CONDITIONAL CASH TRANSFERS
The Philippine Experience
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
Achieve universal, gender-equal primary education
Reduce by two-thirds the under-five mortality rate
Reduce by three-quarters the maternal mortality ratio
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 DSWD’s Php34 billion 2011 budget
Now being implemented in 98.7% of Philippine provinces
Enabling administrative orders/circulars: DSWD AO 16 (2008), Joint Memo 2 (2011)
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
Actual cash grants
Training
Salaries
Administrative
expenses
Advocacy materials &
manuals
Capital outlay
Bank fees
Budgeted
amounts
Php17.1B
Php1.6B
Php0.7B
Php0.6B
Share in
total
81%
8%
3%
3%
Php0.6B
3%
Php0.2B
Php0.1B
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
National Implementing Arm
DSWD-National Project
Management Office
Regional Implementing Arm
Regional Project Management
Offices
City/Municipality
City/Municipal Links for every
Implementing Arm
1,000 households
Local health and education service
providers (under DOH, DepEd)
Funding and Technical Support World Bank, AusAID,ADB, UNICEF,
UNFPA
ORGANIZATION
DSWD (Central)
Regional DSWD offices
Department of Health
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
ORGANIZATION
Department of Education
Department of Interior and
Local Government
National Anti-Poverty
Commission
Local Governments
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
Coordination and advisory
functions, provision of national
poverty data, regional oversight
assistance
Availability of health and education
supplies in target areas,
implementation and coordination
of municipal activities, reports to
regional gov’t, monthly meetings
ORGANIZATION*
DSWD Secretary
Undersecretary/Project
Director
Asst. Sec./Deputy Project
Director
17 Regional Directors,
Asst. Directors
Regional Teams
Nat’l. 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
June 2011
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
December 2011
2.3 million households
March 2007
February 2008
December 2009
December 2010
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 gov’t 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
verification*
*On demand applications in communities also accepted
4.7 million households identified poor as of Jan. 2011
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
Average increase in per capita income among beneficiaries: 12%
Fernandez & Olfindo (2011)
Simulated health and education outcomes
Potential long-run increase in school attendance among poor
households: 8 points
Potential long-run decrease in poverty incidence: 13 points
Son, H.H. (2008). Simulation of impact of conditional cash transfers on school 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 CCT’s mechanisms for monitoring are in place in
Northern Samar, though it’s 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 country’s three poorest provinces.
“Too much, too soon?”
Inadequate support infrastructure
“The decision to expand and accelerate the program
was…made 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 challenging”
Fernandez, L. & 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 gov’t. 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