From CCT to UCT—Are we creating a welfare state

 

 

By Rose de la Cruz

 

First there was the conditional cash transfer (CCT) or more known as Pantawid Pamilyang Pilipino program, an anti-poverty strategy, that was huge criticized in the previous administration because of the big leap in budgetary allocation from Arroyo’s P20 billion a year to P60 billion and then raised to P80 billion.

 

And when the TRAIN law (Tax Reform for Acceleration and Inclusion) was enforced, a separate program called Unconditional Cash Transfer (UCT) again designed for the poor and indigent senior citizens was put in place. The UCT is on top of 4Ps beneficiaries' regular cash grant and P600 rice subsidy from the program.

 

 

Such poverty alleviation measures, though noble in intent, has been breaking the backs of the middle class and the heavily-taxed employees and workforce of the country, who are now asking if a welfare state is being created at their expense. Ironically, it is the middle class, not the rich and landed few, that are shouldering the bulk of taxes in the country. Yet they receive the least, if any, support from government.

 

Under the UCT scheme, 10 million beneficiaries will receive P200 a month as the subsidy for 2018, and P300 a month for 2019 and 2020 to help them amid increasing prices of goods and services which is the initial impact of the TRAIN law. 

 

Progressive groups stressed that the 15.6 million informal sector workers and 2.4 million unemployed Filipinos are the most affected by the tax reform law.

 

For 2018, the government has allocated P25.67 billion for UCTs under the General Appropriations Act (GAA) to help low-income households cope with the slight inflationary impact of the Tax Reform for Acceleration and Inclusion Act (TRAIN).

 

Under the TRAIN, up to 30 percent of the incremental revenues from this law is earmarked for social mitigation measures, while 70 percent will help support the government’s “Build, Build, Build” infrastructure program.

 

The TRAIN, the first package under the Duterte administration’s Comprehensive Tax Reform Program (CTRP) which took effect on Jan. 1, slashes personal income tax (PIT) rates for those earning below P2 million and provides for simplified and lowered rates for donor and estate taxes.  The 13th month pay and other bonuses not exceeding a total of P90,000 are also non-taxable under the TRAIN.

 

Of the P25.67 billion, P24.49 billion is under the account of the Land Bank of the Philippines, which will distribute the UCTs nationwide via ATM card transfers, over the counter or through conduit systems such as rural banks, NGOs and cooperatives.


The remaining P1.18 billion has been allocated to cover the administrative costs of implementing this social protection program.

 

 

Options for UCT

 

But Rep. Michael Romero, 1PACMAN partylist, presented two options for UCT:  Option 1 is P300 for 2018; P400 for 2019 and P500 for 2020; and Option 2 is P500 for 2018; P400 for 2019 and P300 for 2020. He is pushing for P500 for 2018 in view of rising crude oil prices that trigger inflation uptick.

 

Romero said the country has available funds because it continues to import the petroleum product it needs to run the economy and Filipino households. “We are even paying more for the imported oil because of the TRAIN law taxes,” he stressed.

 

Add to that the continuing strong appetite of Filipinos for sweetened non-alcoholic beverages, for beer and other alcoholic drinks, and for tobacco products—all of which are bad for individual and national public health, but which Pinoys consume tons of despite the clear adverse impact on health.

 

He said while he supports the Build Build Build program of President Duterte and noted that capital outlays in the first five months of 2018 grew by 26 percent, the latest Department of Budget and Management figures are silent on the budget utilization rates of the agencies responsible for much of the Build Build Build.

 

Certainly, NEDA and DBM would understand our concern on budget utilization considering that the DPWH utilization rate was a pathetic, dismal, and disappointing 34 percent. COA disclosed that 34 percent figure and it does not encourage optimism, he added.

 

He said he won’t allow the Department of Public Works and Highways to get away with their 34 percent budget utilization rate in 2017. He will call for a House investigation to find out the real reasons DPWH spent so little of what was supposed to be the strong foundation of Build Build Build this year. If DepEd can accomplish a 97 percent budget utilization rate this year and 90 percent last year (and DepEd has the

 

Unconditional cash transfers (UCTs) amounting to P2,400 for 2018 will be distributed within the first quarter to some 7.4 million households, comprising the 4.4 million existing beneficiaries under the Pantawid Pamilyang Pilipino Program (4Ps) and 3 million indigent senior citizens already receiving social pensions, according to the Department of Finance (DOF).

 

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