Targeting poverty assistance right

WHY IS it that decades of determined work and billions of pesos spent by the government to reduce poverty appear to have made no dent on our overall poverty situation through the years? The latest official poverty data for the country show poverty to have been significantly worse in 2009 compared to 2003. From 24.9 percent in 2003, the percentage of poor Filipinos rose to 26.5 percent in 2009. As a percentage of families, it went up from 20.0 to 20.9.

These figures are based on a narrow definition of poverty as mere lack of income: in 2009, a family of five making less than P7,017 a month was considered poor.

But we know that poverty represents deprivation in more than just income. It has social, environmental, cultural, political and spiritual dimensions as well. For example, education indicators have also turned for the worse: Net elementary school participation rate dropped from 97 percent in 2001 to 85 percent in 2008, while net high school participation rate went down from 66 percent to 62 percent. Health indicators are also alarming; for example, incidence of malnutrition has gone up in a majority of our provinces since 2002. I could go on with more data, all pointing to worsened human welfare in recent years. In sum, not only have we made little progress in fighting poverty in the past decades, we actually got worse in most of the last. Why was this so?

It is certainly not for lack of government initiatives. Each administration had its own impressive array of poverty-fighting programs. Cory Aquino had the Community Employment Development Program (CEDP), LAKASS (Lalakas ang Katawang Sapat sa Sustansiya), Self-Employment Assistance (SEA-Kaunlaran) program, and Tulong sa Tao among her key initiatives. Fidel V. Ramos had his Social Reform Agenda (SRA) centered on the Comprehensive Integrated Delivery of Social Services (CIDSS), with flagship programs addressing minimum basic needs focused on the country’s 20 poorest provinces. Joseph Estrada pushed his Lingap Para sa Mahihirap which provided integrated services and converged government programs to the 100 poorest families in each locality. Gloria Macapagal-Arroyo had the Pantawid Pamilyang Pilipino Program (4Ps), Kapit-bisig Laban sa Kahirapan (Kalahi), and a number of other programs, including the continuation of previous initiatives.

Well-meaning as they may have been, most of the past poverty-reduction efforts stumbled on the matter of effective targeting of assistance to reach those who needed it most. Studies showed that most of the assistance (up to 66 percent) had gone to those who did not really need it, while the bulk of those in real need (up to 80 percent) failed to receive help. While analyses deemed Cory Aquino’s nutrition assistance efforts to have been well targeted, effective targeting of her employment and livelihood assistance programs was compromised by intervention from local politicians.

The Ramos targeting scheme was an interesting case. With a professed bias for the 20 poorest Philippine provinces (defined as those with the highest percentages of poor population), governors scrambled to gain the dubious distinction of being part of the list. Not a few governors actually lobbied with Ramos (some through me, as head of the National Economic and Development Authority then) to be included in the list, arguing why their province was actually poorer than what the numbers suggested. Never mind that this could actually be a negative reflection on their leadership; it was the perceived budgetary windfall they were after. But outside observers, including the World Bank, pointed out the problem with the targeting approach: the 20 provinces with highest percentages of poor were mostly small island provinces, accounting for only 11 percent of all poor Filipinos. Thus, even if the percentages could be dramatically reduced in the target provinces, hardly a dent would be made on overall poverty nationwide, as 89 percent of the country’s poor were found elsewhere.

Estrada tried to improve on this by instead targeting assistance on the 100 poorest families per locality (province and city). In doing so, benefits could be more broadly spread nationwide, thus avoiding the above issue with the Ramos targeting scheme. But Estrada’s program also ended up being subject to the discretion of local political leaders, who were entrusted with identifying the 100 most needy within their constituencies—with predictable results. The same political bias marked the Arroyo programs, wherein assistance was almost indiscriminately provided in vote-rich highly urbanized areas, especially Metro Manila, but failed to reach remote areas that needed it most.

So how can we target poverty assistance better? On geographical targeting, the Ramos-era experience suggests that places where the poor have the highest absolute numbers (I’d call it “poverty prevalence”), rather than percentages (“poverty incidence”), would be the logical candidates for focused assistance. This will not be all that straightforward, though. A ranking of localities according to highest headcount of poor would yield a list led by relatively high-income cities like Davao City (No. 1), Quezon City (7th) and Cagayan de Oro (8th). Thus, a proper combination of both headcount and percentage criteria needs to be employed.

As for household targeting, the government’s new National Household Targeting System (NHTS), along with the increasingly popular Community-Based Poverty Monitoring System (CBMS), holds much promise.

With at least P21 billion allotted to assistance for the poor in 2011, let’s do the targeting right this time.

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