Zero Tariff on Steel, Petrol

[optimusprime]

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On the news today, the government approved a zero tariff on oil, steel, rice, detergent raw materials and others potentially losing 4 billion pesos on national treasury. Now, we will hope due to these, prices of prime commodities will go down like oil, in effect basic commodities also will go down. Do you really think mga fellow istoryans naa kaha ni epekto, basin mahulog nalng sad ni wala... Your opinion guys & gals..

[hitch22]

I celebrate that news more than I grieve about it. The idea of boosting the national treasury is a bad one...if the government does a poor job managing it. In the first place, we got into the deficit mess (and debt problems) we're in because of financial mismanagement by the government. And the solution is to throw money at the very people who's mismanaging it in the first place?

The lifting of tariffs on selected inflation-sensitive goods is a step in the right direction. Ultimately, we want to see all tariffs lifted, with the Bureau of Customs' function limited to restricting banned items. They give tariffs the nickname "protection" to make it palatable to the public. Who does it protect, really? The only thing tariffs protect is local inefficiency, their stubbornness to upgrade and improve. But what about the problem of dumping? Dumping, by definition, is a practice of one country of selling goods to another country below its cost. So, what do we do in this instance? If someone wants to sell us something below its cost, we buy it. Who gets hurt more? The closure of one business due to competition is no different either when it's between a local company versus another local company or between a local company versus a foreign one. I think the government should look more into which interests it is favoring more when it imposes certain regulations. They have to be cognizant of its impact on the real silent majority, the over 70% part of the GDP called Consumption. Lobbies from monopolistic business groups and cartels are usually most influential because they have lots of money to party with. Come to think of it, why don't we have an anti-trust commission to prevent cartels and oligopolies?

Another side effect of tariffs is that a lot of potential businesses don't get to see the light of day because high tariffs prohibit the feasibility of making certain products...especially when that product that's being "protected" could've served as raw material for a higher-value product. For example, you may be protecting the seaweed industry but you may have inadvertently prevented industries that use seaweeds as raw materials to produce products like toothpaste, ice cream, etc from springing up....example lang.

It's okay to listen to what credit ratings agencies recommend. They always say the same thing: raise tax rates, raise tax collections. More taxes mean less spending money for us...the ordinary citizen. Indirectly, more taxes simply mean we entrust the government for the wise use of our money, and that's a big mistake. We can actually keep the tax rates as it is, but make it easier and convenient for people to pay taxes (like what Singapore does with E-filing). More people will pay taxes if it's convenient and reasonable to do so. And then people forget that more taxes can be collected if we increase the number of taxpayers by making our country more attractive for investments. If our top tax rate is 35% and Vietnam's is 25% (example lang), guess where that business will likely set up shop? If the government was a business and tax rates represent prices for its goods, it's probably the silliest strategy under a perfect competition environment (as opposed to a monopoly) to improve sales and cash flow by increasing his prices.

The government knows it can do three things to raise revenues: raise tax rates, improve collection measures or reduce government spending. You'll never hear of the third option. How many useless government bureaus can we do without? I bet there's a lot you can think of. These offices serve more to cause unnecessary delays and they don't even perform their mandated functions. They say we have to "swallow the bitter pill", but all we see them do is spend tax money on junkets, Euro generals and Manny Pacquiao fights in Vegas.

[optimusprime]

Hitch, I agree with you, our local industries failed to innovate, failed to compete globally which make them vulnerable to globalization. But government also should make the steps forward to mitigate these things to happen. Enforcing the functions of the tasked government agencies should be strong and transparent. The way I see our country's economy how it is being manage, almost all are being pushed for privatization. Well, I dont know really the disadvantage of having one but the way I see it, it is a one side win situation, its only my perspective.

For me as a Filipino citizen, I can do something in my own little way. SUSTAINABILITY...hehehe..