Who's afraid of CCTs?

The hue and cry attending CCTs in the past few months, typically rather loud and often somewhat quaint (if not altogether unempirical), would have been perplexing in the extreme had it all not been so politically predictable. In last year’s budget hearing, of course, most of those protesting the government’s conditional cash transfer program (currently under the aegis of DSWD) were, noteworthily enough, either from Lakas or NPC. Which is not to say that all their conclusions were merely hasty or polemical: in fact, as of this writing, some are already carefully under consideration.

In broad strokes, the criticisms of the Pantawid Pamilya program tend to fall under several general categories — those that: express concern about national debt (PCIJ); question the accuracy of targeting (Briones, Cojuangco); refer to the tendency towards mendicancy (Syjuco) and corruption (Pamalakaya, a fisherfolk alliance); observe no improvements in SWS hunger figures (Magsaysay); focus on supply-side constraints (Escudero, Philippine Public Transparency Reporting Project); and emphasize that CCTs are ultimately not enough and will need to be supplemented by other programs (Briones, Montelibano) if the poor are to be helped in the long-term.

These misgivings are of course entirely understandable, given the government’s current budgetary allocation for the program. On the highly-publicized matter of debt, however, it is well worth noting that financial institutions like the World Bank not only offer long maturities for these types of project loans, but also charge interest rates that happen to be better than what the government itself pays for its own bonds.

The issue of targeting is a more legitimate source of concern, but is one that is already being addressed fairly proactively. Currently, the DSWD uses the National Household Targeting System for Poverty Reduction (NHTS-PR) to identify who and where the poor are. Regrettably, leakages and critical exclusions still exist, although this phenomenon has been observed in many countries with existing CCT programs and points to the complexity of identifying and counting the poor rather than to any deliberate methodological bias. For instance, how many nuclear families actually exist in any given household and where does an extended family actually begin and end? But a Grievance Redress System to address the problems of inclusion error, fraud, corruption, duplication and non-compliance has already been established to address these issues. There is also an “on-demand” application for families who feel they are eligible but who have not been included in the NHTS-PR list.

As for mendicancy, a minor detail people tend to ignore is that recipients generally receive help for no more than five years. So the notion of a temporary bridge is precisely to discourage parasitism and encourage long-term behavioural change. After all, at P1,400 a month per family, CCTs can only supplement the household income of beneficiaries by increasing their purchasing power for food and other necessities. Moreover, close monitoring of the program has indicated that compliance rates have been particularly high: children’s attendance in school was a decent 88%, while enrolment rates for children from the ages of 6-14 was as high as 96%.

As for Mitos Magsaysay’s claim that there has been no improvement in SWS self-rated hunger figures, the results for the last quarter would certainly indicate otherwise. Of course, it is still far too soon to attribute sweeping causalities to the worsening or improvement of hunger figures. But it should be noted that the international record of CCTs has been fairly impressive: the International Poverty Centre observed in 2007 that CCTs were able to reduce inequality by 15% in Chile and by 21% in both Brazil and Mexico. The successes in poor Asian countries (Bangladesh, Indonesia, Cambodia and Pakistan) have also been considerable. In 2008, ADB noted that CCTs were particularly effective in increasing child enrolment rates in Bangladesh. 

Naturally, as with most developing (and developed) countries, supply-side constraints remain. But the absence of health care facilities in areas where CCT beneficiaries might wish to avail of them, for instance, is already being addressed by DOH and DSWD, who are working with rural health units and on community health teams; in the longer-term, mobile health clinics are also being studied as a possible option. For DepEd, the provision of adequate school facilities is already a central priority.

And for those who maintain that CCTs cannot be the cornerstone of the government’s anti-poverty strategy, the fact of the matter is that, quite simply, they’re not. Direct subsidies like CCTs and PhilHealth for indigents are just one layer of a complex, multi-pronged strategy: community-driven development programs like KALAHI-CIDSS and SEA-K expand the ability of poor communities to organize themselves and support their own development. The delivery of basic social services (like health and education) is another priority, as are employment-generation programs, asset reform, agricultural development and the empowerment of local communities. CCTs can only succeed in the context of such a continuum, and not as a panacea for all social ills in this country.

This investment in health and education could have a dramatic impact on literacy, maternal mortality, neonatal mortality and child labor rates for at least half of the almost four million families currently living below the poverty threshold. Seen from the perspective of opportunity cost, not helping to break the inter-generational cycle of poverty - indeed, not investing in the very human capital that is the lifeblood of this nation itself — becomes, then, not only chilling but ultimately incalculable. 

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Lila Ramos Shahani is assistant secretary of the National Anti-Poverty Commission in the Office of the President and handles communications for the Human Development and Poverty Reduction Cabinet Cluster. She is also adjunct faculty in the Center for Development Management at the Asian Institute of Management and a doctoral candidate at Oxford University.