TRAIN: Si CEO, ang kanyang luxury car at si manang tindera

Si manang tindera at kapwa mahihirap nyang suki ang magbabayad sa matitipid ni CEO sa kanyang luxury car.

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(Larawan mula sa expatch.org)

Isipin n’yo ito –

Kapag bumili, halimbawa, ang presidente o CEO ng isang malaking kumpanya ng luxury car gaya ng Toyota Alphard 3.5 V6 na ang presyo ay nasa Php3.28 million, makakatipid siya nang hanggang Php337,000.

Si manang tindera sa sari-sari store na kailangang bumyahe sa Divisoria para mamili ng mga paninda ay maaaring magbabayad ng dagdag-pasahe sa dyipni nang hanggang Php4, o hanggang Php8 kung balikan. Magiging mas mahal na rin ang bibilhin nyang mga paninda gaya ng yosi na tataas ang presyo nang Php2.50 bawat kaha at softdrinks na tataas nang Php12 kada litro. Kailangan ni manang tindera ng mas malaking puhunan, habang maaaring liliit naman ang kanyang dati nang maliit na kita.

Si manang tindera at kapwa mahihirap nyang suki ang magbabayad sa matitipid ni CEO sa kanyang luxury car.

Ito sa simpleng salita, ang ibig sabihin ng TRAIN (Tax Reform for Acceleration and Inclusion) para sa mayaman at mahirap.

Nakakalula ang laki ng sahod ng mga CEO ng mga dambuhalang korporasyon sa bansa. Ang average na sahod ng CEO ng Metro Pacific Investments Corp. (MPIC) at Meralco nina Manny V. Pangilinan ay nasa halos Php8 million kada buwan. Ang mga CEO na nasa Ayala ay sumasahod ng halos Php7 million kada buwan. Sina Ramon Ang sa San Miguel Corp. (SMC), sumasahod kada buwan nang halos Php6 million. Si manang tindera? Swerte nang kumita ang kanyang pamilya ng Php2,700 sa isang buwan (batay sa 2015 Family Income and Expenditure Survey o FIES ng gobyerno).

Directors-Salary-v2
Mula sa Entrepreneur Philippines

Noong 2016, ang tinubo ng top 1,000 corporations sa bansa na kontrolado nina Pangilinan, Ayala, Ang at iba pang super rich kasama na ang mga dayuhan ay umabot sa Php1.24 trillion, mas malaki pa nang halos 15% sa tinubo nila noong 2015.

Yan lang ang deklarado o alam ng publiko. Magkano pa kaya ang totoo? Kaya walang epekto sa kanila ang anumang taas-presyo sa mga produkto o serbisyo. Sila nga ang may monopolyo sa mga produkto at serbisyo sa bansa at lahat ng taas-presyo ay ipinapasa sa pobreng mamimili. Laruan lang sa super rich ang mga luxury cars, tapos makakatipid pa sila nang daan-daang libo kapag bumili ng mga ito?

Sa kabilang banda, marami sa mga Pilipino ang gaya ni manang tindera na umaasa sa informal economy bilang nagtitingi ng produkto o nagbibigay ng serbisyo gaya ng mga drayber ng traysikel at dyipni, o mga tindera sa karinderya. Wala silang buwanang sahod. At marami sa kanilang kostumer ay mga galing din sa informal economy. Ibig sabihin, hindi sila makikinabang sa mas mataas daw na take home pay dahil sa mas mababang income tax. Pero tiyak na tataas ang kanilang gastos.

Si manong tsuper ng dyipni ay magbabayad ng dagdag na Php2.80 kada litro ngayong taon sa diesel habang si manong traysikel drayber ay may taas-gastos sa gasolina nang Php2.97 kada litro. Si manang may-karinderya ay tataas ang gastos sa LPG nang Php12 kada tangke (11-kg). Batay ito sa pahayag ng DOE.

