Searching for Effective Poverty Interventions. Norio Usui

      Searching for Effective Poverty Interventions

      Conditional Cash Transfer in the Philippines

      Norio Usui

      Asian Development Bank

      © 2011 Asian Development Bank

      All rights reserved. Published 2011.

      Printed in the Philippines.

      ISBN 978-92-9092-411-1

      Publication Stock No. RPT113844

      Cataloging-In-Publication Data

      Usui, Norio.

      Searching for effective poverty interventions: Conditional cash transfer in the Philippines.

      Mandaluyong City, Philippines: Asian Development Bank, 2011.

      1. Social protection. 2. Philippines. I. Asian Development Bank.

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      Cover photo by Rita Festin.

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      This note is prepared by Norio Usui, senior country economist, Philippines Country Office, to elicit discussion and comments. The original paper was prepared in February 2011 as a PhCO Policy Note. Chris Spohr, Human and Social Development Division, Southeast Asia Department, provided useful comments and suggestions on an earlier draft. The author also thanks Junko Onishi, World Bank Office Manila, for useful discussion. Questions and comments can be addressed to the author ([email protected]).

      Summary

      The Philippines lags behind its neighbor countries in its progress toward poverty reduction and faces challenges in achieving the Millennium Development Goal (MDG) targets on poverty, education, and health. A sluggish economic growth over the decades, led mainly by the service sector, did not create enough job opportunities to lift Filipino workers and their families out of poverty. The country thus needs a new development model to benefit the poor. While poverty can be best reduced by economic growth, poverty reduction efforts should be supplemented by an adequate social protection system to relieve the poorest of the poor. The Philippines’ social protection system has been fragmented, uncoordinated, and poorly targeted. The conditional cash transfer (CCT) program, which was initiated in 2007, is currently becoming a centerpiece of the social protection system in the country. This note reviews the economic rationales for transferring a cash grant to poor families contingent on their certain behavior, the major challenges in designing a CCT program, the targeting methodologies, and the impact evaluation designs. It also looks into how the Philippines’ CCT program was designed to resolve major difficulties in its design, targeting, and evaluation. Although the program is well prepared having been based on international experiences, it requires an effective implementation and careful monitoring and evaluation to achieve the expected goals. A CCT program with a rigorous impact evaluation offers an excellent opportunity, for both policy makers and development practitioners, to learn what works and what does not work as they search for effective poverty interventions.