Thank you for inviting me to speak at the Manila Times Philippine Economic Outlook Forum. The discussions and exchanges of thoughts and ideas were enriching and your stories today fully conveyed some of the key takeaways we had during the forum. But please allow me to put in proper context Joel M. SyEgco’s story ["CCT not an anti-poverty program-WB” on Page 2 [of the Feb 24 Wednesday issue]of the Manila Times to avoid generating misconceptions about the importance of the country’s Conditional Cash Transfer Program.
First of all, in my presentation, I showed a graph which showed household income growth per decile between 2012 and 2014 (the year of the most recent household survey data). The graph’s title was: “Recent income growth more pro-poor, driven by Conditional Cash Transfers.” I even emphasized that it was probably a long time ago when the Philippines had seen such a pattern of growth.
In later interviews with news reporters, including of the Manila Times, I also stressed the importance of the CCT for the governance agenda, because beneficiaries are selected through an objective method (a household survey) and not because they are part of the patronage system of local politicians.
Mr. Egco’s story was based on my reaction to Atty. Alex Cabrera who said that the amounts of cash subsidies given to CCT beneficiaries were not enough to cover the daily expenses of poor households and lift them out of poverty. I answered that the CCT is not intended to provide money so their incomes will go beyond the poverty threshold. Instead, the cash subsidies are given so that children from poor households stay healthy and remain in school.
The CCT is an important component of what it takes to create inclusive growth. It is the social protection component of it. The other component is more and better jobs, as I had shown in a graph which showed the high rates of underemployment of the lower income deciles.
Finally, I took issue with the description of the CCT program as a “dole out.” My two brothers and I benefited from child support grants. They allowed our mother to continue our education, even when times were difficult for our family. I did not and do not consider these grants a “dole out.” They were our rights and they allowed us to become productive members of society.
In the Philippines, school dropout rates are very high among poor children; CCT is intended to address that challenge. Healthy and better educated children have better chances of breaking the cycle of poverty by becoming more productive members of society.
Extensive evaluation studies, including by the World Bank, show that the program, is delivering on its education and health objectives:
• Enrollment among poor elementary school children increased by five percentage points, while secondary education enrollment increased by seven percentage points;
• The program increased prenatal and postnatal care by 10 percentage points and increased the delivery of babies in health facilities by skilled health professionals by 20 percentage points.
• Children benefited by receiving higher intake of vitamin A and iron supplementation by around 12 percentage points and increased weight monitoring visits to health facilities by 18 percentage points.
By targeting poor and vulnerable households, the program also helps protect them from the impact of economic shocks, natural disasters and other crises. When Super Typhoon Yolanda hit the Philippines in November 2013, the CCT helped beneficiaries get on their feet.
CCT is part of a broader strategy of the Philippines to fight poverty: high and job-creating
growth through measures including investments in infrastructure, transparent and responsive governance, investment in human development through education and health, greater social protection for the poor through the CCT and overall improved delivery of social services.
Recent studies show that, indeed, CCT contributes to that that broader anti-poverty strategy. The program has reduced the total poverty and food poverty among CCT beneficiaries by up to 6.7 percentage points. At the national level, estimates show the program reduced both total poverty and food poverty by up to 1.4 percentage points in 2013.
I hope this letter clarifies the issues and provides the right context in which I was quoted.
Rogier van den Brink
Lead Economist, World Bank in the Philippines
February 24, 2016