An Act Institutionalizing a Conditional Cash Transfer Program, Providing for the Automatic Indexation of Cash Grants and For Other Purposes. 

Explanatory Note

The Pantawid Pamilyang Pilipino Program (4Ps), a form of conditional cash transfer (CCT), is now on its 7th year of implementation. Operating in 17 regions in the Philippines, spanning 79 provinces, 143 cities, and 1,484 municipalities, the number of families who benefit from the said program has now reached 4,436,732; including 10,888,887 school children aged 0 to 18.[1]

The program provides financial support to poor families, on condition that there will be investments in the education and health of children aged 0 to 18. It has been the mission of the government that with the help of 4Ps, children of beneficiary families will be provided with the necessary faculties that will help them break free from intergenerational poverty—keeping their health in check and their education unhampered by forced employment to help augment what little income their parents earn.

Findings from an Impact Evaluation on the Program has shown that with regard to education, there has been increased enrollment among children aged 3 to 11, and increased attendance among children aged 6 to 17—resulting in near universal enrollment at 98% in this age group.[2] Meanwhile for health, there has been a 10% reduction in severe stunting among children aged 6 to 36 months; the reduction in stunting is expected to yield long term results, as stunting in the first few years of a child’s life has been linked to lower educational attainment and reduced adult income.[3] Healthcare-seeking behaviors have also been observed among beneficiary families when a child falls ill.

The impact evaluation on the program has also noted a change in spending patterns of beneficiary families, who have been spending more on health and education as opposed to poor families who are not covered by the program[4].

Since the launch of the program, an overall increase in the general price level has been sustained as measured by the Consumer Price Index (CPI). The CPI was at an average of 111.4 when the 4Ps was launched in 2008, increasing to 139.5 in 2014.[5] This resulted in an annual average inflation rate of 4.4% for the period. Moreover, food inflation averaged 5.8%[6] during the same period, which may affect the poor more as they spend a larger share of their household budget on food. Despite the sustained increase in prices of commodities, the amount granted to beneficiary families has remained the same at P500 per household every month for the health grant, and P300 per child every month for the education grant. If the cash grant is maintained at its current amount, without due consideration for inflation, the real value of these grants will decrease over time, and may be insufficient for household spending. This could leave parents with no other recourse than to urge children to help out in generating income rather than finish schooling, which in turn could potentially push back poor families into the cycle of intergenerational poverty.

In order to sustain the continuous benefits from this program beyond changes in administrations, institutionalizing the 4Ps is imperative. The program plays a critical role in poverty alleviation and in the development of human capital, but its value in addressing the issue of poverty can be eroded if the amount given to eligible families remains stagnant amidst rapid increases in cost of living. This amount must be automatically reviewed and adjusted every 6 years to account for changes in the cost of living without need for further legislative action.

In light of the foregoing, the approval of this bill is earnestly sought.

RALPH G. RECTO

[1] Pantawid Pamilyan Pilipino Program. http://www.gov.ph/programs/conditional-cash-transfer/

[2] The World Bank Philippines Conditional Cash Transfer Program Impact Evaluation 2012 (revised April 2014)

[3] Ibid.

[4] Ibid.

[5] Consumer Price Index for all Income Households and Headline Inflation Rates Jan 2004 – June 2015. http://www.nscb.gov.ph/secstat/d_price.asp

[6] Inflation Rates by Commodity Group http://www.bsp.gov.ph/statistics/efs_prices.asp

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