Will giving cash to the poor help solve poverty? (First of Three Parts)

SHE HAD neither bought a lotto ticket nor joined a TV game show. But Marissa felt like she won the jackpot anyway late last year, when her family was chosen as one of the recipients of the government’s Conditional Cash Transfer (CCT) Program.

After all, it meant her family would be receiving P800 a month, and while that has since proved inadequate to sustain her brood of four, whatever cash she can lay her hands on is welcome, especially now that her husband, a returnee from suddenly protest-prone Saudi Arabia, has been jobless for the last two months.

Since 2007, some 1.4 million poor households have been selected to receive regular cash grants from the government under the CCT. By the end of this year, the government wants to increase the figure to 2.3 million families.

In the next five years, the government will be enrolling even more families in the CCT; by the time President Benigno Simeon ‘Noynoy’ C. Aquino III’s term ends in 2016, up to 4.6 million poor families would have been covered by the program.

That is the promise of the Aquino government, according to Social Welfare and Development Secretary Corazon ‘Dinky’ Soliman, the CCT’s national program director. But the Philippine Development Plan for 2011 to 2016 – that the government finally released last May 26 – puts the total CCT target-beneficiaries at only 4.3 million by 2016, or 300,000 fewer families.

Also called the Pantawid Pamilyang Pilipino Program (4Ps), the CCT is called “the cornerstone of the government’s strategy to fight poverty and attain” the Millennium Development Goals that the Philippines has pledged to achieve by 2015.

Put simply, the CCT – actually a continuation of a program initiated by Aquino’s immediate predecessor, Gloria Macapagal-Arroyo – is expected to provide a safety net that will keep impoverished Filipinos from sliding to deeper penury.

Now described as “the world’s favorite new anti-poverty device,” CCTs have been differently funded and implemented in virtually all the countries of Latin America and some in Asia and other continents since 1995.

Development scholars and analysts have largely affirmed the good if short-term outcomes that CCTs could trigger such as better school-enrollment ratios and improved health status of the children of CCT beneficiary families.

At the same time, however, they have also expressed concern over the long-term impact and benefits of costly CCT programs, especially if these are not complemented by real, massive spending to ramp up the quantity and quality of education and health services, as well as job-generation and livelihood-training programs for the poor, adult population. Moreover, they warn that sustainability could become a serious problem once the funds run out and there is no all-sided strategy against poverty in place.

In fact, such concerns have made other countries proceed with caution with their CCTs. In Latin America where CCTs first took root, governments first rolled out the program on the local level, or in some pilot areas, before going full blast with a national rollout.

But this is apparently not the case in the Philippines, where a premature expansion of the scope of the CCT, as well as the rush in the implementation of the program, may jeopardize what many still consider as a promising “flagship program” in the Aquino administration’s double-barreled drive against poverty and corruption.

Worrisome findings

A posse of Pantawids

THE straight and narrow path, or “matuwid na daan” in Filipino, is where President Benigno Simeon ‘Noynoy’ C. Aquino III says he wishes all Filipinos would tread. And perhaps to prove that he’s not all talk and no action, Aquino has splurged billions of pesos on many “pantawid” (“tide over” in English) programs that all involve cash subsidies for the poor.

The biggest of these “pantawid” initiatives, of course, is the Conditional Cash Transfer (CCT) or the Pantawid Pamilyang Pilipino Program (4Ps) that has been allotted P21 billion in the 2011 General Appropriations Act (GAA), and a substantial part of it funded with loans from the World Bank and the Asian Development Bank.

Three other programs are also listed under the 4Ps, each with its own hefty budget: the “Supplemental Feeding Program” (P2.88 billion), “Food for Work for Internally Displaced Persons” (P881 million), and “Rice Subsidy Program” (P4.23 billion). Altogether, these other subsidy programs are worth an additional P8 billion.

