POLICY NOTES

PN 2019-11: Effects of TRAIN Fuel Excise Taxes on Goods
and Prices
by Czar Joseph Castillo, Ramon Clarete, Marjorie Muyrong,
and Philip Tuaño

In January 2018, the first package of the Tax Reform for Acceleration and Inclusion (TRAIN) Law took effect, adjusting, among others, the excise tax rates on fossil fuel and petroleum products. This Policy Note discusses the impacts of such adjustment on productive activities and prices across the economy. It finds that the increase in fuel excise taxes would have a slight impact on sectoral outputs and prices, and therefore on household welfare through incomes and employment. Sectors that are energy-intensive would also see a slight decline in output and there would be a slight increase in poverty given higher prices. Nonetheless, the tax reform would also lead to increased economic activity following increased consumption brought about by lower income tax rates, especially among the highest income deciles. This analysis leads to several considerations that policymakers must undertake in designing tax policies, such as the impact of the policy reform on the welfare of the poorer sectors in the country. Click here to download the policy note.

PN 2019-10: Impacts of TRAIN Fuel Excise Taxes on Employment and Poverty
by Czar Joseph Castillo, Ramon Clarete, Marjorie Muyrong, and Philip Tuaño

This Policy Note discusses the impacts on poverty and employment of the increased fuel excise tax rates under the first package of the Tax Reform for Accelerated Inclusion (TRAIN) Law. Among others, it finds that the general price increase resulting from new excise tax rates on fuels slightly increased poverty incidence, particularly among farmers and transport workers. Nonetheless, the law’s provision on unconditional cash transfer mitigated such increase in poverty. In terms of employment, the net effect was positive, wherein the total employment still grew. Still, employment in some sectors suffered from reduced level of economic activities. Although overall employment may still increase, the transition from one work to another may become costly for some workers. To address this issue, this study calls for the crafting of active labor market policies, such as direct employment creation, and passive labor market policies especially those that link workers to available work useful in minimizing the welfare loss of workers. Click here to download the policy note.

LGUs play a key role in addressing new globalization challenges—DILG exec

As with achieving the country’s Sustainable Development Goal (SDG) targets, local government units play a major role in responding to the challenges of the New Globalization.

This is according to Interior and Local Government Undersecretary Marivel Sacendoncillo who spoke during the kick-off press conference of the Development Policy Research Month organized by the Philippine Institute for Development Studies.

“Their [LGUs] role in delivering basic services, creating vibrant local economies, developing resilient communities, maintaining peace and security in their localities, READ MORE

Embrace innovation to adjust to the new globalization

“The Philippines must be prepared to newness not only in globalization but also in everything.”
 
This, Senator Aquilino “Koko” Pimentel III, chair of the Senate Committee on Foreign Relations and Committee on Trade, Commerce, and Entrepreneurship, underscored in his message during the fifth Annual Public Policy Conference (APPC) held in Pasay City recently.  
 
Directing his remark to the country’s planners and policymakers, Pimentel said they “must always be open to change” as “the increasingly integrated global economy is here to stay,” READ MORE

Nat'l and local interventions underway to address IPs educational disparities in Mindanao

The government is exerting efforts to improve the access of ethnic groups to education, especially those who are in Mindanao, said Philippine Institute for Development Studies (PIDS) President Celia Reyes.
 
According to Reyes, it is important to reexamine the inequality of education among indigenous peoples (IPs) across the country, especially those in Mindanao, to identify their needs and help government come up with appropriate interventions that will equip them with the skill set required in the era of the New Globalization.

“One of the drivers of the New Globalization is the Fourth Industrial Revolution. For us to be able to take advantage of the advances of modern technologies, READ MORE

Navigate the new globalization by capacitating our farmers—MinDA chief

Local farmers in Mindanao need to adopt new technologies in agriculture, particularly in rice farming, to increase productivity.

This is according to Secretary Emmanuel Piñol, the newly-installed head of the Mindanao Development Authority (MinDA) and former chief of the Department of Agriculture, during the Fifth Mindanao Policy Research Forum (MPRF) held in General Santos City recently with the theme “Navigating the Challenges of the New Globalization: Local Actions for Mindanao”.

“The New Globalization is a double-edged sword. If you are prepared for it [then] you will benefit from it. [But] if you are not prepared, woe to you. READ MORE

Think tank advances own VUCA versus new globalization issues

As the world enters the fourth phase of globalization—described by experts as full of volatility, uncertainty, complexity, and ambiguity, or in short, VUCA—state think tank Philippine Institute for Development Studies (PIDS) proposes its own VUCA (vision, unity, consultation, and adaptability) as antidote to the complex challenges that the new era of globalization brings. 

In her opening speech at the Annual Public Policy Conference (APPC) held on September 19 at the Sofitel Philippine Plaza in Pasay City, PIDS President Celia Reyes cautioned that the new globalization could be "quite a test to navigate". READ MORE

PIDS bares challenges, opportunities of new globalization to cross-border investments

The past waves of globalization saw the rapid growth of world trade, often accompanied by cross-border investment, and with one or more countries serving as an economic hub.
 
According to Philippine Institute for Development Studies Senior Research Fellow Roehlano Briones, recent technological advances have revolutionized the way investors do business in the global market.
 
Briones explained that global value chains (GVCs), which have been the main driver of the economic restructuring of production over the past three decades, are being transformed due to digitization of trade. READ MORE

FACT FRIDAY

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