10963, is the initial package of the Comprehensive Tax Reform Program (CTRP) signed into law by President Rodrigo Duterte on December 19, 2017.
The Senate had to wait for the House of Representatives version to get passed before it could start plenary discussions like other bills on budget or tax and appropriations.
The Senate voted 17–1 to approve the Tax Reform Acceleration and Inclusion (TRAIN) bill, with Sen. Risa Hontiveros being the lone dissenter on November 28, 2017.
On the succeeding voting for the TRAIN, the positive votes were cast by Senators Sonny Angara, Nancy Binay, Frank Drilon, JV Ejercito, Chiz Escudero, Win Gatchalian, Dick Gordon, Gringo Honasan, Loren Legarda, Joel Villanueva, Koko Pimentel, Grace Poe, Ralph Recto, Tito Sotto, Cynthia Villar and Migs Zubiri.
The negative votes were cast by Senators Ping Lacson, Risa Hontiveros, Bam Aquino and Antonio Trillanes IV[13] Duterte's certification of the TRAIN as "urgent" allowed the bill to get passed the second reading[16] on November 28, 2017.
The committee then approved a bill which favored the Senate version on December 11, 2017, and prepared a report after for ratification of both chambers of the Congress and signing of the President.
[22] There are four complementary measures undertaken to ensure the income from the TRAIN Law will be properly allocated for the development of the Philippines as a nation.
[23] The social programs that will receive priority funding from 30% of revenues include:[23] In order to provide provisional protection for vulnerable households from the initial shock of the TRAIN Law, unconditional cash transfers are dispensed.
In addition to the UCT, social welfare cards are provided to aid in continuous conferring of benefits and subsidies to the poorest households.
The aim of the excise tax is to shift towards renewable energies and generate additional income for building infrastructures and social services.
However, procedures necessary to ameliorate a deformity arising from, or directly related to a congenital or developmental defect or abnormality, a personal injury resulting to an accident or trauma, or disfiguring disease, tumor, virus or infection are tax -exempted.
[26] The excise tax on cigarettes aims to reduce the amount of smokers and respiratory and cardiovascular diseases one can catch from the act, as well as generate additional revenue for health oriented programs and services.
[33][34][35] The three main categories the TRAIN Law affects with its first package are "Growth in the Economy", "Employment Generation", and "Effect on Inflation".
"[8] DOF Secretary Carlos Dominguez III claimed tax revenues grew by 18.2%, "exceeding the 9.7 percent nominal gross domestic product (GDP) growth.
Insofar as expenditures go for the first quarter of 2018, the total amounted to ₱782.0 billion, growing by 27.1%, which also outstripped the 9.7% nominal GDP growth due to the estimated 40.0% increase in capital outlays.
"[8] Socioeconomic Planning Secretary Ernesto Pernia claims that the inflation will most likely peak on the third quarter of the year and start tapering off by October.
Since its implementation, there have been numerous individuals for and against the new tax reform, such as Budget Secretary Benjamin Diokno who has expressed support for the law as the additional revenues provide funds for government initiatives.
[38] The senators who voted for the bill were Senators Sonny Angara, Nancy Binay, Frank Drilon, JV Ejercito, Chiz Escudero, Win Gatchalian, Dick Gordon, Gringo Honasan, Loren Legarda, Joel Villanueva, Koko Pimentel, Grace Poe, Ralph Recto, Tito Sotto, Cynthia Villar and Migz Zubiri.
The reforms being implemented by the Duterte administration have been recognized and lauded by international institutions, leading to strong investor confidence and better growth prospects for the economy.
[40] According to the DOF's chief economist, Gil Beltran, the moderate rise in inflation is only temporary and remains manageable under a robust economy even with the implementation of the TRAIN law.
It will be remedied by the increased spending on infrastructure and social services to keep inflation in check in the future which was what the president was hoping to achieve with the implementation of this law.
TRAIN is seen as a long-term measure that would hope to push the economy to a much higher development path, create more jobs and improve the living conditions for our people.
However this comes with the rising of inflation which would be mitigated by lower income tax rates and implementing cash transfers for the short-term, and; the health, education, social protection, and infrastructure programs in the medium- and long-term.
While the TRAIN gives tax exemptions or reductions to income by marginal earners and minimum salaried workers, it will also raise prices of basic goods and services.
Price hikes for food, transportation, and utilities will make it difficult for low-income families to cope with the rising cost of living.
The petition was anchored on the argument that the tax law was invalid because there was no quorum when the House of Representatives ratified the joint bicameral conference report on the measure, and there was no voting involved.
[42] Three senators called for the suspension of the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law as consumers and transport groups complained of soaring prices of commodities.
These were on the grounds that the law was not beneficial to the majority of Filipinos, due to the increase in prices of oil products and commodities, a family has incurred an additional expense of ₱2,644 monthly for farmers and ₱3,640 for workers.
Protesters explained that for workers earning the minimum wage of ₱512, only ₱70 will be left for food because of the soaring cost of rent, education, LPG, personal hygiene, and commodities.
[45] The Supreme Court en banc, in its session on January 24, 2023, in 13–1 (one on leave) vote, dismissed consolidated petitions from consumer group Laban Konsyumer and former Makabayan bloc legislators to declare the TRAIN law as unconstitutional.