PHILIPPINES: Overcoming Poverty through the Conditional Cash Transfer Program

What is one important lesson we can learn from the Philippines' conditional cash transfer program? Poor and vulnerable families can overcome poverty and deprivation through their own efforts. All they need is a little help from the government.

The story of Elena Ortile from Bicol illustrates this lesson.

In 2006, Typhoon Reming battered the Bicol region, causing Elena to lose everything-her house, livelihood, and personal belongings. A few years later, her husband died due to illness, leaving her to fend for herself and her four children. She sold vegetables and food items, and worked as a cook, dishwasher, and server in a small restaurant, but her earnings were never enough.

The government's Pantawid Pamilyang Pilipino Program or 4Ps, a conditional cash transfer program since 2008-that provides modest cash grants requiring young children to stay in school and get regular health checks-provided a lifeline for Elena.

Fast forward to 2024, her eldest child is now a mechanical engineer, the second working as an air con technician after securing certification from a technical and vocational training, and the third is about to finish college. The youngest is still in Grade 12. Her family has recently "graduated" from the Pantawid program.

Nationwide, there are millions like Elena whose lives have changed for the better because of 4Ps, with continuing support from the World Bank through the Beneficiary FIRST Social Protection Project.

Implemented in 145 cities and 1,483 municipalities of the Philippines, 4Ps has benefitted more than 4 million families (around 20 percent of the country's population), including 8.7 million children, making significant impact on reducing poverty.

The program provides cash grants to poor households under specific conditions to improve their health, nutrition, and education outcomes. Children aged 3-4 years must attend daycare and preschool classes. Children aged 5-18 are required to attend elementary and secondary classes. All of them need to have regular health checks. Parents must attend monthly "family development sessions" where they learn life skills such as effective parenting, early childhood care, financial literacy, and disaster preparedness to promote positive behavioral changes.

The cash grants that beneficiaries receive stop right after their children reach 18 years old, or when they reach senior high school. But for many of these families, these grants open opportunities for their children to get higher education and training, providing them with better chances at improving their lives.

The story of Joylyn Medel, mother of three, resident of Antipolo City, demonstrates this so well. A 4Ps grantee, she augments her husband's income as a security guard by sewing and selling sampaguita flower garlands on the streets.

Her eldest son John Kevin also sells flowers in the morning and goes to school in the afternoon until the evening. She said she allots most of the cash grant from 4Ps for the children's needs in school.

Besides affording the education of all her children, she has started paying for her house and lot. John Kevin is now into college, taking up hotel and restaurant management course. "I see myself as a successful businessman in the hospitality industry in the future," he said.

The 4Ps has been implemented in the Philippines for almost two decades now, allowing for a long-term perspective. Several studies and evaluations have revealed key insights:

• Poverty reduction and equity: The 4Ps has been shown to contribute significantly to reducing poverty and inequality. Studies indicate that without the 4Ps, poverty would have been 7% higher, inequality 0.9% higher, and the poverty gap 11% higher in 2018. The program is progressive, with poorer households receiving a higher share of benefits relative to their share in the national income distribution.
• Human capital development: The program has improved education outcomes, such as school enrollment and attendance, and increased access to key maternal and child health care services among beneficiary households. Investments in children's health and education through the 4Ps are expected to yield positive impacts on their future careers.
• Support during crises: During the COVID-19 pandemic, the 4Ps program played a crucial role in providing social assistance to poor and vulnerable populations, helping to mitigate the impact of the crisis or "shocks" on these groups.

Current support by the World Bank for 4Ps invests in cutting-edge digital technologies and platforms to improve beneficiary experience in receiving transfers from the government and enhance its targeting mechanisms. The World Bank has been supporting 4Ps since 2008 because it's a smart investment that helps break intergenerational poverty in the Philippines. Republic Act No. 11310 or the 4Ps Act of 2019 institutionalized the program as a national poverty reduction and human capital investment strategy.