Cash transfer outpaces other anti-poverty services (Second of Three Parts)

SOCIAL WATCH Co-Convener Marivic Raquiza considers it “very one-sided” that the government monitors compliance by beneficiaries – the so-called demand side – of the Conditional Cash Transfer (CCT) program, but not the supply side, which the national and local government should take care of.

After all, a lack in the latter would make it harder for the beneficiaries to comply with the conditions tied to their cash grants and for the government’s stop-gap poverty alleviation program to meet its goals.

Good news and bad

First, THE good news: According to Ateneo’s Institute of Philippine Culture (IPC), the Conditional Cash Transfer (CCT) Program’s cash grants and the conditionalities have kept students in schools and brought children and pregnant women for regular check-ups at health centers.

CCT beneficiary-families are also very thankful and happy about the benefits they receive from the program.

And while there have been no widespread changes in the sources of independently-generated income and income-levels of 4Ps households since the program began, the cash grants have eased the severity of lean periods and enable more expenditures and consumption of basic necessities and some non-staple commodities and services during abundant periods.

At the barangay level, the program seems to have helped increase the number of children who have been immunized, as well as in improving children’s weights and families’ ability to manage sickness in the household. Greater awareness of maternal health concerns was also observed.

One significant change, though, was in the physical and material readiness of the children to attend school. Indeed, the IPC researchers note that the CCT children came to class clothed more properly, equipped with the necessary materials, and with full stomachs. The clothing, materials and projects, and food also seem to have made students more interested to come to school and be more active in class.

Parents as well were more participative, interacting more with teachers to monitor their children’s performance. At the very least, they no longer had to feel ashamed about any unpaid school fees.

A reduction of child labor in the areas visited by the IPC was attributed to the program’s frowning on child labor. The need for children to work at an early age remained just so poor households could survive, but the CCT program seems to have led to greater awareness and sensitivity about child labor.

Now the bad news: It remains unclear whether the positive behavioral changes observed were simply a result of the beneficiaries’ compliance with the CCT conditionalities (and could therefore disappear once the program ends) or actually signal the onset of long-lasting improvements.

The CCT families themselves were very unsure of how they would fare once the program ends, seemingly convinced that their future was still bleak. Majority did not see how their children could continue without the CCT, much less complete their schooling.

Says the IPC study: “At this rate then, whether school attendance will translate into academic achievement, completion of education, and eventually gainful employment remains blurry. Parents themselves can only be hopeful about their children completing high school. They acknowledge the lack of other income generating opportunities, high cost of education, and limited provision and duration of 4Ps as major constraints to their children’s full acquisition and benefit of education. The teachers recognize the same formidable constraints and are likewise wary, even befuddled about opportunities for children and youth from the (CCT) households.” – Che de los Reyes, PCIJ, May 2011

“If we want the participants to do their end of the bargain,” says Raquiza, “government should do its end of the bargain. And that has to be monitored.”

That, however, could take some doing. As of last January, the CCT was already being implemented in about 98.7 percent of the country’s provinces, half its cities, and 62 percent of its municipalities. But by the assessment of the Department of Social Welfare and Development’s (DSWD), which is the head agency in implementing the CCT, education facilities are often inadequate if not totally absent, and health and education personnel and supplies scant in majority of the CCT areas.

This has led many observers and development experts to say that the haste in which President Benigno Simeon ‘Noynoy’ C. Aquino III, as well as his immediate predecessor Gloria Macapagal Arroyo, has expanded the CCT’s scope not only seems to defy logic, but could also end up counterproductive.

Indeed, almost three years ago, Philippine Institute for Development Studies (PIDS) senior research fellow Dr. Gilberto Llanto had warned the then Arroyo government against a rapid expansion of the CCT given the limited “fiscal space.” Instead, he said, the government should “sit down and look at both supply and demand issues so people can start talking about absorptive capacity and other things.”

But the Arroyo administration failed to heed his advice, and the Aquino government has since followed the lead of its predecessor. Since 2008, the number of CCT beneficiary-families has increased annually by more than half a million on average, and there seems no stopping that trend.

Today the program that began with just 4,459 beneficiary-families in March 2007 now has about 1.4 million. The government wants that figure to reach 2.3 million by this December, a number that is nearly seven times the program’s beneficiaries in 2008.

