The proposed P3.35 trillion national budget for 2017 of the Duterte administration will increase the number of indigent senior citizens receiving social pensions of P500 each to 2.8 million following a government move to lower the age of those covered by the benefits from 77 to 60 years old.

Finance Secretary Carlos Dominguez III said that under next year’s proposed General Appropriations Act (GAA), the social pensions would be given to poor seniors aged 60 years old and above in cash.

” For the elderly seniors, we are increasing the subsidies to them by reducing the qualifying age for receiving subsidies, from 77-years-old to 60-years-old ,” said Dominguez at a recent Commission on Appointments hearing. ” That’s why the budget for subsidies for elderly seniors has increased .”

The allocation for indigent senior citizens has doubled under the proposed 2017 GAA to P17.94 billion from this year’s P8.71 billion because of “transparent and targeted” subsidies that the government would be providing them.

This budget hike plan, once approved by the Congress, will increase the number of elderly-beneficiaries from the current 1.4 million to next year’s 2.8 million.

In one of the consultations held by the Department of Finance (DOF) among civil society groups, the Coalition of Services for the Elderly Inc. (COSE) shared Dominguez’s earlier assessment that assistance for indigent seniors would be better served through targeted subsidies, such as social pensions, rather than providing them with exemptions via the Value Added Tax (VAT) when dining out, which mostly only rich seniors enjoy.

COSE was at the forefront of pushing for social pensions for indigent seniors during congressional deliberations on expanding benefits for elderly citizens under the Senior Citizens Act.

“Our group is pushing for a universal social pension because the targeted ones were indigents, receiving many problems in terms of targeting talaga. Nonetheless, if we look at it, more than 50 percent of the population don’t have any pension at all so the need is there. The need for a pension is there. But these needs cannot be covered by the parent measure which is the VAT exemptions and discounts,” said Aura Sevilla, project coordinator of COSE.

“That’s why the pension will increase their purchasing capacity and they can buy things that they think they need rather than just putting exemptions to items that are not really availed by everyone, especially the poor ones,” she added.

Sevilla has called on the DOF to explore areas of VAT exemptions that should be retained for seniors, such as medicines, so that poor elderly citizens can still benefit from them.

The DOF tax plan submitted to the Congress limits VAT exemptions to only raw food and other necessities such as health, which covers medicines, and education.

Dominguez said earlier the government is not removing benefits for senior citizens under its proposed comprehensive tax reform plan, but is only changing their form and ensuring that these subsidies go to the truly vulnerable ones who need such financial aid the most.

The tax plan’s Package One, which covers cuts in personal income tax (PIT) payments under a simplified, modified gross income system, plus revenue measures to offset losses from such PIT reductions, was submitted to both chambers of the Congress last Sept. 26.

The DOF submitted its proposed Tax Reform for Acceleration and Inclusion Act last month in keeping with the Duterte administration’s 10-point socioeconomic agenda.

Dominguez said the tax reform program enjoys support from a broad range of stakeholders, including foreign institutions such as the embassies of Spain and China and the delegation of the European Union to the Philippines, the representatives of the World Bank and the Japan International Cooperation Agency, as well as former finance secretaries and many local organizations including the Philippine Chamber of Commerce and Industry, Federation of Philippine Industries, Philippine Exporters Confederation, Management Association of the Philippines, the Joint Foreign Chambers of the Philippines, and civil society organizations.

“This is encouraging. It is unusual for such a comprehensive tax reform program to enjoy such a broad support,” he said.

Dominguez stressed that the 20 percent discount on purchases and transactions now enjoyed by all Filipinos 60 years old and above would remain intact.

However, the government plans to replace the exemptions to the 12 percent value added tax (VAT) granted to seniors with direct subsidies that would benefit senior citizens belonging to the poorest of the poor, he said.

“For the vulnerable sectors of society who would be affected by the lifting of some of the VAT exemptions, we would design a subsidy system similar to the CCT (Conditional Cash Transfer program), which is more transparent and targeted,” Dominguez said.

Republic Act 9994, or the Expanded Senior Citizens Act of 2010—mandates a P500 social pension every month for all Filipino indigent senior citizens.

The allocation for social protection programs under the proposed 2017 GAA is P169.63 billion, up 6.3 percent from P159.55 billion in th is year’s national budget , according to Department of Budget and Management (DBM) data.