(First of three parts)
Finance Sec. Benjamin Diokno made an incredible claim at the opening of the Senate budget hearings: “If you look at the composition of the budget it’s talagang pro-poor.” But the budget’s numbers tell a much different story about the administration’s priorities.
The de facto head of the administration economic team said that the poor don’t really pay much taxes but in return “get a lot of benefits [like] free education, free health care, social protection measures”. He told the Senate to understand the budget as what you pay in taxes and how much you get in return for them to see how much Filipinos benefit from it.
But the biggest beneficiaries of the government budget aren’t the poor. If they were, the country wouldn’t be seeing such worsening inequality and the majority being left further behind. Which is why the economic team’s argument is insensitive, patronizing and deeply wrong all at the same time.
Anti-poor, pro-rich
A broad-based fiscal stimulus is needed. This means not just spending more but spending on the right things. However, the proposed 2024 budget doesn’t give the people the urgent relief they need amid rising prices and joblessness. Nor does it go anywhere to fixing the backwardness of agriculture and Filipino industry which are at the root of these rising prices and joblessness. This backwardness will only be felt more keenly as the global economy trips and stumbles next year.
On the other hand, the proposed budget does take pains to keep delivering infrastructure projects to support corporate profits and grease trapo pork barrels. It also takes pains to keep repaying debt which, ungratefully, keeps growing relentlessly. The budget even gives unprecedented room for opaque slush funds justified as confidential and intelligence expenses. This is spending more but spending on the wrong things.
Worse, the administration is making the poor and middle class bear those pains. They don’t get the social services or social protection they need. They’re also made to pay more and more taxes on the few goods and services they can afford from their failing family incomes – even as rich families and large corporations pay less and less taxes on their income. Bloating billionaire wealth, meanwhile, remains untouched.
The quantities of the budget’s thousands of pages reveal a lot about the administration’s real priorities. Why isn’t it a pro-poor budget?
Welfare unfriendly
To begin with, it isn’t responsive to how the number of poor and vulnerable Filipinos has grown since the start of the Marcos Jr administration to some 19-22 million families already. Poverty is increasing because prices still keep rising even if inflation seems to be moderating. Job creation is also increasingly hollow with mostly self-employment and informal work in the economy’s lowest-paying and most irregular sectors.
The budget is a vital tool to give distressed families immediate relief. No other policy measure works as fast for so many. Public spending on social protection and social services should increase in times of crises when low-income Filipinos need these the most. The proposed budget, however, gives very low priority to millions of distressed Filipino households.
Less ayuda
The budgets of major social assistance programs for poor and vulnerable families in the social welfare, labor, health and education departments will be drastically cut in 2024.
The government has emergency assistance programs in the DSWD, DOLE, and OWWA aside from quick response funds in DepED, DOH, DA and other agencies.[1] The Marcos Jr administration already cut the funding for these programs this year by Php7 billion and their combined budget fell to Php90.5 billion in the 2023 General Appropriations Act (GAA).
But there’s an even bigger cut coming up. The budgets for emergency assistance programs are reduced by a huge 31% with a Php27.7 billion cut to just Php63.3 billion in 2024. This includes cuts in the budgets for:
- DSWD’s Protective Services for Individuals and Families in Difficult Circumstances (46% or Php16.8 billion cut to Php20 billion), Residential/Non-residential Care (36% or Php1.2 billion cut to Php2.1 billion), Supplementary Feeding (22% or Php1.1 billion cut to Php4.1 billion), Disaster Response and Management (23% or Php948 million cut to Php3.2 billion), Sustainable Livelihood (13% or Php837 million cut to Php5.6 billion), Quick Response Fund (29% or Php500 million cut to Php1.3 billion), and Social Welfare for Distressed Overseas Filipinos and Trafficked Persons (7.4% or Php6 million cut to Php75 million) programs; and
- DOLE’s TUPAD program for informal workers (32% or Php6.4 billion cut to Php13.7 billion).
These budget cuts overshadow the negligible 1.1% or Php118 million increase in OWWA’s social protection and welfare program to Php10.8 billion.
There are a few other social assistance programs in the DSWD, DepED, CHED, DOH and other agencies. Major programs see large cuts in 2024 including in the:
- DOH’s Medical Assistance to Indigent and Financially-Incapacitated Patients Program which is reduced by 32% or Php10.4 billion, falling to Php22.3 billion in 2024; and
- DepED’s Senior High School (SHS) Voucher Program which falls by 36% or Php14 billion, dropping to Php25.3 billion in 2024. There is only a miniscule 0.3% or Php39.3 million increase in the Educational Service Contracting (ESC) Program to Php12.5 billion.
The DSWD’s flagship Pantawid Pamilyang Pilipino Program (4Ps) increases by 10% or Php10.2 billion to Php112.8 billion in 2024. This is after a Php5.1 billion cut in 2023 though so the net effect is that the 4Ps budget in 2024 doesn’t even keep up with inflation and is still worth less in real terms than in 2022.
Less social services
The total budget for social services is reported to grow mainly because of a few increases that the stingy economic team is legally obliged to give and thus compelled to provide. The Social Pension for Indigent Senior Citizens doubles (97% increase) to Php49.8 billion because of the amendatory law last year doubling the monthly pension to Php1,000. Similarly, the Pension and Gratuity Fund increases 43% or by a huge Php76.5 billion to Php253.2 billion especially because of the mandated automatic indexation of pensions of military and uniformed personnel.[2]
On the other hand, there are some notable cuts in important social service budget items. Despite the pandemic exposing the weaknesses of the public health system, the health budget under social services is perplexingly cut by Php1.8 billion and falls to Php325.4 billion. The DOH budget also clearly shows that the number of public health workers isn’t being increased, and that capital outlays for public health facilities are being cut by 28% to Php24.6 billion.
The education budget is always hyped as accounting for the largest share of the national government budget. Yet despite the learning crisis made even worse by the pandemic, there is no increase in DepED’s permanent staffing which presumably includes teachers; this remains at 1.02 million in 2024. Meanwhile, the budget for overstretched state universities and colleges (SUCs) is actually even cut by Php5.9 billion and falls to Php105.6 billion in 2024.
The Marcos Jr administration hypes fragments of social assistance to feign action and concern for the poor – the “free education, free health care, social protection measures” that Sec. Diokno spoke about. But they aren’t just small compared to the magnitude of the problems at hand. They’re also just chronic band-aid solutions in the absence of real efforts to reverse the decades-long globalization-driven decline in the country’s economic base. Agriculture and manufacturing need to be developed as sources of jobs, decent incomes and government revenues for the nation.
(Second part here)
(Final part here)
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[1] Department of Social Welfare and Development (DSWD), Department of Labor and Employment (DOLE), Overseas Workers Welfare Administration (OWWA), Department of Education (DepED), Commission on Higher Education (CHED), Department of Health (DOH), Department of Agriculture (DA)
[2] The pension for retired military and uniformed personnel is automatically indexed to the pay of those still in active service. This means that salary adjustments of active personnel also result in pension adjustments for retirees.