The Department of Finance (DOF) has identified possible initial fund sources for the increase in the monthly subsidy for poor households as recently ordered by President Duterte.
“Fiscal space for the additional unconditional cash transfers will initially come from the windfall value added tax collections and additional dividends from government-owned and -controlled corporations,” Carlos Dominguez, DOF secretary, told reporters in a text message yesterday.
Early this week, Duterte ordered the DOF to hike the cash grants to P500 per month from the previous P200 monthly to help cushion the impact of the rising prices of fuel.
Asked by reporters if offshore borrowings could be considered to finance the unprogrammed budget, Dominguez said “foreign or domestic debt do not create fiscal space, only unbudgeted revenue and unspent revenues do.”
The President, in his speech during the signing of the Public Service Act into law, said while he acknowledged the economic difficulties that the government will face if the financial assistance is increased, he pointed out that a P200 additional unconditional cash aid is just “too small” and will not be able to sustain a family with several kids.
He said funds under the Bayanihan laws, especially those already programmed for specific items such as coronavirus disease-related responses, would not be touched as these would be used if the country experiences another surge and if new variants enter the country that could lead to more funding needs in the future.
Last week, the Duterte Cabinet’s Economic Development Cluster, which Dominguez heads, recommended the distribution of cash grants to the bottom 50 percent of all Filipino households that will benefit around 12.4 million families or 74.7 million Filipinos.
Dominguez then said the budget for the unconditional cash transfers will amount to P33.1 billion based on a proposed P200-per-month grant or P2,400 per year to be given to each qualified household. – Angela Celis