The Conditional Cash Transfers (CCTs) program run by the DSWD—unlike most of our pro-poor projects—is no dole-out. It’s rather an investment in our country’s human capital. Invented in Mexico in 1997, the CCTs program has been taken up by more than 30 governments—Brazil, Bangladesh, Indonesia, Burkina Faso, Nigeria, and New York City among them.

    The CCTs are periodic grants to the poorest families sufficient to help relieve their most urgent needs. In return, these families are obliged to keep their young children in primary school and present them for inoculations and basic health care.

    Monthly grant paid to the mother
    The Arroyo government adopted the CCTs program in early 2008. It has now spread to cover 3.93 million households across all 17 administrative regions on a yearly budget of P39 billion. Instead of discontinuing the program, the Aquino administration has carried it on. It aims to cover all 5.2 million eligible households by 2015.

    In the Philippines, the maximum grant is P1400 monthly: equivalent to a fifth or a quarter of the typical CCTs family’s total income. As in Mexico, this money is paid to the mother. The grant is withdrawn if a child is absent without explanation for more than 15 percent of the school year.

    This sounds harsh—but the success of the CCTs program hinges on government’s ability to enforce its conditional terms. Only by doing so can it realize the program’s ultimate objective—that of breaking down poverty passed down from generation to generation.
    Dropping out of Grade 2
    As elsewhere, the poorest of the Filipino poor are those families whose heads have the barest formal education. Poor parents who drop out of school tend to raise children who drop out in their turn, and grandchildren who drop out, too.

    And the main reason they do is apparently not so much their lack of access to a classroom as their simple lack of interest in schooling.

    Despite the Filipino’s vaunted love of learning, roughly 10 out of every 100 Filipino children aged 6 -11 never even enter a classroom. And out of every 100 children who do, 14 drop out before they reach Grade 2—yes—Grade 2. Only 65 finish grade school. Only 58 move on; and only 42 finish high school.

    What is more, pupils’ achievement levels are ‘alarmingly’ and ‘pathetically’ low. In the 2006 National Achievement Test, only 15.3 percent of elementary schools crossed the 75 percent level—the required minimum competency for the next level of schooling.

    Since these “dropouts” do not possess even the minimum work skills the modern economy requires, they’re unable to benefit significantly from its growth.

    The vast majority of them find precarious rural niches in subsistence agriculture.

    What middle-income country?
    We’re supposed to be a “middle-income” country. Yet we have so many of these dropouts—in our poorest provinces they may make up a third of all adults—they belie the conventional wisdom that GDP growth by itself makes everyone better off.

    The CCTs program has met much opposition—some from a misunderstanding of its intent; others from fear of its funds being dissipated by our dysfunctional bureaucracy.

    The World Bank does estimate that 40 percent of programmed funds went astray during the Arroyo Administration’s pilot school-feeding program. Another danger is that of the program being captured—like earlier welfare programs—by patronage politicians and the non-poor.

    But the CCTs program apparently works, because it is managed by a pocket of bureaucratic efficiency—has a motivated clientele, and is monitored by the World Bank, a prime institutional lender.
    Gains from program so far
    In Mexico—where the program has now lasted 16 years—girls from peasant families have not only finished secondary school; they’re developing professional ambitions, instead of marrying early.

    In our country, a World Bank survey found that enrolment among children aged 9-12 has increased by some 7 percent. Meanwhile there has been a perceptible decline in malnutrition and retarded growth among children enrolled in the program.

    Since our cash grants stop when a child reaches 12 years, our CCTs program so far may have merely pushed upward the average age that a child from a poor family drops out of school.

    As soon as we can afford to, we should follow Mexico, Brazil, Turkey, and Bangladesh in keeping up CCTs grants even for secondary school aged young people, to enable them to have a better chance of competing in in the global “Knowledge Society.”

    More tax money will extend program
    Raising the tax effort to its 1997 peak of 17 percent by the time his term ends is a fit challenge for President Aquino. Closing down ill-conceived welfare programs, such as NFA’s much criticized rice-price subsidies, will also help channel more funds to the CCTs program.

    Indexing the budget for basic education and primary health care to the growth of GDP has also been proposed separately by Senator Edgardo J. Angara and former Speaker Jose C. de Venecia.


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