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The opposition and the Senate are questioning President Arroyo’s
cash doleouts for the poor to meet their food and fuel (or
electricity) needs. It’s unconstitutional, says Senate Minority
Leader Aquilino Pimentel.
Since when did giving cash to the poor become
unconstitutional?
George Bush gave cash doleouts (averaging $600
per taxpayer and totaling $150 billion) last month to his fellow
Americans, including the poor, to transfer cash resources from the
government to consumers to stimulate spending and prevent or
diminish the effect of an economic slowdown. The $150 billion was
expected to create half a million jobs by end-2008.
Previously, Bush had lowered the tax, by two
percentage points, on the income of rich Americans, those earning
$250,000 or more a year to stimulate investment and continue the
economic boom begun by Bill Clinton. Taxpayers saved an average
$1,800 each and a total of $1.3 trillion in taxes by the end of
2007, according to White House. The Democrats want to remove the tax
relief when they take over in 2009.
In either case (the cash doleout and the tax
relief), Bush, the first MBA president (Harvard, no less), was not
questioned as regards the constitutionality of his action. Of
course, he had laws enacted for the purpose.
Said Bush: “The best way to deal with economic
uncertainty is to let people have more of their own money, because
we believe that the economy benefits when there’s more money in
circulation, in the hands of the people who actually earned it.”
In the Philippines, the senators want another
tax relief, like removing the value added tax on fuel. Since
removing the VAT will benefit even the rich (who fill up their SUVs
with high-priced, overtaxed gasoline), Mrs. Arroyo, an economist,
has deemed it better to give the cash direct to the poor. That way,
the rich will continue paying taxes while the poor receive cash
benefits.
The President is right. Direct the cash to the
poor (who number 26 million). There may be questions as to how the
poor will spend the money—pay for their electricity bill, buy more
rice, buy clothes and slippers for their primary school kids, reload
their cellphones, splurge on Jollibee at Mall of Asia, bet on the
lotto or jueteng. To me, it doesn’t matter. The poor know best how
to spend extra money. If you have never been poor, you don’t know
just how far P500 will go.
Of course, some of the doleouts will be stolen.
Graft, say 20 percent, I think, will be manageable. That’s small
in terms of opportunity cost. Rice has tripled in price, a 200
percent increase in three months this year or 800 percent in one
year. I think those in charge of the doleouts will minimize their
greed and pocket just 10 percent.
Sen. Chiz Escudero suggests a direct Meralco
rebate. Funny. Meralco has yet to return to consumers P20 billion of
the P30 billion of the taxes it paid and charged its customers, as
well as the P21.4 billion in deposits for electric meters and
advance payments it collected from the same customers because the
distribution utility didn’t trust them (Meralco honestly believed
its customers would steal the meters and wouldn’t pay their
initial electricity bills). The Supreme Court (in April 2003)
ordered the refund of the tax charges. The Energy Regulatory
Commission has ordered the return of the deposits.
ERC (bless them) had wanted an 11 percent
interest on those monies. Meralco wants to pay just one percent. If
so, I would want to borrow on those deposits and pay five percent,
which is cheap money by today’s era of sophisticated CSRs and
Gawad Kalinga gimmick.
The urgency of giving cash doleouts to the poor
is emphasized by Albay Governor Joey Salceda’s Noah’s Ark
proposal.
“The gathering of soaring food and fuel prices
and the financial recession in the US pose clear and present danger
to our national survival,” the respected analyst wrote in a recent
memo to the President.
The issue, he says, is not balancing the budget
and scoring higher growth targets but prevent “unprecedented human
suffering.”
The Noah’s Ark is a supplemental budget of
P315.6 billion over three years (2008 to 2010). The amount could be
P441 billion if you include subsidy for the National Food
Authority’s rice procurement program (rice bought high and sold
low to the poor).
The P315.6 billion includes in three-year
totals, P84.6 billion in conditional cash transfers for the poor at
the rate of P28.2 billion per year; P58 billion in agricultural
production; P36 billion in scholarships; P24 billion in fuel subsidy
for public transport.
At present, Salceda notes, most of Arroyo’s
interim pro-poor programs have been funded by the VAT collection
which could run out. The doleouts, says Salceda, “is the biggest
net resource transfer to the poor in recent history.”
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