Philippine economy

Why give just P200 per family when gov’t can tap billions more? – expert

Ralf Rivas
Why give just P200 per family when gov’t can tap billions more? – expert

DUTERTE CABINET. President Rodrigo Duterte discusses matters with Finance Secretary Carlos Dominguez III, Defense Secretary Delfin Lorenzana, and Trade and Industry Secretary Ramon Lopez after holding a meeting with key government officials, February 28, 2022.

Malacanang

The Philippines has P900 billion in unobligated funds. President Rodrigo Duterte's economic team, however, has a history of being stingy.

MANILA, Philippines – President Rodrigo Duterte urged his economic managers to find a way to increase the meager P200 monthly cash subsidy for poor families amid rising fuel costs.

Duterte on Monday, March 21, narrated his conversation with Finance Secretary Carlos Dominguez III: “Sabi ko, ‘Iyong P200, medyo kulang ‘yun. So how much can you stretch? P500 kaya?’ Sabi niya, ‘Oo pero magkaproblema tayo six months after.’ Sabi ko sa kanya kanina, ‘Buang, wala na tayo diyan, bahala na sila.’”

(I told him, “P200 is not enough. So how much can you stretch? Can you do P500?” He said, “Yes, but we will have problems after six months.” I told him, “Silly, we won’t be here by then, the next administration will handle it.”)

Dominguez earlier admitted that P200 was “not enough, but this is what we can afford as of this time.” 

In a briefing on Tuesday, March 22, Presidential Communications Secretary Martin Andanar clarified that the Department of Finance is still studying Duterte’s proposal.

Is the Philippines cash-strapped?

National budget expert and Institute for Leadership, Empowerment, and Democracy executive director Zy-za Suzara told Rappler that the government has plenty of sources for the much-needed aid funds.

Suzara pointed to the government’s contingent funds, in which P10 billion can be earmarked.

Moreover, the government can reallocate unobligated funds similar to what it did back in 2020, when the pandemic struck.

As of December 2021, Department of Budget and Management (DBM) data showed that the national government has P900 billion in unobligated funds. Duterte just has to call for a special session of Congress, as lawmakers are currently on break.

“[The executive branch] can work with Congress to pass a resolution similar to Bayanihan to authorize the reallocation of funds,” said Suzara, who used to work for the DBM during the Aquino administration.

Both chambers of Congress could also file a joint resolution for the measure.

“They have done that before when they increased the pay of the military and police,” Suzara said.

A history of being stingy

Dominguez and the rest of the economic team have been stingy in giving cash aid to poor households, a departure from Duterte’s populist style and leaning toward a more liberal view of the economy where government intervention is limited.

During the pandemic, experts have urged the government to pour more cash into poor households and small businesses. Instead, the economic team has opted for minimal cash aid and more tax cuts for big businesses, assuming that these corporations would reinvest their newfound savings and hire more workers.

In 2022, amid skyrocketing oil prices due to Russia’s attack on Ukraine, the Philippine government has tapped P33.1 billion for the monthly subsidies of 12 million households, or a measly P200 per home.

“At P6.66 per day, it can’t even get one a jeepney ride to the minimum distance,” Senator Grace Poe earlier said.

Dominguez has dismissed calls to suspend fuel excise taxes, saying that the total government revenue for 2022 would be reduced by P105.9 billion if the suspension would be implemented. He said this figure was equivalent to 0.5% of the country’s gross domestic product.

He added that P147.1 billion from fuel excise tax and value-added tax were expected to be collected in 2022, and have already been allocated for expenditures, such as those for the Build, Build, Build program and salaries of government employees including soldiers, police, and teachers. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.