Posted on 12 August 2013.
by Ronald U. Mendoza (A repost article from rappler.com)
At a recent forum on the Pantawid Pamilyang Pilipino Program (or 4Ps) held at the Philippine Institute for Development Studies, experts from different government agencies and academic institutions discussed the rationale and the feasibility of extending and expanding the program.
Under the management of Department of Social and Welfare Development (DSWD), the 4Ps is widely known to be the lynchpin of the government’s anti-poverty efforts. One of its key interventions is the provision of small cash transfers to mothers, as long as they commit to investing in their children, such as by ensuring their children go to school, as well as get deworming, vaccination and regular health check-ups to name a few other aspects of the program. 4Ps operates in 79 provinces covering 1484 municipalities and 143 key cities in all 17 regions nationwide.
As of June 2013, the program covered almost 4 million households. The planned extension of the 4Ps program will include an additional 2 million children to the current 8.5 million in the program. A special emphasis will be placed on providing additional support to children from poor families who would like to go to high school.
Yet, even as the budget for 4Ps is set to increase, some people seem impatient about its pay-off, which most assume will be immediate—such as reducing the number of poor and hungry people in the country. Several opposition politicians have even resorted to calling the government program a “dole-out”. And some question the size of the allocations dedicated to the 4Ps. Their typical argument is that there are better alternative uses for these funds.
At that forum, I argued otherwise—noting that the 4Ps program is and continues to be a good investment. Here’s why.
First, the 4Ps is NOT the only program in the anti-poverty strategy of the government, yet it’s quite possibly the most important component. The reason is that this program attacks one of the root causes of poverty—weak education, health and other human development characteristics that disadvantage a poor person.
No amount of job creation will employ and lift out of poverty millions of under-skilled and unhealthy citizens. No business would get into such an enterprise, and no government can sustain economic growth and job creation on such a weak foundation. Therefore, human capital build-up is, first and foremost, the key ingredient in the strategy.
What is often poorly understood about the 4Ps program is that it’s less focused on adults, and more focused on the next generation. The economic pay-off from these investments, therefore, will take some years to fully manifest—in the form of more educated and healthy citizens and more productive workers.
If we are serious about poverty reduction (and dare I say, poverty eradication), investing in children is where we should really begin. Otherwise, a never ending stream of people with weak education and health will add to the ranks of the poor.
Of course, human capital is not enough. Access to the other factors of production and growth will also need to dramatically improve for the vast majority of the population—such as through microfinance and lending to SMEs (improving access to capital); and true agrarian reform (access to land).
Preparing for the country’s youth bulge
According to the United Nations, our country is expected to reach its peak number of young people by around 2040-2050, roughly 25-30 years from today (see Figure 1). This means the brunt of our future labor force is comprised of infants already being born today—and their future capabilities depend heavily on the policy choices we make.
4Ps can help ensure that the majority of our young people do not fall through the cracks. For every 1.8 to 2 million children born every year in the Philippines, at least about one-third (or up to six hundred thousand) are born to poor families according to some estimates. Because of 4Ps, children will grow up to be educated, healthy, and productive members of Philippine society, contributing to the country’s economic competitiveness in the longer term. Therefore, the 4Ps is not merely a matter of charity for poor children as far as the country is concerned—our long run economic growth depends in large part on how successfully we equip our future citizens and workers to compete.
Nevertheless, the 4Ps prepares future workers; but it does not in itself create jobs. It is imperative that more jobs are created and more entrepreneurship encouraged in order to spur economic development that is inclusive for the vast majority of the youth.
Figure 1. Philippine Youth (Aged 15-24), 1950-2100 (In Millions)
Source: UN Population Division (World Population Prospects: The 2010 Revision).
Fueling economic and political transformation
Improved human capital will definitely be useful for improving wages and productivity—but it could also help sustain “matuwid na daan”. This is possible if a strong social protection system underpinned by 4Ps truly “emancipates” over 4 million poor families from patronage politics.
Patronage has become a way of life for many of our citizens, because the conditions of poverty force our people to seek help. And before 4Ps, poor families typically only had the local political patron as their main option. Table 1 provides a tongue-in-cheek outline of the major differences between professionally managed and evidence-based social protection vs. patronage politics.
As I noted in another Rappler article on reforming pork barrel politics, politicians are not the only ones addicted to pork—poor families actively seek the support of politicians, and they will continue to do so unless a proper social protection system is able to help poor and low income families mitigate risks and empower them in a systematic, fair, and evidence-based manner.
The 4Ps contains key accountabilities in helping the poor to break free from the poverty trap—it is targeted at the poorest households (and not merely political allies); the cash support is less than what is necessary to be technically non-poor but enough to matter for child investments (so it is specifically designed to mitigate the risk of dependency); and beneficiaries (typically the cash is given to mothers) are required to deliver on conditions that are linked to investing in children (and not merely conditioned on voting for the patron).
On top of all this, the 4Ps is among only a small number of government programs that are actually evaluated for their impact. In fact, the impact evaluation evidence suggests that the design of the 4Ps seems to successfully mitigate any possible dependency effects—poor families actually further increase child investments, over and above the cash transfer itself.
These are all good reasons to continue to expand and improve the program. Killing this program will bring us back to the previous status quo: no evaluation; poorly targeted; riddled with leakages (so that non poor people also benefit, and far less reaches the poor); and likely to be dominated by patronage politics.
The author is Associate Professor of Economics at the Asian Institute of Management and Executive Director of the AIM Policy Center. The views expressed in this article do not necessarily represent those of the institution. Questions and comments could be addressed to email@example.com. – Rappler.com
Reprinted from www. rappler.com