MISCEPY

P4-billion new subsidy programs for poor coming

By PAOLO ROMERO
The Philippine Star PLACER, Masbate ā€“ President Arroyo announced here yesterday that the government will provide another P4-billion worth of subsidies for the poor that includes financial assistance for electricity bills and cash grants for the elderly.
In her message at the start of the National Disaster Coordinating Council -Cabinet meeting here, Mrs. Arroyo also called on political leaders and the people to set aside politicking to allow the country to swiftly recover from the devastation brought by typhoon "Frank" and confront the global food and fuel crises.
She warned the people that at least 14 more typhoons are expected to hit the country according to the Philippine Atmospheric, Geophysical and Astronomical Services Administration .
"Billions of pesos were lost due to typhoon Frank and billions more are needed to help our farmers, fisher folk and city folk who were severely affected," the President said. "Meanwhile, we continue to allocate funds for sectors that are affected by the soaring prices of oil."
She said that there is no time for politicking and she called on the people to join hands in helping the less fortunate.
Mrs. Arroyo said using the excess value-added tax revenues from April to June derived from increasing prices of oil would enable the government to release another P4-billion worth of subsidies for the poor.
Last May, the government released P4 billion from VAT revenues for power subsidies, student loans and scholarships, and conversion of gasoline-fed engines of public utility vehicles to natural gas-run vehicles.
Out of the P4-billion in fresh financial assistance, P1 billion would be for power subsidies to lifeline users or families using electricity in the poverty threshold. Each family would be given P500 cash.
Another P1 billion would be allocated for soft livelihood loans for wives or other family members of PUV drivers and conductors.
Mrs. Arroyo also said P1 billion was set aside for the rehabilitation of areas hardest hit by typhoon Frank.
NDCC executive director and Deputy Presidential Spokesman Anthony Golez said during the meeting that total estimated damaged by the typhoon was at P13.342 billion, with agriculture sustaining losses of P7.42 billion and infrastructure P5.8 billion.
Some half a billion pesos would be released to upgrade government hospitals in remote areas.
Another P500 million would be given out as cash assistance for senior citizens not benefiting from pensions from the Social Security System and Government Service Insurance System.
Budget Secretary Rolando Andaya Jr. said the assistance was brought about by the fact that the 20-percent discounts for senior citizens was already eroded by the 12 percent VAT.
There was no information yet from the Palace on how the cash assistance for the elderly would be given out.
Earlier this year, economic managers estimated that VAT collections on oil could reach P18 billion this year but as oil prices continue to rise, revenues could go even higher.
Press Secretary Jesus Dureza said it was also agreed that the Arroyo administration would coordinate closely with the Catholic Bishops Conference of the Philippines , the Iglesia ni Kristo, the El Shaddai and other religious groups to help local government units identify the beneficiaries of the subsidies and monitor closely its implementation for transparency.
MalacaƱang defended the continued distribution of subsidies to the poor as something that is legal and will not affect the bottom line of the government.
Andaya noted that the constitutionality of the subsidies was never an issue and even Congress concurred that it was legal.
He said that he was questioned by the oversight committee of the House of Representatives about the issue of subsidies and the congressmen all agreed that it is legal and that it has been pre-authorized by Congress when they passed the 2008 national budget.
He emphasized that the funds for the subsidies were sourced from the windfall proceeds from the value added tax on oil, which the Department of Finance estimated at around P9 billion for the first half of the year.
The excess revenues came about with the increase in the price of world crude oil prices, which resulted in higher tax and duties collections.
Since these revenues were unprogrammed and came about only because of external factors beyond the control of the government, Andaya admitted that the distribution of subsidies should be considered as something that is unsustainable.
He pointed out that the government targeted specific sectors in the subsidies program, particularly the poorest of the poor and the socially sensitive sectors such as transport.