DBM Secretary Diokno guested in a live broadcast interview with Bloomberg TV this morning at the Bloomberg Markets Asia Studio in Hong Kong.
In his interview with David Ingles of Bloomberg TV, Secretary Diokno was prompted to discuss the relationship between TRAIN law and rising inflation in the Philippines.
According to Secretary Diokno, the estimated contribution of TRAIN to inflation is only 0.4%. He pointed to food supply factors as the reason behind rising inflation.
“[The] price of pork has gone up because of the crisis with Swine Flu. Also, our own National Food Authority had 4.6 million sacks of rice they did not release on time; they also have money to buy rice, they did not do it,” the Secretary said.
When asked if the economic managers were going to back-track on the implementation of TRAIN law after pressure from some legislators, Secretary Diokno said “no”.
“It is a structural reform. The past tax reform that we did was 30 years ago. We needed to make the tax system fairer, simpler, and more competitive with our ASEAN neighbors [...] We’re not sacrificing that to solve transitory problems. That’s like using a sledgehammer to kill a fly,” Secretary Diokno explained.
According to the Secretary, the economic managers expects inflation to “taper off” by fourth quarter of 2018 with increased importation and the coming of the harvest season. He also expects inflation to go back within the government’s original target band of 2-4% by 2019.