WB execs back cash assistance to poor
By Doris Dumlao
Philippine Daily Inquirer
First Posted 03:20:00 12/05/2008
Filed Under: Poverty, Government, International Economic Institutions
A well-targeted conditional cash transfer (CCT) program can help the Philippines in its long-running battle against poverty, experts in social safety nets said Thursday.
In a forum held at the Asian Institute of Management, World Bank country director for the Philippines Bert Hofman said the country’s economic growth did not help reduce poverty levels over the last 30 years. He said greater intervention was needed to meet the Millennium Development Goals, particularly the goal to halve the poverty level by 2015.
He said the CCT framework had become very popular across the globe owing to its direct positive impact in terms of providing relief to poor families, especially those who were heavily burdened by financial shocks.
CCT programs vary across countries but usually contain the following features:
• Direct transfer of cash to the poorest of the poor.
• Requirement for poor households to comply with certain conditions or “co-responsibilities,” such as school enrollment and attendance for children, as well as regular checkups at health centers.
• Poor households are chosen through a rigorous poverty targeting mechanism.
“At the minimum, safety net programs help households facing hard times avoid irreversible losses, allowing them to maintain household assets from which they earn their living and to adequately nourish and school their children,” said Margaret Grosh, lead economist for the World Bank’s social protection unit.
In the Philippines, the CCT program initiative started in 2006 with the support of the World Bank.
Through the Department of Social Welfare and Development, the government has a CCT program called “Pantawid Pamilyang Pilipino” (PPP) program that provides cash grants to households including P500 a month for health and nutrition expenses and P300 a month per child for educational expenses.
Beneficiaries are selected through a computerized system that ranks poor households.
“CCT is a development program that invests in people, it is not a dole,” said Social Welfare Secretary Esperanza Cabral.
She said the PPP program, for instance, would enhance the role of parents and would help them accomplish their duties and responsibilities to their children.
“The program encourages them to invest in the future, in particular in the health and education of their children and in the nutrition and food for their families,” Cabral said.
Ariel Fiszbein, chief economist for human development network at the World Bank, said that in Nicaragua, Colombia and Mexico, CCTs had reduced the number of people below poverty line by 5.3 percentage points, 2.9 percentage points and 1.3 percentage points, respectively.
“CCTs have generally led to substantial increases in the utilization of education and health services among the poor,” said Fiszbein. He noted that:
• In Mexico, the CCT had reduced the dropout rate between 6th and 7th grade by nine percentage points.
I• n Pakistan, the Punjab Education CCT increased the school enrollment of 10- to 14-year-old girls by 11 percentage points.
• In Cambodia, two pilot programs reduced dropout rates between 6th and 7th grade by 20-30 percentage points.
• Utilization of preventive healthcare services in countries like Colombia, Honduras, Mexico and Nicaragua rose by eight to 33 percentage points.
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