This is precisely why there is a subsidy component to the TRAIN Law, which is going to be implemented by

the Department of Social Welfare and Development (DSWD) through the unconditional cash transfer (UCT)

program.

Under UCT, households which qualify will be given a monthly cash grant of P200 in 2018, and P300 in 2019

and 2020. It is estimated that about 10 million Filipino households and individuals who belong to the poorest

sector of the country will benefit from this program.

At the end of the month, the DSWD is scheduled to begin handing out a lumpsum of P2,400 to the qualified

beneficiaries. For 2018, a total of P24 billion has been earmarked for the implementation of the UCT in the

2018 General Appropriations Act. The funds are now deposited with the Land Bank of the Philippines.

The first to receive the cash grant are the 1.8 million household beneficiaries of the Pantawid Pamilyang

Pilipino Program (4Ps) with cash cards who will receive these by tomorrow, January 31. The remaining 2.6

million 4Ps beneficiaries without cash cards will receive theirs at a later date.

Also included in the UCT are the three million indigent senior citizens who are currently also beneficiaries of

the DSWD Social Pension Program which is implemented in partnership with their respective local government

units (LGUs). They will receive their cash grants by the end of March 2018.

The remaining 2.6 million households will then be chosen from the DSWD Listahanan, or National Household

Targeting System for Poverty Reduction (NHTS-PR). A validation process will be conducted and is expected to

last for three months. DSWD plans to finish the process by May so that the cash grants will be distributed to the

qualified households by the end of June.

Key to the success of this component of the TRAIN Law is the effectiveness and efficacy of its implementation.

The DSWD is now in the process of finalizing the implementing guidelines. Included in the guidelines are the

terms of partnerships with Land Bank and other financial institutions. A program management office will be

established within the DSWD to oversee payroll generation, beneficiary validation and the release of the funds

to the beneficiaries.

Unlike the 4Ps, which is a conditional cash transfer where the disbursement of the cash grant is contingent on

some conditions, such as enrolling children in school, the UCT is an outright subsidy given by the State to the

poor to shelter them from the shock of increasing prices despite unchanging low levels of income which is

expected as an effect of TRAIN.

Outright subsidies are always a double-edged sword. They provide a stopgap measure for families which are

adversely affected, hoping that the cash grants will compensate for the increases in household expenditures due

to rising prices of commodities.

However, the strategy of giving a lumpsum of P2,400 to a household, without the rudimentary

consciousness to save, could lead to the possibility that the amount may end up being quickly spent, and

hence its effects would not be felt to be spread out over the entire year. Another concern is whether the

amount is enough to cover the increases in the prices of goods. The subsidy appears to be also insensitive

to household size, which is in fact a primary factor in determining whether the amount would be

sufficient.