THE NATIONAL Economic and Development Authority (NEDA) ruled out a legislator’s proposal to increase the monthly unconditional cash transfer (UCT) for poor families affected by the tax reform law.
“It’s kind of a quantum leap,” Socioeconomic Planning Secretary Ernesto M. Pernia told reporters during an inflation briefing last week, when asked whether he is open to raising the UCT to P500 a month from the current P200.
Representative Michael L. Romero of the One Patriotic Coalition of Marginalized Nationals (1-PACMAN) party-list said in a June 24 statement that he will file an amendment to Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion law (TRAIN), amid the rising price of basic commodities.
Inflation hit 5.2% in May, with a five-month average of 4.3% — breaching the government’s 2-4% target.
The TRAIN law grants a P200 per month UCT for the first to seventh income decile, which will increase to P300 per month next year until 2020.
NEDA Undersecretary Rosemarie G. Edillon said: “The more robust solution is to increase production, increase capacity, production capacity. So if you intervene of the side of the transfers, then we miss out on initiating what is supposed to be the robust medium- and long-term solution. And that is what we want to happen.”
“We have a stopgap, 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. And that is why we are using the additional revenue from TRAIN for the ‘Build, Build, Build,’ for human capital investment,” she added.
The government’s economic managers said that the high-inflation environment is “temporary,” as it is driven by the rise in world oil prices and a weaker peso, along with a spike in demand as the economy grows.
They forecast inflation to average between 4-4.5% for 2018.
They are also largely banking on the passage of the Agricultural Tariffication bill — currently pending in Congress — to combat rising inflation.
Economic managers expect inflation to peak in the third quarter and taper off by October, and that it will return to the 2-4% target band by 2019.
Some 30% of revenues from the TRAIN law are to be spent on social mitigating measures. Apart from the UCT, the TRAIN law also mandates the distribution on fuel vouchers to jeepney drivers and operators — targeted to be released this month — fare discounts in public transportation, discounted prices for National Food Authority rice, and technical and vocational skills training. — Elijah Joseph C. Tubayan