The basics of universal basic income

It might be time to look into giving every Filipino a universal basic income (UBI) of P1,500 per month per adult. Some netizens have raised concerns on why we should and how we can implement such a program, and they are all valid.

I group people’s views on UBI into three general categories: those for universal welfare, for targeted welfare, and for no welfare.

The Universal Welfare group, of which UBI advocates are a part, prioritizes the universality of programs so they’re also supporters of universal health care and education.

The No Welfare group generally prioritizes an individual’s responsibility to work hard to achieve a good life. Eliminating welfare will lessen the taxes needed to be paid for by taxpayers.

However, this kind of system will have the state pay in some other form. For example, the state spends an estimate of P6,000-P8,000 per inmate per month (part of it goes directly to the inmate such as food and utilities, while the rest goes to operating the jail).

The UBI can be viewed as the state spending for basic sustenance so the poor won’t resort to petty crimes. It provides Filipinos with a little more safety knowing that everyone is not hungry.

The way I imagine UBI to be communicated is as a form of income for those presently working, looking for work, conducting household work, or doing community work. The UBI can then be used as a national activation tool, giving greater social pressure from those around you to make yourself valuable to society.

The Targeted Welfare group generally prioritizes the efficient use of resources. Its concern has to do with perceived resource constraints. If you are also for targeted health care and education (PhilHealth and public primary schools should only be for the poor), then this position is consistent with that. It is much easier to see why this leads to discontent among those living on the margins who don’t get support, and the rest of the taxpayers who do not get treated the same way. Conditions may also lead to poverty traps where recipients would rather stay stagnant since if they improve their financial standing, they will lose their benefits.

Administering these conditionalities costs money, which might be better used to make the programs universal. These conditional programs are big opportunities for corruption and slow down the response for helping people who experience sudden drops in financial situations, such as accidents or job loss. These people need immediate financial support, which UBI can provide.

Here are five ways to start UBI.

Negative income tax (NIT) is where the government will provide citizens money if they earn below an income threshold. The NIT concept is “taxing less and transferring less” versus the UBI’s “tax more and transfer more.”

Universal “less than basic” income is to create UBI with a small amount such as P500 per month per adult citizen. My UBI proposal includes a use-it-or-share-it mechanism. If we can appeal to 80 percent of our populace to share their P500, the 20 percent under the national poverty line will get P2,500 per month instead.

Non-universal basic income can come in three forms: Senior basic income starts by providing UBI to citizens above 60 years old and then gradually adjusting the age criteria until it reaches 18 years old; rich LGU basic income can be done by a rich local government unit (LGU) carving out local funds and implementing UBI, and other rich LGUs can follow; and small LGU basic income is an experiment the national government can start with small LGUs. This should be the fastest to implement since it will deal with the fewest people. I prefer this route as we can immediately see results and refine systems. If pilots are successful, the program can be continuously expanded until it has covered the entire Philippines.

Since elections are coming up, I hope candidates put the why and how to start UBI in the national conversation. Different groups and multiple options are available as starting points. I believe any small step in forging a UBI infrastructure will compound its usefulness over time, and the Philippines will be able to reap the benefits of such a program.

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Claro Arriola III is an industrial engineer by training and profession. He values efficiency and effectivity, which is why he’s drawn to programs such as UBI.