Press Release
September 4, 2008

Loren thumbs down policy of mendicancy

Senator Loren Legarda said yesterday that the announced scrapping next year of government subsidies to the poor under its Katas ng VAT (Value Added Tax) program only proves that a "policy of mendicancy" can never be sustained.

"The provision of subsidy is a stop-gap measure at its best, a veritable band-aid solution to the big problem of poverty facing the majority of Filipinos," said Legarda.

The chair of the Senate Economic Affair Committee, Legarda stressed that the utilization of scarce government resources to create jobs and spur livelihood projects in the countryside and rural areas is the long-term solution to poverty.

"As the saying goes, it's infinitely better to teach a man to fish than to give him fish. For giving him fish will only make him dependent on dole-outs," said Legarda.

The government said the scrapping next year of the subsidies is under the assumption that world oil prices will go down further, thus VAT revenues from oil would also go down.

Legarda said that when the government started providing subsidies, she already aired her misgiving about such a program, citing a number of reasons.

"First, because it's simply not sustainable, and that we cannot foster dependency among our people," said Legarda, who also chairs the Senate Rural Development and Social Justice Committee.

"Secondly, there's not enough subsidies for all the people who need them, thus many qualified recipients are left out."

Legarda said that the government should not grieve over its reduced VAT revenues from oil since more tangible benefits can be derived from the lowering of oil prices in the world and local markets.

She said that industries will benefit from reduced fuel cost, thereby spurring production and additional taxable income from them.

"The government must be creative with its economic policies, with an eye on sustainable benefits that should trickle down to our people."

The lawmaker cited the need to spur the growth of small, micro and medium enterprises to create more jobs and strengthen the purchasing power of ordinary Filipinos.

"The trade of goods and services is the key to a vibrant economy. But first, the people must have money to jump-start trade and production growth," Legarda said.

News Latest News Feed