62879 PHILIPPINE SOCIAL PROTECTION NOTE MAY 2011 NO. 2 Overview of the Philippines’ Conditional Cash Transfer Program: The Pantawid Pamilyang Pilipino Program (Pantawid Pamilya) Luisa Fernandez and Rosechin Olfindo1 1. Background The Pantawid Pamilya2 is a conditional cash transfer (CCT) program which provides cash to beneficiary households, subject to compliance with program conditionalities. The Pantawid Pamilya is targeted at chronic poor households with children aged 0-14 years who are located in poor areas. The cash grants range from P500 (US$11) to P1,400 (US$32) per household per month, depending on the number of eligible children.3 To qualify for the grants, beneficiary households must undertake certain activities that are meant to improve the children’s health and education such as visiting health centers regularly, sending the children to school, and undertaking preventive check-ups for pregnant women. Like most CCT programs, the Pantawid Pamilya aims to alleviate current poverty by supplementing the income of the poor to address their immediate consumption needs, while the conditionalities can help improve human capital and thus break the intergenerational cycle of poverty. The Pantawid Pamilya is central to the Philippine government’s poverty reduction and social protection strategy. In recent years, several countries have adopted the CCT program as a new approach to providing social assistance to the poor. Many countries in Latin America have such a program, and large-scale CCT programs are also being undertaken in Asian countries such as Bangladesh and Indonesia. In the Philippines, the Pantawid Pamilya started as a pilot program of the Department of Social Welfare and Development (DSWD) in 2007 when the agency was embarking on social sector reform. Today, the program is seen more broadly as a vehicle for enhancing coordination within the government in assisting the poor and for increasing the effectiveness of social protection programs. The Pantawid Pamilya does this by complementing supply- side interventions of other line agencies such as the Department of Education (DepEd) and Department of Health (DOH) in addressing lagging human development outcomes. Since its inception in 2007, the Pantawid Pamilya has expanded at a rapid pace and now covers about 30 percent of the Philippines’ eligible poor households. Following the pilot program conducted at the end of 2007—in which the household targeting system and basic operation of the Pantawid Pamilya were tested—the Pantawid Pamilya was scaled up in March 2008 as a response to the food and fuel price shocks and global financial The Philippine Social Protection Note crisis.4 The Pantawid Pamilya has undergone two more phases of expansion since then. By January 2011, the series aims to disseminate experiences, good practices, and key findings from the Philippines on the topics related to social protection. It aims to broaden 1 World Bank Office Manila, the Philippines. For questions and clarifications about this note, please email to lfernandezdelgad@ the dialogue on social protection and worldbank.org. Rashiel Velarde contributed with analysis in section 8. Comments were provided by Nazmul Chaudhury, Junko stimulate public engagement in moving Onishi, Yuko Okamura and Rashiel Velarde from the World Bank and Rosela Agcaoili and Tarsicio Castaneda from AusAID. Editorial forward the policy agenda. The views assistance was provided by Minna Hahn Tong. expressed here are those of the authors 2 The Pantawid Pamilyang Pilipino Program was previously called 4Ps for short instead of Pantawid Pamilya. and do not necessarily reflect those of 3 US dollar equivalent based on average exchange rate in January to March 2011 (BSP, 2011). the World Bank. 4 During the pilot period, the CCT program was called Ahon Pamilyang Pilipino Program. Six municipalities were covered: four rural (Sibagat and Esperanza in Agusan del Sur, Lopez Jaena and Bonifacio in Misamis Occidental) and two urban (Pasay City and Caloocan City in Metro Manila). www.worldbank.org.ph 1 Overview of the Philippines’ Conditional Cash Transfer Program: The Pantawid Pamilyang Pilipino Program (Pantawid Pamilya) program had about 1 million beneficiary households, making the DSWD takes the lead in implementing the Pantawid Pamilya, with Pantawid Pamilya one of the largest social protection programs in support from key agencies and local partners. With the creation the Philippines. The massive scale-up was made possible by pooling of the Pantawid Pamilya in 2007, the government formalized resources from the government and the World Bank. The World institutional arrangements among the agencies involved.8 DSWD Bank and Australian Agency for International Development (AusAID) works in partnership with key agencies such as DOH, DepEd, provided considerable technical assistance. Subsequent phases Department of the Interior and Local Government (DILG), and Land have also been supported by the Asian Development Bank (ADB) Bank of the Philippines (LBP) which help ensure the availability of in coordination with the Government, World Bank, and AusAID.5 health and education services as well as provide necessary support In 2011, the Pantawid Pamilya aims to cover 2.3 million beneficiary services in the targeted areas. DSWD created the Pantawid Pamilya households, or almost 60 percent of the poor households in the National Project Management Office (NPMO), which handles Philippines. The program has budgetary support of P21 billion, the day-to-day operations of the program with assistance from or about 60 percent of DSWD’s budget (Figure 1), for 2011.6 Regional Project Management Offices (RPMO) and City/Municipal Links.9 DSWD also has support from local service providers such Figure 1. The Pantawid Pamilya Coverage and Budgetary Support, as the school principals and midwives who have been designated 2007-2011 to oversee and ensure proper verification of compliance to conditionalities. 