• Extension needed for dirt-poor to outgrow govt subsidy

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    Extending the Pantawid Pamilyang Pilipino Program or 4Ps beyond five years for current beneficiaries is needed to allow the poor to “outgrow” the government’s conditional cash transfer (CCT) program.

    This was emphasized by experts from the state think-tank Philippine Institute for Development Studies (PIDS) recently.

    PIDS Visiting Research Fellow Vicente Paqueo noted that, the “Pantawid” extension will be economically and socially beneficial and will also give the government more time to work out a transition strategy and pursue policy reforms that will lead to a massive expansion of job opportunities for beneficiaries.

    Paqueo presented five arguments supporting the CCT extension: (1) poverty and income inequality remain high and stable; (2) the Pantawid program has been a credible, effective, and valuable instrument for poverty alleviation in the short run; (3) an extension will be an opportunity to produce greater positive impact on the welfare of the poor; (4) an extension will provide social stability and support to allow the government to undertake reforms; and (5) a significant improvement in high school enrollment and completion is expected with moderate subsidies for cash grants.

    “The concerns about creating a culture of dependency and irresponsible use of CCT cash assistance have been shown to be overblown and unfounded. In fact, household spending on health and education increased remarkably in both absolute amount and as a share of total consumption spending,” he said, citing the analysis of data from the Annual Poverty Indicators Surveys.

    Paqueo also noted that, by extending the 4Ps to enable beneficiaries to finish high school, they would be in a substantially better position to get jobs and become economically productive in the future.

    Based on simulations by Paqueo’s research team, an additional P5 billion in the budget to cover eligible 12- to 18-year-olds can support a rise in high school completion rate from 44.5 percent to 53 percent. An outcome of 75 percent, or better will require an additional P10 billion in the budget.

    Meanwhile, PIDS President Dr. Gilberto Llanto said the CCT program should be examined in the light of the Philippine economy and context. “The need for evidence-based policy has assumed greater significance,” he said.

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