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There should be no beef on the grant of subsidies. Governments
across the globe do it all the time. It is the moral responsibility
of governments to help people, businesses, and marginal sectors
whenever they have the means to do it.
But, definitely, there should be creativity in
the grant of subsidies. Well-executed welfare programs are one
thing. Outright dole-outs, such as the current grant of a P500
electricity subsidy to the poor, are hare-brained social programs
with very little economic sense.
Subsidies have to pass the test of the famous
Chinese line: Give a man a fish and he will eat for a day. Teach him
how to fish and he will eat for a lifetime.
Instead of dole-outs, the subsidies should be
poured into productive enterprises. Or to infrastructure build ups
that will help cushion the impact of surging energy and food
costs.
Okay, where should government invest, say, a P20
billion slice of the oil VAT collection?
To raise the level of food production, ease the
critical shortage of rice and corn, subsidies should fund:
The carpet-bombing of farming areas with
subsidized hybrid seeds and fertilizer. Farmers need two fertilizer
types to improve their yields (Triple 14 and Urea) and the
subsidies should cover both.
Farmers using shallow tube wells to water
their farms in the absence of year-round irrigation service should
be given diesel subsidies.
If the government can throw in free hoes and
shovels for the maintenance of irrigation ditches and canals, the
better.
The aquaculture sub-sector of fisheries is on
its death throes. Tilapia and catfish raisers simply cannot cope up
with the close to P60 per liter price of diesel at the pump and the
P52 farm gate price. The spiral in the prices of tilapia and catfish
feeds (from P600 per sack to P1, 200 now) is the bigger
problem.
With feeds and diesel subsidies, tens of
thousands of hectares of tilapia and catfish ponds forced to cease
production because of the high cost of diesel and feeds, will
produce anew.
If the government marketing people can link up
the tilapia and catfish farmers to companies producing fish fillet
for the local and the overseas market, the better. They can get past
the middlemen and sell direct to a premium market. There is a big,
big market for tilapia fillet. I visited my OCW deep in the
Midwest (not really a place where you can readily find tilapia
fillet) and her ref, unbelievably, was stocked with tilapia
fillet from the Philippines and Thailand.
Our OCWs will always look for tilapia fillet and
will always find it. Same with hito and bangus plus the condiments.
In all of the above, we are talking of subsidies
that will make a real impact on food production and rural incomes.
The other option is for the government to use a
portion of the oil VAT fund to start building—in partnership with
local oil industry players or transport groups—a network of
gas stations retailing CNG (for buses) and LPG for jeepneys and
taxicabs.
Why? Because the P1billion subsidy granted to
transport groups to enable public utility buses, public utility
jeepneys and taxis to convert their engines into CNG-run or LPG-run
has a missing link—LPG retail stations are few and there are less
than five CNG retail outlets in the whole of Luzon.
Two-thirds of the entire daily provincial
passenger traffic in Luzon is between Metro Manila and the North
and Central Luzon provinces. Yet, not a single CNG retail station
has been built in this critical bus route. Where will the operators
load CNG after the conversion of their buses from diesel to CNG?
Right now, nowhere.
The CNG retail outlets have to be built now,
along EDSA and Balintawak and up to Cagayan, which is the eastern
end, and Ilocos Norte, the western end, of the major bus routes.
You might want to connect the dots. How would
building CNG retail outlets in these sensitive bus routes help
people stand on their own two feet for the rest of their productive
lives?
The majority of the bus passengers are job
applicants, either for jobs in Metro Manila or overseas jobs. Right
now, their mobility is impaired by the adjusted fares of the PUBs
Once the CNG stations are operational, buses can run on CNG and they
can definitely lower their fares. CNG costs around P20 per liter,
while diesel, obtained at industrial prices by the bus operators
(which, weirdly, is right now priced higher than the pump cost
of diesel) is priced at P60 per liter.
So that is the equation: lower bus fares is the
equivalent of boosting the mobility of job seekers.
Jobs, after all, are the equivalent of an
empowerment of a lifetime.
mvrong@yahoo.com
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