Conditional Cash Transfer: Challenges, Prospects

Tuesday, 16 November 2010 03:53

Written by Tony La Viña

Poverty alleviation and eradication is one of the Philippine government’s priority responsibilities. A government that cannot even help ensure social equity is a government that cannot enjoy the full confidence of the people, with dire consequences for both political and economic stability. The Pantawid Pamilyang Pilipino Program (4Ps) of the Department of Social Welfare and Development (DSWD) is one of government’s tools in addressing the challenges of lifting people from privation, and sustaining the pace and depth of economic development.

4Ps is a conditional cash transfer (CCT) program inspired by similar initiatives in Latin America. CCTs provide periodic, frequent cash allowances to beneficiary families in exchange for the family’s commitment to keep their children in school (in 4Ps’ case, through elementary school), and avail of community health services. It is partly welfare—the cash allowances are intended to help poor families in the program make daily ends meet, so that they could economically support a child through school—and also partly an incentive for the beneficiary families to form valuable habits and expectations of themselves, such as the importance to stay healthy and keep one’s household healthy, too.

CCTs are based on the broader view of economic development that includes the need to develop human capital as well as physical capital. At the same time, the experiences of the 4Ps program show that CCTs may also help develop a third category of capital equally essential to economic development: social capital. Seeing socio-economic development through this physical/human/social capital lens is not a new idea, having gained attention in the 1990’s, it is an idea that bears reminding or refreshing, both in the public arena and public policy.

Capital, in economic terms, is that which enables people to do economically useful, productive work, transforming human labor into output or products for consumption. The most readily-cited examples include the machines of factories, tools of craftsmen, and the infrastructure of states like roads and electrical utilities; these are known as physical capital. Many of the development projects touted by the Arroyo administration—road works, ports and airports development, and promotion for outsourcing companies to build their centers in the Philippines—revolve around physical capital.

Human capital, in turn, includes the education, health, and welfare of the population – and these are the target goals of the 4Ps program. Building schools is not enough; government must also ensure that every child can use these schools. Ensuring that poor families can commit their children through primary education not only improves the country’s basic literacy rate, but also helps those same children qualify, once they graduate from elementary (and their families from 4Ps), for high school. One of the reasons usually given by an indigent household why they cannot put one of their children through school is because they couldn’t support that child’s school needs, prioritizing older children before younger, or because they needed the child to help support the family. The cash allowances provided by 4Ps help address this need, as well as provide continuing incentive to ensure that all their children graduate from primary education.

Finally, social capital is based on the idea that the welfare of our social networks—family, community, and larger networks eventually encompassing the country—also helps economic productivity. It is not like physical capital, which is “ready-to-use” in the economy, or human capital, where there is a direct connection between health and education, and income and productivity. Yet both research and human experience have shown that a healthy family or community, rich in love, trust, and support, can contribute to things such as successful education and a healthy lifestyle (both 4Ps targets), and can discourage risky behavior like dropping out of school, bad health habits like smoking and drinking to excess, and economic idleness (thus being unable to support one’s family). In addition to cash allowances, 4Ps also provides periodic seminars, attendance also being mandatory, for households on topics ranging from women’s issues to childcare, which can be helpful in promoting stable and happy family lives.

The 4Ps’ experiences with its beneficiary families have also shown that it can develop the largest social capital of them all: the relationship between people and their government. In a report presented by the DSWD and the World Bank, beneficiaries have testified that the program has encouraged them to interact with schools, health centers, and their local governments more. One head of household had even mentioned the desire to learn how to write, so that he would have the privilege of signing his name on the recipient’s list, instead of leaving his thumbprint behind. This experience may show 4Ps potential to restore the bond between the government and the governed at the ground level, bonds of trust and accountability, to bridge this gap that is often prevalent in Philippine politics. It should be no surprise that social capital advocates encourage the development of “bridging” social capital, which extends the circle of trust outside of families to larger communities, alongside “bonding” social capital (though perhaps they may not have had the bonds between government and people in mind when defining social capital).

There is of course a danger that corruption can distort this anti-poverty initiative. While personally convinced that the current leadership in the DSWD will make sure this does not happen, it will not do harm if Congress and citizen organizations are continually vigilant. It is heartening to observe that DSWD Secretary Soliman has been very open to and has taken seriously the concerns of Senators and Representatives. Implementing the 4Ps also provide a unique opportunity to advance social accountability mechanisms and tools that would allow citizens to engage with DSWD. Such mechanisms and tools range from monitoring initiatives to assessing performance through well-crafted score cards. The ultimate objective of both Congressional intervention and citizen engagement should be improving implementation of the initiative.

One final point: The CCT program should not be the sole and ultimate anti-poverty program of the Aquino administration. It should be considered a bridge for a more sustainable and decisive strategy to combat and reduce poverty. I agree with Akbayan representative Walden Bello, who wrote in the Philippine Daily Inquirer, that any tool to contain the further spread of poverty should be utilized, that CCTs can help the country reach its Millennium Development Goals, and that they buy time for structural reforms to kick in. According to Bello, the necessary reforms are "reversing trade liberalization, a moratorium on foreign debt payments, and effective agrarian reform", fundamental policy changes that will require some time before they can be achieved.

The CCT program of the government, if successfully implemented, could offer proof of a concept: Once we—government and people—can lay down the foundations of physical, human, and social capital, we may perhaps unleash the full human development potential of the Filipino people. There will be challenges but the prospects more than justify them.

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