ID system, rice import reforms to help mitigate inflation, DOF says
The government will accelerate the rollout of cash handouts and fuel vouchers to complement upcoming laws like the national ID system and the lifting of restrictions on rice imports to mitigate the effects of inflation, the Department of Finance (DOF) said on Wednesday.
In a statement, Finance Assistant Secretary Ma. Teresa Habitan said reforming the current rice import scheme — by shifting from setting import quotas to just imposing tariffs on cheaper imports of the grain — would help stabilize local supply and lower its prices in the retail market.
This is expected to directly benefit less affluent consumers who account for an estimated 20 percent of domestic rice consumption.
A national ID system, meanwhile, will plug leaks in the implementation of the so-called “unconditional cash transfer” program and other social welfare programs and will help ensure that cash aid would reach the legitimate beneficiaries, Habitan said.
These twin measures will also help mitigate the inflationary impact of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, she said.
Based on estimates by the Bangko Sentral ng Pilipinas (BSP), rice tariffication alone will immediately lower the inflation rate by 0.4 percentage points, “which already offsets TRAIN’s impact on prices,” Habitan explained.
Up to 30 percent of the incremental revenues collected under TRAIN, which is the first package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP), has been earmarked for social protection programs to help vulnerable sectors cope with the inflationary impact of this tax reform law.
“The impending passage of the national ID system law will complement these programs given the ambitious target of delivering social welfare benefits to 10 million poorest family beneficiaries,” Habitan said ahead of the resumption of the House ways and means committee hearing on the second tax reform package of the CTRP, which covers corporate taxation and the modernization of investment incentives.
Habitan and Director Juvy Danofrata represented the DOF at the hearing.
According to Habitan, the Department of Social Welfare and Development has so far released some P4.3 billion to the Land Bank of the Philippines for some 1.8 million Pantawid Pamilyang Pilipino Program (4Ps) beneficiaries with existing LandBank cash cards.
Another 2.6 million household beneficiaries are in the process of getting their cash subsidies in May and June. For 2018, some P24 billion will be released to cover the poorest 10 million households.
The Department of Energy and major petroleum companies also agreed last March to provide fuel discounts for public utility vehicles, while the Department of Transportation is preparing the fuel vouchers for duly-franchised public vehicles, Habitan said. /muf
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