Dominguez says all subsidies should be digitized

MANILA, Philippines — The finance department wants all future subsidy programs to be digitized, saying it will prevent corruption and ensure that financial aid will reach the intended beneficiaries.

Finance Secretary Carlos Dominguez said it would be hard for anyone to commit irregularities if cash transfers are done electronically since there is no need to tap people who will distribute the money.

"We think all subsidy programs in the future should be digitized...The direct distribution of aid should be through banks or e-wallets, e-wallet accounts of the intended beneficiaries," Dominguez told President Rodrigo Duterte during a meeting in Davao City last Monday.

Dominguez said the system was adopted in the small business wage subsidy program, which assisted workers displaced by the coronavirus pandemic. About P41 billion has been disbursed under the program.

"No cash was handled, nobody can keep the cash so the intended beneficiaries, the employees of small companies were able to receive subsidies," the finance chief said.

Dominguez made the proposal as the government is preparing to provide more aid to pandemic-affected sectors with the passage of Bayanihan 2 bill. The measure, which will allocate P165.5 billion to programs that will boost pandemic response and revive the economy, will soon be transmitted to Malacañang for Duterte's signature.

Duterte agreed with the finance chief's proposal, saying digitalization would remove human intervention in the distribution of subsidies.

"The most important thing here is the placing of funds to banks so they can go directly to workers. There is no intermediary and there is no intervention of any kind...It will lessen corruption," the president said.

Dominguez said agencies have proposed the inclusion of a Bayanihan 2 provision which states that all aid should be given through banks and remittance centers if possible.

The government has been using electronic cash transfers in the implementation of the second phase of the Social Amelioration Program (SAP), which provides cash aid to low-income families. The distribution, however, remains unfinished because the social welfare department had to check the list of beneficiaries, officials said.

About 7.2 million of the 8.7 million intended beneficiaries of SAP have received the second tranche of assistance as of August 23. 

"The DSWD (Department of Social Welfare and Development), along with our payout partners, both in the direct and digital schemes, have been working hard to ensure that this subsidy is distributed to its intended recipients. We remain committed in this undertaking to secure the 100 percent accomplishment rate," social welfare secretary Rolando Bautista said.