Are “Ayuda” Programs Placing an Unfair Strain on Working Filipinos?

Finance Secretary Recto aims to generate ₱300 billion in revenue by 2030 through a proposed increase in capital gains, donor, and estate taxes from 6% to 10%.

Are “Ayuda” Programs Placing an Unfair Strain on Working Filipinos?

By Wilma N Yamzon – Thenationweek.com  

July 18, 2025

MANILA, Philippines — As millions of Filipinos tirelessly fuel the engine of the national economy, a pressing question emerges: Are government “ayuda” (assistance) programs unintentionally favoring those who do not work, including individuals grappling with addiction?

This ongoing debate highlights concerns over resource allocation and the perceived disparity between contributors and recipients.

For the upcoming Fiscal Year 2025, the Department of Budget and Management (DBM) has set aside a staggering ₱253 billion for an array of cash assistance initiatives, including the Pantawid Pamilyang Pilipino Program (4Ps), Assistance to Individuals in Crisis Situations (AICS), TUPAD, and AKAP.

These programs are designed to extend vital support to society’s most vulnerable sectors.

However, the source of funding for these initiatives has ignited a firestorm of controversy.

The Department of Finance projects that the 20 percent final withholding tax (FWT) on deposit interest, introduced under the Comprehensive Modernization and Economic Policy Act (CMEPA), could yield over ₱25 billion in revenue by 2030.

This equates to an average annual contribution of around ₱5 billion, sourced exclusively from deposit interest.

This ₱5 billion slice of the pie accounts for nearly 9.88 percent of the total ₱253 billion “ayuda” budget, prompting some to question the fairness of the current system.

One concerned citizen posed a thought-provoking query: “Could we trim the ‘ayuda’ budget to ₱228 billion and abolish the 20 percent tax on deposit interest?”

This sentiment echoes the growing frustration among many working Filipinos who feel burdened by taxes while non-working individuals reap the benefits of government assistance.

The crux of the issue lies in whether the existing framework inadvertently rewards those who do not actively contribute to the economy.

This debate invites critical reflection on the effectiveness and equity of social welfare programs.

While the noble intention of aiding those in need is commendable, the mechanisms of funding and their potential unintended repercussions warrant a thorough examination.

The challenge remains: how can the government balance social needs to support vulnerable populations while ensuring that the financial responsibility for others is equitably shared across all sectors of society, thereby fostering productivity and rewarding those who drive the nation’s economic growth?