Painting Rice Cakes

by Juan L. Mercado

“You can’t dull hunger by painting rice cakes,” says an Asian proverb. That fits the new UP School of Economics paper by Melva V Tutor: “The Impact of the Philippine  Conditional  Cash Transfer on Consumption”

CCTP is: Pantawid Pamiliyang Pilipino program  It provides the poorest wtih cash grants, with strings attached: Parents get kids to school, have them immunized and dewormed. Impoverished pregnant mothers receive  prenatal and postnatal checkups and. health personnel attend at deliveries.

Mexico  crafted the first  CCTP in 1997. Africa followed a decade later. They grew to  to more than 30 after a decade. Red de Protección Social in Nicaragua incorporates evaluation components “Overall, CCTs are achieving short term goals.” 

Former President Gloria Macapagal Arroyo launched a CCTP in 2007.  It startred with  6,000 families from 20 of the most hard up provinces  It focused on families with pregnant mothers and  kids up to 14.  Beneficiaries were to get a P1,400 cash grant a month for five years

But graft crippled the Arroyo watch. Thus, the 4Ps never budged beyond a P4-billion token. President  Benigno Aquino, however, ramped  the 4Ps budget to P39 billion, then to P44 billion  Next year, 4Ps could buffer 28 million beneficiaries. They would be a quarter of the population then.

By 2016, the number of beneficiary-families could surge to 4.87 million families.  “No social protection program in our history ever reached this scale, notes Lila Ramos Shahani of Poverty Reduction Cabinet Cluster.

A  2013 World Bank impact evaluation found the program jacked up enrolments, e.g 10 percent among toddlers 3 to 5 . This lead vanished among 12-year-olds and above.

The Philippine CCTP resulted “in significant increase in per capita spending 38 percent for education  and medicine. Filipino “parents were  allocated another  38 per cent more on high protein foods, such as eggs and fish., notes the UP study.”

A  good signal is  the households’ remain keen on continuing to stay signed in. “They understand the program logic and have positive expectations of  it’s impact of their welfare in the future”.

Households grapple with  tough choices among goods required by the program, like schooling, and “those that are not.” After deducting 4P requirements, household  parceled remaining  income on food. Specifically,  they prioritized carbohydrates.

“This choice supports the view that women’s control over resources leads to spending on goods that improve total household welfare.” But over time, can cash grants tide  households from hunger and enable them to sustain investments in human capital?.”

Asia Development Bank meanwhile committed $400 million to boost the CTTP here. “By and large, Pantawid Pamilya has become the cornerstone of the government’s poverty reduction policy,” notes Tutor.  “In less than seven years of implementation,the number of Pantawid Pamilya households increased from 6,000 to 3.93 million.

She calls attention to the geographical spread.  In 2008, CTTP covered 27 provinces. This surged to 50 provinces in 2009 and continued it upwards momentum.  As a consequence, the  Department of Social Welfare and Management grew  ten fold in resources and personnel.

The data reveals families are determined to stay in the program because they have positive experience in daily life. Daily per capita bill on food for example significantly increased from 28 to 49 pesos.

That’s peanuts of course for graft-charged impaled Senators Juan Ponce Enrile, Jinggoy Estrada, Bong Revilla, and now, Lito Lapid.   But this meant more protein, fruit and vegetables on the tables of deprived families.

“There is still no observed impact on spending for medicine”   Those in the bottom fifth of the poor had, as may be expected, had no savings. Minus five, in fact. With CCTP, they’ve ”reduced their shortfall by 1.6 percent.This is small. But it signals “households were reducing their debts. If sustained over time, households may eventually have some room gainful improvement to improve productivity.”

The economy will  grow at 6.4 percent this year, then 6.7 percent in 2015, forecasts the World Bank’s Philippine Economic Update released Thursday. “That’s one the fastest in East Asia, second only to China”, notes bank country director Motoo Konishi.

Growth is now translating into food on tables and jobs. “Poverty incidence declined by 3 percent  from 2012 to 2013. That lifted  2.5 million  Filipinos out of poverty, notes Rogier van den Brink, bank lead economist for the Philippines.  “And in April this year, the economy created 1.7 million jobs”.

That growth can be sustained  by accelerating structural reforms and jacking up further  investments in infrastructure, health and education, ,” adds  Karl Kendrick Chua,  bank senior country economist. That’d add on government’s  already doubled  spending on social services and infrastructure..

“Government raised tax revenue equivalent to 1.2 percent of GDP in the last three years through the sin tax reform, improved tax administration, and higher growth. Chua notes.  The extra bucks for the long pull   could come from making  the tax system more efficient, and equitable.

President Aquino has made it clear he’ll step down come 2016.  Even the most rabid critics concede that the president, like his mother Corazon, has not been tarred by the corruption brush.

Those who thought themselves irreplaceable are all in the cemetery, French president Charles de Gaulle once said. So, it  will be urgent to institutionalize CCTP so as not to orphan beneficiaries  after Aquino  steps down. That needs more than painting rice cakes.

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