ADB cites PH cash-for-poor program
The Philippines has set an example for countries on how to effectively carry out a conditional cash transfer program that will curb extreme poverty and help out millions of people without spending too much, according to the Asian Development Bank (ADB).
In its evaluation study “Social Protection Strategy,” ADB found convincing evidence that social protection programs, especially well-designed safety nets that transferred resources to the poor, could effectively reduce the depth and severity of poverty and inequality.
“In the Philippines, for example, the government’s conditional cash transfer (CCT) program to uproot extreme poverty costs less than 0.5 percent of the country’s gross domestic product, yet reaches 15 million people,” the ADB said in a statement regarding the study.
Mothers get regular cash payments under the CCT program when they meet conditions, such as regular medical checkups and class attendance for their children at public clinics and schools, respectively.
“After just three years of implementation, evaluation findings show positive results on elementary education school enrollment and beneficiary households spending more on the health and education of their children,” the ADB said.
Social protection systems in most Asian countries fall far short of meeting the needs of the vulnerable even though better safety nets can be affordable for poorer countries, the ADB reported.
Despite high economic growth in much of the region, public spending on social protection in Asia and the Pacific is lower than in any part of the world, except for sub-Saharan Africa, the multilateral agency said.
While safety nets such as the CCT could reduce poverty, it was noted that some countries still preferred to retain food and fuel subsidies for their social programs. But the ADB pointed out that such subsidies would generally cost more.
They are vulnerable to misuse and leakage, may benefit the better-off relative to the poor, and are “politically difficult to unwind,” it added.
The ADB found that, based on its experience in helping countries build comprehensive social protection systems, most governments are reluctant to borrow for social protection except in times of crisis. Lending surged during the global economic crisis of 2008–2010, before declining sharply.