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Aaron Gabrielle M.

Tanyag
Ms. Roce Jane Limoso
EN 12 S05
September 9, 2014
Pay it forward: Ending Poverty through 4Ps
For the past few years, the Philippines has experienced a dramatic increase in gross
domestic product (GDP), an indication that the economy is growing. However, as news of
economic growth flares up each year, a question lingers in the minds of the poor: Where is
the growth? In spite of the impressive performance of the economy, the Philippines remains
poor as poverty continues to plague the country. As of the first half of 2013, poverty
incidence among Filipinos stands at 24.9 percent of the entire population (Philippine
Statistics Authority). In addition, according to a survey by the Social Weather Station, 4.3
million families or approximately 1 in every 5 Filipino households experience involuntary
hunger in the third quarter of 2011.
There are many reasons as to why poverty continues to persist in the country. On one
hand, there is the classical view that poverty exists because of the structural factors that
hinders the poor from getting enough resources. Among this is the lack of education,
inadequate employment opportunity, corruption, war and monopoly.
On the other hand, there is the modern view which holds that poverty exists not only
because the poor are lacking resources but also because of a value or cultural system that
perpetuates poverty. According to Lewis, the people in the culture of poverty have a strong
feeling of marginality, of helplessness, of dependency, of not belonging[they] have neither
the knowledge, the vision nor the ideology to see the similarities between their problems and
those of others(35). In other words, this value system disempowers the poor and hinders
them from escaping the cycle of poverty.

To address this problem is more challenging than just addressing the poors lack of
resources. According to Becker, eradicating poverty involves enabling the poor to acquire not
only resources but also human capitals such as skills, education and health (Human Capital).
These human capitals will change the poors perception about their social status while at the
same time will enable them to break out of the intergenerational cycle of poverty.
Most developing countries in the world have initiated a Conditional Cash Transfer
(CCT) Program to address this adversity. In the Philippines, the CCT program is known as
the Pantawid Pamilyang Pilipino Program (4Ps). The CCT or 4Ps is a social protection
programs in which the government provides monetary benefits to poor households in
exchange for the recipients fulfilling specific behavioral conditions. This includes enrolling
children into school, undergoing regular check-ups in health facilities, attending family
development session etc.
The 4Ps, which is managed by the Department of Social Welfare and Development
(DSWD), is by far the largest anti-poverty program in the country with a budget of P62.6
billion in 2014. Under this program, each household beneficiary receives as much as P1, 400
a month for the education and health needs of the children (Pantawid 2-3).
Like any other CCT program, the 4Ps has raised many criticisms from various
experts. Despite this, there are also many experts who believe that the benefits of the 4Ps far
outweigh these backlashes. Although it has received many criticismsfrom being a dole-out
program to being unsustainablethe Pantawid Pamilya is still an effective and efficient
poverty alleviation program as it addresses the poors problem of lack of resources and
human capital.
One of the criticisms against the Pantawid Pamilyang Pilipino Program is that it is a
poor public investment. Despite being the countrys most expensive anti-poverty program,
the 4Ps is a non-revenue generating project (Somera 6). This means that investing in cash

transfers does not provide guaranteed returns to the economy as much as investing in public
capitals like agriculture and public transportation. In an article by Inquirer, Carlos Badion of
the urban poor organization Kalipunan ng Damayang Mahihirap (KADAMAY), argues that
the government should instead allocate its budget for the 4Ps in strengthening industries
that could generate jobs for the poor (Shahani). He further adds that [n]o matter how much
the Aquino government spends on the CCT, reducing poverty in the country still boils down
to adequate social services and jobs creation, and more importantly, a national development
strategy. In this way, the poor can accumulate the necessary capital to alleviate themselves
from the vicious cycle of poverty.
Furthermore, it puts the governments fiscal sustainability at risk since much of the
funds constituting the program are generated from foreign loans. In 2010, the Asian
Development Bank provided a $400 million loan for the 4Ps including a three grant-based
technical assistance projects worth $2.5 million. The support to the CCT program will run
from 2011 to 2014 and comes with a 15% commitment fee payable in 25 years (Asian
Development Bank 1-3). Somera notes that this can put future administrations to further debt
when they start repaying the loans. He explains that the current administration will only pay
the commitment fee but succeeding administrations will have to shoulder 0.827% by March
2016 up to 5.55% by September 2035 (8).
Nonetheless, some experts argue that the 4Ps financial cost to the government is
compensated by the economic benefits it brings. According to various studies, the program
has been successful on delivering inclusive educational and health services for the poor. In
the education sector, it has been proven that the 4Ps has significant impact on improving
school enrollment among children whose family receives benefits from the program
(Chaudhury and Okamura 12-18, Handayani 307-315). Meanwhile, in the health sector, the
program has led to an increase in health care coverage for poor households (Chaudhury,