Indeed, by all indications, the CCT has served as a public-relations handle of the Aquino government’s epic battle versus poverty. But it is one built on the flawed spin or fallacy that it is a program for all the poor in the Philippines.

Six months of the PCIJ’s research and review of relevant documents, and interviews with relevant sources on the CCT reveal it to be a focused, time-bound initiative only for poor Filipino families who would pass the computer-generated targeting of beneficiaries under a “proxy means test,” and then would have to comply with strict program conditionalities. Under these terms, the poorest of the poor, notably the “food poor” and the most destitute that walk the streets and do not belong to typical “family” units, are not the targets of the CCT.

The decision to expand and accelerate the program was also made without adequate due diligence in assessing supply-side, implementation, and program delivery requirements. The program’s target beneficiaries have been increased seven-fold from 2008 to this year even without a full assessment of the availability, quantity, and quality of education and health services in all CCT areas, or even before a comprehensive evaluation of the program’s first phase under the Arroyo administration could be made.

The CCT has been paraded in multiple road-show activities even before the formal launch of the Philippine Development Plan or PDP for 2011 to 2016 that should serve as the administration’s governance and growth framework. The odd sequence of events has yielded a disparity in the number of CCT target-beneficiaries. Soliman, the President and other senior officials have boasted that the CCT would benefit 4.6 million households by 2016; the PDP says it would only be 4.3 million.

Soliman’s number is pegged on the 2006 Official Poverty Statistics. The National Statistical Coordination Board (NSCB) has finished the 2009 Official Poverty Statistics, which counts a different number of poor households, but the DSWD’s targeting of CCT households is stuck on the 2006 version.

Across the Philippines, the NSCB said there were 3,670,791 poor families by 2006, and 3,855,730 by 2009.

For sure, the program’s expansion and accelerated implementation will not come cheap. It involves mainly the giving of cash of up to a maximum of P1,400 each to 4.6 million families. A significant portion of those funds (whose total runs up to tens of billions of pesos) are coming from loans from the World Bank and the Asian Development Bank (ADB) in the next five years, raising the question of whether or not the government can sustain the program beyond 2016.

Billions of pesos have also been allotted for personnel and administrative systems to monitor the beneficiaries’ compliance (demand side) with CCT conditions, even as there remains no vigorous parallel monitoring of how national and local government agencies will comply with their obligations to deliver on education and health services (supply side) that the CCT promises.

Meantime, the designated lead agency for the CCT, the Department of Social Welfare ad Development (DSWD), is now under intense pressure to accomplish its tasks related to the program, along with its regular duties. To cope with the rushed and expanded implementation of the program, DSWD is hiring, training, and deploying some 2,300 ground monitors (called ‘municipal links’ and ‘city links’ in project documents) at frenetic speed. As budgeted in its 2011 agency appropriation, the DSWD could actually spend up to P4 million on CCT-related “training” activities alone, every day.

This is even as the targeting and enrollment of additional beneficiaries are proceeding just as quickly. On its website, the DSWD has posted a two-slide power-point report saying that as of last March 11, it had already disbursed P744.7 million of cash grants. It said it expects to ramp up its cash grants disbursement to P2.68 billion by March 31, 2011, or by a phenomenal P1.9 billion in just 20 days.

The DSWD has yet to complete its Supply-Side Assessment (SSA) in 320 of the 729 cities and municipalities that have been listed as “CCT areas” by November 2010, but already the results are way too tragic. Of the 409 CCT towns and cities audited, an overwhelming majority are not meeting seven of the nine quantity benchmarks for education, and all three benchmarks for health personnel ratios to population.

On the ground, though, the picture has become quite complicated. Under the General Appropriations Act of 2011, the CCT funds must be directly deposited to government depository banks, and directly accessed by the beneficiaries. “No DSWD employee/officer, CCT secretariat and local government official shall directly handle funds intended for cash grant,” the law says. But because the Land Bank of the Philippines, the CCT fund depository bank, has no branches in many CCT areas, the DSWD has lately enrolled pawnshops and mobile cash-transfer outlets to serve as distribution centers of the cash grants.

