The Impact of the COVID-19 Pandemic on the Philippines

In order to prevent the spread of the virus as well as for the safety of everyone, President Rodrigo Roa Duterte declared on the 16th of March 2020 during his address to the nation to put the entire island of Luzon under the enhanced community quarantine (ECQ) until midnight of April 13. During the imposition of the lockdown, there are changes as well as restrictions provided to prevent the contagion of the disease following the sharp increase in the number of confirmed cases in the country. Guidelines of the said provision include strict home quarantine, public mass transports like jeepneys are suspended and only private establishments or entities who have the basic necessities are open and allowed to operate. Some officials of the government will be working from home to avoid close contact and social distancing must be always observed. Although these preventive measures can alleviate the burden of a pandemic, many have been affected negatively by these changes including the tax system of the Philippines.

    Unfortunately, the implementation of lockdown hit exactly the month of April which is generally considered as the tax month of the year. Many struggle in paying their taxes and other financial obligations due to the protocols provided by the government. As the online platform for paying the taxes is still in process, some of the banks require the physical presence of the taxpayer but because of the restrictions, they can’t leave their houses that’s why the commissioner of the BIR prevent it and decided to extend the filing and paying of taxes. However, due to these extensions and delays, there is a shortfall in the collection of taxes considering that most businesses including large taxpayers and micro, small, medium, enterprises (MSME) have been forced to close or shut down completely because they can only operate with a skeleton workforce and the lack of the demand for their product affected their industry because only businesses that have essential products are allowed to operate. Also, many employees were compensated less and some were terminated due to being unable to provide the needed resources of the workforce. In addition, due to the closure of all courts nationwide including the Court of Tax Appels, the pending tax cases and other matters will be on hold as what was issued by the Philippine Supreme Court.

Besides the quarantine and other restrictions, Republic Act No 11469 also known as “Bayanihan to Heal As One Act” (the Bayanihan Act), came into force on the 26th of March 2020 and was passed by the Philippine Congress as a general response to the pandemic which is effective for three months. The said law grants additional authority to the President to combat the COVID-19 pandemic in the Philippines as well as to respond to other temporary emergency issues that need urgent solutions brought by the crisis. Among these temporary measures includes grants of grace periods on loans which can be beneficial to the individuals to recuperate even for a short period. It is inconsiderate for the banks and other institutions to still force individuals to pay given that most of the business and other establishments have been closed and some are not able to work due to the situation. Other measures included in the said law are the extension deadlines to pay taxes, suspension of the prescriptive period for assessment and collection of taxes, improves ease of filing and payment, and other tax exemptions. 

    Despite all the shortcomings in terms of financial measures and pandemic response, the government still decided to provide financial assistance to vulnerable groups and individuals and raise funds for medical resources as well as for an “economic recovery plan” when the pandemic subsides. Under Social Amelioration Program (SAP), the DSWD gives financial aid to qualified households including those who belong in “poor and low-income households”.  However, the government has been tapping and borrowing loans from various sources to be able to have secure fundings for its response to the pandemic. Also, before the occurrence of the pandemic, the government has been considering how to carry out its planned tax reforms. In 2018, Tax Reform Package 1 or TRAIN Law has already come into effect, and as the article was updated last May 2020, the CITIRA or Package 2 is still pending. And currently, it was signed into law and called CREATE Law. Package 3 and 4 still in process and the government said that this increase in taxes will do good since the government will need the revenue to be raised by these reforms. However, it seems like these reforms are not necessary and should not be the priority in this time of the pandemic. Thus, those on the government must put the attention on those “lambs” they are sacrificing and the front liners fighting this pandemic. I just hope that the government will still prioritize the urgency of this pandemic and its response beyond all other personal intentions.