MANILA - Imagine a helicopter dropping P144 billion in paper bills for people to gather down below.
That, economist Benjamin Diokno half-jokingly said, is one way to stimulate a sluggish economy, instead of the Disbursement Acceleration Program (DAP) the Aquino administration implemented from 2011 to 2013.
The "helicopter drop" as an economic stimulus was a suggestion made by the late American Nobel prize winner Milton Friedman in 1969 and later made popular by former US Federal Reserve Chairman Ben Bernanke who mentioned it in a speech in 2002
Not meant to be taken literally, the point of a helicopter drop is to infuse cash directly to households so that it would be spent immediately, thereby pump-priming the economy.
Diokno’s version involves dropping cash right above the slums. “Why the slums? Because hindi makikipag-agawan ‘yung mga milyunaro doon. Talagang pupunta sa mahihirap. At gagastusin nila agad yun. If you drop it sa Forbes, they will get it but deposit it in a bank. Where’s the pump priming there?”
He says a more realistic alternative to DAP, though, would be to give tax refunds—like what Australian Prime Minister Kevin Rudd did during his time.
In 2009, Rudd gave taxpayer refunds ranging from $250 to $900 as part of a $42-billion stimulus package aimed at cushioning the impact of the global financial crisis.
Anyone who filed a tax return the year before received a direct credit in the bank or a check in the mail.
Taxpayers blew the extra cash on shopping or holidays or simply paid off debts.
A similar program, if replicated in the Philippines, says Diokno, would reward tax payers. “If you didn’t pay taxes, you don’t get a rebate. It’s a real option. ‘Yun ang pump-priming.”
Assuming there are 20 million taxpayers in the Philippines, and the P144 billion released by the Aquino administration for the DAP is divided equally and refunded to taxpayers instead of spending these on various “pump priming projects,” each taxpayer would receive P7,200.
Rudd stepped down as prime minister in 2010. Depending on which side of the political fence was talking, his mega cash-bonus was anywhere from an epic fail to a mild success.