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Friday, September 17, 2010

Analysis: ‘4Ps’ cash transfer program “deceitful” -- Kadamay

This article was originally released by Kadamay on September 5, 2010.

"Although we recognize the need for -- and definitely demand -- immediate relief measures for our long-suffering poor, we cannot accept this deceitful '4Ps' program."

This was the statement made by the urban poor group Kalipunan ng Damayang Mahihirap (Kadamay), after Social Welfare Secretary Dinky Soliman announced Thursday that the Asian Development Bank (ADB) has approved a $400-M loan to bankroll the expansion of the Pantawid Pamilyang Pilipino Program (4Ps), the government's conditional cash transfer (CCT) program run by the DSWD.

Kadamay has earlier warned the government against incurring further debt to fund its antipoverty programs, saying that this will prove more harmful to the country in the long run.

"The 4Ps program is deceitful because its proponents fail to point out the very real conditions that almost destine it to failure," said Carlito Badion, the group's vice chairman. "As such, it becomes little more than a 'smoke-and-mirrors' campaign to cover-up for the administration's failures in carrying out more fundamental reforms."

Kadamay presented its critique of the 4Ps program as follows:

First, as the 4Ps program is construed at present, it is sorely insufficient. "Sec. Soliman almost always cites the Latin American experience in defending the 4Ps program. Well, here is the score: Brazil and Mexico, both of which rank higher than the Philippines in terms of the U.N. Human Development Index, have one-fourth and one-fifth of their households under CCT programs, respectively," said Badion.

"What have we got? A mere one million out of 18 million households is covered by 4Ps; even if the 2.3-million target [by the DSWD] is reached by 2011, this represents only about one-eighth of total households. We wonder how this will even make a dent in poverty."

Second, the necessary social infrastructure to make CCT programs meaningful is not in place. "While we recognize that a number of studies attribute some degree of success to CCT programs in other countries," said Badion, "these invariably come with major caveats, each of which we are bound to fail."

In a 2009 study (‘Conditional Cash Transfer Programmes and their Impact on Poverty Reduction: Lessons from Mexico and El Salvador’; www.pegnet.ifw-kiel.de/activities/silva.pdf), the German institute GTZ wrote: "...It becomes clear that CCT programmes’ objective of fostering long-term investments in human capital can only be achieved with the supply of good-quality and accessible health and education services, and with the existence of a governmental system that provides the beneficiaries with the possibility to access other social programmes of the national development strategy" (italics added).

It adds:  “The question that remains is how to achieve an incentive compatibility of CCTs and other programmes of the development strategy, so that the healthier, better-educated young people who benefit from the [CCT] programmes can get access to productive opportunities. An exit strategy is needed which can link the ex-beneficiaries with other development strategies to ensure their further progress and prevent them from falling back into the poverty trap.”

The UN publication MDG Insights (www.undg-policynet.org/ext/MDG_Insight/MDG_Insights_Feb_2010.pdf) echoes:  “[CCT programs] can provide a windfall in human development in contexts where basic social services are already there but demand is still inadequate. They can also create pressures to improve service provision. They do not represent, however, the panacea for inadequate supply of basic social services; and they do require significant administrative capacity” (italics added)”

“Simply put,” said Badion, “it still boils down to adequate social services and jobs creation, and more importantly, a ‘national development strategy’. With the proposed 2011 budget further slashing allocations for health, economic services, and public infrastructure, we fail to see how the government plans to meet these criteria and make the CCT program meaningful in the long run.”

Third, as mentioned, the new debt incurred for the 4Ps program will inevitably redound to further hardship for the poor. “Haven’t we learned from our experience with SAPs (‘structural adjustment programs’) and ‘conditionalities’ imposed by the IMF-WB in exchange for loans? Aside from the burden of paying for these debts until now, these loans have tied us to disastrous policies of trade liberalization, reduced social spending, and many others. This administration should know better,” said Badion. ##


Reference Carlito Badion, Kadamay Vice Chair | 0939.387.3736
For further details, kindly contact Jon Vincent Marin, Kadamay PIO, at 0910.975.7660.

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