Paano ang mga magsasaka at mangingisda – na pinakamataas ang poverty incidence sa lahat ng sektor (kapwa nasa 34% sa pinakahuling official data) – na umaasa sa kerosene, na tataas nang Php3.30 kada litro dahil sa TRAIN (pinakamalaki sa lahat ng produktong petrolyo) bilang pang-ilaw, pangluto at sa paghahanapbuhay?

Ngayong taon pa lang yan. Sa susunod na 3 taon, lalo pang tataas ang presyo ng langis dahil sa TRAIN, bukod pa sa halos linggo-linggong oil price hike dahil sa deregulasyon. Binibilang pa lang natin ang direktang impact. Ang pagtaas sa presyo ng langis (at kuryente bunga pa rin ng TRAIN) ay may domino effect sa presyo ng iba pang produkto’t serbisyo.

Lampas 15 million ng mga may-trabaho sa bansa ang walang regular na buwanang sahod o hindi nga sumasahod kahit nagtatrabaho, katumbas halos ng 37% ng kabuuang bilang ng employed noong 2017, kabilang ang gaya nina manang tindera at manong drayber. Paano pa kaya ang mga walang trabaho na nasa 2.4 million batay sa pinababang unemployment rate ng gobyerno?

Pero maraming ordinaryong manggagawa o empleyadong may regular na sahod ay hindi rin naman makikinabang sa TRAIN. Walang madadagdag sa sahod ng mga dati nang sumasahod ng minimum wage o mas mababa pa na bumubuo sa halos kalahati (46%) ng lahat ng manggagawa sa Pilipinas. Pero papasanin nila ang pagtaas ng mga presyo’t bayarin dahil sa TRAIN.

Kakarampot na nga ang minimum wage sa bansa. Bago pa ang impact ng TRAIN, ang minimum wage ay wala na sa kalahati ng tinatayang cost of living (hal. sa NCR, nasa Php1,130 ang cost of living kada pamilya kada araw kumpara sa arawang minimum wage na Php512). Paano kung maging mas mahal pa ang mga bilihin at serbisyo dahil sa dagdag-buwis?

Babawiin din ng taas-presyo dahil sa dagdag-buwis ang sinasabing pagbaba ng personal income tax. Kahit ang mga mataas-taas ang sahod at may pambayad pa, halimbawa, sa Uber o Grab ay hindi ligtas. Nagsabi na ang Grab ng taas-singil sa pasahe nang aabot sa Php13 dahil sa TRAIN. Mas mataas na ang gastos sa gasolina ng mga de-kotseng middle class. Hindi pa pinag-uusapan na inaalis ng TRAIN ang dating tax exemption na hanggang Php100,000 para sa 4 na dependents (hal. anak) ng isang taxpayer (o Php25,000 kada dependent) bukod pa sa personal exemption na Php50,000.

Isang paraan ang progresibong pagbubuwis para tiyakin ang makatarungang pamamahagi ng yaman ng isang lipunan. Pero kung ang mahihirap ang papasan ng buwis para sa maluhong pamumuhay ng mayayaman, hindi lang iyan regressive, pang-aapi na iyan. #

How MVP-Ayala will squeeze LRT 1 commuters dry

Fare hikes galore as the MVP-Ayala group takes over the LRT 1
Fare hikes galore as the MVP-Ayala group takes over the LRT 1 (Photo from ppp.gov.ph)

A fare hike after the presidential State of the Nation Address (Sona) and massive retrenchment of LRT 1 employees by early next year are among the immediate impacts of the Php64.9-billion LRT 1 extension and privatization project.

As the lone bidder in the largest public-private partnership (PPP) deal of the Aquino administration, the group led by Metro Pacific Investments Corp. (MPIC) of Manny Pangilinan (MVP)/Salim Group (Indonesia) and Ayala Corp. of the Ayala family, a long-time crony of the Aquinos, is now all set to take over the operation of the country’s first-ever metropolitan rail system from the Light Rail Transit Authority (LRTA).

MPIC (55%) and Ayala (35%), together with Australia-based investment giant Macquaire (10%) have formed the Light Rail Manila Consortium to extend the LRT 1 from its current endpoint in Baclaran to Niyog in Bacoor, Cavite.

