Thursday, December 16, 2010

Former National Treasurer Leonor M. Briones Expresses Reservations about P-Noy's Conditional Cash Transfer Program

By Chanda Shahani

The former National Treasurer Leonor M. Briones said that the Aquino Administration's PhP 21-billion conditional cash transfer (CCT) program will not substantially alleviate poverty.

In an interview with the Diliman Diary, Briones a professor public administration at the National College of Public Administration and Governance at the University of the Philippines (U.P.) at Diliman said that CCT's “are all right but only as one of a more comprehensive package for poverty reduction.”

She expressed concern about the “absorptive capacity” of the Department of Social Work and Development to make use of its huge increase of funding of 125% or an increase from the current PhP 12 billion to PhP 21.9 billion in 2011.

To cover a total of 2.3 million beneficiaries in 2011, the Aquino administration has increased the program's budget.

DSWD Secretary Corazon “Dinky” Soliman has said in the past that to ensure smooth program implementation, the additional 1.3M family beneficiaries next year will be categorized into phases. High poverty incidence areas like the Autonomous Region in Muslim Mindanao, Caraga, Zamboanga Peninsula, Bicol region, Samar and Leyte; covering 79 provinces in all will be prioritized.

But Professor Briones said the CCT is still a program of handouts.

Briones, convener of civil society group Social Watch Philippines, said CCT “is not a leading answer to poverty”, adding that as a policy response, CCT is deficient, and does not justify the huge loans made to fund the program.

She said that the huge CCT allocations could be a source of fund for other items that needed boost in funding especially in education, environment, agriculture and health.

“The expansion of the conditional cash transfer should be accompanied by the expansion of the supply side, for example, improvement of public health service, education and transport facilities and services in order to be successful,” she said.

“How can you give money for a child to go to school in a place where there are not enough schools?” she asked. Social Watch says that the fact that Philippine public investment in education and health is low and has generally declined between 200 and 2006 means that public investment in health and education must increase.

Briones said the program expansion should be deferred pending the submission of the program impact evaluation on the dole-out program and the completion of the National Household Targeting System for Poverty Reduction.

“Increasing the budget for inputs does not necessarily lead to increases in outputs and outcomes if the implementing capacity is insufficient,” she said.

She said that on Latin America, historical experience has shown that it was difficult to wean away recipients of CCT monies and that there must “be a clear exit strategy” including the provision of basic services and a chance for impoverished families to have employment opportunities.

Professor Briones is also the lead convenor of Social Watch Philippines which has taken the stand that the expansion of CCTs have to be accompanied by expansion of the “supply side,” that is improvement of public health services in order for this to work.

Social Watch's stand is that the CCT program expansion should be deferred pending the submission of program impact evaluation on a dole-out program agreat part from multilateral funding from nd completion of the National Household Targeting System for Poverty Reduction.

“We need to know what are the clear returns in exchange for borrowing all this money to fund this program,” she said. The current CCT program relies on the release of Land Bank of the Philippines (Landbank) ATM cards to beneficiaries. But the Landbank funds will be sourced in turn from the National Budget from funding earmarked by loans from multilateral institutions such as the World Bank and the Asian Development Bank.

Social Watch said that the National Government was borrowing US$ 405 million from the World Bank and US $ 400 million from the Asian Development Bank for the CCT program which only serves to increase the national indebtedness in implementing a strategy that will have limited impact on poverty reduction.

Social Watch is asking the National Government to come out with a comprehensive strategy to reduce poverty which includes social and economic policy; embedding the CCT program within the framework.

It is also important, Professor Briones said said that civil society and other groups should be involved in independently auditing and monitoring how the funds are being spent.

On the other hand, an August 24, 2010 study co-authored by U.P. School of Economics Dean Arsenio Balisacan said that said the administration of former President Gloria Macapagal-Arroyo's Conditional Cash Transfer (CCT) initiative under its Pantawid Pamilyang Pilipinong Program (4Ps) appeared to be effective as a vehicle for addressing short-term poverty and long-term human capital development and impliedly suggested that Aquino administration should continue it (see:

The study said CCT programs are widely implemented in many developing countries, particularly in Latin America and more recently in Asia. The World Bank says CCTs "provide money directly to poor families via a “social contract” with the beneficiaries – for example, sending children to school regularly or bringing them to health centers. For extremely poor families, cash provides emergency assistance, while the conditionalities promote longer-term investments in human capital."

The UPSE study said that assessments of these programs show significant positive impacts on nutritional intakes, schooling performance,and reduction in poverty and inequality. "Of all the government's current subsidy programs, the CCT initiative holds perhaps the most promise for breaking the vicious cycle of poverty and, hence, is a good candidate for upscaling toward a national anti-poverty program," the study said.

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