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 27th, 2008 at 12:01 pm
I agree that this temporary dole-out can help those that really really need it.
But because majority in that economic strata also have the mindset of relying on the gov’t or someone else to provide their needs for them we need to emphasize the value of working in exchange for a benefit. Hitting two birds..
June 27th, 2008 at 9:05 am
@CrystalBalls, I had to smile at the “relatively”. I know you know what we all know about that.
You probably know about Pom Reside of the UP School of Economics study on tax incentives. Media doesn’t always report that because it’s “malayo sa bituka” and not easy to understand. If you have the figures and can expound what you just said, I would love to publish your article 
June 27th, 2008 at 9:04 am
@Sammy, well said. I do get your point. And for the most part, I think you are right. But let me tell you something: I was once part of that underclass. Yeah, I’m not kidding. I was able to work my way up a little bit to the working class with some “cash subsidies” from good souls around me. I’m a proud person, and I didn’t like dole-outs. But when you haven’t eaten for a day, you get what’s given to you with gratitude in the shuffle of your feet. I think there are many Filipinos still in this stage. What can be done for them?
June 23rd, 2008 at 9:16 am
i’d rather see the money channeled to social services and education where the there’s long term benefits. I don’t believe in giving money to the poor…promoting culture of mendicancy…I’d rather give money in exchange for some labor, like street sweeping.
btw, there are many people in my neighborhood qualified for that dole out, they get their electricity from jumpers…further jacking up meralco’s system lost charges with meralco doing nothing even if it’s an open secret
June 23rd, 2008 at 3:20 am
sige lang, ano pa gusto mo? Madami pa nyan dito sa gobyerno, maski marami na akong nakuha este nagamit sa mga proyekto ko. Syanga pala, malapit na ang susunod na halalan ha? Heto, sa iyo na itong T-shirt na ito. Ayos ba ang picture ko dyan? Kuha ka pa ng ilan at ibigay mo sa mga anak mo. Pati na rin sa kapitbahay.
Direct money transfers are the looters’ way of staying in power. In the US, since Lyndon Johnson declared a War On Poverty in the 1960s, over $6 TRILLION has been transferred to the poor in foodstamps, welfare and other forms of direct assistance. And still the percentage of poor in the US remain stubbornly the same. What the $6 trillion bought was not the defeat of poverty but the entrenchment of a dependent underclass that has lost its desire to improve its lot on its own.