CASH TRANSFER PROGRAM
WHO ARE the poor? Where are they? Ofelia walks every day with her children to the forest to gather hearts of banana plants that she can sell so there is some money to send her children to school. Nena has to make a choice daily between eating three times a day and allowing her three children to go to school.
Lito is a 10-year-old boy who wakes up at 3 a.m. daily to sell pan de sal so he can earn P50, the jeepney fare he needs to go to school. The taong bato still live in the caves of Palawan, without sufficient opportunities to get proper health and educational services.
These examples do not capture the whole picture of who the poor are and where they are. The Department of Social Welfare and Development (DSWD) has developed the National Household Targeting System for Poverty Reduction (NHTS-PR) to identify and locate the poorest of the poor. This became the basis for identifying the beneficiaries of poverty-reduction efforts of the department such as the conditional cash-transfer program.
The poor were identified through:
1.) Geographical targeting based on the Family Income and Expenditure Survey (FIES) of 2006 and the 2003 Small Area Estimates (SAEs), both of which were released by the National Statistical Coordination Board. The FIES identifies the poorest provinces while the SAEs ranks the poorest municipalities.
From the list, barangays are selected according to the following:
If poverty incidence in a municipality is at least 50 percent all its barangays are to be assessed.
If poverty incidence is less than 50 percent, barangays are selected based on socioeconomic indicators through pockets of poverty.
2.) Household assessment using the household assessment form, administered through interviews. The data gathered are encoded at DSWD regional offices using the software developed by the NHTS-PR. From here, a proxy means test is applied to estimate the poverty level of the households and rank them.
The survey resulted in a database of 9 million households. After running the proxy means test, the NHTS-PR identified 4.6 million families as the poorest of the poor. This is consistent with the estimate of the FIES, but with a significant improvement: the name, place and profile of each family were listed.
A review of DSWD programs and services indicated that there was a need for a more strategic use of resources and expertise. It also showed that there should be a more efficient delivery of services.
Thus, there was an agreement that the convergence and/or complementation of poverty-reduction programs are in order (see diagram).
Conditional cash transfer
The Conditional Cash Transfer (CCT), also known as Pantawid Pamilyang Pilipino Program or 4Ps, is a program that aims to help the poorest families enjoy the right to elementary education and to health.
Through this program, President Aquino is ensuring that no one will be left behind. Investment in human capital will be made to break the intergenerational cycle of poverty.
The CCT or 4Ps is the backbone of the country’s consolidated social protection initiatives. Officially launched in late 2007, it is the country’s version of the widely practiced program in Latin American countries such as Mexico and Brazil. [Cash transfer programs have been adopted in some 45 developing countries, covering more than 110 million families.]
The program has succeeded in the country because it gives the money directly to the poor, to be invested in education and health to: 1.) boost investment in human capital; 2.) increase the level of community participation and promote responsibility on the part of beneficiaries through capacity enhancement and family-development sessions; 3.) promote growth in the local economy by increasing the purchasing power of 4Ps beneficiaries, thus contributing to a more suitable environment for the development of microenterprises.
Currently, there are 900,000 household beneficiaries in the program. By the end of the year, the DSWD will reach 1 million households. In 2011, the goal is to add 1.3 million households for a total of 2.3 million by December 2011, half the 4.6 million households indicated to be living below the poverty line.
The 4Ps is present in all provinces except Batanes. The Autonomous Region in Muslim Mindanao has the biggest number of beneficiaries for the expansion at 193,000, because it has the highest poverty incidence rate at 61.6 percent.
The beneficiaries of 4Ps receive P300 per child (maximum of 3 children aged 0-14), for 10 months that the children are in school. The condition is for the child to be in school 85 percent of the schooldays.
In addition, P500 is given to mothers, especially pregnant and lactating ones, provided that they have pre- and post-natal checkups and attend monthly family-development sessions.
The cash grants are delivered through Land Bank of the Philippines, either as over-the-counter payment, cash cards (ATMs) or through off-site payments.
Recently, the department has explored the use of G-Cash Remit for far-flung areas such as Balabac, Palawan, and Burdeos, Quezon. Other conduits and cooperatives are being explored to be partners in the delivery of grants.
Grants are released to the mother because she is perceived to be the most responsible person in the household.
