Philippines – National ID system to spell success of tax safety nets for poor Filipinos

By | June 17, 2017

MANILA, June 17 — The government is bent on issuing national identification (ID) cards to all Filipinos that will also serve as social welfare cards to ensure the effective and targeted implementation of its social safety nets for the poorest families under the proposed Tax Reform Acceleration and Inclusion Act (TRAIN), the Department of Finance (DOF) said.

According to DOF Undersecretary Karl Kendrick Chua, once the Congress enacts a law enabling a national ID system, the first to be issued such cards will be senior citizens and persons with disabilities (PWDs), followed by members of the 5.2 million poorest households in the country not yet covered by the ongoing conditional cash transfer (CCT) initiative of the Department of Social Welfare and Development (DSWD) known as the Pantawid Pamilyang Pilipino Program (4Ps).

“The Philippine Statistics Authority (PSA) will issue the ID cards, with the National Economic and Development Authority (NEDA) providing oversight functions,” Chua said. “The DSWD, meanwhile, will coordinate the various social benefits programs that will be put in place under TRAIN.”

Chua said the DOF proposal is for the national ID to contain biometrics data about an individual, with the possibility of adding an EMV (Europay-Mastercard-Visa) chip card to load the cash subsidies for persons legally entitled to such benefits.

“The ID will also contain information to determine if a person can take advantage of discounts in medicines, commuting, health care, education, and other applicable benefits under the law and as specified under TRAIN,” Chua said.

He said this proposed national ID will replace all other identification cards issued by the government, except for passports and driver’s licenses.

The target is to provide 105 million Filipinos with the ID within two years of the enactment of the law mandating the implementation of the national identification system, Chua said.

As of June 2 when the Congress adjourned sine die, the  Committee on  Population and Family Relations in House of Representatives already approved the establishment of a national ID system, which will provide every Filipino a Common Reference Number and single ID card that he or she will use for all government transactions.

Meanwhile, a counterpart bill filed in the Senate has so far been reported on first reading and referred to the Senate Committees on Justice and Human Rights and on Finance.

Under the proposed TRAIN or House Bill No.  5636, 40 percent of the annual incremental increase from oil excise taxes will go to social-mitigating measures such as targeted cash transfers for the poorest families, public utility (PU) operators and drivers, and electricity consumers in Small Power Utilities Group (SPUG) areas or island-provinces not connected to the main power transmission system.

The balance of 60 percent, Chua said, will bankroll projects on infrastructure, education, health, housing and social protection.

HB 5636 was approved on third and final reading by an overwhelming majority of the House last May   

This bill had consolidated HB 4774, the DOF-endorsed version filed by Rep. Dakila Carlo Cua, with 54 other tax-rwlated measures.  TRAIN has been certified as an urgent and priority measure by President Duterte. 

Under HB 5636, the targeted program for over 10 million households involve unconditional cash transfers (UCTs) of P2,400 for one year for every beneficiary-family. 

The UCT will be considered a “top-up” on the existing cash transfers received by the current 4.8 million beneficiaries under the 4Ps.

An additional 5.2 million households will also be covered by the UCT program, but they would have to register and be issued identification cards to ensure that only the intended beneficiaries get to receive the benefit, Chua said.

For public utility jeepney (PUJ) drivers, the government will revive the Pantawid Pasada Program, which will provide each of those with valid franchised vehicles cash cards with amounts of up to P2,200 per month or about P26,400 a year to lessen the effects of the potential slight increase in fuel costs arising from the higher excise tax.

He said an alternative solution to mitigate the impact of oil excises on PUJs is the Jeepney Modernization Program that aims to replace 220,000 jeepneys, including 70,000 in Metro Manila, that are 15 years old and above,  with more fuel-efficient vehicles.

The Pantawid Kuryente Program, which will focus on lifeline consumers in SPUG areas that use diesel or bunker fuel to power their communities, “will not involve any financing because this will be cross-subsidized by richer households,” Chua said.

Households covered by the Pantawid Kuryente are those that consume less than 100 kilowatts per hour.

HB 5636 was passed by the House after President Duterte had certified the bill as urgent, given that it was designed to help provide a steady revenue stream to his government’s ambitious high—and inclusive—growth agenda anchored on record spending on infrastructure, human capital and social protection for the poor and other vulnerable sectors. 

Finance Secretary Carlos Dominguez III said the DOF will continue to hold dialogues with senators during the remaining weeks of the congressional break to explain to them the merits of the tax reform package and convince them to retain the original DOF-endorsed version outlined in Cua’s HB 4774.  

“I’m very confident that our legislators are very aware of what is needed in the country, and are very responsive to what the country needs. I’m very confident that we will all sit together, and reason together, and come to a bill that will be good for country,” Dominguez said.   

Dominguez said he hopes the Senate will retain the original features of TRAIN under HB 4774 to optimize the  bill’s revenue gains, which were trimmed under the House-approved version.

“We can live” with HB 5636, “but of course it’s better if we get more,” he said. 

The finance chief, who had earlier asked the President to certify the tax reform bill as urgent, said in his memorandum to the Chief Executive that this TRAIN bill is “expected to help reduce poverty rate from 21.6 percent in 2015 to 14 percent in 2022, lifting some six million Filipinos out of poverty, and helping the country achieve upper middle-income country status where per capita gross national income increases from $3,500 in 2015 to at least $4,100 by 2022.” (DOF)

Source: Philippine Information Agency

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