I was able to obtain a copy of the final Concession Agreement and its Annexes/Schedules. You may download the Concession Agreement here. As for the Schedules, contact me through the comment section below to get a copy. The files are too big and it takes time to upload everything.

(You may now access all the documents here.)

Based on the Concession Agreement and Schedules, the concessionaires will implement an initial Notional Fare composed of P12.13 in boarding fare plus P1.10 per kilometer (distance fare component) starting on August 1, 2014. Notional fare refers to the fare that the concessionaire is entitled to under the Concession Agreement.

This means that a commuter travelling from Roosevelt to Baclaran will pay a new fare of more than P32 – representing the P12.13 in boarding fare plus a distance fare of P19.88 (P1.10 x 18.07 kilometers or the distance between the Roosevelt and Baclaran stations). That’s P12 more or 60% higher than the current fare. (See Table)

Old fares vs. new fares under LRT 1 privatization (Figures in pesos unless stated otherwise)
From Roosevelt to: Distance (km) Distance fare (@ Php1.10 per km) Distance fare + Php12.13 boarding fare Current fare Difference Increase (%)
Balintawak 1.87 2.06 14.19 12.00 2.19 18.23
Monumento 4.12 4.53 16.66 12.00 4.66 38.85
5th Avenue 5.21 5.73 17.86 12.00 5.86 48.84
R. Papa 6.16 6.78 18.91 12.00 6.91 57.55
J.A. Santos 6.82 7.50 19.63 15.00 4.63 30.88
Blumentritt 7.75 8.53 20.66 15.00 5.66 37.70
Tayuman 8.42 9.26 21.39 15.00 6.39 42.61
Bambang 9.04 9.94 22.07 15.00 7.07 47.16
D. Jose 9.69 10.66 22.79 15.00 7.79 51.93
Carriedo 10.37 11.41 23.54 15.00 8.54 56.91
Central 11.10 12.21 24.34 15.00 9.34 62.27
U.N. 12.31 13.54 25.67 15.00 10.67 71.14
Pedro Gil 13.06 14.37 26.50 15.00 11.50 76.64
Quirino 13.86 15.25 27.38 15.00 12.38 82.51
Vito Cruz 14.68 16.15 28.28 15.00 13.28 88.52
Buendia 15.75 17.33 29.46 15.00 14.46 96.37
Libertad 16.48 18.13 30.26 15.00 15.26 101.72
Edsa 17.49 19.24 31.37 20.00 11.37 56.85
Baclaran 18.07 19.88 32.01 20.00 12.01 60.04
Sources: LRT 1 privatization Concession Agreement and LRTA

Also, it is higher than the original and long-delayed fare hike that the DOTC approved which was P11 in boarding fare plus P1 per additional kilometer. If transportation officials decide to implement this (the approved fare) instead of the initial notional fare, the concessionaire is still assured to collect what was committed to them under the Concession Agreement. In the Concession Agreement, if the Approved Fare (e.g. P11 + 1) is lower than the Notional Fare (e.g. P12.13 + 1.10), government will pay the concessionaire the difference through the so-called Deficit Payment scheme.

In other words, the concessionaire is protected from any regulatory intervention on fare setting, as government, using taxpayers’ money, is obligated under the Concession Agreement to fulfill the guaranteed profits of the concessionaire (generated through the notional fare) at any cost. This is a form of regulatory risk guarantee that Aquino said he would use to promote his PPP program.

But the fare hike through the initial Notional Fare is just the start of regular and automatic fare increases under LRT 1 privatization. Under the Concession Agreement, once the extension of the LRT 1 to Bacoor, Cavite has been completed, the Notional Fare will be automatically increased by 5% through the Step-up Fare Adjustment.

Further, on top of the Step-up Fare Adjustment, the concessionaire is also entitled to increase the Notional Fare starting on August 1, 2016 and every second anniversary thereafter (or the Notional Fare Setting Date) by an effective rate of 5% per annum or 10.25% per adjustment through the Periodic Adjustment of the Notional Fare scheme.

