The Department of Finance (DOF) expects a gradual and progressive reduction in the government's budget for social protection measures, including the cash-based Pantawid Pamilyang Pilipino Program (4Ps).

In an interview with Manila Bulletin, Finance Secretary Benjamin E. Diokno said that numerous social welfare programs have enabled a significant number of Filipinos to overcome poverty.

According to Diokno, Filipinos today are earning more money, there are fewer unemployed individuals, and poverty rates in the country have been decreasing consistently.

Diokno also said the Philippines is on track to achieve upper-middle-income status, meaning the average annual income of Filipinos will soon reach a minimum of $4,466, approximately equivalent to P252,531.

As of 2021, the Philippines is classified as a lower middle-income country, with a gross national income per capita of $3,640 or P205,830. However, this is nearly a twofold increase compared to the average earning of $2,000 in 2008.

“As the country attains upper middle-income status, employment situation continues to improve, and poverty incidence declines, it is reasonable to expect that the budget for social protection programs should slowly but progressively decline,” Diokno said.

In particular, Diokno has raised the necessity of assessing the financial sustainability of the Department of Social Welfare and Development's (DSWD) 4Ps program which has been in place since 2008, along with other social protection schemes.

In the proposed 2024 national budget plan, the government has allocated P112.84 billion for 4Ps, which provides financial assistance to eligible families.

“The cash-based 4Ps program has served its purpose,” Diokno believes.

Additionally, P49.81 billion will be dedicated to the Social Pension for Indigent Senior Citizens, and P19.97 billion will be allocated to support more Filipinos through the Protective Services for Individuals and Families in Difficult Circumstances program.

These three social protection programs alone will require a budget of P182.62 billion for 2024.

Diokno, meanwhile, said that as the national government gradually reduces its funding for social protection, local government units (LGUs) may step up and take on more responsibility in providing social protection.

He revealed that unlike in the past, LGUs now have more financial resources due to the implementation of the Mandanas-Garcia ruling that granted them a larger share of national tax collections.

Based on the DOF estimates, LGUs are projected to end 2023 with a budget surplus of P232.51 billion.

“As LGUs get more fiscal resources, they may assume greater responsibility in providing social protection for their constituencies in a more efficient and effective way,” Diokno said.

But while the government prepares for changes in its social protection scheme, Diokno highlighted the need for improvements in the current 4Ps program managed by the DSWD.

The DOF chief specifically emphasized the importance of reviewing and updating the list of 4Ps beneficiaries to ensure its accuracy and effectiveness.

“It is not perfect; it can be improved,” Diokno said.

He recommended that the 4Ps program should be more focused on ensuring that deserving people are included while preventing ineligible individuals from receiving benefits.

“With the advancement in technology and new processes, like the national ID and issuance of basic deposit account (BDA), this can be done,” Diokno stated.

Once the DSWD has a “near-perfect” list of beneficiaries after reviewing it thoroughly, Diokno said there will be the possibility of providing a welfare grant that takes into account the rising cost of living.

Presently, there is a bill proposed in Congress to revise Republic Act (RA) No. 11310, also known as the 4Ps Act, in order to raise the cash grants provided to beneficiaries.

Under RA 11310, cash grants are given to the poorest households with the condition that they fulfill certain commitments to improve key development indicators, such as undergoing nutrition and health check-ups and ensuring children attend school.

The program currently supports 4.4 million families.

At present, the government is conducting a review of various social protection programs implemented by different government agencies, including the DSWD, Departments of Labor and Employment, Transportation, Agriculture, Education, among others.

Diokno said the objective is to make these programs more targeted, effective, adaptable, and cost-effective for the government.