National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan on Monday opposed the idea of providing broad subsidies for oil and electricity, emphasizing a more targeted approach to aid the vulnerable sectors of society.
On the sidelines of the Philippine Economic Briefing in Pasay City, Balisacan said he prefers implementing targeted subsidies aimed at vulnerable sectors rather than general subsidies which, he argued, disproportionately benefit the wealthy.
The NEDA Chief's remarks follow San Miguel Corp. (SMC) President and CEO Ramon Ang's remarks during a panel discussion, where he noted that fuel and power prices in the Philippines are higher compared to neighboring countries because those countries provide subsidies.
"We have been there before. I think our approach is not to subsidize oil generally but what we can subsidize (is the) vulnerable sector," Balisacan said.
"We should avoid subsidizing power, electricity, fuels generally, because the biggest consumers of fuels, for example, are the rich. The biggest consumers of electricity are the rich, so if you subsidize those, who benefits?" Balisacan added.
The NEDA Chief highlighted the government's current strategy of providing targeted subsidies, which he believes can be further refined through the implementation of a digitalization program. This program aims to provide a national identification card for all Filipinos, enhancing the precision of subsidy distribution.
"We should be able to perfect targeting the ones we aim to help, those will indeed be the ones who receive assistance."," Balisacan said. He emphasized that precise targeting of subsidies can save significant fiscal resources and help avoid potential fiscal crises.
"We can save a lot of fiscal resources and avoid potentially serious problems like fiscal crises as what happened in the past when you have an oil price stabilization fund."