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CONDITIONAL CASH

TRANSFERSThe Philippine ExperiencePaulo Jose M. Mutuc 07222011


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KEY POINTSPhilippines conditional cash transfer program (4Ps) is an

intriguing large-scale policy experimentMuch bigger set of resources and responsibilities for arelatively small, lesser known executive government office

Very technical, yet very political as wellConsistently mentioned and highlighted by the President inreference to the anti-poverty and anti-corruption platform ofgovernance he campaigned on during the previous election (May2010)

Involves challenging policy implementation issues at thegrassroots level


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CONTEXT AND RATIONALEWhat are conditional cash transfers?

Periodic cash payments to women/household heads ofpoor families subject to monitored compliance with healthand education obligationsPreventive health care and school attendance

Goals: Immediate income support, long-term povertyreduction

Why conditional cash transfers?

Income and incentive effectsMore efficient , less costly (direct and objective targeting)Stimulates supply-side improvementsFavorable, cross-country empirical evidenceConsiderable poverty gap reductions (e.g. Brazil)

Double-digit increases in school enrollment and health service useImproved learning and health outcomes


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CONTEXT AND RATIONALE

Fragmented approach to social protection in the

PhilippinesCost-effectiveness of existing programs questionable due toarbitrary, varying modes of targeting

Share of poor in total Food for School transfers only 39.5%

Low, very variable amount of resources devoted to social

assistanceReal social assistance/poor person (1999-2006): Php81.75

(163.50)

Bala, A. R. (2010). The Philippine experience in social assistance., in S.W.Handayani & C. Burkley (Eds.)., Social Assistance and Conditional Cash

Transfers. Mandaluyong: ADB.

Achieving Philippine Millennium Development Goaltargets by 2015:Halve the proportion of Filipinos living below the national povertyand food subsistence thresholds


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A national poverty reduction program administered by the

Department of Social Welfare and Development (DSWD)

providing conditional cash grants to households that:

Live in the poorest municipalities as identified by the National

Statistical Coordination Board

At or below the provincial poverty threshold

Have children between 0-14 years old or have a pregnant woman

Agree to meet conditions

Target: 4.6 million beneficiary households by end-2016

Given Php21 billion (approx. 42 billion) in the 2011 budget

Represents 62 percent of DSWDs Php34 billion 2011

budget

Now being implemented in 98.7% of Philippine provincesEnabling administrative orders/circulars: DSWD AO 16 (2008), Joint Memo 2

PANTAWID PAMILYANG PILIPINO

PROGRAM (4Ps)


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Total maximum monthly grant: Php1,400 (approx.

2,800)

Total maximum yearly grant: Php15,000 (approx.

30,000)*

Grants are given up to a maximum of five years,

through cash cards from government bank branches*On average, about 20% of beneficiary-households annual income

Monthly Amount PurposePhp500 Health and Nutrition

Php300/child Education


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Purpose Budgeted

amounts

Share in

total

Actual cash grants Php17.1B 81%

Training Php1.6B 8%

Salaries Php0.7B 3%Administrative

expenses

Php0.6B 3%

Advocacy materials

& manuals

Php0.6B 3%

Capital outlay Php0.2B 1%

Bank fees Php0.1B 1%

PANTAWID PAMILYANG PILIPINO

PROGRAM (4Ps)

*Excludes Php0.1B (Php100M) for household targeting system


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Availing of pre- and post-natal care for pregnant women,

with childbirth overseen by trained health professional

Attendance in monthly family development sessions

Regular health check-ups and vaccines for children (0-5yrs.)

School attendance requirements*:

Daycare or preschool for children aged 3-5Elementary or high school for children aged 6-14

*Attendance in 85% of classes per month

Twice a year deworming for school age children*Additional conditions exist for some communities

CONDITIONS*


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ORGANIZATION

Lead Agency DSWD

Supporting Offices Departments of Health,Education, Interior and Local

Government, and Land Bank

National Implementing Arm DSWD-National Project

Management OfficeRegional Implementing Arm Regional Project Management

Offices

City/Municipality

Implementing Arm

City/Municipal Links for every

1,000 households

Local health and education

service providers (under DOH,

DepEd)

Funding and Technical

Support

World Bank, AusAID, ADB,

UNICEF, UNFPA


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ORGANIZATION

DSWD (Central) Oversight, supply assessment, target

area identification, technical

assistance, data repository, grievancesystem implementation, fund and

resource management

Regional DSWD offices Specific operational guidelines,

availability of health and educationsupplies at municipalities, resolution of

all regional concerns, preparation of

accomplishment reports and monthly

meetings

Department of Health Ensure health supplies, assist inlogistics, permanent support staff for

4Ps at all levels, monitoring


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ORGANIZATION

Department of Education Ensure education supplies, assist in

logistics, permanent support staff for

4Ps at all levels, monitoring

Department of Interior and Local

Government

Incorporation of pro-poor programs

and capacity building for local

governments, impact evaluation in

communities

National Anti-Poverty Commission Coordination and advisory functions,

provision of national poverty data,

regional oversight assistance

Local Governments Availability of health and education

supplies in target areas,

implementation and coordination of

municipal activities, reports to

regional govt, monthly meetings


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ORGANIZATION*DSWD Secretary Natl. Advisory

Committee

(DSWD, DepEd, DOH,DILG, NAPC, NAPC,

Budget, NutritionCouncil, NEDA)

Undersecretary/ProjectDirector

Asst. Sec./DeputyProject Director

Regional Teams

Program Manager,Project Management

Office17 Regional Directors,Asst. Directors

Regional, Provincial,Municipal Advisory

Committees

As per EO 43 (2011), the DSWD Secretary is the chair of the Cabinet

Cluster on Human Development and Poverty Reduction.

