ADB approves $400-million loan for cash transfer program

MANILA, Philippines – The Asian Development Bank (ADB) approved yesterday a $400-million loan for the Philippines to support the expansion of its conditional cash transfer program known as the Pantawid Pamilyang Pilipino Program or 4Ps.

Social Welfare Secretary Corazon Soliman said the new loan will benefit some 582,000 poor Filipino families.

“We are thankful for the ADB’s approval of a $400-million loan for the expansion of the Pantawid Pamilyang Pilipino Program. This is very timely as the DSWD will increase the number of families receiving monthly cash grants to 2.3 million by the end of 2011,” Soliman told a press briefing at the ADB office in Ortigas, Pasig City.

The DSWD said this was the first ADB loan to the Philippines for the 4Ps under the Aquino administration.

The 4Ps is a five-year poverty reduction program of the government implemented through the DSWD which provides conditional cash grants to extremely poor households to improve their health, nutrition and education particularly of children aged 0-14.

It gives a P500 per month grant for health and nutrition and P300 per month per child for educational expenses. A household with three qualified children can avail themselves up to P1, 400 per month or P15, 000 a year.

Soliman said the program has benefited nearly 900, 000 poor households nationwide since it was launched in 2008. She said the beneficiaries will likely reach one million before the year ends.

According to the ADB, financial barriers are a major reason why children and pregnant women from poor families do not regularly seek out preventive healthcare. Similarly, costs associated with education, as well as poor households’ need for additional income – are leading factors keeping children out of school.

“Conditional cash transfer programs have proven to be an effective way of keeping children healthier and in school,” said Camilla Holmemo, ADB poverty reduction specialist.

“These programs help families break free from the cycle of poverty,” she said.

Poor mothers and pregnant women are eligible for cash grants if their young children receive regular health checkups and immunizations; and if pregnant women receive prenatal and postnatal care.

Families can also receive an additional grant if their children are enrolled in primary or secondary school and maintain a class attendance rate of at least 85 percent every month.

Neeraj Jain, ADB country director, said the loan will have a 25-year term, including a grace period of five years. The loan has an annual interest rate of 0.15 percent.

Meanwhile, Soliman said the Philippines is unlikely to achieve one of the Millennium Development Goals (MDGs) which is reducing poverty incidence to 12.5 percent by 2015.

Soliman said poverty incidence rate in the country is currently at 40 percent based on the latest survey by the Social Weather Stations.

Jain said the conditional cash transfer program of the government “is a necessary program but is not sufficient program to reduce poverty.”

“This must be complemented with livelihood programs such as community-driven development programs,” he said. –-Helen M. Flores (The Philippine Star) with Ted Torres