Press Release
January 27, 2006


Sen. Mar Roxas yesterday called on the Department of Trade and Industry and local officials to fan out price monitoring teams to public markets starting this weekend to prevent unscrupulous traders from jacking up prices of basic goods unreasonably due to the 20-percent increase in the expanded Value Added Tax.

Roxas, chairman of the Senate Committee on Trade and Commerce, said the implementation of a 12% VAT, a two-percentage point increase from the current VAT of 10%, should not affect prices of agricultural goods and would only translate to minimal increases in prime commodities and petroleum products.

Based on the latest price monitoring report by the Department of Trade and Industry, prices of some canned pork, canned milk, and detergent bar in Metro Manila public markets have gone up by 3.45% and canned beef by 7% as compared to their prices a month ago.

Some brands of soy sauce and canned fish have increased by 5.2%, refined sugar by 9.6%, brown sugar by 8.23%, galunggong by 11%, and bangus by 7.14%.

Roxas said the increase in value-added tax would translate to a weaker purchasing power for the consumers, but it would also mean additional revenues for the government and boost investors confidence on the countrys fiscal condition.

The people would like to know how the government plans to spend the additional revenues that will be collected, he said.

Roxas, chairman of the Senate Committee on Economic Affairs, said the government is expected to raise about P100 billion from the full implemented of the Reformed Value Added Tax Law this year.

He said it would be better if the government would use the amount to finance infrastructure projects that would have long-term benefits on the people rather than spending it to buy rice and noodles for distribution to the masses.

Money should be spent wisely on projects that will have a big impact on peoples lives. It may be used to build more school buildings or improve the facilities of government hospitals, he said.

According to Roxas, the people expect to see tangible benefits from the additional taxes that they pay to the government and experience better living conditions brought about by the growth in the domestic economy.

He said consumers have not seen prices of some prime goods like imported milk going down because of a stronger peso. He added that prices of world crude have gone up to about 69$ a barrel and may lead to higher pump prices in the near future.

Government economic managers may continue to trumpet rosy economic figures, but these are just numbers that do not mean anything yet to ordinary Filipinos, he said.

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