PH’s biggest firms show Train’s success – DoF
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Fri, 01 Mar 2019 17:40:57 +0000
The performance of the country’s biggest companies best shows that the first package of tax reforms is “a hundred-percent success” in boosting the spending power of Filipino consumers, the Department of Finance (DoF) said.
“Ninety-nine percent of individual taxpayers enjoy reductions in their personal income tax (PIT) rates. Filipinos earning below $4,500 annually are now exempted from paying personal income taxes while workers earning above it now receive about a month’s extra take-home pay each year from the deductions in their tax rates,” Finance Secretary Carlos Dominguez 3rd was quoted as saying during the recent Philippine Economic Briefing in Osaka, Japan.
“To emphasize that point, by correcting the tax rate for our average wage earners, we have basically given out a 14th month pay annually,” Dominguez added.
Implemented at the start of 2018, the Tax Reform for Acceleration and Inclusion (Train) law raised taxes on petroleum products and car sales, among others, in exchange for lower personal income tax rates.
The Finance department estimates that the law has given 99 percent of the country’s workers a total of P103 billion in extra income combined in the first three quarters of 2018, or an average of P12 billion a month.
Dominguez said that since Train’s implementation, retail giants, real estate firms, and banks such as Jollibee Foods Corp., Ayala Land Inc.,
SM Prime Holdings, BDO Unibank Inc., and Metropolitan Bank & Trust Co.. all reported double-digit growth in sales and high profit margins.
He added that published data showing the significant growths in sales and income of corporate giants in the real estate, fastfood and banking industries are strong indications that Filipinos have started to benefit from the Train Law by way of their greater purchasing power.
For instance, Dominguez acknowledged that Jollibee Foods Corp., the Philippines’ largest fastfood chain and globally recognized brand, posted sales of about $2.9 billion in 2018, 16 percent higher than the 2017 sales level. Its net income also increased by 17 percent to $158 million in 2018 compared to a year ago.
Ayala Land Inc., the Philippines’ premier and oldest property company engaged in the planning and development of large-scale, integrated estates, posted an 18-percent increase in sales in 2018 to $3.11 billion year-on-year. Its net income also rose 16 percent to $558 million, he added.
SM Prime Holdings, the Philippines’ owner of the biggest and most number of malls in the country as well as the second-largest high-rise condominium developer, posted sales of almost $2 billion in 2018, up 17 percent compared to 2017. SM Prime’s net income jumped by 17 percent to $616 million last year, driven mainly by its new mall openings in the provinces, Dominguez added.
“The Philippines’ leading commercial banks also posted strong interest income growth on the back of strong customer loan growth in the first nine months of 2018,” he said. For one, BDO Unibank Inc., the largest bank in the Philippines in terms of assets, saw its interest income rise by 20 percent to $1.4 billion on the back of an 18-percent customer loan growth, he explained.
He also emphasized that Metropolitan Bank & Trust Co., the second-largest lender in terms of assets, also reported its interest income grew by 13 percent to almost $1 billion in the first nine months of 2018 on the back of a 16-percent customer loan growth. Its net income in the first three quarters rose 18 percent to around $352 million versus the same period a year ago, he said.
Earlier, the DoF said government revenues from tax measures under Train totaled P41.9 billion in the first nine months of 2018. However, the January-September Train revenues fell 5.4 percent short of the P44.3-billion target for the period.
The post PH’s biggest firms show Train’s success – DoF appeared first on The Manila Times Online.