The Aquino Administration’s $400 million Bonehead Maneuver

In my latest post to the Bad Manners Gun Club a couple days ago, I opined that part of the continuing failure of the Aquino Administration to overcome the fallout from the Manila Bus Massacre was, in the absence of swift and decisive corrective action, their inability to find a way to ‘wag the dog’ – in other words, another issue to distract everyone’s attention from the sordid and depressing affair du jour. Some news published in the past couple days, however, now has me wondering if I have misread the situation. Incredible as it may seem, has the Manila Bus Massacre actually been the coincidental ‘dog-wagging’ to keep everyone’s mind off even more stupid things that are being done?

Even more stupid things, for example, like a recently-procured $400 million loan from the World Bank via the ADB to fund the DSWD’s Pantawid Pamilyang Pilipino Program. The program provides cash grants to poor families with the stated intention of helping these families keep their elementary-aged children in school. Each family that qualifies for the program receives Php 500 per month, plus an addition Php 300 per month for each of up to three children per family, with monthly and annual limits set at Php 1,400 and Php 15,000, respectively. The main requirements for families to be eligible for the program are that (according to DSWD Secretary Dinky Soliman) “unlike traditional welfare programs, only families who keep their children in school and ensure that children and pregnant women get regular health check-ups can receive the cash grants,” which presumably makes the program a “conditional cash transfer” rather than a straight dole-out.  In Soliman’s estimation, the World Bank-ADB loan will allow the Department to expand the “4P’s” program to 582,000 additional families, mostly in rural areas.

There is exactly NOTHING about this scheme that makes any sense whatsoever, as several members of Congress have been quick to point out. It is an extremely short-term solution; assuming that the entire $400 million is distributed to poor families – which it won’t be, because some attenuation of the funds for administrative purposes has to be assumed, even under ideal conditions – the fund will sustain the “4P’s” program for only about eight months, if Soliman’s estimate of the program’s expansion to 2.3 million families by the end of 2011 is even close to being correct. As a direct, purpose-specific loan to the government, the funds are outside normal Congressional budgetary oversight; monitoring and follow-up on the use of the funds will fall within the purview of the Commission on Audits, but that bit of security is already moot – if there are irregularities in the handling of the funds, they will only be discovered once the funds are already gone.

In a sense, one has to give Aquino credit for being consistent: the one promise he has made that he is apparently exerting great effort in keeping is to be a different sort of president than the ee-vil Dr. Arroyo, and with the announcement of the World Bank-ADB loan, he is doing exactly what he said he would – whereas Arroyo’s stewardship saw the country’s external debt drop by 1.1% by the end of 2009, N/A has in one blow managed to generate a year’s worth of debt increase and virtually wipe out that gain. And to add insult to injury, he has locked the country into a 25-year repayment obligation that will, at a minimum, cost the Republic $514 million (based on current LIBOR rates and the ADB’s carrying charge) for a use which will generate no discernible return, only a temporary small cash stimulus for a limited number of people. The “conditions” set for the “conditional cash transfer” are vague and lack details as to how they are to be enforced, not to mention how the additional demand for services they will hypothetically generate is to be managed and funded, particularly since the program is directed at rural areas where school and medical facilities are already in short supply.

On the other hand, the mystery of why such an obviously bad idea has been enthusiastically embraced by the government might be solved by considering the timing of the move: with barangay and SK elections just about a month away, it’s difficult to accept that a short-term cash handout directed at the grass-roots support base of the Yellow Machine is entirely coincidental. On the other hand, that may be an unnecessarily cynical view; but the very fact that it is the view that comes quickly to mind is a sign that N/A’s self-absorbed “integrity and transparency” are not making much of an impression to any minds other than the one inside his own skull.

About bkritz

I'm a writer, and I do things my own way. That might sound cool to you, unless you're one of the people who actually knows me, in which case you're probably shaking your head in exasperation at the depth of that understatement.
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33 Responses to The Aquino Administration’s $400 million Bonehead Maneuver

  1. ChinoF says:

    People should know by now that political dole-outs are vote-buying in disguise.

