The making of a “New Deal” for Filipinos?

Arroyo adviser proposes P316B ‘Noah’s Ark’ subsidy plan

By PAOLO ROMERO
Philippine Star

President Arroyo is considering seeking congressional approval for a proposed three-year P316-billion subsidy program that would help cushion the impact of food and fuel price surges on consumers, Albay Gov. Joey Salceda said yesterday.

The Department of Social Welfare and Development (DSWD) is meanwhile poised to set up 70 mobile “disbursement centers” all over Metro Manila this weekend to allow “lifeline users” of the Manila Electric Co. (Meralco) to claim their P500 worth of power subsidies easily.

Salceda has submitted a proposal entitled “Strategic Response to Food and Fuel Crisis-Noah’s Ark Framework,” which he described as an imperative in the face of a “clear and present danger to our national survival.”

The massive cash subsidy program that could cost P441 billion pales in comparison with the P18 billion earlier programmed by the government for electricity and school subsidies from proceeds of value-added tax on oil.

“Social protection, in contrast to growth impetus as instrument of poverty reduction, has now become the foremost undertaking of the national government. Thus, we propose to the President and to our policymakers this social protection plan to build a Noah’s Ark of basic needs to shelter the poor so no one would be left behind once the surging waters of economic adversities sweep over our shores,” he said.

The program will be submitted to Congress by way of a three-year supplemental budget from 2008 to 2010.

The Noah’s Ark is a multi-year policy mix costing P316 billion in increased public spending spread till 2010, translating to a deficit of only one percent of Gross Domestic Product sustained over three years.

This combines income augmentation targeted at poor and middle class families and increased public goods spending on agriculture, education, health and housing, he said.

Salceda however clarified that the figure counts incremental spending spread over the period. Foregone losses from the recent tax relief of P12 billion will boost the aggregate to P352 billion.

With P28 billion annually or P84 billion for three years, the cash subsidies to poor households is the biggest component and would only approximate the Comprehensive Agrarian Reform Program “as the biggest net resource transfer to the poor in our recent history,” he said.

Another feature of the subsidy package is a massive P36 billion for Commission on Higher Education scholarships and training vouchers from the Technical Education and Skills Development Authority.

He said household spending on higher education is likely to be displaced by higher prices of food, which accounts for 60 percent of family spending, and fuel light and power.

Another feature of the proposed program is a P30 billion budget for the National Food Authority (NFA) to build up a strategic rice reserve by buying from local farmers.

“This is to shield the country from market volatility or adverse trade patterns such as export curbs,” he said.

Salceda said the Noah’s Ark proposal has nothing for infrastructure since it is an incremental spending and it is assumed the government will continue its programmed infrastructure spending.

Power subsidy

In an interview, DSWD Secretary Esperanza Cabral said starting June 14 government social workers and representatives from the Landbank of the Philippines (LBP) will visit every barangay with identified beneficiaries of the “Pantawid Kuryente: Katas ng VAT Program.”

Cabral said these centers would be in addition to the five LBP branches designated to distribute the power subsidies to millions of beneficiaries.

“The DSWD and LBP will reach out to the barangays, in addition to the five identified servicing Landbank branches,” Cabral said.

She said the new mechanism of distributing the power subsidy would help poor families save money on travel expenses.

Cabral said payments for the rest of Metro Manila will be done in three weekends of June – June 14 to 15, 21 to 22, and 28 to 29.

She urged beneficiaries to bring with them original copies of Meralco Billing Statement (MBS) and identification cards.

Last Friday, LBP started paying the lifeline users in Metro Manila in its branches in Buendia, Makati; Manila Cathedral-Intramuros; Banawe and Batasan, Quezon City; and Capitol Branch in Pasig.

President Arroyo earlier launched her P2-billion power subsidy program to help four million lifeline users – or families consuming less than 100-kilowatt hours of electricity monthly – pay their power bills.

Cabral stressed that the P2 billion is part of the revenue generated from the Expanded Value Added Tax or E-Vat, and is the Arroyo administration’s way of giving back to the people the fruits of economic reforms.

State of panic

However, senators yesterday warned that the doling out of subsidies was the administration’s way of showing its state of panic.

“Malacañang has just betrayed its headless economic strategy to cope with rising costs of living,” Sen. Panfilo Lacson said in a statement.

Lacson, along with Senate President Manuel Villar Jr. and Sen. Manuel Roxas II said one-time subsidies could hardly make any difference in people’s lives.

Sen. Francis Escudero said he would like to know how the government had been spending the government’s resources to address the plight especially of the poor with the increase in prices of oil and basic commodities.

Lacson also sees the government’s grant of subsidies as merely political.

“This government has been obsessed with image-building, even at the expense of Filipino taxpayers. Now that it faces a real economic problem, it lost the guts to make the hard decisions. No thanks to its inconsistent policies, we are seeing our economy in a mess,” he said.

He noted that giving subsidies and imposing a “shopping ban” were useless and inconsistent.

“For an economist, Mrs. Arroyo is either absorbed in her own little world, or she is in a state of panic. Why else would she give billions of pesos in subsidies one week, then discourage Filipinos from shopping due to inflation?” he asked.

Malacañang announced it would grant the poor P500 in power subsidy and P1,500 for fertilizer. Funds will also be distributed directly to people as education subsidy.

Villar and Roxas both questioned the government’s move to distribute the funds rather than use them for bigger and long-term farm investments.

Roxas, for his part, said the equivalent of P1,500 would only be one bag of fertilizer since a hectare of land would need one to two bags on the average. “That is useless,” he said.

Villar also said the subsidy program even left out the 1.6 million fishermen who were the first to reel from high gas prices as up to 80 percent of what they earn from their dwindling catch goes to fuel.

Because fishing is an oil-reliant industry, half of the retail price of the common people’s fish represents fuel expenses.

Lacson also pointed out that in the case of power subsidies, Cabral – a career official – admitted the P500 power subsidy for poor families was a one-shot deal due to lack of funds.

Escudero pointed out “money in the budget is the President’s best weapon in her arsenal to combat high rice prices and low rice production, and spending it (properly) is the first thing she must do.”     – Helen Flores, Aurea Calica

 

 

 

 

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