Painting rice cakes
“You can’t dull hunger by painting rice cakes,” says an Asian proverb. That fits the new UP School of Economics paper by Melba V. Tutor titled “The Impact of Philippines’ Conditional Cash Transfer Program on Consumption.”
CCT is the Pantawid Pamilyang Pilipino Program or 4Ps. It provides the poorest with cash grants, with strings attached: Parents get kids to school and have them immunized and dewormed; impoverished pregnant mothers receive prenatal and postnatal checkups and health personnel attend at deliveries.
Mexico crafted the first CCT in 1997. Africa followed a decade later. They grew to more than 30 after a decade. Red de Protección Social in Nicaragua incorporates evaluation components. “Overall, CCTs are achieving short-term goals.”
Then President Gloria Macapagal Arroyo launched CCT in 2007. It started with 6,000 families from 20 of the most hard-up provinces. It focused on families with pregnant mothers and kids up to 14. Beneficiaries were to get a P1,400 cash grant a month for five years.
But graft crippled the Arroyo watch. Thus, the 4Ps never budged beyond a P4-billion token. President Aquino, however, ramped up the 4Ps budget to P39 billion, then to P44 billion. Next year, the 4Ps could buffer 28 million beneficiaries. They would be a quarter of the population then.
By 2016, the number of beneficiary-families could surge to 4.87 million. “No social protection program in our history ever reached this scale,” notes Lila Ramos Shahani of the Cabinet Cluster on Poverty Reduction.
A 2013 World Bank impact evaluation found that the program jacked up enrollments—e.g., 10 percent among children 3 to 5. This lead vanished among the 12-year-olds and above.
The 4Ps resulted “in significant increase in per capita spending—38 percent for education and medicine.” “Parents were allocated another 38 percent more on high-protein foods, such as eggs and fish,” notes the UP study.
A good signal is that the households are keen on continuing to stay signed in. “They understand the program logic and have positive expectations of its impact on their welfare in the future.”
Households grapple with tough choices among goods required by the program, like schooling, and “those that are not.” After deducting 4Ps requirements, households focused the remaining income on food. Specifically, they prioritized carbohydrates.
“This choice supports the view that women’s control over resources leads to spending on goods that improve total household welfare.” But over time, can cash grants tide over households from hunger and enable them to sustain investments in human capital?
The Asian Development Bank has committed $400 million to boost the CCT here. “By and large, Pantawid Pamilya has become the cornerstone of the government’s poverty reduction policy,” notes Tutor. “In less than seven years of implementation, the number of [4Ps] households increased from 6,000 to 3.93 million.”
She calls attention to the geographical spread. In 2008, the CCT covered 27 provinces. This surged to 50 provinces in 2009 and continued its upward momentum. As a consequence, the Department of Social Welfare and Development grew tenfold in resources and personnel.
The data reveal that families are determined to stay in the program because they have positive experience in their daily life. The daily per capita bill on food, for example, significantly increased from P28 to P49.
That’s peanuts, of course, for graft-charge-impaled Senators Juan Ponce Enrile, Jinggoy Estrada, Bong Revilla, and now, Lito Lapid. But this means more protein, fruit and vegetables on the tables of deprived families.
“There is still no observed impact on spending for medicine.” Those in the bottom fifth of the poor have, as may be expected, no savings. Minus five, in fact. With the CCT, they’ve reduced their shortfall by 1.6 percent. This is small, but it signals that “households were reducing their debts. If sustained over time, households may eventually have some room for gainful employment to improve productivity.”
The economy will grow at 6.4 percent this year, then 6.7 percent in 2015, forecasts the World Bank’s Philippine Economic Update released Thursday. “That’s one of the fastest in East Asia, second only to China,” notes World Bank country director Motoo Konishi.
Growth is now translating into food on tables and jobs. “Poverty incidence declined by 3 percent from 2012 to 2013. That lifted 2.5 million Filipinos out of poverty,” observes Rogier van den Brink, World Bank lead economist for the Philippines. “And in April this year, the economy created 1.7 million jobs.”
“That growth can be sustained by accelerating structural reforms and jacking up further investments in infrastructure, health and education,” adds Karl Kendrick Chua, World Bank senior country economist. That’d add on government’s already doubled spending on social services and infrastructure.
“Government raised tax revenues equivalent to 1.2 percent of GDP in the last three years through the sin tax reform, improved tax administration, and higher growth,” Chua notes. The extra bucks for the long pull could come from making the tax system more efficient, and equitable.
President Aquino has made it clear that he’ll step down in 2016. Even the most rabid critics concede that the President, like his mother Corazon, has not been tarred by the corruption brush.
Those who thought themselves irreplaceable are all in the cemetery, French President Charles de Gaulle once said. So it will be urgent to institutionalize the CCT so as not to orphan beneficiaries after Mr. Aquino steps down. That needs more than painting rice cakes.
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