DOF proposes ‘corruption-free’ subsidy payouts

Published August 26, 2020, 5:00 AM

by Chino S. Leyco

The Department of Finance (DOF) has proposed three imperatives to ensure an efficient and corruption-free distribution of government subsidy in cooperation with the private sector.

Finance Secretary Carlos G. Dominguez III (Bloomberg file photo)

Finance Secretary Carlos G. Dominguez III recommended that future emergency subsidies be patterned after the Small Wage Subsidy program (SBWS) implemented by the DOF and Social Security System (SSS).

According to Dominguez, funds under the SBWS were efficiently and fully distributed to around 3.1 million small business employees affected by the pandemic without a hiccup.

Dominguez said the DOF and SSS adopted three mechanisms to meet their goal.

These three imperatives are digitalization of the entire process from application to distribution; direct distribution of the aid through banks or electronic payment channels; and adoption of close administrative oversight of the program, which includes tapping private sector expertise.

Dominguez said these three imperatives had made the SBWS “largely efficient and effective.”

“That’s why we took the lessons here at pinasok ho namin sa Bayanihan 2 law na as much as possible lahat ng tulong sa tao, give it through the banks, to MLhuillier so no cash is handled, as little as cash as possible,” Dominguez said.”So walang mangungupit, walang nawawala.”

President Duterte endorsed Dominguez’s recommendations and said these “will lessen corruption” in the distribution of financial aid to beneficiaries in the future.

In his report to the President, Dominguez said that by automating and digitalizing the SBWS, the government was able to efficiently and quickly distribute a total of P46 billion to 3.1 million employees of small businesses.

The SBWS was implemented with the applicant-beneficiaries having zero face-to-face contact with government employees handling this subsidy for displaced workers of COVID-affected small businesses.

This system not only reduced corruption, but it also minimized health risks that come with physically

applying for the subsidies and distributing them to the beneficiaries amid the COVID-19 outbreak, Dominguez said.

“We think all subsidy programs in the future should be digitized. In other words, go through digitalization of all transactions. And number two, the direct distribution of aid should be through banks or e-wallet accounts of the intended beneficiaries,” Dominguez said.

“And one of the most important factors that made this a relatively successful program, is close administration oversight of the critical steps of the program,” he added.