Assessment of TRAIN’s Coal and Petroleum Excise Taxes: Environmental Benefits and Impacts on Sectoral Employment and Household Welfare

This study assessed the impact of the first package of the Tax Reform for Acceleration and Inclusion (or TRAIN) Law, which includes an increase in petroleum and coal excise taxes, as passed by Congress in 2017. This study reviewed the context of the energy sector in the country given that petroleum and coal are the largest sources of energy in the country. Using a computable general equilibrium-microsimulation model, it mainly assessed the impact of this increase and of the whole TRAIN 1 package (which includes a reduction in the personal income tax and the broadening of the value added tax). The results from the simulations show that there is a slight adverse output effect for most industries under an increase in petroleum and coal taxes scenario, resulting in a lower level of carbon emissions. There is a slight decline in employment, and poverty incidence increased slightly as excise taxes have an adverse effect in terms of higher commodities prices among the poor

Economic Losses From COVID-19 Cases in the Philippines: A Dynamic Model of Health and Economic Policy Trade-Offs

The COVID-19 pandemic forced governments globally to impose lockdown measures and mobility restrictions to curb the transmission of the virus. As economies slowly reopen, governments face a trade-off between implementing economic recovery and health policy measures to control the spread of the virus and to ensure it will not overwhelm the health system. We developed a mathematical model that measures the economic losses due to the spread of the disease and due to different lockdown policies. This is done by extending the subnational SEIR model to include two differential equations that capture economic losses due to COVID-19 infection and due to the lockdown measures imposed by the Philippine government. We then proceed to assess the trade-off policy space between health and economic measures faced by the Philippine government. The study simulates the cumulative economic losses for 3 months in 8 scenarios across 5 regions in the country, including the National Capital Region (NCR), to capture the trade-off mechanism. These scenarios present the various combinations of either retaining or easing lockdown policies in these regions. Per region, the trade-off policy space was assessed through minimising the 3-month cumulative economic losses subject to the constraint that the average health-care utilisation rate (HCUR) consistently falls below 70%, which is the threshold set by the government before declaring that the health system capacity is at high risk. The study finds that in NCR, a policy trade-off exists where the minimum cumulative economic losses comprise 10.66% of its Gross Regional Domestic Product. Meanwhile, for regions that are non-adjacent to NCR, a policy that hinges on trade-off analysis does not apply. Nevertheless, for all simulated regions, it is recommended to improve and expand the capacity of the health system to broaden the policy space for the government in easing lockdown measures

Assessment of TRAIN’s Coal and Petroleum Excise Taxes: Environmental Benefits and Impacts on Sectoral Employment and Household Welfare

This study assessed the impact of the first package of the Tax Reform for Acceleration and Inclusion (or TRAIN) Law; which includes an increase in petroleum and coal excise taxes; as passed by Congress in 2017. This study reviewed the context of the energy sector in the country given that petroleum and coal are the largest sources of energy in the country. Using a computable general equilibrium-microsimulation model; it mainly assessed the impact of this increase and of the whole TRAIN 1 package (which includes a reduction in the personal income tax and the broadening of the value added tax). The results from the simulations show that there is a slight adverse output effect for most industries under an increase in petroleum and coal taxes scenario; resulting in a lower level of carbon emissions. There is a slight decline in employment; and poverty incidence increased slightly as excise taxes have an adverse effect in terms of higher commodities prices among the poor