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Bullet train rolls

Two months after President Duterte’s approval of the Tax Reform for Acceleration and Inclusion (Train) law, the hard reforms undertaken have started to benefit the poorest members of the society.
More than P4.3 billion was released by the Land Bank of the Philippines for cash doles for 1.8 million household-beneficiaries.
The Department of Social Welfare and Development (DSWD) expects 8.2 million beneficiaries to also receive unconditional cash transfer (UCT) from the government.
The doles being unconditional was a shift from the same Pantawid Pamilyang Pilipino Program (4Ps) initiated by former President Gloria Arroyo, continued by Noynoy and is maintained by the current administration.
The problem with imposing conditions with the doles is that these are hard to enforce due to the limited government personnel.
Having conditions also exposes the social assistance scheme to political influence.
Budget Secretary Ben Diokno had espoused targeted cash transfer but with key changes that may include providing parents with a job program to make income of households more sustainable.
Under Rody’s UCT program, the government provides cash grants of P200 a month to the poorest Filipino families which are identified by the DSWD.
The government, however, is giving the doles in one blow of a total of P2,400 for the whole of 2018.
Another addition under Rody’s version of 4Ps benefits indigent senior citizens who also get cash doles.
In all, 4Ps beneficiaries will be receiving P1,700 a month which is a decent amount to augment the income of poor Filipinos and help them meet their basic family needs.
4Ps beneficiaries also get a P600 rice subsidy as part of programs to help poor families adjust to increases in prices of commodities as a result of the implementation of the Train Law.
UCT is the tax subsidy provided under the TRAIN law to help the poor cushion the adverse economic effect of the policy. It is considered to be the biggest tax reform mitigation program under the TRAIN law which seeks to provide 10 million beneficiaries with cash subsidies amounting to P200 a month for this year and P300 a month for 2019 and 2020.
Diokno added that higher government revenues would also mean funds for the Duterte administration’s massive “Build, Build, Build” program, which in turn is seen to generate more jobs.
Some P8.4 trillion in spending is being targeted for the infrastructure buildup until the end of Rody’s term in mid-2022.
Under the 2017-2022 Public Investment Program (PIP), an estimated P7.7 trillion is needed to accelerate infrastructure development through some 4,490 projects.
Many of the projects are set for implementation this year that will mean instant availability of jobs particularly for unskilled labor.
The unemployment rate in the country stood at 5.6 percent of the labor force as of July last year but this is expected to be radically reduced by the middle of the year o a targeted unemployment rate of around three to five percent by 2022.
Diokno said infrastructure programs are sustainable sources of jobs, citing that some of the projects identified by the current government would be implemented beyond its term.
“We can build forever. Look at Singapore, Build Build Build,” he said.
While opportunities increase, the income tax of majority of salaried Filipinos or those who earn P250,000 or less a year or nearly P21,000 a month was made free.
Diokno said the reduction in government revenues as a result of Train will be made up by increased consumer spending with more disposable income in Filipinos’ pockets.
“You’ll have more money in your pocket so that will create multiplier effect,” he added.
The hike of excise taxes of some products like fuel and sugar-sweetened beverages will also recoup lost tax takes.
The additional excise taxes will then be used to provide subsidies to the lower 50 percent of the society as non-conditional cash transfer on top of the existing conditional cash transfer program like the 4Ps.
Benefits are starting to be realized, a mere two months after the Train started rolling which can be considered at jet speed when compared to the previous yellow term which couldn’t even decide where it was heading to.

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