Vote:
a) Of course not! Subsidies are baaad.
b) It’s a source of corruption. Mark my words!
c) It’s a band-aid solution, but a few pesos are better than nothing.
d) Everybody’s doing it. The US and other countries are giving subsidies. Sige na nga, pwede na (It’s okay).
e) Hey, let’s not look a gift horse in the mouth!
A lot has been said about the government’s decision to give out cash transfers or subsidies to the poor. Comments range from the totally absurd to pure wisdom.
There have been three forms of subsidies thus far: the P500 cash transfer to households that consume at most 100 kilowatt hours a month which will cost government P2 billion, a P2-per-liter discount for drivers of jeepneys and other public utility vehicles, and a P300 subsidy for every child that goes to school.
There is no official tally on the total cost, says Amando Doronila. He points out that these subsidies are on top of the P6.9 billion the government shelled out for the National Food Authority’s cheap rice as of May and the fertilizer subsidy to increase rice production amounting to P43.5 billion (P1,500 per farmer).
All across Asia — in Indonesia, Malaysia and Taiwan – governments are giving out subsidies. The Philippine Daily Inquirer’s editorial “Money for nothing” says the region is extremely tense. Now, whether the subsidies are being given to help the poor or to keep them from being a pain in the neck is anyone’s guess. We can talk till our throats are hoarse, but even the intelligentsia who figure it out will still have to deal with whether subsidies really work.
Presidential aspirant Senator Manuel Villar wants the administration to continue collecting value-added tax on oil and give the proceeds to the poor in the form of subsidies. Jaro Iloilo Archibishop Angel Lagdameo says giving subsidies is like putting money in a basket with a hole in the middle. Bicol region Governor Joey Salceda says subsidies can stimulate the economy. There’s more on this discussion over at Manolo Quezon’s blog The Daily Dose.
Government subsidies are matters of public policy, but there are certain personal finance principles that come to mind. Giving somebody in the pits a leg up is not bad, as long as you can afford it and it doesn’t turn him into a dependent sycophant.
Even on a personal level, whether you are the receiver or the giver, accepting or giving cash is a tricky situation. Receiving inheritance, for example, is well and good, but when my friend told me she didn’t have to save much money because she has an inheritance waiting for her, it triggered all sorts of warning signals in my head.
The League of Corporate Foundations (LCF) believes there is a better way to alleviate our people’s suffering than outright cash subsidies. During a press conference yesterday, Bill Luz of Ayala Foundation for example said government could spend that P500 on compact fluorescent lamps (CFLs) and ask low-income households to exchange their incandescent lightbulbs with CFLs.
“That P500 will be gone after a month but a CFL can help that family for the lifetime of that bulb. I think teaching them to lower their electricity consumption is much better than giving them cash for their electric bills,” Luz said.
Good point. In Day two of the CSR Conference on July 16 to 18, CSR Conference chairman Roberto Calingo said the LCF will challenge companies to find ways to lower consumption of electricity, gas and other commodities which are getting more expensive by the hour.
These days, who doesn’t need a leg up? Whether financial, spiritual, emotional or mental, there is a point in everyone’s life where he becomes a beggar. Giving that help may turn out to be a good immediate solution (think first-aid before rushing to the hospital), but we might have to think harder on finding the right way to give.
June 21st, 2008 at 3:40 am
The good thing about direct subsidies is that they are ‘relatively’ transparent. It is generally easier to spot whether the proceeds go directly to the poor or not.
They are at least better than “hidden” subsidies like tax exemptions and tax incentives given to companies and industries often carelessly identified by the government as “key” or “strategic”. These tax breaks redistribute income and wealth from low-to-middle class salaried taxpayers to owners of corporations that are found in “preferrred” or “strategic” industries. These fiscal incentives also help facilitate a lot of tax loopholes since they are difficult to spot.
So I guess my point here is that I don’t mind gov’t’s giving out direct subsidies, specially if they are temporary, transparent and are meant to alleviate a transitory problem. If we can get rid of opaque, complicated tax breaks that tax accountants and corporate parasites thrive on, we’d probably have enough funds for both short term direct subsidies and big budget items for enhancement of both physical (farm- to-market roads, post-harvest facilities, alternative energy generation facilities) and human capital (health, education) to alleviate the worsening poverty situation in the countryside.
June 20th, 2008 at 12:43 pm
I will go with C.
But like someone said, the recipients will have to work for it somehow in terms of community service.
June 20th, 2008 at 7:16 am
I will go with C. It just a stopgap not a fix. The government is just doing this hoping that people will not again do another Edsa.
Now, I just have a question - what happened to all the supposed economic gains our government had been claiming for years? Where did all the money go?
June 20th, 2008 at 1:05 am
after some thoughts…..
majority of enlightened people know that the way out of poverty is adequate education… i.e. attaining a level of skills and/or knowledge, in a field of value to trade for something of necessity… but as with everything else, it takes time…. time
our situation right now…. given the runaway cost of fuel, which in turn raises the price of basic commodities….. may likely cause social unrest ….. those subsidies hopefully may/can control or prolong the tipping point long enough…. the style of using money to buy time is effective but…. “gaano kakapal bulsa mo?”
June 20th, 2008 at 12:47 am
aahhh….. before answering that….. i may have to consider where i am sitting for a correct point of view…..
if i am the one receiving the subsidy and starving…… fire away, thank you, meron pa ba?
if i am the one giving from my own pocket and not starving…… ok, this is for you, that’s what i can spare, please make do
if i am giving using someone else money…. sige lang, ano pa gusto mo?