The Finance department said it will infuse direct subsidies to poor provinces amid plans to overhaul the country’s tax system.
Finance secretary Carlos Dominguez III said while the comprehensive tax reform package is designed to fund massive investments in infrastructure, human capital development and social protection programs, it also aims to prevent conflicts and curb insurgencies in regions with high poverty incidence.
He said poor families in poor regions like the Autonomous Region in Muslim Mindanao —where the gross national income of individuals is only seven percent of what Metro Manila residents are getting— will benefit from the program.
“Metro Manila is almost 16 times richer than the ARMM, and that is why we have conflict there because they have no other opportunity for better agriculture. They have no other opportunity. It is fairer and will cost us less in the long run,” Dominguez said.
“So what do they do? Because they don’t have it, they don’t have better education, they go into rebellion and the people in Manila have to spend a tremendous amount of time and money to suppress those rebellions,” he added.
The Finance chief said that aside from the massive investment in infrastructure and human capital formation, the government should also provide targeted subsidies impoverished regions and vulnerable sectors.
Dominguez noted that the per-capita Gross Regional Domestic Product (GRDP) for 2015 in the National Capital Region was the country’s highest at P398,985 while that of ARMM was the lowest at only P26,757.
The Finance department said the proposed tax reform package presented to Congress by Malacañang’s economic team aims to raise enough revenues for programs meant to bridge the chronic income gap between Metro Manila and the other regions.
It also targets to cut the poverty rate by 1.5 percent per year from the current 26 percent to only 17 percent by the time President Rodrigo Duterte leaves office in 2022.