Expand cash transfer to 4.6 million families

MANILA, Philippines—It should disturb the nation, not just the new administration, that total hunger increased by 1 percentage point compared to the second quarter of 2009, and severe hunger was also higher compared to the first quarter of 2010 because the second quarter encompassed a presidential election which should have been a major redistributive event.

Moreover, the conditional cash transfer (CCT) has been in place since mid-2008 while beneficiaries have expanded to 800,000 families by the second quarter of this year which should have liberated more families from the scourge of hunger.

The 800,000 has been well-targeted at the 4.6 million families identified by the Department of Social Welfare and Development (DSWD) as poor, thus vulnerable to food insecurity. This partly coincided with the food-for-school program (contingent food transfer).

When seen against the longer trends in hunger as captured by both surveys by Social Weather Stations and the Food and Nutrition Research Institute, there is more reason for policy dismay.

While total hunger stood at 21.1 percent in the second quarter, the long-run end-results or cumulative impact of hunger being underweight and underheight prevalence are much worse at 26.2 percent/27.9 percent (age 0-5), 25.6 percent/33.1 percent (6-10) and 17 percent (11-19).

Simply stated, the impact of hunger is being felt by the most vulnerable sector (children of poor families) and at highly critical formative stages.

The culprit for the stubborn deterioration in hunger statistics is food prices. While food prices were stable in the second quarter (+0.20 percent in June CPI), rice prices have actually not fallen much from their peaks in the second quarter of 2008.

The increase in the second quarter could be partly due to the withdrawal by the National Food Authority (NFA) of the subsidized P18.25 a kilo rice supply which should have curtailed access.

Food accounts for 59.6 percent of the total budget of the lowest 86 percent of the population. Rice accounts for 36.8 percent of the entire food budget.

The policy prescription is to cover the 4.6 million poor families, already identified by the DSWD national targeting system, under CCT. And given the absorptive capacity of the DSWD, 2.3 million could be targeted in the first General Appropriations Act of P-Noy (President Aquino), entailing a full-year budget of P27.8 billion in 2011.

The replacement of the food-for-school program by CCT is a step in the right direction. However, the substitution should be executed under a build-and-scrap strategy, not scrap-and-build. Only 59 percent of the surveyed families were covered by the food-for-school program while only 20 percent of those covered were recipients.

This virtually validates the World Bank observation that it takes the NFA P5 to deliver a P1 subsidy to the poor. –Joey Salceda, Philippine Daily Inquirer

(Albay Gov. Joey Salceda is a former economic adviser of former President Gloria Macapagal-Arroyo. He has claimed that the economic growth during the previous administration did not trickle down to the poor. He is now allied with the Aquino administration.)