DBM funds TRAIN cash transfers to mitigate inflation impact

THE Department of Budget and Management (DBM) has released funding for cash transfers provided under the tax reform law, which will be given the poorest Filipino families to help them keep up with rising commodity prices.

In a statement, the DBM said IT transferred P24.49 billion to the Land Bank of the Philippines ( Landbank) for distribution to the country’s 10 million poorest households, as part of the Tax Reform Cash Transfer Project (TRCT) administered by the Department of Social Welfare and Development.

Within the month, some P4.3 billion in cash will be transferred to the accounts of over 1.8 million families currently covered by the Pantawid Pamilyang Pilipino Program (4Ps), representing an additional P2,400 in their cash cards.

Signed into law as Republic Act 10963, the Tax Reform for Acceleration and Inclusion ( TRAIN) law introduced additional taxes on fuel, cars, coal, sugar- sweetened drinks and a host of other items, which took effect Jan. 1.

Majority of Filipinos will also enjoy bigger disposable incomes under TRAIN, as it reduced the income tax rates for those earning below P2 million yearly. However, this does not include minimum wage workers as they were exempt from paying duties under the old tax regime.

The cash transfer represents a P200 monthly subsidy, which is intended to help the poor weather the inflationary conditions, with prices of basic goods and services rising by at least 4% year on year.

“The TRCT seeks to provide cash grants to poor households and individuals who may not benefit from the lower income tax rates but may be adversely affected by rising prices,” the DBM said.

Around 30% of the P82.3 billion in additional revenue generated by TRAIN will be spent on “social protection” programs, while the bulk of the collections will fund the government’s “Build, Build, Build” infrastructure agenda.

An additional 2.6 million families under the 4Ps program will also receive a top-up in the cash transfer which they receive in March, but they will be receiving it through other cash agents as they do not hold Landbank cards.

Meanwhile, three million senior citizens who are receiving social pensions are expected to get the cash transfers between April and May.

Some 2.6 million poor households who will be first-time beneficiaries of the government’s cash transfers scheme will be given a year’s worth of benefits by August, the DBM said.

The cash grants will eventually be increased to P3,600 for the years 2019 and 2020 or P300 per month. The distribution schedule will likewise be adjusted to the first quarter of the year as the system is put in place.

The government is looking to reduce poverty incidence to 14% by 2022, while spurring economic growth to as fast as 7-8%.