A safety net for the poor

The secretary of the Department of Social Welfare and Devlopment has been getting a lot of flak lately about the more-than-doubling of the DSWD 2011 budget to finance the government’s Conditional Cash Transfer program, known locally as the 4Ps or the Pantawid Pamilyang Pilipino Program. The objections which arise from various sectors — religious, activists, politicans — have one thing in common: they think that the program is a dole-out, probably given with ulterior motives, and therefore is at best useless.

Senator Ralph Recto has been quoted as saying that the Philippine program has “not proven to be effective in reaching the parameters set under the UN’s Millennium Development Goals.” Others claim that the money would be better spent providing employment for the household head.

Let me disabuse the critics. First, it is NOT a dole-out.

It is a contract between the government and the household, where in return for the cash transfer, the family must fulfill certain conditions regarding education and health. If the conditions are not fulfilled, the money stops coming.

Exactly who can be the contractors, and what are the terms of the contract? To qualify for the program, the household income must be below the provincial poverty threshold, must either have a pregnant woman or children 14 years old and below.

And the terms of the contract are that for P500 a month, the following health safeguards must be in place: the pregnant women must avail of pre-and post-natal care and be attended during childbirth by a health professional; parents must attend responsible parenthood, parent effectiveness, and mother’s classes; children below 5 must receive preventive health checkups and vaccines, and children 6-14 must receive deworming pills twice a year. And for P3,000 a year each for a maximum of 3 children, the following education conditions must also be met: Children from 3-5 years old must have an attendance rate of 85% or higher in preschool or day care classes; children from 6-14 must have an attendance rate of at least 85% in elementary and/or high school classes.

And there is a unique feature here: the cash is received by the woman of the house, and for a very valid reason — it has been found that women’s expenditure patterns are more focused on basic human priorities than those of their male counterparts.

Thus, the minimum amount that qualified household gets a year is P9,000 (with one child who is at least 3 years old) and the maximum is P15,000 (with three children up to age 14).

The second point that must be made is that while, as Sen Recto says, the CCT in the Philippines has not proven to be effective in reaching the UN Millennium Development Goals, that is not because it is a bad program, but because it hasn’t had time to take effect, and has had, so far, very little reach.

It was piloted in late 20007, and was supposed to have reached 123,000 poor families in 2008, and will reach 900,000 families by the end of this year.

Compare these to the number of households living below the poverty line in 2006: 4.68 million. Even if the percentage of poor familes has been estimated to have decreased marginally since then, the absolute number will have increased.

It doesn’t take a rocket scientist to conclude that the program is not going to have that much effect on the poverty situation.

Which is why the DSWD is more than doubling its budget, for the CCT, with the encouragement of both the World Bank and the Asian Development Bank, who are financing the program through loans.

And why are the World Bank, the Asian Development Bank, and by the way, the United Nations, so enthusiastic about the program?

Very simply because it has generally succeeded in many other countries — 17 at last count. So much so that Nancy Birdsall of the Center for Global Development has been quoted as saying that “these programs are as close as you can come to a magic bullet in development.”

Why? Because evaluation studies show that they have significant beneficial impacts on schooling, health, infant mortality, child labor, and poverty. And on inequality as well.

What essentially the CCT boils down to is a social protection or safety net for those suffering from income poverty in the short run, that also addresses outcome poverty at the same time, building human capabilities so that in the long run, the intergenerational transfer of poverty is short-circuited.

There is always room for improvement, of course.

And the success of the CCT in terms of human development outcomes will depend on the availability of the schools, health centers, and other facilities that are needed by the poor to fulfill their part of the contract, as well as the accessibility of the source of funds for the women. Not to mention the ability of the DSWD to target the poor without political interference.

Is P30 billion too costly a program?

Compared to the subsidies given by the government to some of its GOCCs (with less or even nothing to show for it), not to mention the humongous government corporate debt that the national government has had to take over over the past 25, the CCT is not only reasonable, but certainly well worth it.

One must congratulate the Aquino government for putting its money where its mouth is with regard to poverty and development. If anything, it should be spending even more, as as long as the proper safeguards are met.

In any event, the CCT represents the Philippines’ only chance to make significant gains in achieving our Millennium Development Goals. Let us all be reminded that given the current (sans CCT) pace of progress, halving the 1990 income poverty incidence will only be achieved in 2026, reducing the 1990 maternal mortality rates will be reached only in 2048, universal elementary school completion in 2075.

Come to think of it, the success of this administration’s CCT program may yet go down in history as one of its most important accomplishments. –Calling A Spade… — By Solita Collas-Monsod, Businessworld