Unsurprisingly, even beneficiaries are now raising queries about the program, with some expressing doubt that they would be able to comply with the conditions that come with the CCT grants. Others are pointing to unexplained bulk disbursements that have been followed by delayed payouts as signs that the system is still far from being efficient.

Thousands of poor families are also wondering why they were left out and if there is a chance for them to be included in the program in the future.

Surprised client

Marissa herself was surprised when her family was among more than 900 selected for the CCT in her community in Metro Manila. When the Department of Social Welfare and Development (DSWD) conducted its survey to help it pick CCT beneficiaries last year, Marissa’s husband was still working as a cook abroad and earning the equivalent of P15,000 a month.

In Marissa’s community – a former dumpsite that is now populated by street hawkers, manual laborers, and factory workers, along with hordes of the unemployed – that was, and is still, considered a princely sum. (All of the people PCIJ interviewed in that community, Marissa included, asked that their real names not be used for this story.)

By the government’s own definition, Marissa’s family was not poor at the time of the survey. To be considered poor, a family with six members residing in Metro Manila should be earning a monthly income below P9,901 in 2009. This is the so-called ‘poverty threshold,’ which the NSCB defines as “the minimum income required for a family to meet the basic food and non-food requirements.”

State researchers say that minimum income will enable a family to feed all its six members three nutritionally adequate meals and one snack (for a total of 2,000 calories a day, on average) and pay for basic necessities such as clothes and footwear; housing; fuel, light and water; medical care; education; and transportation and communication, among others.

Income-poor families, says the NSCB, now number 3.86 million – or about two in every10 families. There are also about 1.45 million families who are “food poor,” or those not earning enough to eat three nutritionally adequate meals a day. According to the NSCB, a family of five in Metro Manila would need at least P5,763 monthly to be able to have such daily meals.

By dint of hard work, Lorie, a widowed mother of four, has made it possible for her family’s income to make it to that NSCB benchmark. Yet her family obviously still falls under the income-poor category, and can be considered ‘chronic poor’ – which is why Lorie can’t understand why she was overlooked by the CCT.

In what sounds like a reference to “unlikely” beneficiaries like Marissa’s family, Lorie, a resident of the same shanty community that Marissa calls home, wonders aloud: “It’s puzzling. There are those whose husbands are working abroad, whose houses are made of concrete – why were they included in the 4Ps and I wasn’t?”

Lorie depends on her dead husband’s social security pension of P4,200 a month, which she tries to augment in whatever way she can. For instance, she operates a sari-sari store that earns her about P100 a day. She also washes pots for a neighbor’s food stall, for which she gets P70 a day. But even then, she often finds herself short of cash, and she would be unable to keep her store running if she were to lose her line of credit from small-time lenders in the community.

Lorie says she was told the selection had been done “by a computer.” But the process is actually far more complicated than that. Dubbed as the “National Household Targeting System for Poverty Reduction (NHTS-PR)” and launched in 2009, the system for selecting CCT beneficiaries was designed supposedly to prevent cash benefits from leaking to the non-poor.

‘Proxy means test’

First, DSWD hired 21,892 workers, including enumerators who would conduct house-to-house interviews across the country. But instead of asking households directly about their income and expenditure, DSWD used a ‘proxy means test’ wherein 34 questions were asked to gather information about a household’s socioeconomic condition, such as the family members’ education, their tenure status, house construction material, appliances and furniture, and whether a member is working abroad, among others.

DSWD prioritized the 20 poorest provinces and municipalities. In other areas, the agency focused on “pockets of poverty” or areas where clusters of poor households reside, such as in Marissa and Lorie’s community.

A computer model calculated the approximate income per capita of the household and ranked them in reference to the poverty threshold of the province or the district in the National Capital Region (NCR). To qualify for the CCT, a family’s economic condition must be equal to or below that threshold.