*1 Operations Cluster per 20,000 households

*1 Municipal link per 1,000 households


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IMPLEMENTATION HISTORY

November 2006 DSWD and World Bank begin

work on 4PsMarch 2007 Pilot implementation 4,459

households in three regions

February 2008 320,000 households in 27provinces, 160 cities

December 2009 665,542 households in 63

provinces, 446 cities

December 2010 1 million households in 79

provinces, 729 cities

June 2011 2 million households reached

December 2011 2.3 million households


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Fernandez, L. & Olfindo, R. (2011). Overview of the Philippines conditional cash transfer

program: the Pantawid Pamilyang Pilipino Program (Pantawid Pamilya). Philippine Social

Protection Note No. 2. World Bank and Australian Government Aid Program.


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Fernandez, L. & Olfindo, R. (2011)


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PROGRAM CYCLE


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IMPLEMENTATION

1. Targeting and enumeration

Development ofNational Household Targeting SystemPoorest provinces identified (Family Income and Expenditure

survey)

Poorest cities and municipalities identified within poorest provinces

Outside poorest cities, poor communities identified via datafrom Presidential Commission on Urban Poor and local

social indicators

In poorest cities, communities are selected based on local govt

dataDSWD deploys enumerators to gather socioeconomic information

via house-to-house interviews (questionnaire about household

assets)

Households incomes estimated using interview response data

Lists of potential eligible households posted in communities for


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IMPLEMENTATION

2. Verification and disbursement

Eligible households sign agreement and are organized intocommunity assemblies (with elected leaders) for monitoring

Actual cash disbursements made every two months, to coincide with

compliance checks by DSWD program management offices

Payroll process: NPMO

DSWD Cash Division check

DSWDProject Director and Manager approval Land Bank

3. Updating (Management Information System)

Individual households responsible for updating information

Updates flow from community upward to NPMO, for encoding

Updates presented at monthly community assemblies, verified by

links

Third non-compliance offense/change in household eligibility results

in termination of payments


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IMPLEMENTATION

Compliance Verification System

NPMO (compliance forms) RPMO (compliance forms) Cityschools & health centers RPMO (via municipal links) NPMO

updates MIS and issues compliance forms for next period

Grievance Redress System

Grievance application and process via MIS being testedComplaint reporting mechanisms (text hotline, e-mail, social

networking)

4. Program monitoringAside from internal monitoring by DSWD and World Bank, biannual

spot checks done by a third party (Social Weather Stations in 2010)

President has mandated Senate and House Oversight Committees

on Public Expenditures to monitor 4Ps implementation


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IMPACTCompliance with conditions

As of Q1 2011 (April 18, 2011)

Condition Compliance

Day care attendance 95.71%

Primary and secondary school

attendance

97.50%

Check-ups for children and

pregnant women

96.99%

Deworming for school-age

children

97.29%

Family development sessions 97.30%


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IMPACTIncome effects

Fernandez & Olfindo (2011)

Potential reduction in beneficiaries income gap: 5.3 points

Potential reduction in beneficiaries poverty severity: 4.3

points

Average increase in per capita income among

beneficiaries: 12%Potential long-run increase in school attendance among

poor households: 8 points

Potential long-run decrease in poverty incidence: 13

points

Simulated health and education outcomes

Son, H.H. (2008). Simulation of impact of conditional cash transfers on schoolattendance and poverty: the case of the Philippines. Presentation made at the 46thannual meeting of the Philippine Economic Society.


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Results of Northern Samar field spot check in 2010*:

In general, the CCT in Northern Samar is successful.

The CCTs mechanisms for monitoring are in place in

Northern Samar, though its unpaid extra work for the

teachers and health workers who must record the

compliance of the grantees with the conditionalities.

Mangahas, M. (2010, November 26). A conditional cash transfer spot check.

Philippine Daily Inquirer

(Mangahas is president of Social Weather Stations, a leading Philippine publicopinion and social research institute.)

*Northern Samar was identified in a 2008 national development mapping survey

as one of the countrys three poorest provinces.


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Inadequate support infrastructure

The decision to expand and accelerate the programwasmade without adequate due diligence in

assessing supply-side, implementation, and program

delivery requirements.

Of the 409 CCT towns and cities audited, an

overwhelming majority are not meeting seven of the

nine quantity benchmarks for education, and all three

benchmarks for health personnel ratios to population.

Philippine Center for Investigative Journalism

Too much, too soon?


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As of October 2010, only around 59 percent of Set 1 and

71 percent of Set 2 active beneficiary households receivepayments through LBP cash cards. Even for municipalities

with LBP branches, issuance and distribution of cash

cards to beneficiary households have been particularly

challenging

Proposed project cycle not exactly followed

4Ps scaled up even as assessment of health and

education in communities remain unfinished

Concerns about govt. capability and accountability

Doubling of DSWD staff and budget

Larger issue of state of local schools and health facilities

Sustainability of 4Ps financing

WEAKNESSES

Fernandez, L. & Olfindo, R. (2011)


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INSIGHTS

Promising initial results, but too early to tell whether 4Ps

truly make a difference

Administrative challenges and financing issues need to be

discussed more openly and tackled more directly

There may be a need to distinguish or prioritize between

social protection and social development aims

Policy ownership may be an issue given considerable input

by foreign aid organizations

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