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_Davao City, Philippines November 27, 2005 | VOL. 1 ISSUE NO. 3
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Desperate Housewives

How the new value-added tax law adds to the suffering of
Davao’s women and mothers.

By Grace Uddin
davaotoday.com

DAVAO CITY – Ever since her husband, a house painter, started getting fewer clients last year, Miranda, a 41-year-old mother of one, started working as a bet taker in their community for the illegal gambling called “last two.”

Miranda, who insisted on using an alias as a condition for talking to davaotoday.com, knows that what she’s doing is wrong and could potentially send her to jail, but according to her, she was willing to take the risk if only to bring food on their table. She earns between 200 and 300 pesos every day from collecting bets for “last two.”

"It is a big help to me,” Miranda said of her illegal activity. “People dare to bet because they also want to have money. Even if they only have five pesos, they would still gamble it because they want to try their luck in these hard times.”

Recently, Miranda has been working double time -- so do many mothers and housewives in this city and in the whole country whose lives have been affected by the passage of the expanded value-added tax (EVAT) law. This law not only increased prices of several basic commodities but also expanded the coverage of taxable items, which now include fuel.

Most of Miranda’s income from “last two,” she said, goes to their food, water, electric bills and other household needs. With the price increase brought about by the EVAT, her belt has been getting tighter and tighter.

“There has really been a big difference in our budget since EVAT was implemented. When you buy now, when you go to the grocery, there is an additional charge. If you don’t have money and ask for a credit, that too will have another additional charge,” Miranda said. “What shall you do then?”

A pre-EVAT bar of soap cost 5.50 pesos, Miranda said. Now, it costs 7 pesos. Miranda used to spend only 20 pesos for viand. Now, 50 pesos is often not enough.

To maximize her meager income, Miranda said her family had been having bulad (dried fish) much more often lately. “If we cook viand, we will spend more or less 100 pesos, including the oil, the spices, the cooking gas.”

Lea Emevy, a 37-year-old mother, works as a vendor at the Bankerohan public market. In many sense, she is better off than Miranda. But Lea has her own complaints.

For one, her income from her sari-sari (variety) store has dwindled since EVAT. Lea was especially concerned about the effect the hard times will have on her children’s schooling; she has a child in college and two in high school.

“The EVAT really affects the schooling of my children,” Lea said. “If before I gave them 20 pesos for their daily allowance, now they demand 30 pesos because the transportation fare has also increased. “

At her store, Lea could detect some of the many ways Filipinos use to cope. “They used to buy goods in kilos but now they buy in half-kilo, or even one-fourth kilo or at whatever cheap retail price they could get the product for,” Lea said. “More and more are buying half-kilo rice because of dire poverty.”

The EVAT, which took effect on Nov. 1, is the centerpiece economic reform program of the Arroyo administration. It is hoped to raise additional revenues that will be used to plug the country’s chronic budget deficit.

The EVAT, according to the government, is also needed to pay the nation's growing foreign debt. More than half of the country’s budget goes to debt servicing. The country’s budget deficit is 180 billion pesos or 3.27 billion dollars, which has been a constant source of alarm among financial analysts.

According to the Department of Trade and Industry, the following good and services are subjected to the EVAT: petroleum products and other indigenous fuels, power and electric cooperatives, services rendered by doctors and lawyers, domestic carriage of passengers by air and sea, non-food agricultural products and works of art, literary works and musical compositions.

The law retains the existing 10 percent VAT but allows the government to increase it to 12 percent by January next year. The government hopes to collect as much as 35 percent more of its tax collections through the EVAT.

The trade department insists that the EVAT is not anti-poor because, according to the department, it exempts products and basic commodities mostly consumed by the poor, such as vegetables, meat, fish, fruits, eggs and rice, lease of residential houses not exceeding 10,000 pesos monthly, educational services rendered by both public and private educational institutions, books, newspapers and magazines, sales of persons and establishments earnings not more than 1.5 million pesos annually, which includes sari- sari (variety) stores, carinderias (eateries) and street vendors.

According to the Department of Finance, those who consume more will be taxed more. Therefore, a 10-percent VAT on oil products will hurt the rich more since 30 percent of Filipino families consume almost 65 percent of the total fuel consumption in the country.

But to housewives like Miranda and Lea, this is hardly reassuring, given that they feel the immediate effect day in and day out.

According to Ibon Foundation, an economic research institution, the provisions of the EVAT law that exempt some goods and services should not be seen as the essence of the law. It says that the issue is the purchasing capacity of the people. For instance, although the poor consumes less fuel than the rich, the effect of higher oil prices due to the EVAT is greater on the poor because they have smaller incomes.

In the end, the women will carry much of the burden of EVAT because they are charged with the budgeting of the meager incomes of their husbands, according to Gabriela, a women’s group.

And it’s not just the basic commodities that are affected. Because housewives will prioritize food over medical services, many among them will no longer be able to spend for health needs such as medicines, said Grace Gamalinda of Gabriela Southern Mindanao.

Gamalinda also feared that the impact of the suffering EVAT creates will be felt more by women. Financial crises, according to her, have a way of increasing abuses and cruelty against women, as husbands lose jobs or earn less income. Trafficking in children and minors also increase as more of them try to find jobs as househelpers in other areas.

“Poverty and marginalization leave some women more vulnerable to violence,” according to the international human rights group Amnesty International. “It is extremely difficult for women living in poverty to escape abusive situations, to obtain protection and to access the criminal justice system to seek redress,” it added.

There have also been some media reports about housewives in some areas in the country resorting to prostitution just to make ends meet. Gabriela said the hardships that will result from the EVAT will make the situation worse.

“Sometimes my head aches because of all these problems,” Miranda, the “last two” bet taker, said. “It is difficult when you are the one earning for the family. I wanted to stop working and take a rest but just couldn't because I always think, ‘What shall we eat tomorrow?’" (Grace Uddin/davaotoday.com)

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