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4Ps Concept Paper for MCC As of 21 January 2009, 10:30 AM

Project Title

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Conditional Cash Transfer (CCT) Philippines - Improving the Human Capital of the Poor (Pantawid Pamilyang Pilipino Program or 4Ps) Department of Social Welfare and Development (DSWD) Poorest Households in the Poorest Municipalities of Regions IV-B, V, VI and VIII or 172,488 households Php10.8 Billion or $227 (at Php48/$1) 2010—2014

Proponent Target Coverage Cost Estimate

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Target Implementation:

I.

PROJECT RATIONALE AND DESCRIPTION

A. Towards Poverty Reduction 1. A strategy of inclusive growth is fast evolving as a key agenda of emerging markets in many developing countries, with the end in view of achieving a significant reduction in poverty. Inclusive growth is anchored on three pillars, namely: (a) economic growth can be created by generating full and productive employment; (b) access to economic opportunities can be broadened by providing mechanisms for capability enhancement; and (c) minimum well-being can be ensured by providing social protection. Inclusive growth aims to disperse the benefits of economic development. Safety nets are at the core of inclusive growth, which can be channeled to address the welfare of the vulnerable and needy (ADB 2008)1. 2. In the Philippines, a wide range of social protection programs is in place. However, the 1997 Asian financial crisis exposed weaknesses in coverage, targeting methodologies and techniques, and operational constraints. These result in significant leakages; resources go unduly to the non-poor and the near-poor amid lack of reliable poverty measures as well as overlaps and redundancies in sectoral or geographical beneficiaries (ADB 2008)2. 3. Inadequate human capabilities and limited access to social services are often key factors underlying poverty and inequality in the country. While the Philippines has achieved nearly universal primary education, enrolment in secondary education, at about 73%, leaves much room for improvement. In 2004, the average enrolment rate for the bottom 10% of the population was less than 55% compared to about 75% got the top 10%. Attendance in secondary education is below the national average in the poorer regions. In terms of health services, disparities in access to such services among income groups are even more pronounced. The average access to health services was a little over 30% for the bottom 20% of the population while it was close to 45% for the top20%. 4. Confronted with these findings, the Government of the Philippines, through the leadership of the Department of Social Welfare and Development (DSWD) was moved to adopt a Conditional Cash Transfer (CCT) Program dubbed as Pantawid Pamilyang Pilipino Program 1

Hyun H. Son. Conditional cash transfers: an effective tool for poverty alleviation,? Asian Development Bank Economic and Research Department ERD Policy Brief Series No. 51. 2008. 2 Asian Development Bank. Philippines: Critical Development Constraints 2008.

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4Ps Concept Paper for MCC As of 21 January 2009, 10:30 AM

(4Ps). Aside from providing income support to extremely poor households that would encourage them to increase investments in their children’s human capital, 4Ps will serve as the lead vehicle through which the many cross-cutting issues (e.g. targeting, monitoring and evaluation) will be addressed. 5. The 4Ps - as adapted from the CCT Programs in Latin America - is a poverty reduction strategy that provides cash grants to extremely poor households to allow the members of the families to meet certain human development goals. The focus is on building human capital of poorest families (health/nutrition and education) given the observation that low schooling, ill health and high malnutrition are strongly associated with the poverty cycle in the Philippines. 6. In order to ensure an effective and well-targeted social protection program, 4Ps employs a [i] targeting system to identify the poorest...
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