PIDS push institutionalization of conditional cash transfer program

State think tank Philippine Institute for Development Studies (PIDS) has called for the institutionalization of the government’s conditional cash transfer program or the Pantawid Pamilyang Pilipino Program (4Ps).

PIDS Senior Research Fellow Celia Reyes pointed out that institutionalizing the 4Ps will have massive implications on the national budget. However, policymakers should first refine the 4Ps by identifying areas in the program that need to be improved.

Reyes noted that programs like the 4Ps have produced encouraging results and was even ranked by the World Bank as one of the “best-targeted social safety net programs in the world” in its 2015 report.

“The proportion of children attending school has been increasing over time. This is something that is actually consistent,” said Reyes. However, she noted that the potential impact of such programs can be stunted when certain conditions are not fully considered.

“Initially, while the 4Ps was designed to assist children ages 6-14 years old, it has been noted that the school participation rate for that age group is already very high. It is really in the older group where you have the problem.”

She also noted a huge disparity between the proportions of children aged 16-18 years old who are attending school in the poorest deciles compared to children of the same age group in the richest deciles.

“As we would expect, the average years of schooling would increase with income. So, that’s eleven years average schooling for those belonging in the richest decile, and only about five years for those belonging in the poorest deciles. If you wanted to provide some assistance, you would really need to target the poorest,” suggested Reyes.

“If you want to fine-tune the program, we would need to shift the assistance from elementary to high school, and probably revisit the amount of grants that we give to high school,” recommended Reyes.

In relation to the need to help young and poor Filipinos attend high school, Reyes presented a comparison of average daily wage rates based on the level of education.

“It is no surprise that high school graduates earn higher income at about PHP 284 a day, higher than those who are not high school graduates at only about PHP 171 per day. Meanwhile, those who are college graduates earn around PHP 623 pesos per day while those who have completed post-graduate studies earn around PHP 1,216 per day.”

Reyes is not keen on extending the 4Ps to tertiary. However, she advised policymakers to explore ways to link up 4Ps recipients and broaden their opportunity of reaching tertiary level of education.

She reiterated looking at the possibility of shifting resources from elementary to high school and strengthening support at the high school level as a policy starting point.

Reyes also emphasized that there should be different interventions or programs for chronic poor, or those people living in poverty over extended period of time, and for transient poor, or those who move in and out of poverty.

“Addressing the needs of the chronic poor requires structural and long term solutions like investing in education and human capital strategies. The transient poor, on the other hand, require a different and more specific approach, not to mention the policy input of other government agencies and sectors—like labor, finance, and disaster resilience—which are just as equally important to combating poverty,” Reyes said.

“Studies show that there has been a slight decline in poverty incidence in recent years, but the actual number of poor people has increased due to rapid population growth. Policymakers must tailor solutions to minimize the occurrence of poverty because poor people are not uniform and their needs are not uniform as well,” Reyes concluded.

 

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