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A different type of social protection: conditional cash transfers in the Philippines

Social protection and the concept of welfare schemes is a controversial topic; some argue that such services discourage people from finding their own means to improve their socioeconomic situation. However, when we are referring to social protection for the poor, there is a fundamental reality, which is that in numerous countries, the standard public services fail to reach the poorest and so there is a moral need to extend social protection efforts to those who are excluded.

The World Food Programme, for example, conducts what is called the Food-for-Assets Programme, which provides food in exchange for work. The main mission is to break the cycle where people spend the majority of their time in survival mode, trying to find enough to eat every day, which prevents them from going to work, which could instead lead them to acquire additional skills and experience. In this way, the hope is that such a programme assists the poor to take their first steps out of hunger.

The World Bank offers a somewhat similar social protection service, called Conditional Cash Transfers (CCT). In the report, written by Nazmul Chaudhury and Yuko Okamura, titled, Conditional Cash Transfers and School Enrollment, the impact CCT programme had in the Philippines to improve school enrolment is explained thoroughly. The Pantawid Pamilyang Pilipino Programme was launched in 2008, to provide cash allowances to poor households, in exchange for enrolling their children at school, assuring their regular attendance, as well as committing to have the children take deworming medicines twice a year and attending pre- and post-natal check-ups, in the case of pregnant women.

This programme was coordinated, together with the Filipino Department of Social Welfare and Development, and covered 3 million households, which represent 60% of the poor in the Philippines. Due to the frequent climatic shocks in the country, Chaudhury and Okamura explain that the 10% of the Filipino population who live just above the poverty line are constantly in a vulnerable state, making it particularly challenging to break the intergenerational cycle of poverty.

With the Pantawid Pamilyang Pilipino Programme, households received a lump sum, equivalent to $11.69 per month as health grants and $7 per month per child for education. An interesting condition this programme included, is to not offer the education grant to more than three children per household, in order to discourage higher fertility. Moreover, the grants were calculated to equal about 20% of the average annual income of the beneficiaries in order to prevent them becoming dependent on them.

Using both the Difference-in-Difference and Regression Discontinuity Design approaches, Chaudhury and Okamura found that the conditional cash transfer programme increased average school enrolment by 9%, between 2008 and 2011 and that the positive impact was most evident in young children in smaller households. In particular, the gap in school enrolment in children of age 9 to 12 had the most positive effect where, by 2011, it had narrowed down to 2%.

On the other hand, during these years, enrolment rate for children of age 13 to 17, decreased for both beneficiaries and non-beneficiaries of the programme, which follows the general dropout trend In the Philippines. Chaudhury and Okamura remind us that the opportunity cost for enrolling these older children in school is higher both in direct and indirect ways.

The direct cost is due to reduced accessibility to high schools and for this it costs more for the children to commute to school and requires more of their time. The indirect cost points out how these children are often seen as assets, who can earn money working instead of going to school. For this, other CCT programmes of the World Bank that were implemented in Bangladesh, Brazil, Mexico, Honduras and Turkey, allocated bigger grants to households who committed to enroll their older children in school.

They recognise that because this CCT programme allocated grants only to children aged 6 to 14, there is insufficient data to compare the impact of the programme on younger children versus older children, since those who may have been, for example, 13 years old in 2008, would not have received the grant by 2011. In addition, because the programme limited the education grant to a maximum of three children per household, it is understandable that households with more than three children did not benefit as much as the smaller households, since the grant in relative terms was of less significance for them.

Nonetheless, this CCT programme is an excellent illustration of the innovative ways in which development-focused institutions, such as the World Bank, dedicate to designing social protection programmes, designed to meet the immediate consumption needs and help in getting these households out of the poverty trap. Also, the report on this programme demonstrates the challenges that exist in making sure they incentivise people to become more productive, rather than becoming more dependent on aid, which should be a constant objective within this delicate matrix of social protection.

Ayako Iba

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