This means that by August 1, 2016, the Notional Fare would now be P13.37 in boarding fare plus P1.21 in distance fare. An LRT 1 ride from Roosevelt to Baclaran thus would already cost around P35 by that time. And this assumes that the 5% Step-up Fare Adjustment is not yet being implemented two years from now (the Cavite extension is estimated to take three years).

Note that the Periodic Adjustment of the Notional Fare will occur every two years throughout the 32-year lifespan of the Concession Agreement. It could even be longer as the Concession Agreement may be extended until 50 years.

But the commuters’ woes do not end there. Aside from the Periodic Adjustment of the Notional Fare every two years, there is also the Inflation Rebasing of the Notional Fare every four years to reflect movements in inflation. The first inflation rebasing will take place in August 2018 per the Concession Agreement.

Indeed, the Concession Agreement applies the neoliberal principle of full cost recovery in LRT 1 fare determination, thus assuring the MVP-Ayala group of substantial profits at the expense of consumers.

On top of the regular and automatic fare adjustments already mentioned, the concessionaire is also entitled to the Differential Generation Cost mechanism, which allows it to pass on to the commuters the cost of extreme fluctuations in the generation costs of electricity through a fare hike (although capped at 5% of the notional fare).

Considering that LRT 1’s power supplier Manila Electric Co. (Meralco) is also controlled by the MVP group while the Ayalas are also in the power generation business, the Differential Generation Cost thus represent multiple oppression and burden for commuters and multiple profits for the MVP-Ayala tandem.

Finally, the Concession Agreement made it clear as well that in case a value-added tax (VAT) or sales tax is imposed on LRT 1 fares, the cost of such tax shall be fully passed on to the commuters, further bloating their burden.

LRT 1, even without a fare hike, is already generating more than enough revenues for LRTA and government. In 2013, LRT 1 operations generated a farebox ratio of 1.26, reportedly one of the highest in the international rail community. It means that revenues from commuter fares exceed the operating expenses of the system. It does not even include non-rail income (from advertising, lease, etc.). With increasing ridership and fares, LRT 1’s farebox ratio is expected to further rise, translating to more profits for the MVP-Ayala group.

If you still could not imagine how LRT 1 fares would cost several years from now under the operation and management of MVP, the Ayalas and their foreign partners, just look at the Metropolitan Waterworks and Sewerage System (MWSS). The MWSS Concession Agreement is very similar to the LRT 1 Concession Agreement with its provisions on rate rebasing, inflation-based adjustments, and other pass-on schemes. Since the MWSS privatization deal took effect in 1997, the average basic water rates have jumped by 585% (Maynilad) to 1,119% (Manila Water).

Another similarity? The MVP group (Maynilad) and the Ayalas (Manila Water) are also MWSS’s private concessionaires!

By clinching the LRT 1 privatization deal, the MVP-Ayala tandem is now starting to assert its monopoly control over Metro Manila’s light rail system. The duo has already bagged the P1.72-billion Automatic Fare Collection System (AFCS), another PPP project of the Aquino administration, which involves the operation and management of a centralized fare collection system using contactless-based smart card technology for LRT Lines 1 and 2, and MRT Line 3 (which the MVP group partly controls as well).

Meanwhile, the P1.4-billion LRT-MRT common station, which will connect the LRT Line 1 and MRT 3 (and the soon to be built MRT 7), will also be constructed by the MVP-Ayala tandem as part of the LRT 1 contract, and will be connected to the Ayala-owned Trinoma Mall – assuring it of an increasing stream of mall patrons.

In my next post, I will share the position paper prepared by a group calling itself the Alliance against LRT Privatization (AALP). Their paper comprehensively discussed other controversial issues related to the impending takeover of the MVP-Ayala group, including the massive displacement of LRT 1 employees. To be concluded (Read Part 2 – How Aquino betrayed public interest in LRT 1 privatization)