MANILA, PHILIPPINES (2 September 2010) – The Asian Development Bank’s (ADB) Board of Directors today approved a $400 million loan to support the expansion of the Philippines’ conditional cash transfer program, known locally as the Pantawid Pamilyang Pilipino Program (4P), a cornerstone of the country’s social reform efforts in the wake of the global economic crisis.

The project, administered by the Department of Social Welfare and Development (DSWD), will provide direct financial support to 582,000 of the Philippines’ poorest families. Unlike traditional welfare programs, only families who keep their children in school and ensure that children and pregnant women get regular health checkups can receive the cash grants.

“The 4Ps program has already led to significant increases in school enrolment, child immunization, and prenatal medical care,” said Social Welfare and Development Secretary Corazon Juliano-Soliman said. “The program helps families break free from the cycle of poverty.”

Almost one in five children in the Philippines never attend primary school, and of those who do, three in every ten children drop out. Many of these children never receive preventative healthcare.

“This project will help families escape poverty while ensuring young people have better opportunities for advancement,” said Camilla Holmemo, Poverty Reduction Specialist in ADB’s Southeast Asia Department. “There is no better investment in a country’s future than an investment in its children.”  

Financial barriers are a major reason children and pregnant women from poor families do not regularly seek out preventative healthcare. Similarly, costs associated with education – as well as poor households’ need for additional income – are leading factors keeping children out of school.

The cash transfer project directly addresses this problem, giving an average impoverished family a 20% boost in annual income.

There are two types of cash transfers under the ADB-supported project, the first for child and maternal healthcare, and the second for school enrollment and attendance.

Poor mothers and pregnant women are eligible for cash grants if their young children receive regular health checkups and immunizations; if pregnant women receive prenatal and postnatal care; and if parents attend monthly family development sessions.

Families can also receive an additional grant if their children are enrolled in primary or secondary school, and maintain a class attendance rate of at least 85% every month.

The project will also support the government’s national household targeting system for poverty reduction.   

The loan will be sourced from ADB’s Ordinary Capital Resources (OCR). It will have a 25-year term, including a grace period of 5 years, an annual interest rate determined in accordance with ADB’s London interbank offered rate-based lending facility, and a commitment charge of 0.15% per year.

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. In 2009, it approved a total of $16.1 billion in financing operations through loans, grants, guarantees, a trade finance facilitation program, equity investments, and technical assistance projects. ADB also mobilized cofinancing amounting to $3.2 billion.

The Department of Social Welfare and Development is the primary agency that provides social protection and promotes the rights and welfare of the poor, vulnerable and disadvantaged individuals, families and communities. ###