PHL mulls future of Conditional Cash Transfer Program as poverty lingers

By Rea Cu, Businessmirror, NOVEMBER 21, 2016

ACCORDING to data from the Department of Budget and Management (DBM), the government has allotted P1.34 trillion for programs under the social-services sector, which covers housing, livelihood and community-driven projects, and the Conditional Cash Transfer (CCT) Program.

The allocated budget for the sector in 2017 increased by 20.1 percent compared to its 2016 counterpart, and this shows a share of 40.1 percent of the total budget for 2017.

Under the 2016 budget of P3 trillion, social-services allocation reached P1.12 trillion. And under the 2015 budget of P2.41 trillion, an allotment of P886 billion was provided to the sector.

Broken down, the budget for social protection in 2017—including government expenditures for programs that cater to the marginalized, senior citizens, persons with disabilities (PWDs), those who have survived from disasters and those residing in conflict-affected areas—is P418.65 billion.

The 2017 budget for these sectors sees an increase of 12.5 percent, from the 2016 allotment of P370.40 billion.

The CCT Program by the national government was given a budget of P78.69 billion under the proposed budget of P3.35 trillion. The budget for the CCT also sees an increase compared to the 2016 budget for the program of P62.67 billion.

Social-protection budget

THE World Bank has said the CCT, called the Pantawid Pamilyang Pilipino Program (4Ps), falls under one of the best targeted social safety-net programs in the world.

The government agency responsible for the implementation and monitoring of the 4Ps is the Department of Social Welfare and Development (DSWD).

The allocated budget for the DSWD under the 2017 General Appropriations Act (GAA) totals P129.9 billion, increasing by 17.1 percent compared to the department’s 2016 budget of P110.1 billion.

The higher allotment given under social protection was explained to be in line with the goals of President Duterte’s 10-point socioeconomic agenda. Included in the Duterte administrations priorities are that the government ensures that the poorest and the marginalized sectors of Philippine society are protected from economic shocks and environmental disasters. The government aims to improve social-protection programs, which include the CCT Program, to protect the marginalized sector from instability.

Expenditure priority

AN expenditure priority of the government for 2017 is empowering human welfare and providing livelihood for the poor. An allotment of P295.2 billion has been allocated for social security, welfare and employment. This is 22 percent higher than the government’s 2016 allocation of P241.7 billion.

Of the total, 44 percent will go to the DSWD to further improve the well-being of poor families. For 2017, according to the DBM, the DSWD targets to aid 33,238 families under the 4Ps converting them from survival to subsistence, while 803,789 families turning their state from subsistence to self-sufficiency.

The bulk of the DSWD budget will be for the continued implementation of the CCT Program. The budget for CCT increased from P62.7 billion in 2016 to P78.7 billion in 2017, this was explained to be due to the department’s compliance with the government’s new directive to provide rice allowance for eligible CCT beneficiaries.

Rice and jobs

ACCORDING to DBM data, there are 4,402,253 households under the regular CCT Program. Of these households, 3 million eligible CCT beneficiaries will be given 20 kilos of rice every month for 12 months starting January next year. The rice allowance totals P23.4 billion.

The beneficiaries will receive the subsidy as long as the conditions are met and must have compliance with the conditionalities for about five years.

According to John D. Forbes, senior adviser for the American Chamber of Commerce in the Philippines (AmCham), the government should focus on improving the 4Ps, as it encourages a larger chunk of the population to get proper education, which will prepare them in time when they look for jobs.

“The Aquino administration added families with teenage children to CTT coverage to encourage them to remain in high school and complete their secondary level education,” Forbes explained. “However, the unemployment rate of high-school graduates is extremely high, and the Duterte administration may wish to ramp up programs and policies for first jobs for new graduates.”

Forbes said that, since the goal of the Duterte administration is to alleviate poverty in the country and generate more jobs for the Filipinos, the government should also include in its priorities to better the Philippine educational systems, which, in turn, may help more citizens land a job and lessen the country’s unemployment rate.

Requirements

ACCORDING to Asian Development Bank (ADB) Senior Social Sector Specialist Joel V. Mangahas, a CCT Program is social assistance done by the Philippine government, wherein it provides cash grants to poor families to enable them to invest in their children’s future.

Under the 4Ps, which was implemented in the year 2008, mothers who belong to the marginal sector with children from zero to 18 years of age are given cash benefits when they comply with the requirements of the government.

The requirements include that the child be enrolled in school and should have at least 85 percent in attendance in their classes. The mother should also undergo regular health- center visits and must attend monthly family-development sessions.

Last year the 4Ps was given an annual budget of $1.2 billion, which made up 0.5 percent of the country’s GDP. About 10 percent of the budget was allocated for administration costs of the 4Ps. Households who benefited from the cash grants reached 4.4 million, which includes more than 10 million children.

Broken down, household utilization of the cash grants include 49 percent of their budget allocation for food. About 25 percent was spent for education and 7 percent for health. The budget for clothing made up 11 percent, while no allocation was given for vices and recreation.

Impact assessment

DOCUMENTED CCT impact on the poverty rate and welfare of the Philippine pointed out that beneficiaries of the cash grants spend more on health and education.

There was significant reduction in stunting among children and that more pregnant women from the marginal sector get more prenatal care and postnatal care and deliver in health facilities, according to the ADB data Mangahas presented during the Second International Tax Forum in October.

It was also seen that child labor in the country was reduced, ADB data revealed. Other findings revealed that the matriarch and patriarch in the household continue to look for work and families become more optimistic about the future. In addition, at least 1.5 million 4Ps families are now above the poverty line under the National Household Targeting System for Poverty Reduction of the DSWD.

The ADB further pointed out that the 4Ps has a positive effect on the country’s poverty gap. It complements the long-term solution to poverty, as well as reduces the national poverty incidence and food poverty incidence in the country. To be concluded