Yet DSWD’s Soliman herself admits that the system isn’t foolproof. That’s why, she says, the DSWD has been correcting the errors made by enumerators – whether done inadvertently or on purpose – through a grievance system whereby people could contact DSWD through text or email. But for the likes of Lorie, an easier option would be ‘on-demand application’ whereby one could go to designated areas in the municipality and have oneself included in DSWD’s database.

In both options, DSWD will validate the family’s eligibility. As of last March 10, a total of 43,000 families have been delisted from the program while 80,000 have been added, according to Soliman.

That, however, brings little consolation for Lorie, who already joined the on-demand application twice but still failed to make it to the list.

Being part of a poor municipality and on or below the provincial poverty threshold are not the only criteria to qualify for consideration for the CCT, though. The poor household must also have one or more children below 15 years and/or a pregnant woman at the time of the DSWD’s assessment.

Strings attached

Once selected, a CCT household would get P500 a month at least. There is also a P300-monthly education grant for every child aged three to 14 in that household; this would be given 10 months in the year for up to three children per family. Each CCT family can be part of the program for a maximum of five years.

For the poorest families, sending a child to school often means foregoing a meal or two for the rest of the family members, says Soliman.

With the CCT cash, these families in theory would now be able to send their children to school and leave their budget for food intact.

But it’s money with strings attached. Beneficiaries need to comply with conditions that include pre- and post-natal care for those who are pregnant, preventive health check-ups for children zero to five years old, and 85-percent school attendance by children three to 14 years old.

In addition, parents must attend family development sessions every month in an area designated in coordination with the local government. These include responsible parenthood sessions, mothers’ classes, and parent-effectiveness seminars.

Compliance check

The DSWD says these conditions are necessary to “encourage parents to invest in their children’s (and their own) human capital through investments in their health and nutrition, education, and participation in community activities.” The program’s proponents also say this is what essentially differentiates CCT from a dole out.

DSWD monitors compliance by having school and municipal health personnel record school attendance and health check-ups. Compliance reports are timed with the cash releases that take place every two months. A family that fails thrice to comply with the conditions is suspended from the program. After the fourth offense, the errant family can be dropped completely from the program.

“It’s also possible,” says 4Ps public relations officer Pamela Caperiña-Susara, “that the child or whoever did not comply would be the only one dropped from the program, not the entire family.”

But such conditions seem to have been thrown out the window in Marissa’s community last November, the same month they were enrolled as CCT beneficiaries. They were expecting to be given two months (November-December) worth of grants as their first payout, but instead they received money for the 12 months of 2010, including for the 10 months when they were not yet CCT beneficiaries. Each of the families received a lump sum, which sent many of them on a tailspin.

For instance, however hard Marissa and her neighbors tried to crunch the numbers, they couldn’t figure out exactly how much each of them was supposed to receive.

According to DSWD, a family who has three qualified children should receive P15,000 in a year.

In Marissa’s community, however, some families with three children reportedly received less than that amount, while others received P15,000 despite having less than three children.

Since it was nearly Christmas, most of the parents who received lump sums used the money to buy clothes and shoes for their children. Some mothers also used the money to buy milk and vitamins. Marissa observes, however, that this was probably because they thought they were going to be monitored right away.

Not so responsible

In fact, other parents were less than responsible with that first cash grant. Some of them were even caught gambling by the city link – the DSWD personnel assigned to assist beneficiaries – who then confiscated their ATM cards, which gave them access to their special CCT accounts at the Land Bank.

Sought for explanation by PCIJ, DSWD even admits that the lump-sum disbursements were not isolated to Marissa’s community. It says its personnel had to temporarily stop certain CCT-related activities across the country while the May 10, 2010 elections ban was in force. This particularly affected the registration and validation of beneficiaries and the transmittal of cash grants during that period.

