The FINANCIAL — The Asian Development Bank (ADB) has approved a $400 million loan to help the Government of the Philippines further expand its flagship conditional cash transfer (CCT) program, which provides regular health and education grants to millions of the country’s poorest households.
“The support, which builds on ADB’s initial loan to the project of the same amount, will help the government support more families, now also including high school students,” said Karin Schelzig, Senior Social Sector Specialist in ADB’s Southeast Asia Department. “This is important, as impact evaluation shows that the CCTs are keeping vulnerable young people at school, opening the door to a better future.”
The CCT program, known locally as Pantawid Pamilyang Pilipino, provides grants to poor families if they send their children to school, visit health centers and attend family development sessions. CCTs are an investment in human development that pays off when healthier and better educated young people grow up to get better jobs and break out of the poverty trap, according to ADB.
ADB approved the initial loan in 2010 to strengthen the program’s poverty targeting system, finance a share of the cash grants to 637,000 households in selected areas, build capacity among program staff, and support monitoring and impact evaluation. The fresh assistance will finance a share of the grants to all participating households nationwide. Since the program’s inception, the number of CCT partner beneficiaries increased from 340,000 to more than 4.4 million at the end of 2015—making it the fourth-largest CCT after programs in India, Brazil and Mexico.
The program has expanded rapidly since it began in 2008 and has evolved over time based on lessons and experience. Examples of evidence-based program adjustments include first increasing the grant amount for older children and expanding the eligibility cut-off from 14 years of age to 18 to raise the rates of high school graduation of children from poor families.
More than 93% of the participating households regularly meet the conditions for receiving the grants, well in excess of the 80% target. Performance targets for women’s participation, school enrolment rates, and other key indicators have also been exceeded, and rigorous impact studies have found no evidence that receiving the grants discourages adults from seeking paid work. Participation in the program is based on an objective and transparent poverty targeting system known as the Listahanan.
Along with its additional financing, ADB is providing a technical assistance grant of $1 million, which will provide demand-driven policy and advisory services. It will help the Department of Social Welfare and Development strengthen program management, assess any proposed program or policy adjustments, and undertake operational spot checks on program implementation.
ADB’s additional financing will be provided over 4 years to December 2019. The government has also sharply scaled up its support for the program, with a budget of P 62.7 billion, or about $1.3 billion, for 2016.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region.