June 25, 2024

The Insider News

Direct from the source

House joint committee on special privileges moves to increase SC discount on basic goods

HOUSE Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) led the Joint Committee hearings of the tax panel, and the House committees on senior citizens and persons with disabilities in directing the Department of Trade and Industry and the Department of Agriculture in increasing the senior citizen’s discount on basic goods from P65 per week to P125 per week, or a total of P500 per month.

“Using food inflation rates, we determined that by now the total value of the discount should have been adjusted to around P126.31 per week. So, adjustment to P125 is more or less where we should be by now,” Salceda said.

The joint committee made the determination by choosing between either CPI levels or food inflation from 2010 to 2024.

“The food inflation rate makes better sense since these are basic goods,” Salceda added

“At least, this is an empirically made policy decision rather than setting an arbitrary adjustment,” Salceda added.

Under the current system, promulgated through DTI-DA Administrative Order No. 10-02, as part of Republic Act No. 9994 or the Expanded Senior Citizens Act, Senior Citizens are entitled to a special discount of 5% of the regular retail price, without exemption from value-added tax, of basic necessities. The total value of goods discounted is capped at P1,300 per week, or a P65 discount.

“The DTI and the DA are so directed to adjust the rates prescribed in the administrative order,” Salceda said, following a motion from fellow committee chairs Rep. Alfel Bascug and Rep. Rodolfo Ordanes.

“This is just an administrative order, so it can be adjusted with immediate effect,” Salceda added.

Discounts on basic goods cost 31bn

Salceda also estimated that “the cost to society of these discounts is at least P31.096 billion every year, a burden shared equally among all others.”

“This is the overarching doctrine of these discounts – everyone else has a responsibility to take care of elders, simply because everyone else will become elders at some point.”

“The policy decision we have made as a society is that we will all distribute the burden amongst ourselves, as sellers will likely pass these costs on to other consumers.”

“It has an inflationary effect of around 0.04 percent, which doesn’t look like much, but the nominal value, if taken on its own, is substantial.”

Committee to tackle Philhealth issues next

Salceda also added that the joint committee hearings will take up issues with the availment of Philhealth benefits among rehabilitative care next.

“Occupational therapy and rehabilitation is perhaps the most beneficial type of medical care because its aim is to make the patient productive again. So, as far as returns to society go, there is not only a moral gain but an economic benefit to it.”

The committee’s action on the matter is in response to concerns that individual professionals are not eligible for Philhealth benefits for speech pathology and occupational therapy.

Salceda adds that the Committee will also discuss case rates for these.

“As far as availing these benefits go, the door should be barrier-free,” Salceda added.