Coping with Crisis

Leonardo A. Lanzona, Jr.

Professor, Economics Department
Ateneo de Manila University

Social Indicators

Even before the crisis, the social welfare has not
been faring well, even as the country was
experiencing unprecedented growth.

More importantly, the situation is bound to worsen
because of the absence of social safeguards that
will allow the poorest regions to withstand any
crisis.

The crisis is so large that no amount of
remittances can cover for the damages.

In almost all cases, the situation in Mindanao has
not improved or even worsened.

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Poverty Incidence

Subsistence Incidence

2
Primary School Drop-out Rates

High School Drop-Outs

3
 Potable Water

Sanitary Toilets

4
Living in Makeshift Housing

Malnutrition

5
 Current Spending per Student

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Per Capita Health Expenditures

6
Introduction of the CCT: Response to
the Crisis

Conditional Cash Transfers—monthly subsidies provided
to the poorest households on condition that the parents
send their children to school and provide themselves and
their children the necessary health care

Transfers are minimum: P500 per child who is at
schooling age

Began early this year and to be scaled up at the latter part
of the year: the Government announced its intention to
scale-up the APP program to 300,000 households in 2008
itself. Whereas DSWD was allocated P 299 million to
reach 20,000 households in the GAA for 2008, it is now
working to scale-up the program with the understanding
that it will receive additional budgetary resources to do so.

Not to be confused with unconditional cash transfers
(UCT)

Objectives of the CCT

To reduce poverty now and in the
future

Poverty now can be decreased if the
poorest of the poor households are offered
the subsidy

Poverty in the future can be minimized if
the transfer is used to increase enrollments,
improve health and to enhance the general
welfare of the household, particularly in
terms of their household composition and
nutrition (food consumption).

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Crucial Steps

Targeting: Need to establish a uniform
and objective basis for deciding who
are eligible

Monitoring and Evaluation: Regular
monitoring and yearly assessment of
the impact of the project

Necessary for management process

Necessary for the continued
implementation of the project

Main Components of Targeting

Geographic Targeting: To determine the
regions and provinces that are the poorest and
in need of welfare assistance

Proxy Means Test: To identify the households
within the poorest provinces who are eligible
for the program, particularly in terms of their
schooling, health and consumption needs

Verification: To check prior to the distribution
of the cash transfer for the errors in the
identification

8
Key Issues

How do we scale-up the project?
Do we include Metro Manila?

How do we verify the eligible
households?

How do we deal with the supply
side?

How do we address the specific
risks?

What is the role of the LGUs?