Ayudanomics fiasco

The fight against poverty, waged with hard-won gains under the previous two administrations and cutting the poverty rate from 25 percent to about 13 percent, is being lost.

In his first State of the Nation Address in 2022, President Ferdinand Marcos Jr. pledged to drive that number down to single digits by the end of his term.

Then corruption swallowed the momentum whole.

State think tank Philippine Institute for Development Studies found that, relative to the World Bank’s upper-middle-income poverty threshold, 58.7 percent of the population remains vulnerable to poverty.

The Philippines is considered a middle-income nation, but economic gains are not trickling down to the poorer segments of society.

Now, it is again in the grip of a deepening economic crisis. Inflation surged to 7.2 percent last April, its highest level in three years.

Economic growth crawled to a meager 2.8 percent in the first quarter. An estimated 14.4 million poor and low-income families are struggling to survive on P22,000 or less per month, while another 7 million lower-middle-income households teeter dangerously close to the poverty line.

According to the independent research firm Ibon Foundation, between 1.7 million and 2.2 million middle-class families could tip into poverty with just a few more price increases.

The Marcos administration’s anti-poverty programs, based on ayuda, or token cash handouts dressed up as compassionate governance, have failed miserably.

These were designed less to lift Filipinos out of poverty than to project the image of a caring state while quietly entrenching the machinery of political patronage.

Lately, the administration created the UPLIFT program, or the Unified Package for Livelihoods, Industry, Food and Transport, which only exposed the gap between political theater and genuine poverty alleviation.

Of more than 2.2 million tricycle, jeepney and delivery drivers nationwide, only around 1.25 million received the one-time P5,000 cash assistance. Barely half a million got fuel subsidies.

For farmers and fisherfolk, a sector comprising nearly 11 million individuals registered in the government’s own agricultural database, Ibon said the P1.5-billion assistance package is expected to reach only 70,000 beneficiaries — less than 1 percent of the people it should be serving.

Ayuda programs were primarily meant to consolidate political power.

The Philippines spends approximately P250 billion annually across a dizzying array of overlapping cash assistance programs such as the Assistance to Individuals in Crisis Situations, Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers, Medical Assistance to Indigent and Financially Incapacitated People and others, with no solid evidence that any of them meaningfully improved the lives of intended beneficiaries.

Instead, these programs are riddled with exclusion and inclusion errors, unverifiable entries and persistent corruption.

Ayuda requires names on lists that are compiled through local political machineries and thus creates dependency. Recipients know who gave them the cash. They know who to thank at election time.

Local officials who control the lists become gatekeepers of survival. The national administration, in turn, basks in the goodwill of appearing generous while the actual relief remains far from adequate.

Senator Rodante Marcoleta said it would be better to replace all fragmented ayuda programs with a universal full electricity subsidy for households consuming at least 200 kilowatt-hours per month, which would cover 5 million poor families, or approximately 25 million to 30 million Filipinos.

Such a scheme would cost under P100 billion, representing savings of roughly P150 billion annually over the current ayuda architecture, with no opportunity for corruption or favoritism. The subsidy flows directly through electricity billing, which is transparent, automatic and verifiable.

The Marcos administration preserves fragmented, name-based cash transfers not because they work, but because they serve the administration’s interest in cultivating political loyalty and projecting an image of generosity.

Millions of Filipinos need structural relief, but they instead get a check written in their name and cashed by politicians.