WB gives govt thumbs up on NFA's 2011 budget cut

A new World Bank (WB) review of public spending shows the Philippine government has made the right move in reducing funds for rice subsidies and converting the money into cash dole-outs for the poor. The budget cut and reallocation matched the recommendations in the 2010 Philippine Public Expenditure Review that the WB presented in Quezon City on Thursday. The Department of Agriculture (DA) has given the NFA a P2.5-billion share in its 2011 budget, down from P8 billion in 2010. The NFA budget this year is a jump from an initial zero-budget proposal, which, the agency warned, could lead to higher prices and shutdown of NFA warehouses. NFA administrator Angelito Banayo earlier said the subsidy savings will boost funds for the Department of Social Welfare and Development’s (DSWD) conditional cash transfer (CCT) program. Under the CCT, poor and qualified families will receive crash grants provided they keep their children in school and ensure that children and pregnant women get regular medical check-ups. ‘Investment’ vs. ‘give-away’ The WB review notes that NFA subsidies benefit only 25 percent of the intended beneficiaries — the poor. The review team leader, Spanish national Rosa Alonso, on the other hand vouched for the CCT ‘s effectiveness based on similar programs around the world. The CCT program — which targets the poorest of the poor — is more effective than providing blanket subsidies that even rich and middle-class families can take advantage of, Alonso said in an interview with GMA News Online. The WB report shows that 48 percent to 70 percent of the beneficiaries of NFA subsidies do not belong to the poor. NFA subsidies may be consumed overnight, Alonso added. She said the CCT program, on the other hand, requires the poor to avail themselves of long-term services in education and health. She explained that the CCT is an “investment" while NFA subsidies are a “giveaway." ‘Corruption is the real scourge’ Dr. Edna Co, dean of the University of the Philippines (UP) National College of Public Administration and Governance, said the WB should have also considered “the context on the ground" in creating recommendations. Noting corruption and other systemic problems, Co said, “This is not just economics. This is an issue of governance." “Whether NFA or CCT, one has to understand the system that affects those two programs or institutions. It’s not sufficient to talk about how much expense should we put here, or how much money should we invest here," she added. Dr. Olivia la O’ Castillo, president and chair of Sustainable Development Solutions for Asia and Pacific, also told GMA News Online that corruption is the scourge of which government must first purge itself. “It’s not the tax inefficiency. It’s the kotong (kickback) and the boundary," she said. — VS, GMA News