WE support Presidential Consultant for Entrepreneurship Jose Concepcion’s proposal for the gradual phaseout of the government’s Conditional Cash Transfer (CCT) Program, an idea that is backed by many in the business sector and, supposedly, by some members of the Cabinet, including the head of the National Anti-Poverty Commission (NAPC).
With a budget of almost P80 billion this year and some 20 million beneficiaries, the Philippine government’s CCT, also called the Pantawid Pamilyang Pilipino Program or 4Ps, is among the top 5 largest CCT programs in the world in terms of scale, according to a World Bank report.
The 4Ps was the centerpiece antipoverty program of the administration of former President Benigno S. Aquino III. Under the program, poor families are given a monthly stipend on several conditions—that parents will send their children to school and have them checked regularly in barangay health centers.
The CCT extends a health grant amounting to P500 monthly year-round and an education grant of P300 per child for 10 months each year to each participating household.
To receive the cash grants, pregnant women must avail themselves of prenatal and postnatal care, and be attended during childbirth by a trained professional. Parents or guardians must attend the family-development sessions, which include topics on responsible parenting, health and nutrition.
All these are worthy endeavors. We are not saying the CCT has not worked at all. But we can certainly argue that it has not been making significant headway in poverty reduction.
The percentage of poor Filipinos in the country, going by government statistics and other surveys, has remained virtually unchanged since the administration of Gloria Macapagal-Arroyo began implementing the CCT Program, raising questions about its effectiveness as an antipoverty measure.
Even the current NAPC head, Liza Maza, said there are better ways to address poverty, other than the CCT Program. Maza said, rather than continuing the CCT, the government would do well to invest its resources on livelihood programs that may have greater impact on the lives of the poor.
During a briefing at the sidelines of the 30th Asean Summit, Concepcion had suggested shifting the CCT’s multibillion-peso annual budget to provide loans for small businesses for the poor.
Concepcion said providing funding to small businesses, which account for 97 percent of all registered businesses in the Philippines, would be a sure way to help lift people from poverty compared to the CCT Program.
We agree that using these CCT billions to help poor Filipinos start their own collateral-free or collateral-friendly small businesses would give them a better chance of licking poverty in the long run.
To date, the share of micro, small and medium enterprises (MSMEs) on domestic output is only about 36 percent, despite the fact that they employ about two-thirds of the country’s labor force.
The CCT billions could increase the share of MSMEs on domestic output and also have a multiplier effect. The start-up businesses that can be generated out of it would not only help the poor help themselves but would also give more jobs to their fellow poor Filipinos.
The best solution for poverty is to help poor people find a decent way of earning a living, either by giving them jobs or helping them start small businesses. In the long term, dole outs cannot solve poverty and they will not help much. They may alleviate hunger for a day or a few months, but after that, what? Sure, the government needs short-term measures to address hunger and poverty. But cash dole outs are palliative measures at best.
In the end, what we want is along the lines of that Confucian aphorism— teach people how to fish to feed them for a lifetime, instead of giving them fish to feed them for a day.