  2. Mary says:

    Have you read that he also increased his own pork? Integrity and Transparency my foot.

    http://www.philstar.com/Article.aspx?articleId=609222&publicationSubCategoryId=63

    • BenK says:

      I haven’t even gotten started on the budget yet, it’s so completely retarded. The only comfort we can draw from that so far is that there are strong signals that it is not going to be swallowed easily by the Congress. So far, anyway; maybe that big pork allotment is necessary so ol’ N/A can buy himself some favorable legislation. Hard to say.

      Take note, a 112% increase in DSWD’s budget plus another $400 million loan gives that particular department a working budget of about Php 52.3 billion for 2010. A budget managed by one, who, in the words of one of my correspondents whose opinion I value, is “not really the brightest person.” hahahaha

      7.9% GDP growth? Better remember it, you’re not seeing that again for a long time. hahaha

  3. mihael keele says:

    Thank you for this article. So awesome to know that not everyone is blinded by this futile exercise. 

    Instead of teaching these people to fish (or at least giving them a lasting opportunity to fish for themselves), the government ran itself into another loan so it can give them fish for “a day” that their children will have to pay for with not just one fish later on.

    Sure, keeping the kids in school is an investment in their future, but this is still futile if the public school system is still broken. 😦

    • Jay says:

      Keeping the kids in school? If they actually looked at the current state of the K-12 educational system, its just as dismal as the now degrading education of American K-12 school systems. Even if they add 2 more grades, if the quality isn’t the same unless there is a complete overhaul done by the dept of ed.

      Coincidentally, during the makati explosion which 33 people were killed, someone reported about GMA putting out a huge loan as well. Not as gargantuan and as terrible as this one but similar tactics that when the citizens are at their most confused, the government moves at its quickest.

      But yeah, so much for transparency beyond GMA’s administration.

  4. Markad says:

    Sad…just sad…

  5. mihael keele says:

    The latest comments on PeNoy’s misguided bloody budget slashing in this article give me hope. We are not alone! ^________^

    http://www.philstar.com/Article.aspx?articleId=609222&publicationSubCategoryId=63

  6. Hyden Toro says:

    Cash disbursements and allocation of funds will surely fall into Massive Corruption again. Noynoy Aquino is drowning the country in massive debts. Who will pay for the debts? Not him; not Hacienda Luisita; not KamagAnak, Inc. We and our Grandchildren will pay the debts. Almost 70% of our Gross National Income goes to the servicing of the yearly interest of these debts. So, the imbecile wants more debts. So, that his family; who are in business, can profit from it. Sooner, the country will declare Bankruptcy…while he and his family gets rich…

  7. frustratedcitizen says:

    so the oligarchs are wanting to place the country even deeper into debt..
    this is really frustrating.. the only positive side to this article that there are people who are aware on what’s really happening with the country..

  8. J.B. says:

    For a government struggling with budget deficit for years, dole-outs should be the last resort to address the grassroots problem.

  9. nymphetamine says:

    lubog na tayo sa utang.. tsk tsk.. anong susunod? Isangla ang bansa?

  10. this is what i have learned so far in the first 60 days of Penoy..

    1st – Penoy increase Pork Barrel for congressmen from an average of 6-7B every year from the Arroyo administration to Penoy’s proposal of 22.3B for 2011.
    2nd – Penoy increased his own pork from regular 700M to 1Billion. 3rd – dinky soliman, the dswd guru just had a smile on her face after they have secretly manuevered a $400 million dollars loan from World bank – locking the goverment for another 25 years of debt. This PeNOY administration is squeezing every juice they can make. They are even close to selling all government owned corporations after they have successfully destroyed its credibility in the public.. this is Yellow Media, and they have even increased there number of followers while they are raping our kids future. just unbelievable!

  11. ice_queen says:

    Just perpetuating the cycle of patronage.

    Ingratiate yourself with the masses. Even if you take away their dignity, they’ll love you for it.

  12. Jack says:

    The IMF/ADB are financial mafia whose sole aim is to ruin a country and then sell its property to worldwide auction just like they did in Argentina, iceland and greece. They don’t have 400 million dollars….they just print it from thin air..all country just honor the transaction, they charge interest on no money.

    IMF has ruined many countries…North Korea, Iran, venezeala are the only countries who refuse IMF loan and guess what they are the enemies of the world. Its a financial suicide.

