MANILA, Philippines – The government will spend in the third quarter of the year another P4.5 billion for social projects using windfall proceeds of the value-added tax (VAT) on oil to help the poor and make small businesses more competitive amid the global economic crisis.
Press Secretary Jesus Dureza and Finance Secretary Margarito Teves told a news briefing that President Arroyo decided to implement another round of subsidies under the “Katas ng VAT” program during yesterday’s Cabinet meeting.
The government has been receiving windfall revenues from VAT on petroleum products due to the soaring prices of oil in the world market.
Officials said P500 million would be used in expanding school feeding program in Mindanao and another P500 million for the “early recovery” rehabilitation projects in communities affected by fighting between government troops and the Moro Islamic Liberation Front.
Also, P2 billion will be allocated for the Department of Agriculture’s fertilizer, irrigation, extension and education, loans, dryers and post-harvest facilities, and seeds or FIELDS.
The Pantawid Kuryente or subsidies for households consuming little electricity will be implemented for the third time this year, with P400,000 and P600,000 to be allocated as funding for programs to enhance competitiveness of small and medium enterprises.
Teves said the remaining P500,000 was actually an unspent amount from the previous P4 billion subsidy program from VAT proceeds on petroleum products in the second quarter.
The amount would be added to the existing funding for school building programs.
Teves said the government has collected about P22 billion from VAT on oil from July to September, or an additional P8 billion, based on the original projection of P13.98 billion for the same period.
But with the prices of oil in the world market going down, the government’s P18 billion projection in windfall VAT for the year may not be realized, he said.
He, however, assured that the remaining P4 billion would likely be allocated for new subsidy programs for the last quarter even with reduced VAT revenues from oil.
The first round of subsidies the Arroyo administration implemented earlier this year amounted to P4 billion, P2 billion of which was for power subsidies to poor families that received P500 each, P1 billion for scholarships and student loans, and another P1 billion for the conversion of public utility vehicles’ engines to run on natural gas.
The second round also amounted to P4 billion, of which P500 million was given as direct cash assistance to senior citizens not covered by the Social Security System or Government Service Insurance System; livelihood programs for families of public utility drivers, rehabilitation of typhoon-hit areas, and another round of power subsidies.
President Arroyo earlier said more than 80 percent of the VAT are paid by the rich or the well-off and there are “billions to spend for infrastructure and programs and projects for the masses.”