Inflation spikes, yet cash subsidies nowhere in sight

May 6, 2022

by IBON Foundation

The fastest consumer price increases in over three years is burdening low-income households even further and makes cash aid ever more urgent, research group IBON said. Yet the Duterte administration keeps reneging on its promised aid to vulnerable families, said the group.

Inflation spiked by 0.9 percentage points from 4.0% in March to 4.9% in April according to the Philippine Statistics Authority. This is the highest inflation since the 5.2% recorded in December 2018. Inflation is accelerating mainly because of oil price hikes which is resulting in increases especially in food and transport indices.

The index for food and alcoholic beverages increased from 2.6% in March to 3.8% in April. Vegetable inflation soared from -0.1% to 9.2% over the same period, meat and others from 2.9% to 4.2%, and fish and other seafood from 4.3% to 5 percent.

Actual prices monitored by the Department of Agriculture show a Php5-40 increase in the prices of fish, meats and some lowland and upland vegetables from March to April.

Transport inflation meanwhile accelerated from 10.3% in March to 13% in April, surpassing November 2021 levels when oil prices last rose consecutively. Diesel inflation jumped from 58% to 83.7% over the same period and gasoline from 36.7% to 43 percent. Passenger transport by sea also spiked from -5.9% to 13.6 percent. The 52.2% spike in fuels inflation is the highest since computation on the figure started in 1994.

Despite a fourth rollback in oil prices last Tuesday following pockets of global petroleum supply recovery, the energy department reports a net year-to-date increase of Php17.80 per liter in the price of gasoline, Php30.30 for diesel, and Php23.90 for kerosene.

IBON said that millions of low-income Filipino families are very much in need of cash subsidies but the Duterte administration still has not distributed the aid it promised for the poorest households. The economic managers proposed a Php500 monthly subsidy for the poorest 50% of families. However, it has yet to come up with the guidelines for sourcing and distributing even these paltry cash subsidies.

IBON noted that this is just the latest instance of government stinginess, pointing out that it did not even bother to fully distribute Tax Reform for Acceleration and Inclusion (TRAIN) unconditional cash transfers (UCTs) in 2019 and 2020 with Php45.2 billion remaining undistributed.

The TRAIN Law was supposed to give UCTs to the country’s 10 million poorest families to cushion the impact of its higher consumption taxes. This should have been Php200 monthly in 2018 and Php300 monthly in 2019 and 2020, by virtue of the Department of Social Work and Development’s (DSWD) Memorandum Circular 03 series of 2018.

Gabriela Women’s Partylist however found that some Php45.24 billion of the total Php96.98 billion in UCTs have still not been disbursed as of 2021. The social welfare department reported that the 4.4 million beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps) who already have cash cards were given their UCTs until 2020, but millions of social pensioners and listahanan recipients did not get their allotted UCTs for 2019 and 2020.

IBON said that providing cash subsidies in times of emergencies is a vital social protection mechanism that should be part of any economic program that claims to prioritize the needs of Filipinos. Cash assistance is so urgent that the people shouldn’t have to wait for a more compassionate administration to deliver it, the group said.