    I really hoped P-noy would be different, im a fool cos i also believed in Obama..can you spot the difference between these two….I don’t know how much peace loving good hearted filipinos can take it….they are pushing people to the edge 

    • ChinoF says:

      I don’t buy the hogwash that ADB, IMF and WB are out to ruin countries. There are better ways to do that instead of lending money. Lending money is actually meant to help people (teach them how to fish, don’t give the fish, which is why you should not just give money to people and nations). Leftist crap, no matter how much you dress it up, is still crap.

      However…”IMF has ruined many countries…North Korea, Iran, venezeala are the only countries who refuse IMF loan and guess what they are the enemies of the world.” NK and Iran are enemies of the world… rightfully, for other reasons, not because of being anti-IMF.

    • BenK says:

      For one thing, this is not an IMF program; it is a WB-backed loan made by ADB. Get it straight before you start your “I-watch-too-much-Fox-News” ranting. For another, Iran and Venezuela, being reasonably well-developed countries with considerable – and also reasonably well-developed – resource wealth hardly need to give a second thought to WB or IMF funding and the conditions that are usually attached. And North Korea’s problems with the rest of the world start waaaaayyyy before anyone can work down the list far enough to “doesn’t accept WB or IMF funding”.

      Your clueless rant falls flat in another respect, in that you are assuming there are some sort of ee-vil NWO hoops the country has to jump through as a result of receiving these funds, when there are in fact none. The only conditions attached to it are repayment, under rather moderate terms I might add. It’s not a grant, and the WB or ADB didn’t initiate the process, the RP did. Read on:

      This loan came about as a result of an application for it initiated by the Arroyo Administration back in 2008. Why that was done, I don’t know, because it wasn’t a good idea at any point, unless there was a much different plan for the use of the funds originally. If the original plan was just as stupid as the current one, N/A could have really earned himself some political capital and backed up his anti-Arroyo rhetoric with actual action and rejected the loan. But of course, he did not, so double fail on this one.

  13. famous wolf says:

    “Daang matuwid?”

    Sucka’ please.

  14. It’s also worth noting that Dinky’s DSWD got a P34.3 bilion allocation for 2011 compared to the P15.4 billion this year which is basically a 112.9% increase. Good times for Dinky who recently blamed the Arroyo regime for being responsible for the recent Manila bus crisis.

  15. miriam quiamco says:

    I wonder though if this form of economic policy will work.  In Japan, this type of social welfare economics is being attempted, the money that will be transferred to the poor will be poured back into the economy and could generate some growth, with the poorest of the poor benefiting from it.  The only problem is that, this may not prove sustainable.  How could the government keep funding this kind of program without borrowing more.  If the economy grows as a consequence of this kind of public spending, then, perhaps future taxes could keep funding the program.  They should couple this program with reproductive reduction policy, or it will not work at all.  I suppose this is the government’s answer to correcting the poverty statistic that has degraded our sustained economic growth.  I think the fact that it is not included in the pork barrel of a congressman will keep the fund from the constant thievery of local politicians.  It is a good idea that a national government agency is managing the program, we need to build our government agencies and be held accountable for their actions.  This scheme is more rational than having a politician approve disbursements, at least, the project will not be politicized.

    • BenK says:

      The problem, apart from it encouraging dependency, is that it’s a loan. Good management sense should dictate that a return greater than or at least equal to the cost of the investment should be defined and fall within a tolerable risk level before going ahead with it. Can the government quantify a $514 million benefit to be derived from this scheme? I’d bet real money that they can’t.

      • Mike H says:

        Maybe the back of the napkin (Emerald restaurant napkin) calculation goes like this.

        If “no help”, then the children of the 582,000 families will be unskilled destitute adults. With the $400Million, then on average there will be one in each family that becomes OFW 💡 .

        That will be 582,000 OFW’s sending home 😉 at least $1,000 a year — or ➡ $582Million.

      • ChinoF says:

        Thing is, he reduced the budget for education, which is necessary to produce good, skilled OFWs. Otherwise, if he wants more unskilled OFWs, he’s sending off more people to be “abused by foreign masters.”