To guarantee that the beneficiaries are complying with the conditions, a verification system is in place. The verification is done in partnership with representatives of the Department of Education (teachers and principals) and the Department of Health (rural health workers, midwives, nurses and doctors).
In 2011, different faith-based organizations, citizen-volunteer groups and development NGOs will be the third eye in monitoring program implementation.
In case of noncompliance, a beneficiary may be delisted from the program. Since 2008, the DSWD has delisted some 16,000 beneficiaries due to noncompliance (i.e., not using money for education and healthcare) or inclusion error (the families should not have been beneficiaries because they do not belong to the poorest of the poor).
To better address complaints and to oversee accountability, a grievance-redress system has also been put in place. It will process complaints in the form of written reports or through text messages to the hotline 09189122913. Grievances pertaining to the implementation of the program may also be sent via e-mail through email@example.com.
The beneficiary will graduate from the program after five years. Before graduation, preparatory activities are being developed, including capacity building for households as in the case of family-development sessions and microenterprise-development seminars.
The second component for the convergence strategy is the Kalahi CIDSS (Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services), which stands for community-driven development.
The program engages in a community-empowerment activity cycle in which people identify issues and problems besetting them and develop solutions, including projects.
This process is driven by the citizens themselves and they decide the allocation of funds, with the local government unit facilitating the process and providing counterparts for the projects. The funds, directly transferred to community accounts, are managed by the people, who also manage the project.
Kalahi CIDSS encourages cooperation within the community through the provision of financial and technical assistance that would enable beneficiaries to determine and assess their needs for the construction of small infrastructure projects like daycare centers and classrooms.
These infrastructure projects would increase their income-generating capacity as a community.
Kalahi CIDSS is also crucial for the construction of facilities for the delivery of education and health services, particularly in 4Ps communities. The program covers 12 regions and is present in 42 provinces and 200 municipalities. A municipality is eligible if its poverty incidence is 33 percent based on the 2003 SAEs.
Municipalities are chosen through merit-based filtering done at dialogues with local government units. Projects are presented and reasons why financing for these are necessary to foster growth in the community are explained.
Next year, the program will be expanded to cover 397 municipalities with financing from the Millennium Challenge Corp. fund.
The final pillar for poverty reduction is sustainable livelihood or community-driven enterprise development as created by the Pinoy Microenterprise Foundation (PinoyME). These are interventions that seek to involve the poor in business development, resource mobilization, business planning, and business management and sustainability.
The sustainable-livelihood component will build on the self-employment assistance program of the DSWD. It is a program for poor families to enable them to build their capacity to engage in enterprise development and manage microenterprises.
A family enterprise can be composed of five members. The DSWD will lend P10,000 per family. Ten to 25 families can organize themselves into a business.
After two years, the loan should have been returned. It is collateral- and interest-free. The repayment rate over the past 10 years is 72 percent. The department is using a rolling fund for this program.
After two years the enterprises will be linked to formal credit institutions.
Aside from PinoyME Foundation, Rimansi, a micro-insurance company, is engaged with the DSWD to boost our sustainable-livelihood programs by operating as a resource center.
Rimansi has microfinance pilot projects in Southeast Asia offering micro-insurance services for a whole year. The company’s objective is to assist microfinance institutions to establish coherent and sustainable micro-insurance programs that are appropriate for the poor.
Another objective is to promote mutual assistance and sharing of resources among stakeholders and to build a stable financial infrastructure for microfinance. On this note, PinoyME and Rimansi are vital players in re-engineering the current structure of DSWD livelihood projects. It is a public-private partnership for the poor.
Right to education … right to health … right to development. The three-pronged poverty-reduction program addresses the deprivation of poor families, especially their right to elementary education and to health, within the context of their right to development.
The three components are driven by empowerment processes in which the resources—cash for education and health, and funds for community-driven social service infrastructure, and enterprise development—are in the hands of the poor themselves.
It creates social accountability, builds social capital and transforms patron-dependent communities into empowered and active citizenry. It is a solid building block for true democracy.
(Corazon Juliano Soliman is the social welfare secretary. She wrote this article with the assistance of Abigail Pangilinan.) –Corazon Juliano Soliman, Philippine Daily Inquirer