GMA OKs P316-b subsidy program to help poor families

PHILIPPINE NEWS SERVICE — PRESIDENT Arroyo has approved a three-year, P316-billion subsidy program to cushion the impact of spiraling prices of rice and oil on ordinary consumers, Albay Gov. Joey Salceda said yesterday.

Salceda said the President had approved the social protection program that would include providing P28 billion in subsidies annually to 4.7 million households living below the poverty threshold.

“She agreed in principle when I made the presentation, but she instructed me to haggle with our economic managers to allow higher deficit targets, said Salceda, who also advises the President on economic issues.

“She will sign a supplemental budget for this. It is clear we need more state intervention on behalf of the marginalized,” he said.

“Social protection, in contrast to growth impetus as an instrument of poverty reduction, has now become the foremost undertaking of the national government.”

Salceda said Mrs. Arroyo would submit the supplemental budgetary request to Congress on July 28, when she delivers her State-of the-Nation Address.

Salceda said he proposed a supplemental budget of P94 million to cover cash transfers and food subsidies for the poor for the remainder of the year.

“The President said she really wants to spend [on the poor] and that we have to engage Congress on this,” he said.

“Surplus in a period of economic weakness is immoral. Anyway, we have enough economic lending capacity,” he added.

Salceda said the protection plan, called “Noah’s Ark,” would be financed by local borrowings and loans from the World Bank and the Asian Development Bank.

“We are debating right now with the economic managers because we need to have a higher deficit target for this. This is the time to revisit our economic policies and produce new solutions. There’s enough empirical data to support this,” Salceda said.

He noted that Finance Secretary Margarito Teves, in particular, had been very conservative in the proposal to revise economic targets, especially the deficit ceiling.

Over a period of three years, the protection plan will include a P58-billion incremental budget for the Agriculture Department and P90 billion in rice subsidies.

Salceda said the packages’ unique feature was a P36-billion funding for scholarships through the Commission on Higher Education and the Technical Education and Skills Development Authority.

Another P30 billion would be released to the National Food Authority to build up a strategic rice reserves, and by buying from local farmers “to shield the country from market volatility or adverse trade patterns such as export curbs,” Salceda said.

The Bureau of Agricultural Statistics yesterday said commercial rice prices had gone down by as much as P2 a kilo all over the country as a result of the release of state-subsidized stocks in the market.

Agriculture Secretary Arthur Yap has said the National Food Authority will be releasing 350,000 metric tons or seven million bags every month as a way of stabilizing rice prices.

Also yesterday, the Consumer and Oil Price Watch recommended that 1.64 million poor families be exempted from the 12-percent value-added tax on liquefied petroleum gas tanks.

Raul Concepcion, the group’s chairman, said the subsidy would cost P125 million a month, and could be taken from the royalties that the government gets from the Malampaya gas project.