        You know, that’s funny. Many Filipinos believe that OFWs are being abused abroad, but why is it that families still send their children off to become that?

        Masochism or intentional victimization to take advantage of the victim mentality?

        If it’s the latter, then it’s also dishonesty.

      • Friday says:

        I really like this website and I’m definitely NOT a fan of the Aquino administration, but maybe conditional cash transfers (CCTs) are a big help and it’s not as bad as some may think it is. I think it’s good news that the poor are actually paid to go to health care centers and go to school. 1000 pesos is already a huge, huge amount for them, given that they don’t even have enough to get by. We all know that health, education, and food are very urgent needs for the poor, and this project immediately addresses those needs–they get education and health services, plus they have extra cash to buy food and support the family. The government ends up spending less on the costs of lack of education, disease, hunger, high infant and maternal mortality rates…(and the domino effect goes on since all of these issues are interconnected), rather than if the government waited until it had enough funds to do something like this on a national scale. In this sense, this project is a preventive measure and an investment. Also, since the cash is sent directly from the national treasury to the person via ATM, this eliminates, if not significantly reduces, corruption. If not through a loan, where else can the government get the money? I’m also not in favor of the recent budget cuts on education, but then again, this problem of health and education is so enormous that the government and all other development countries are better off getting a loan to address the problems.

        And I was thinking if the CCT is not a good idea, what would be a better, feasible solution to address health and education with the same level of immediacy, without sacrificing other areas of development?

        @Other readers and those who have left comments: I know that we are shaking our heads again and again about P-Noy and the current administration (and negative attitudes of some Filipinos), but I think it’s also important not to jump into conclusions, generalize, or be simplistic. I, too, sometimes, fall into this trap, especially when anger and strong emotions get the better of me.

      • Friday says:

        Oh, I also agree that some Filipinos have the victim mentality, and that there is something in Filipino culture and history which feed into that. But what can we or the government concretely do to address millions of poor (hungry) people in the fastest, most cost-effective way? What is the best that should be done, or that we can do, given the urgency of this problem?

  16. Miriam Quiamco says:

    BenK, the feudalistic system in the country already encourages dependency.  The very limited job opportunities that we have go to people with education and connections, the rest are at the mercy of loan sharks and their patrons.  With these cash dole outs, at least poorer families are able to send their children to school with the hope that they will be able to compete in the future when hopefully there will be enough jobs for all.  I once spoke to a manicurist in Makati who said she would definitely vote for Binay, in Makati, the poor families get cash assistance to keep their kids in schools, she said without this, there wouldn’t be enough money for her kids to be able to go to school.  I could see how earnest she was and a good manicurist at a beauty salon in a Makati mall.  Is Binay perhaps behind in this initiative?  

    Sad, sad, sad, the budget for education has been decreased?  

  17. Arnel E says:

    I wouldn’t be surprised if after the news of the cash transfers, there will be a survey commissioned on the popularity of Pnoy..

  18. potaters says:

    Would it be a better idea if the 400M loan be allocated solely to education? This morning, Dinky Soliman was on Headstart and said that the loan would also address the high rates of dropouts but uh, we don’t even know if she wants to address high school ba or grade school dropouts? It’s all vague!

  19. bubi78 says:

    The Arroyo administration had a similar program and it’s likely they are just continuing the program, albeit with a new twist to it – using ATM cards, increased amount per month etc. An altruistic approach to poverty reduction like resorting to conditional cash transfers is doomed from the start because the funds available are not unlimited. What will happen after the funds shall have been exhausted?  Will the government again resort to borrowing just to carry on with the dole-outs? We’ll be in for a vicious cycle of borrowing, spending and borrowing ad infinitum. Who is going to foot the bill for this? One commentator had correctly pointed out that it will only encourage dependency. Instead of instilling the proper work ethics, the government would only be inculcating and perpetuating a ‘mendicant’ mentality among the poor. Once this mindset takes root, we can kiss goodbye any hope of reducing poverty in our country. Not now, not ever. 

  20. Friday says:

    I understand the concern with a cycle of dependency. While I am moved to ponder on this more, here’s Monsod’s take on it:

    http://www.bworldonline.com/main/content.php?type=9

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