Friednman and Onishi 27).These short-term accomplishments indicate that the 4Ps has been
successful in fulfilling its economic objectives. While providing income to the poor do not
easily translate to immediate poverty alleviation, it is still necessary since it gives them equal
opportunity to gain basic needs that they could not otherwise obtain.
In addition, by improving the economic and social welfare of the poor, the
government receives its return on investment. Unlike other financial investments, the return
on investment of the Pantawid Pamilya is not gain by the investors (in this case the
government) but by the people in which the money was invested (Paqueo et al. 4). Such
presumption can be seen in the case of Brazil and Mexico. The conditional cash transfer
programs of these two countries are credited for having a significant impact on income
distribution. According to Osorio, the level of total income inequality fell significantly in
Brazil and Mexico during mid-1990s to the mid-2000s, the same period in which they
implemented and expanded their CCT programs. For the Philippines, there is a reason to
believe that the 4Ps can replicate the success of other countries. In fact, a 2011 study by
Velarde and Fernandez finds that the Pantawid Pamilya can help reduce inequality in areas
covered by the program by as much as 6.6% a year (1). Although this study isnt as
significant as those of other countries, it nonetheless indicates that there is a potential for the
Philippines CCT program to reduce inequality.
Beyond its initial economic objectives, the Pantawid Pamilyang Pilipino Program is
also proven to be effective in bringing solution to other social adversaries. For instance,
studies indicate that the 4Ps is instrumental in reducing violence in conflict-ridden areas
around the country. According to Crost, Felter and Johnston, the number of conflicts in areas
where the program is implemented decreases sharply since its expansion in 2010 (18). The
study demonstrates that cash transfers play a key role in establishing a relationship between

the government and the public and thus enables the former to gain valuable information
regarding criminals and insurgents (19).
Aside from reducing conflict, the 4Ps is also recognized as a program supportive to
gender equality and women empowerment. In a press release, the World Bank states that
[w]omen and marginalized groups in particular see benefits from CCTs, often stretching
beyond the household (The World Bank). In Mexico, a study reveals that there is an increase
in confidence and self-esteem among women as a result of having equal control of family
resources and the promotion of the education of girls through the CCT (Adato et.al 5). The
same thing applies in the Philippines as women are given more chance for education and
control of resources within the household. Handayani believes that CCTs may have effects
on improving the balance in intra-household dynamics. This in return translates into status
improvement of women in the community.
Despite these, there are still some who remains skeptical on the Pantawid Pamilyang
Pilipino Program. Perhaps the most common argument against the program is that it promotes
a culture of dependency among its beneficiaries. In a study entitled Does Pantawid Foster
Dependence or Encourage Work? Evidence from a Randomized Experiment, Orbeta and
Paqueo mentions that there is a tendency for recipients to rely heavily on the governments
support as their primary source of income (1-2). They add that this is built upon the standard
idea in economic theory that people who receive social assistance will be discourage from
seeking work (2). Thus, providing cash transfer to the poor can lead to a lost in incentive to
improve their welfare using their own initiatives and resources. Simply put, it does not
empower the poor.
This dependency syndrome stems from the fact that the subsidies provided by the
4Ps do not give the recipients the skills needed for employment (Alzua, Cruces, Repani 1216). Unlike the conditional cash transfer programs of other countries, the Philippines

