Electronic payments for CCT urged, World Bank

The World Bank has urged governments to use electronic methods to improve the cost-effectiveness of state payment schemes such as the country’s conditional cash transfer (CCT) program.

In its General Guidelines for the Development of Government Payment Programs, the World Bank established standards for governments and other stakeholders in developing countries for operating safe and efficient payment programs.

The guidelines state that the extensive use of electronic payments in government payment programs can reduce costs and improve transparency and traceability.

The World Bank also mentioned cases of government payment programs that adopted electronic mechanisms. Among them is the CCT program of the Department of Social Welfare and Development (DSWD), also known as the Pantawid Pamilyang Pilipino Program.

According to the report, CCT grants are distributed using electronic mechanisms such as a cash card issued by state-owned Land Bank of the Philippines.

In instances where payment through a cash card is not possible, the beneficiaries are able to withdraw their cash grants via over-the-counter transactions from the nearest Land Bank branch, the report said.

Also, in December 2010, the DSWD and Land Bank partnered with Globe Telecom to conduct the pilot implementation of G-Cash Remit in distributing cash grants to beneficiaries, it added.

President Aquino, in his State of the Nation Address last July 23, said that the CCT program for the poorest poor has covered 3.1 million households as of February from 760,357 when he took office in June 2010. For 2013, the program will be expanded to cover 3.8 million households.

A similar cash transfer program in Brazil called Bolsa Familia used electronic benefit cards, World Bank said.

“By switching to electronic benefit cards issued by this state-owned financial institution, the program helped lower administrative costs from 14.7 percent to 2.6 percent of the value of the grants disbursed,” the World Bank noted.