Full throttle

“The government is racing ahead and we were running behind it,” says Bert Hofman, country director of the World Bank, which has been financing earlier CCT programs in other countries like Brazil and Mexico. “That, I think, is a fair way of putting it.”

The initiative, he says, “was supposed to start very slow.” So when the Philippine government began expanding its CCT program sometime in 2009, Hofman says that even officials of the international lending institution “got a little nervous.”

According to the World Bank executive, the move diverted from the original plan, which was to “evaluate (the initial run of the program) and test the procedures…and then gradually expand it.”

In fact, DSWD had originally planned the CCT’s yearly expansion at a much more conservative 350,000 beneficiary-families at a cost of around P5 billion each time. Even then, the agency was already struggling to cope with the onslaught of additional duties that each batch brought in.

Hofman, however, says that when food and fuel crises struck the country in 2008, “it became urgent to have a better social protection system.” By the next year, he says, the Philippines was asking the World Bank for a loan to finance part of the rapidly expanding CCT.

Apparently, the Arroyo government wanted CCT beneficiary-families to reach one million by the end of that year. But it would not reach the target within that time frame; DSWD records show only 665,542 beneficiary-families in the program by end-2009, for which a total of P8.3 billion was disbursed. The last budget signed by Arroyo meanwhile would include a P10-billion allocation for the CCT, or an eight-fold rise in just three years.

A DSWD insider says people at the agency had been surprised by then President Arroyo’s announcement of having a million CCT families within 2009. But since it was the year before national elections were to be held, the insider figures the decision may have been politically motivated.

Funds ready but…

That theory was echoed by World Bank officials in Manila, according to an Aquino Cabinet secretary. The loan for the expanded phase of the CCT was ready for release in early 2010, or during the last months of the Arroyo administration, but the Aquino Cabinet member says that the Bank decided to buy some time before releasing the money. As the official recalls it, the unsaid argument was that since the May 2010 elections would surely usher in a new government, it would be better that the funds not be used to prop the campaign of the Arroyo-backed candidates.

Interestingly, the DSWD personnel also thinks politics is behind President Aquino’s move to expand the program even more, as soon as he came to Malacañang in June 2010. This is despite the fact that, save for the Autonomous Region in Muslim Mindanao (ARMM), the country is not going to have elections until 2013.

DSWD Secretary Corazon ‘Dinky’ Soliman says, however, “The reason why we continued and expanded it to bigger numbers is because (considering) the sheer number of those in need, of the impoverished, we needed to do a strategic intervention on two key areas of concern that will help very poor families move out of poverty. That’s education and health.”

Another reason, says Soliman, is that the government is trying its best to meet the Millennium Development Goals (MDGs), which include poverty alleviation, as well as specific health and education targets, by a 2015 deadline.

Politics & poverty

Llanto of PIDS himself concedes that through the CCT, Aquino has been able to “respond effectively to the political challenge of addressing the immediate needs of those who have put him in power.”

Albay Governor and CCT advocate Jose ‘Joey’ Salceda also argues that at the very least, the program fulfills the ‘satisfier variable’ for any development intervention: “First (people) must be alive. If (they) don’t survive now, what achievement are we talking about?”

World Bank’s Hofman, for his part, says that the available evidence from other countries’ CCT programs is enough proof that “this type of program really meets what the Philippines wants for their social protection system.”

The question, he says, is “not so much about whether it is the right thing to do or not,” but about the “logistics of expanding the program in such a rapid manner.” Still, he is quick to add, initial evaluation reports commissioned by the World Bank last year have given it confidence that the program “would work.” (See Sidebar)

For all that, the government’s folly of putting the cart before the horse seems to be already showing. Even the evaluation reports cited by Hofman note problems in the program’s implementation among the mixed outcomes.

Done on selected pioneer CCT areas or those that were included in the very first phase of the program in 2008, the reports were aimed at further improving the program “as it is being implemented,” says Hofman. He also clarifies that they were “not a final evaluation or bottom line of the (program).”

Ateneo de Manila University’s Institute of Philippine Culture (IPC) and the Social Weather Stations (SWS) each conducted a study in early 2010 and came up with similar observations. This was even though IPC looked into the first 18 months of the CCT in six municipalities and three provinces from January to May 2010 while SWS concentrated on CCT areas in Northern Samar, one of the country’s poorest provinces, from January to March 2010.

