TRAIN and toxic greed

In a small coastal town in rural Sorsogon where the inflation rate is thought to be lower than the national average, ironically the prices of some essential goods and food staples are exponentially higher. This should not be the case. Rural communities are proximate to fishing waters and farmgates behind which value added taxes are inapplicable and, given our agricultural technologies, the impact of excises under the Tax Reform for Acceleration and Inclusion (TRAIN) are relatively insignificant.

Unfortunately, we live in a time of constant absurdity.

One Sorsogon businessman related how the price of Narrow -barred Spanish Mackerel (Tanigue) sold directly off fishing boats to dealers and traders jumped from P150 per kilo to as much as P250 to P300 per kilo. That’s at least a 67 percent increase for an unprocessed product whose only TRAIN-related input was the incremental excise on marine diesel fuels where a per liter price of P36.50 rose to P39.50, a 7.6 percent increase due to TRAIN.

If these observations are accurate, the numbers cannot be denied. So also, are the anecdotal testimonies of other Sorsogon residents who feel the pain of absurdly high prices compared to the mere pinches felt by urban counterparts in Manila.

Quickly analyse the data between the two locales. Manila pays higher wages than Bicol.

The average per capita income in the Bicol region falls far below while its poverty incidence is astronomically higher.

Dovetailing the national economy, gross regional domestic productivity in the national capital region was 6.1 percent. The same was a whole percent lower for the Bicol region.

Poverty incidence in the Bicol region, outstripping the national average, was 27.5 percent when last recorded. When we unravel those averages the poverty numbers are even higher for fisherfolk. Relative to other livelihoods, when we consider the finer differences, where the poverty incidence is 34 percent for fishermen on the national level, it is only a third of that at 11 percent for urban dwellers and professionals.

To be specific, Manila’s poverty incidence compared to the Bicol region is about 40 percent less. By relating these numbers against the impact of inflation, it is easy to see why any rise in prices for both fishermen and the local fish markets in Sorsogon can be exponentially debilitating relative to mere inconveniences in Manila.

In our example of a 67 percent increase in the rural price of a product whose only TRAIN-related cost input was a mere 7.6 percent fuel increase indicates the presence of extraneous factors that invade pricing formulae yet have absolutely nothing to do with direct costs.

This is especially critical where rural economies like those in Bicol have less capacities for coping than urban centers like Manila where price regulators have a bigger presence.

At a time when runaway inflation is wreaking havoc on the economy and on vulnerable consumers unable to catch-up, unexplainable prices relative to rational cost increases naturally lead us to assume that perhaps insatiable greed is an even bigger factor than costs.

Let us cite a rather trivial example in Metro Manila where unexplainable high prices are similarly imposed beyond reasonable costs inflated by TRAIN.

Note how mall parking charges have increased exponentially through a disingenuous mix of shortened hours applicable to an initial charge plus the increase of charges for succeeding hours set at increments of an hour. In the case of the latter, where these were previously P10 per succeeding hour, post TRAIN, some now go as high as P30.

Yet parking costs are substantially fixed costs expended whether one vehicle is parked or thousands. Guards, booth operators, even lighting charges are not variable and the TRAIN -related inputs are confined to electricity. And yet post-TRAIN these effectively bloated beyond 200 percent of fixed costs.

If there is anything sabotaging the whole TRAIN package and the economy with it, it is opportunism and greed. Unfortunately, such avarice is inflicted on the rural sector far worse than in the urban areas.