Pantawid Pamilya extends its educational assistance only for five years and to children aged
14 and below. At this age, the only educational attainment that children receive is elementary
education. According to Shahani [a]s children from beneficiary families become ineligible
for cash transfers, there is less incentive for them to continue schooling. This means that
with less education, these children are face with the challenge of less employment
opportunities. Instead of providing the poor with the necessary capital to escape from
poverty, they are only given benefits that last for a short period. Even if the income support to
the poor gives them a way to meet their basic needs, it doesnt follow that their economic
status will change permanently.
Although promoting dependency is somewhat true, this is not always the case. The
program was designed in such a way that it would hinder a culture of dependency. According
to Chaudhury and Okamura, [t]he level of transfer was designed to be sufficient enough to
encourage poor households to send children to schools and health centers on a regular basis,
yet low enough as not to encourage dependency. This means that the amount receive by the
beneficiaries is not enough to cover all their basic needs. Hence it is not meant to be used as a
source of livelihood. In fact, household beneficiaries still need to find other source for income
in order to support their family. It is estimated that the money grants accounts only for 20%
of the annual income of each household beneficiary (Velarde and Fernandez 6-8).
Additionally, evidence from latest studies in other countries reveals that social
assistance such as CCT has the opposite effect. Instead of promoting dependency, conditional
cash transfer programs actually encourages self-sufficiency. In Brazil, household recipients
use the cash transfer to diversify their income portfolio and even start their own business
(Lichand 5). According to Lichand, Brazils CCT stimulates self-employment and might
have positive long-term effects on growth (6-8). The reason behind this is that recipients are
less wealth-constrained after receiving support from the CCT. Through the cash transfer, they

accumulate additional capitals necessary to engage in business activities. This highlights the
fact that conditional cash transfer programs, including the 4Ps, can actually empower the
poor from breaking out of poverty.
When it comes to the political factor behind the 4Ps, another issue raise
against the program is that it is vulnerable to corruption and political abuse. Because of the
voluminous financial transactions and the multiple actors involved in the process there is a
high possibility that the 4Ps will be susceptible to exploitation (IBON News). Last
November 2012, the Commission on Audit (COA) reported about problems in the programs
implementation which includes the billions of unaccounted disbursement and the
questionable use of funds (Commission on Audit). In addition, CCTs can also be used by
politicians as an instrument to garner votes during elections (Labonne 29-30). In Colombia,
for instance, a study found that beneficiaries are more likely to cast their votes to the
incumbent politician who pioneered and/or expanded the CCT program (Camacho, Conover
and Zarate). Relating this in the case of the Philippines, critics argue that the decision of our
policymakers to allocate massive budget allocations for the CCT especially during election
period turns questionable (Punongbayan). It becomes uncertain whether or not such move is
purely for economic reasons.
Admittedly, this argument has a lot of validity. However, proponents of the Pantawid
Pamilya assert that while the 4Ps is prone to corruption, it doesnt necessarily mean that the
program is already rigid with corruption and that nothing can stop it from occurring. Since its
implementation, the DSWD has incorporated governance and anti-corruption (GAC)
elements in the program which enables it to strengthen transparency and accountability
within the programs system (Arulpragasam et al. 7-8). By institutionalizing tight control over
the program, the DSWD can eliminate, or at least reduce, the possibility of corruption. More
importantly, the kind of administration is ultimately the most essential standard in gauging

the programs credibility (The CCT Debate). Comparing the past two administrations,
Bello explains that:
Under a corrupt regime like the Arroyo presidency, the vast sums of money
involved would definitely create corruption. While the Aquino administration,
which ran on an anti-corruption, anti-poverty agenda, cannot promise a 100
per cent elimination of corruption, it will definitely substantially reduce it, and
it will certainly make sure corruption does not infect its flagship program (The
Conditional Cash Transfer Debate).
Meanwhile, when it comes to its effects during the election, the problem lies not on
the 4Ps but on the implementation of election laws. During the 2013 election, the DSWD
launched its own anti-EPAL campaign to combat the use of the CCT program as a tool to
win elections (Department of Social Welfare and Development). The campaign aims to
inform beneficiaries of their rights as well as the programs system of implementation. More
than anything, it shows that the aim of the CCT, as an anti-poverty program, is to uplift the
poor from poverty and not further oppress them.
The Pantawid Pamilyang Pilipino Program is a social protection program of the
government that plays a key role in addressing the problem of poverty in the Philippines.
Although there are conflicting arguments against the programs effectiveness, its economic
and social benefits far outweigh all of these. It addresses both short-term and long-term
poverty by providing income support to poor households and developing their human capital
through health and educational assistance. With these, it anticipates the elimination of the
intergenerational cycle of poverty that has plagued the country for many years. Nonetheless,
what is more essential than the success of the Pantawid Pamilyang Pilipino Program is the
realization of each Filipino that they must partake in the elimination of poverty and the
advancement of the countrys prosperity.

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