The National Economic and Development Authority (Neda) said hiking the cash aid given to the poor to help them cope with price increases caused by the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) would be “difficult.”
Neda officials made the statement after House Assistant Majority Leader Michael Romero of 1-Pacman proposed the increase in the unconditional cash transfers (UCTs) to P500 per month, from the current P200.
The UCTs, however, are scheduled to go up to P300 per recipient on the second year of implementation of the TRAIN law.
“It’s kind of a quantum leap. It may be difficult [to increase the UCTs],” Socioeconomic Planning Secretary Ernesto M. Pernia told reporters at the sidelines of a recent news briefing.
Neda Undersecretary Rosemarie G. Edillon said the “more robust solution” to allow Filipinos to adjust to the TRAIN law is to “increase production, increase capacity, production capacity.”
Edillon said rolling out policies or intervening in the cash transfers may not be sustainable solutions to increasing per-capita incomes. She said this could be addressed by the government through the “Build, Build, Build” (BBB) program that can boost employment and incomes for millions.
The UCTs, Edillon said, are only “stop gap” measures that are not designed for medium- and long-term implementation.
“We have an immediate stop gap, but at the same time, we’ll put in the measures that are necessary for the more robust expansion of capacity and expansion of production,” she said.
Romero earlier said the increase in the UCT to P500 shall be sourced according to the funding provisions of the TRAIN law. He also said the increase in the UCT will benefit about 4 million families, or 22 million poor Filipinos—15 million of whom are children.
The national government is targeting to grow the economy by 7 percent to 8 percent in the medium term and reduce poverty incidence to 14 percent from the current 21.6 percent.
This will contribute to efforts to increase per-capita income levels to upper middle- income country levels as early as next year. This is also in line with the Philippines AmBisyon to become a high-income country by 2040.
The Philippines is considered a lower middle-income country with a per capita gross national income of around $3,500 as of 2016. The World Bank said lower middle-income economies, like the Philippines, have a GNI per capita between $1,026 and $4,035.
As of 2016, the World Bank said low-income economies are defined as those with a GNI per capita, calculated using the World Bank Atlas method, of $1,025 or less in 2015.
Upper middle-income economies are those with a GNI per capita between $4,036 and $12,475, while high-income economies are those with a GNI per capita of $12,476 or more.