Press Release
May 31, 2008


Senator Mar Roxas said the government must come to the aid of distressed consumers by supporting the suspension of the value-added tax (VAT) on oil and immediately implementing "relief measures" that Congress has recently passed and are about to be signed by the President: the Cheaper Medicines Act and the law exempting minimum wage earners from income tax.

Roxas said the slower gross domestic product growth (GDP) of 5.2% this quarter - at the low end of the government's forecast of up to 6.2% and slower than the 7% growth in the same period last year - shows weaker purchasing power on the part of consumers and less support to them by the government.

"Personal consumption slowed down by 0.8 percentage points. Consumer spending is the main driver of growth in the economy, sharing 75% of GDP. So any slowdown in consumer spending should be of urgent concern," he said.

"Since the start of the year, our consumers faced a deluge of price hikes. Oil started out at $90 a barrel, and now it's more than $120. Food prices, especially rice, have gone wayward too due to a combination of local and international factors. And our OFWs, faced with a stronger peso, now effectively send less to their families back home," he added.

The Chairman of the Senate Committee on Trade and Commerce said the government should now seriously consider giving up its potential windfall from VAT on oil in order to provide immediate relief to our consumers.

"From my review of the growth figures so far, government spending dropped by 1%, and government services grew a dismal 3% from last year's 8%. So it appears that all these talk from the government that revenues will be spent to help consumers and grow the economy is really nothing," he said.

"Mukhang itinatago lang nila ang kita nila sa baul kaysa ginagastos doon sa sinasabing mga 'pro-poor programs.' Kung ako sa kanila, ibalik na lang ang pera ng taumbayan ngayong higit nila itong kailangan kaysa gobyerno," he stressed.

"Now that the government has admitted it could not anymore meet its balanced budget target, then it's time for them to give up its windfall from VAT on oil. Because strong economy or weak economy, the revenue agencies were not attaining their targets anyway," he added.

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