Queries, glitches

Among IPC’s findings was that even after having been part of the program for a significant period of time, member households in general remained lacking in knowledge about the details of the various conditions they were supposed to meet. Some had even proceeded to create “additional” conditions, such as maintaining a backyard vegetable garden, avoiding gambling, and paying school fees in full.

Many queries from beneficiaries regarding various issues (ranging from the cash grants to updates in household composition) also often went unanswered by local and central government personnel alike, says the study.

But perhaps among the more basic glitches in the program found by IPC was the exclusion of several families more deserving of being CCT beneficiaries than those selected. In large part, this was because members of many excluded households were not in their homes, but most likely out working at the time of the survey to select the beneficiaries, the study says. Soliman herself says that such targeting errors affected beneficiaries who began receiving grants in 2008 and 2009.

Another possible factor that led to the exclusion of several deserving families was the absence of a targeting system at the time. DSWD’s targeting system was installed only in the first quarter of 2009.

The database containing the names of those considered eligible for the CCT will also be completed only this year – even as the program is being expanded at its fastest clip yet, and the DSWD is adding more beneficiary-families than ever before.

As well, the DSWD happens to still be in the process of completing its Supply-Side Assessment (SSA) in CCT areas. And yet there are already indications that many of the program’s beneficiaries may be receiving substandard education or would be hardpressed in finding medical personnel to help them fulfill the conditions enabling them to receive grants.

For instance, the DSWD has found that an overwhelming majority of elementary schools in CCT places are not meeting seven out of the nine quality benchmarks set by the Department of Education (DepEd). Majority of municipalities and cities with CCT programs are also not meeting all three benchmarks on health personnel set by the Department of Health (DOH).

Lack of textbooks

So far, too, the DSWD has found a serious shortage of textbooks in all five core elementary subjects. The biggest shortfall is in science textbooks, with more than nine out of 10 municipalities/cities surveyed failing to meet DepEd’s standard of one textbook per pupil. Eight out of every 10 municipalities/cities also do not have adequate textbooks in English, Math, Filipino, and HEKASI. Only one out of every 10 municipalities, moreover, is able to provide DepEd’s standard of two deworming pills per student.

In general, CCT areas are faring well in only two education indicators: the teacher-to-pupil ratio and the classroom-to-student ratio. DSWD’s figures show that about nine in 10 CCT areas covered by the SSA so far have an adequate number of teachers and classrooms based on DepEd’s standard of one teacher per 45 students and one classroom per 45 students. And yet it is highly possible that these healthy ratios were achieved only because in many areas with huge student populations, public schools conduct two to three shifts of classes for the same grade levels.

When it comes to health services, the SSA reveals that majority of CCT municipalities and cities surveyed are short of health personnel. Only three in every 10 CCT areas, in fact, have enough doctors (at least one doctor per 20,000 people). Only four in every 10 areas have an adequate number of nurses (at least one nurse for every 20,000 people) and midwives (at least one per 5,000 people).

Providing education and health facilities and services, though, is beyond DSWD’s mandate. Thus, says the agency, it created a technical working group composed of representatives from the DOH, DepEd, Department of Budget and Management (DBM), and the Department of the Interior and Local Government (DILG) in order to “find ways to address the identified gaps on supply side.” In addition, it says, its Regional Project Management Team “continuously engages the LGUs to address supply gaps.”

DepEd Undersecretary for Legal and Legislative Affairs Alberto Muyot says that the CCT areas are “more or less, consistent with (DepEd’s) 40 priority divisions…where (DepEd) will focus (its) resources.” These divisions are being prioritized, he explains, because these are the areas scoring low on achievement tests. 4Ps public relations officer Pamela Susara also says that DepEd has already earmarked a certain portion of its 2011 budget for additional classrooms, textbooks, and teachers in CCT areas.

The DOH has also partnered with local government units in implementing a project dubbed “Registered Nurses for Health Enhancement and Local Service” or “RN HEALS.” Under the project, 10,000 skilled nurses will be hired and deployed for one year to 1,221 rural “unserved or underserved communities.” The DOH will share the cost of providing the monthly cash allowances for these nurses with LGUs. But it will be LGUs that will “supervise, provide board and lodging, and ensure the safety and security of deployed nurses.”

