BACOOR CITY, Cavite (PIA) — Economists are pushing for targeted non-monetary and fiscal interventions—such as tax holidays and local sourcing—to help local producers cope with high operational costs driven by inflation.
Dr. Maria Soledad Mojica-Lising, Dean of Cavite State University’s College of Economics, Management, and Development Studies, emphasized that targeted non-monetary interventions such as lowering licensing fees and imposing tax holidays can help cut production costs and lower market prices.
“Tax holidays are a monetary tool being given sa malalaking manufacturing industry. In order to encourage investments, we have tax holidays.”
Mojica-Lising suggested that local government units can lower registration fees while establishing local trade fairs and community buying groups to allow local farmers and producers to bypass middlemen and directly sell their products without additional costs.
Not only will it provide consumers with cheaper goods, local trade fairs also help local farmers and producers connect directly with their customers.
Lising explained, “Puwede rin ‘yung mga trade fair sa LGU mismo na makakatulong rin sa mga farmers [at] sa mga consumer siyempre kasi mas mura ang bilihin. Malaking bagay sana kung mababawasan ang taxes.”
Lising added that non-monetary policies such as directly providing a platform for local farmers to sell their products can help cut costs spent on middlemen, and instead can be added to purchasing raw materials directly from suppliers.
“Puwede gumawa ang mga LGU ng linkages para mawala ang middlemen na dadagdag sa presyo ng materials, puwede itong community-based buying group na direktang pumupunta sa mga supplier. Wala nang conduit which means na ‘yung raw materials mo ay bababa ang presyo. Pero again, very abnormal kasi ngayon ang inflation rate natin. Minsan kasi we have to be imaginative in our solutions, mahirap hanapan ng non-monetary policies ito.”
Likewise, CvSU Department of Economics faculty member Julie Ann Sarinas supported policies such as tax holidays to help manufacturers ease production costs during higher inflation rates.
Sarinas said that tax holidays can be more sustainable for small businesses than relying solely on financial aid or ayuda.
“Ito ‘yung significant factor sa kanila kung bakit declining ang production at ‘yung isang part ng cost of production nila is ‘yung taxes. Instead na bigyan lagi ng ayuda may tinatawag tayong tax holiday na in the duration na mataas ang inflation rate, puwede i-exempt muna ‘yung imposition ng taxes. The cost of production tends to decline instead na pambayad nila ng tax, additional payment na po nila ito sa other materials para sa production nila.”
The Philippine Statistics Authority (PSA) reported that September inflation rates in the CALABARZON region shot to 7.2 percent from 5.6 percent in August. (PB-PIA CALABARZON)