedly augment public funds amid the Covid-19 crisis. Senator Francis Tolentino last week filed the Deparment of Finance-backed “Covid-19 Economic Lifeline Act” which aims to create a Covid-19 Privatization Commission. The said commission will be headed by neoliberal extraordinaire Finance Sec. Carlos Dominguez who will oversee the disposition of state-owned assets which he deems “unprofitable.” Earlier in April, Rodrigo Duterte himself expressed his intent to sell the land where the Cultural Center of the Philippines and the Philippine International Convention Center stand on.