When the lights go out

In Monday’s column, I looked at how political grandstanding (mandated discounts for senior citizens and persons with disabilities [PWDs] without backing them with proper state resources) forces private enterprise to foot the bill for public social welfare.

To understand why this policy is breaking our hospitality industry, you need only to look at a recent, sobering breakdown shared by restaurateur Elbert Cuenca. He recounted a true story from a steak restaurant where a group of 10 diners each presented a senior card:

– Original total bill: P81,000

– Discounted amount: P63,642.86

– Government share: P8,678.57

– Restaurant’s loss of revenue: P14,464.29

As Cuenca points out, this was not a problem when the original Senior Citizens Act of 1992 (Republic Act No. 7432) granted the 20 percent privilege strictly to indigent seniors earning under P60,000 a year, paired with a 100 percent tax credit for businesses. But subsequent revisions—RA 9257 in 2003, RA 9994 in 2010, and the PWD law, RA 9442, in 2007—made the benefits universal while quietly shifting the mechanism from a direct tax credit to a meager tax deduction. Today, as Cuenca notes, these mandatory discounts can strip away as much as 8 percent of a restaurant’s total revenue, transforming a well-intentioned welfare policy into a luxury card subsidy for people who can easily afford fine dining.

When you compound that structural bleed with recent economic news, you realize why beloved fixtures are shuttering—from the heartbreaking closure of 48-year-old family fixtures like Emin and Mila’s Canteen to iconic spots like Recovery Food and Scout’s Honor pulling the plug after a decade.

These losses feel like localized tragedies, but viewed through a macroeconomic lens, they reveal a systemic trap.

This week, Citigroup delivered a stark verdict that should shock anyone still under the illusion that our economic engine is humming along: the Philippines has officially entered stagflation.

When quarterly gross domestic product growth lurches down to a dismal 2.1 percent while inflation surges to 7.8 percent and joblessness climbs, the abstract language of macroeconomics collides harshly with reality. The middle-class restaurateur, the neighborhood canteen owner, and the independent retailer are no longer just fighting bad municipal ordinances or high operating costs; they are trying to stay afloat in a national economy that has flatlined while the cost of basic survival skyrockets.

In a healthy, high-growth economy, businesses might weather the structural weight of uncompensated government mandates like universal senior discounts. But in a stagflationary environment where an external energy shock driven by the Iran war has sent diesel past P140 a liter, choked logistics, and doubled utility bills, there is nothing left to absorb.

When the state mandates social policy by offloading its cost onto private operators, it acts as though corporate balance sheets are wallets begging to be pickpocketed. They are not. When consumers are forced into aggressively doing without because their paychecks are being swallowed by basic food and electricity costs, restaurant tables empty out. When customer bases contract and operating expenses explode simultaneously, businesses don’t gracefully decline, they collapse.

The closure of a neighborhood canteen or a beloved steakhouse is not just a commercial statistic. It is the destruction of multigenerational family legacies, the wiping out of life savings, and the quiet eradication of the community spaces that anchor our daily lives.

As lawmakers continue to play the benevolent patron with funds that aren’t theirs (keeping tax deduction systems intact rather than passing meaningful tax credit reliefs like Senate Bill No. 2494 and HB 10497), they are ignoring the wildfire blazing all around them.

You cannot legislate prosperity while starving the very enterprises that generate jobs and tax revenues. If our economic managers and legislators continue to treat “Main Street’s” survival as an afterthought while the country stumbles deeper into stagflation, Monday’s heartbreaking obituaries for our favorite neighborhood spots won’t be exceptions. They will be the new normal.

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Email: [email protected]; Twitter: @mlq3

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