welfare

Why Fuel subsidy is a hard swallow

BusinessWorld writes that the Government is preparing for fuel subsidies. This isn’t even fuel subsidies for all forms of transportation, but rather cherry picked to go only for the jeep and tricycles sector. Fisher folk are some of the other beneficiaries being considered by the government. Subsidies no matter how well meaning, never do work out. Not in the long run. Take for example why LRT and MRT are fiscal black holes.

This begs the question: why only these sectors of society? Are the jeep and tricycle drivers any less poor than the maid or the office worker or the student riding along each day? Teachers riding the jeep to school every day are no less in a precarious situation than the Jeep driver and their families. Police officers and Military men likewise are at the bottom of the food chain. Others too experience poverty. And of course cutting taxes from fuel is not an option.

BusinessWorld quoted President Aquino who said that this will only run for a month. That it will issue only PHP500 Million for this project. Do we intend for example to reduce inflation by pumping 500 million? Half a month’s reprieve from high fuel costs doesn’t seem to be a good idea. Fuel subsidies is a hard swallow because its impact is questionable, except of course for the obvious public relations effect for the government

So the question that needs to be asked, wouldn’t money allocated for fuel subsidies better allocated as resources for the Conditional Cash Transfer program?

 

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