More effort, resources

Still, the huge gaps in the delivery of the most basic health and education services point to the need for much more effort – as well as more resources. The SSA results even show that shortages afflict not only the poorest provinces, but also the more affluent areas.

One striking example is the National Capital Region (NCR), which is usually ranked among the country’s least poor areas. In all the four NCR districts covered during CCT’s phase two, a whopping eight out of every 10 elementary schools failed to meet DepEd’s pupil-to-classroom standard; almost nine in 10 did not meet the pupil-to-science textbook standard.

Less of a surprise is the case of Zamboanga del Norte, which is among the poorest provinces in the Philippines. Nearly every other resident there is considered income poor. In all that province’s 13 municipalities that were covered in the CCT’s first phase, not a single elementary school met DepEd’s textbook-to-pupil standard ratio. Neither did any municipality there meet the standard doctor-to-population ratio set by the DOH, according to DSWD’s SSA.

The SSA for health, meantime, revealed peculiar results. Among the regions covered in CCT’s phase two, for example, Region I ranked consistently the highest in terms of adequacy of health personnel (doctors, nurses, and midwives). And yet, not a single province there was able to administer enough vaccines for children below one year to meet the DOH standard.

By contrast, a 2009 World Bank policy research report says that in countries where CCT programs have been deemed successful, initiatives to improve access to, and coverage of, education and health services were implemented “in parallel with or as an integral part” of the CCT.

In Mexico, for example, the government’s efforts to improve educational services included rehabilitating 50,000 schools, giving grants to parents associations to pay for minor classroom maintenance and repairs, and constructing secondary schools.

In Bangladesh, government spending on education almost doubled as a proportion of social sector spending since the 1980s. Says the World Bank report: “This has allowed for a significant expansion in the capacity of the schooling system.”

The United Nations Food and Agriculture Organization (FAO) has also warned against the phenomenon of “the tail wagging the dog.” FAO was referring to the tendency of some governments to treat the CCTs as a complete solution to the problem of inequities in human capital, “thus taking resources and/or attention away from essential investments in health and education which may be the only way to sustain the long term investment in human resources required to reduce poverty.”

But the Aquino government seems to have finally woken up to the reality of a yawning gap between demand and supply in the CCT and has been playing a furious game of catch-up. At DepEd, for instance, Muyot says the agency will “fast track the construction of classrooms” by “encouraging” investments from the private sector “either through outright grants, soft loans, or other forms.”

He also says that DepEd is entering into partnerships with local government units (LGUs) for the construction of school buildings. The LGU will manage the actual construction, Muyot says, while DepEd will monitor whether the LGU is able to comply with its quality standards. Construction costs would be shared by the LGU and DepEd.

Not to be outdone, the DOH is reportedly proposing health projects to the Public-Private Partnership (PPP) Center, an attached office of the National Economic and Development Authority (NEDA) tasked to coordinate and monitor PPP programs and projects. These include the modernization of public hospitals and the development of vaccines.

Just last May 13, too, Aquino signed Executive Order No. 43, which aims to rationalize the Cabinet into “clusters” according to the administration’s key priority areas.

The cluster that will take charge of Aquino’s anti-poverty efforts is dubbed the “Human Development and Poverty Reduction cluster” and will be composed of 14 government agencies. The DSWD secretary will lead the cluster as its chair, while the National Anti-Poverty Commission (NAPC) will serve as secretariat.

Cluster members are the chairpersons of the Housing and Urban Development Coordinating Council (HUDCC) and the Commission on Higher Education (CHED); and the secretaries of Education, Health, Agrarian Reform, Agriculture, Environment and National Resources, Labor and Employment, Interior and Local Government, Budget and Management, and NEDA.

It remains to be seen if all these moves will solve the CCT’s supply-side problem. Obviously, though, CCT advocates here would rather look at the bright side. Hofman, for one, underscores the positive outcomes listed by the World Bank-commissioned studies, particularly better school attendance and health-seeking behavior, as well as a decline in the incidence of child labor.

Proclaiming these outcomes as “much better than expected,” Hofman says that the Philippines is rolling out the CCT “at par or even better than the mature programs in Latin American countries.”

But he also says, “Whether people in the end live a richer and happier life – that, of course, is a longer-term perspective.” – Che de los Reyes, Philippine Center for Investigative Journalism