CONDITIONAL CASH The Philippine Experience TRANSFERS

Paulo Jose M. Mutuc 07222011

KEY POINTS
Philippines conditional cash transfer program (4Ps) is an intriguing large-scale policy experiment Much bigger set of resources and responsibilities for a relatively small, lesser known executive government office Very technical, yet very political as well
Consistently mentioned and highlighted by the President in reference to the anti-poverty and anti-corruption platform of governance he campaigned on during the previous election (May 2010)

Involves challenging policy implementation issues at the grassroots level

CONTEXT AND RATIONALE

What are conditional cash transfers? Periodic cash payments to women/household heads of poor families subject to monitored compliance with health and education obligations
Preventive health care and school attendance

Goals: Immediate income support, long-term poverty reduction

Why conditional cash transfers? Income and incentive effects More efficient , less costly (direct and objective targeting) Stimulates supply-side improvements Favorable, cross-country empirical evidence
Considerable poverty gap reductions (e.g. Brazil) Double-digit increases in school enrollment and health service use Improved learning and health outcomes

CONTEXT AND RATIONALE

Fragmented approach to social protection in the Philippines
Cost-effectiveness of existing programs questionable due to arbitrary, 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 assistance

Real 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 Goal targets by 2015:

Halve the proportion of Filipinos living below the national poverty and food subsistence thresholds

PANTAWID PAMILYANG PILIPINO PROGRAM (4Ps) 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 provinces
Enabling administrative orders/circulars: DSWD AO 16 (2008), Joint Memo 2

Monthly Amount Php500 Php300/child

Purpose Health and Nutrition Education

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

PANTAWID PAMILYANG PILIPINO PROGRAM (4Ps) Purpose Budgeted Share in

Actual cash grants Training Salaries Administrative expenses Advocacy materials & manuals Capital outlay Bank fees
amounts Php17.1B Php1.6B Php0.7B Php0.6B Php0.6B Php0.2B Php0.1B total 81% 8% 3% 3% 3% 1% 1%

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

CONDITIONS*
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 (0-5 yrs.) School attendance requirements*:
Daycare or preschool for children aged 3-5 Elementary 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

ORGANIZATION
Lead Agency Supporting Offices DSWD Departments of Health, Education, Interior and Local Government, and Land Bank DSWD-National Project Management Office Regional Project Management Offices City/Municipal Links for every 1,000 households

National Implementing Arm Regional Implementing Arm City/Municipality Implementing Arm

Funding and Technical Support

Local health and education service providers (under DOH, DepEd) World Bank, AusAID, ADB, UNICEF, UNFPA

ORGANIZATION
DSWD (Central) Oversight, supply assessment, target area identification, technical assistance, data repository, grievance system implementation, fund and resource management Specific operational guidelines, availability of health and education supplies at municipalities, resolution of all regional concerns, preparation of accomplishment reports and monthly meetings
Ensure health supplies, assist in logistics, permanent support staff for 4Ps at all levels, monitoring

Regional DSWD offices

Department of Health

ORGANIZATION
Department of Education Ensure education supplies, assist in logistics, permanent support staff for 4Ps at all levels, monitoring Incorporation of pro-poor programs and capacity building for local governments, impact evaluation in communities

Department of Interior and Local Government

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

ORGANIZATION*
DSWD Secretary Undersecretary/Project Director Asst. Sec./Deputy Project Director 17 Regional Directors, Asst. Directors Regional Teams Natl. Advisory Committee (DSWD, DepEd, DOH, DILG, NAPC, NAPC, Budget, Nutrition Council, NEDA) Program Manager, Project Management Office

Regional, Provincial, Municipal Advisory Committees

*1 Operations Cluster per 20,000 households *1 Municipal link per 1,000 households

As per EO 43 (2011), the DSWD Secretary is the chair of the Cabinet Cluster on Human Development and Poverty Reduction.

IMPLEMENTATION HISTORY
November 2006

March 2007

DSWD and World Bank begin work on 4Ps Pilot implementation 4,459 households in three regions 320,000 households in 27 provinces, 160 cities 665,542 households in 63 provinces, 446 cities 1 million households in 79 provinces, 729 cities 2 million households reached 2.3 million households

February 2008 December 2009 December 2010 June 2011 December 2011

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.

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

PROGRAM CYCLE

IMPLEMENTATION
1. Targeting and enumeration Development of National Household Targeting System
Poorest provinces identified (Family Income and Expenditure survey) Poorest cities and municipalities identified within poorest provinces Outside poorest cities, poor communities identified via data from Presidential Commission on Urban Poor and local social indicators In poorest cities, communities are selected based on local govt data DSWD 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

IMPLEMENTATION
2. Verification and disbursement
Eligible households sign agreement and are organized into community 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 DSWD Project 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

IMPLEMENTATION
Compliance Verification System
NPMO (compliance forms) RPMO (compliance forms) City schools & 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 tested Complaint reporting mechanisms (text hotline, e-mail, social networking)

4. Program monitoring
Aside 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

IMPACT
Compliance with conditions Condition Day care attendance Primary and secondary school attendance Check-ups for children and pregnant women Deworming for school-age children Family development sessions
As of Q1 2011 (April 18, 2011)

Compliance 95.71% 97.50% 96.99%

97.29%
97.30%

IMPACT
Income effects Potential reduction in beneficiaries income gap: 5.3 points Potential reduction in beneficiaries poverty severity: 4.3 points Fernandez & Olfindo (2011) Average increase in per capita income among Simulated health and education outcomes beneficiaries: 12% Potential long-run increase in school attendance among poor households: 8 points Potential long-run decrease in poverty incidence: 13 Son, H.H. (2008). Simulation of impact of conditional cash transfers on school points attendance and poverty: the case of the Philippines. Presentation made at the 46th
annual meeting of the Philippine Economic Society.

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 public opinion and social research institute.) *Northern Samar was identified in a 2008 national development mapping survey as one of the countrys three poorest provinces.

Too much, too soon?

Inadequate support infrastructure The decision to expand and accelerate the program wasmade 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

WEAKNESSES
As of October 2010, only around 59 percent of Set 1 and 71 percent of Set 2 active beneficiary households receive payments through LBP cash cards. Even for municipalities with LBP branches, issuance and distribution of cash cards to beneficiary households have been particularly Fernandez, L. challenging & Olfindo, R. (2011)
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

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