Aquino defends cash aid program for poor

By On September 18, 2010 · 9 Comments · In News

ABS-CBN News reported:

In a speech in Cebu City on Wednesday, Aquino said his administration’s Conditional Cash Transfer (CCT) scheme, through the Pantawid Pamilyang Pilipino Program, is “helping people rise above poverty.”

“But I must warn you that not everyone shares our goal of reform. Already, the enemies of reform seek to politicize the conditional cash transfer program…They are organized, well-funded and determined,” he said.

The President, however, did not cite specific groups or personalities that are allegedly against the cash aid program.

Under the 2011 budget, Aquino earmarked P21.2 billion for the CCT program, which is expected to benefit 2.3 million households nationwide.

“I am aware that these programs can be improved. There have been complaints about payment issues such as lower-entitlement and no cash in card. Missing names in the payroll list or delay in the delivery of cash grants are hindrances to the program’s objectives,” he said. “I am happy to report that we are fine-tuning the mechanisms of this initiative. We will solve these problems, undo the bottlenecks, and make this program more effective.”

The President added that he has ordered Department of Social Welfare and Development Secretary Dinky Soliman to implement the National Household Targeting System and identify families that most urgently need cash assistance.

Solita Collas-Monsod calls CCT as “a safety net for the poor:”

What essentially the CCT boils down to is a social protection or safety net for those suffering from income poverty in the short run, that also addresses outcome poverty at the same time, building human capabilities so that in the long run, the intergenerational transfer of poverty is short-circuited.

There is always room for improvement, of course.

And the success of the CCT in terms of human development outcomes will depend on the availability of the schools, health centers, and other facilities that are needed by the poor to fulfill their part of the contract, as well as the accessibility of the source of funds for the women. Not to mention the ability of the DSWD to target the poor without political interference.

Is P30 billion too costly a program?

Compared to the subsidies given by the government to some of its GOCCs (with less or even nothing to show for it), not to mention the humongous government corporate debt that the national government has had to take over over the past 25, the CCT is not only reasonable, but certainly well worth it.

One must congratulate the Aquino government for putting its money where its mouth is with regard to poverty and development. If anything, it should be spending even more, as as long as the proper safeguards are met.

In any event, the CCT represents the Philippines’ only chance to make significant gains in achieving our Millennium Development Goals. Let us all be reminded that given the current (sans CCT) pace of progress, halving the 1990 income poverty incidence will only be achieved in 2026, reducing the 1990 maternal mortality rates will be reached only in 2048, universal elementary school completion in 2075.

Come to think of it, the success of this administration’s CCT program may yet go down in history as one of its most important accomplishments.

What do you think?

Cocoy Dayao has written 573 articles on this blog.
 
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  • jose dennis flores

    i agree with cocoy,prof.monsod said in one of her TV appearances, that if we will not tax income, we can still get the money by taxing consumption,which to my opinion is the best for income earners, since they will end up with more spending money. the trouble is,though govt is not admitting, government will find it difficult to get all that tax from consumption since many businesses are not really paying the right tax or reporting the right income to be taxed. one suggestion is to increase the vat and vat everything, no exemptions because this is easier to collect.

  • Pingback: Arroyo calls CCT— irresponsible | The Pro Pinoy Project

  • GabbyD

    @cocoy

    not completely true: if people save more, it only becomes useful when its used to consume/purchase productive resources. jesus christ is right– burying money is a shitty way to be financially responsible.

  • Brucewayne O’Dell

    Try the Bill and Linda Gates foundation for grant money to help fund this program.
    They give millions to worthy, honestly run causes such as this one.
    Just Google them on the internet or contact me if you are interested.

  • UP nn grad

    If you remove tax-collections on the under-P50,000 a month income group, then Pilipinas will have less money to pay for judges or teachers. While Pilipinas can borrow money for poverty-reduction programs like CCT/4P, I doubt if USA or European countries will lend money to pay for the regular judges’ and teachers’ salaries for Pilipinas.

    Noynoy administration’s task is to increase the revenue-collection. Noynoy said “walang korap, walang mahirap” anyway, so it is not that he will break any campaign promise when Noynoy admin really truly sincerely works hard to reduce by 20% (hopefully by more!!) leakages from tax-evasion, smuggling and corruption (which gets perpetrated by Pinoys-in-Pinas making P12Million-a-year).

    • http://cocoychronicles.com Cocoy

      UP n Grad,

      See, as I said, my hypothesis— and I don’t know if anyone has done some modeling on it, you don’t lose revenue. As I said, it goes back into the economy because as more disposable income occurs, these people will buy more things or send their kids to school or they can opt to save more. The economy doesn’t suffer. I’m not sure how /huge/ that revenue stream to begin with is. I suspect— that it negligible and my hypothesis is that we might even be exhausting more energy collecting it as income tax to begin with.

      My hypothesis is that by doing so you give the public a general perception that hey, we’re making things lighter for you. A P.R. that doesn’t hurt the bottom line.

      Yes, well aware of what the President has promised— to reduce leaks from tax-evasion. not saying he should prefer one over the other. I’d like to see both.

  • http://cocoychronicles.com Cocoy

    Personally, I wouldn’t mind an increase in VAT, if it means income tax for people making less than 50,000 pesos a month get removed. At the end of the day, I believe those people are being “punished” (I use the term very lightly) simply because they’re the easiest bunch to collect income tax from. They’re already mandated to set aside their GSIS or SSS. They’re mandated by law to give to PhilHealth and to Pag-IBIG (housing), which they will need anyway.

    My hypothesis has always been— if you ease their tax burden, they will either save more, or spend more. So removing their income tax burden is simply giving these people disposable income. In either case, whether they spend more or save more, the economy still benefits.

    Who will more likely benefit from an increase in take home pay? Teachers. Soldiers. Police. The lowly janitor. Employees in the public and private sectors.

    If you can also reduce it in such a way that the paperwork for Bureau of Internal Revenue (BIR) gets reduced by simply not collecting taxes from these people, and instead redirecting that energy going after the bigger fish, that’s also a win isn’t it?

  • Felicity

    I don’t mind an increase in taxes if we see where all our taxes our going. Citizens in developed countries pay up to 60% of their income to taxes and while it does hurt to see it go, we don’t hear much mass complaining simply because the results show.

    The “no new taxes” promise is a populist statement, much like the “tougher on criminals” line is, but is it really better policy-wise (that is, cost-benefit analysis on budget, economy and social impact/welfare).

    Not that I hope Aquino raises taxes (who likes paying taxes anyway), but if he does, I’d keep my mind open to where the money is going and how it’s being used. Hopefully DOF and DBM will release annual and un-doctored accounting of national funds.

  • UP nn grad

    Obtaining the US$400Million loan to extend CCT to 598,000 families is good. But President Noynoy Aquino should also raise VAT in order to fund more schools and better health care facilities. “The success of the CCT in terms of human development outcomes will depend on the availability of the schools, health centers, and other facilities that are needed by the poor to fulfill their part of the contract, as well as the accessibility of the source of funds for the women.”