DSWD was able to resume CCT activities only in the third quarter of 2010. To compensate for the delay, the department disbursed several months worth of cash grants; in some cases, these reached a year’s worth.

Meanwhile, DSWD says inaccuracies in the information given and/or entered in the assessment forms during the selection survey could explain the discrepancies in the amounts that the beneficiaries received. These could include incorrect numbers and ages of children that the household declared, it says.

The irony is that since receiving that sudden bonanza, Marissa and the other CCT beneficiaries in her community have not gotten a centavo of their bi-monthly grants for this year, and no one knows why. As far as they know, they repeat, every CCT family there received lump sums for 2010 and nothing else since. Not surprisingly, the situation has not only led them to scratch their heads, but also to cast a wary eye on the program.

Erratic release

Perhaps because the payout release now appears erratic to her, Marissa says the CCT may not really help keep poor children in school. At the very least, the experience has reminded her that CCT beneficiaries like her shouldn’t rely on the program too much.

“Like they say, it’s just for tiding you over,” she remarks. “But…you have to wait another two months.”

Then again, the grant amount her family was supposed to receive already had Marissa worried that her family would not be able to comply with the condition regarding education.

Only the youngest of her four children is under the age of 14. Marissa says the monthly P300 from the CCT that is supposed to help that child keep on attending class may not be enough. It translates to a subsidy of P15 a day for the child, who may have a maximum number of only three absences a month to keep on being a CCT beneficiary.

By Marissa’s computation, each child needs at least P20 a day for baon, exclusive of any transportation expense. And even that amount is hardly enough for a nutritious meal. Of course there’s still the P500 that each CCT family gets per month as a health subsidy, but Marissa says her household’s daily food expenses run to P300.

They’re already on a strict budget, since neither she nor her husband is employed at the moment. They’re surviving because after her husband lost his job overseas, Marissa pawned the rights to their house. Part of the proceeds was allocated for her husband’s job-hunting expenses; the rest has been paying the family’s daily expenses. Once that runs out, all that would be left for them to rely on would be the CCT money.

“For poor people like us, it’s really difficult,” says Marissa. “For instance, if a child doesn’t have pocket money, he’ll really miss class.”

“They’re saying, ‘Why will the child miss school when you’re already receiving cash?’” she adds. “But is the amount really sufficient?”

Big transpo cost

In rural communities especially, poor families often reside in the remotest barangays. Isabelita Escobilla, who hails from a mountain barangay in the Bondoc Peninsula, says that one-way motorcycle fare from their place to the town proper, where the public school is located, costs between P30 to P50.

Health centers are usually in the town proper as well, and these are supposed to be visited by CCT beneficiaries at least once a month. That means they will have to earmark part of their P500 monthly health subsidy for transportation.

Myrna, yet another CCT beneficiary from Marissa’s community, also says that P500 cannot cover the medical expenses of her youngest son, who has chronic asthma and now has primary complex.

On the upside, she says that she can use it to buy the vitamins that her son needs. But what she is really thankful for is the membership in Philhealth’s indigent program that came with her family’s being selected for the CCT. Because of Philhealth, Myrna says that she no longer has to resort to raiding her family’s meager funds whenever her son needs medical care.

Still, all nine CCT beneficiaries and non-beneficiaries that the PCIJ interviewed say the government could help them more effectively if it would provide them with a means of livelihood or a job.

Such a program would also be more sustainable in the long run, they say. Too, people would use their money more judiciously. “Kasi pinaghirapan, eh (Because we had to work hard for it),” says Michelle, an 18-year-old mother of two who was not selected for the CCT.

According to DSWD Secretary Soliman, her agency is linking the CCT with programs that provide micro-credit and guaranteed employment to beneficiaries. Socioeconomic Planning Secretary Cayetano W. Paderanga Jr. himself says that “to be able to reduce poverty, you must generate employment.” – CHE DE LOS REYES, PCIJ