2. Design Features of the Pantawid Pamilya 2.1. Targeting System The Pantawid Pamilya targets poor households located in the poorest areas of the Philippines. To be eligible for the cash grants, households must meet multiple criteria at the time of registration. First, they must reside in poor areas selected by the program. Second, they must be classified as poor. Third, a household must have a pregnant woman or at least one child aged 0-14 years. Four, ! the households must be willing to commit to meeting program Source: DSWD. Number of beneficiaries for 2011 refers to target. conditionalities. The Pantawid Pamilya helps to fulfill the country’s commitment The targeting system follows a multi-step process. The poorest to meeting some of the Millennium Development Goals (MDG). provinces are first selected based on official poverty incidence These MDGs include: eradicating extreme poverty, achieving according to the latest Family Income and Expenditure Survey universal primary education, promoting gender equality, reducing (FIES) by the National Statistics Office (NSO). Within the selected child mortality, and improving maternal health. Government provinces, the poorest municipalities are selected based on the estimates indicate that 26.5 percent of the population was living poverty incidence of Small Area Estimates (SAE) by the National below the poverty line in 2009, which was lower than the baseline Statistical Coordination Board (NSCB), while the poorest cities figure of 33.1 percent in 1991 but still far from the target of 16.6 are selected based on a standard set of indicators such as data on percent by 2015. Progress in achieving MDG targets in education and health has also been slow. In 2008, the net enrollment ratio in primary education was 85.1 percent, and only 75.4 percent of those in school were able to start Grade 1 and reach Grade 6. The number of maternal deaths per 100,000 live births was 162 in 2006, more than three times the target of 52.3, while only 79.2 8 The institutional arrangement among government agencies in the percent of one-year-old children were immunized against measles implementation of Pantawid Pamilya was formalized in the following: a) in 2008.7 Memorandum Circular 9 Series of 2007, Creating the Ahon Pamilyang Pilipino (APP) Program National Advisory Committees and defining their roles and responsibilities; b) Administrative Order 16, Series of 2008, guidelines on the implementation of Pantawid Pamilyang Pilipino Program (Pantawid Pamilya); 5 The World Bank provided funding support for the first and second phases of and c) Joint Memorandum Circular 1, Series of 2009, defining the institutional expansion, while ADB funded part of the second phase and the third phase of arrangements for the implementation, monitoring, and evaluation of the expansion. AusAID has supported the Pantawid Pamilya since 2008 by financing Pantawid Pamilya. the World Bank’s technical assistance to DSWD in designing and implementing the 9 City/Municipal Links are persons assigned to oversee program operations Pantawid Pamilya and also by providing direct technical assistance to DSWD. at the city/municipality level. They are in close contact with beneficiary 6 According to Government estimates, the Philippines had 3.8 million poor households. One City/Municipal Link is assigned for every 1,000 beneficiary households in 2009 (NSCB, 2011a). households in average starting in January 2011 to better respond to program 7 MDGs as stated in Pantawid Pamilya website (DSWD, 2011); MDG indicators implementation needs. From 2008 to 2010 the ratio was one municipal link to as of February 2011 (NSCB, 2011b). 1,500 beneficiary families. 2 PHILIPPINE SOCIAL PROTECTION NOTE pockets of poverty.10 A household targeting system is then used The household targeting system was institutionalized and adopted to identify poor households within the selected barangays. Finally, as the main targeting system for identifying poor households in the potential beneficiary households are selected among the poor Philippines. From 2007 to 2008, the targeting system was embedded households in the barangays based on the eligibility criteria.11 List in the Pantawid Pamilya operations and was being managed by the of potential beneficiary households is published at the barangay Pantawid Pamilya NPMO.13 In 2009, successful implementation hall for community validation, before beneficiaries are enrolled in of the program prompted DSWD to institutionalize the targeting the program. system, which became the National Household Targeting System for Poverty Reduction (NHTS-PR). DSWD created a separate NPMO A core element of program implementation is the standardized to manage the NHTS-PR through a de-concentrated approach at the household targeting system used to select beneficiary regional level. The NHTS-PR, which contains a national database of households. The targeting system uses the proxy means test poor households, can also be used by other government agencies (PMT) method to select the poor households within a municipality. in identifying potential beneficiaries of their programs. By January The PMT is a statistical tool that determines a household’s 2011, DSWD had shared the database with the Philippine Health economic condition based on information such as household Insurance Corporation (PhilHealth), Department of Agriculture composition, socio-economic characteristics, assets, housing (DA), DOH, and International Labor Organization (ILO). conditions and tenure status, education, access to basic services, and regional variables. It is widely considered to be the most Although the NHTS-PR has been used to select poor beneficiary straightforward, practical, and reliable way to gauge poverty, households throughout the program, the selection criteria for particularly in countries with large informal sectors where incomes municipalities have differed in every phase of expansion. The first are difficult to verify. In selecting Pantawid Pamilya beneficiary phase of expansion (March-December 2008), which covered the households, DSWD conducts a nationwide survey of households first set of beneficiaries of the program (“Set 1”), was conducted and uses the PMT to determine whether a household is poor. As in the poorest municipalities of the 20 poorest provinces as well of January 2011, about 10 million households were surveyed, as the poorest provinces in other regions (Table 1). The second of which 4.9 million households were identified as poor.12 phase of expansion (March-July 2009), covering “Set 2” beneficiary Table 1. The Pantawid Pamilya Beneficiary Households, by Sets Set of Beneficiary No. of Beneficiary Period of Geographic Selection % Dist. Households Households Expansion Coverage Criteria • 2 poorest provinces Pilot September to 3 regions, 3 provinces, 4,459 0.4 • Accessible municipalities to December 2007 2 districts monitor pilot testing • Poorest municipalities in 20 17 regions, 33 provinces, Set 1 March to poorest provinces 333,281 32.1 4 districts, 170 December 2008 • Poorest provinces in other municipalities/cities regions • Poorest municipalities Set 2 11 regions, 28 provinces, 288,192 27.7 March to July 2009 (poverty incidence above 60 140 municipalities/cities percent) Set 3 October 2009 to 17 regions, 77 provinces, • Individual selection of 412,901 39.7 December 2010 472 municipalities/cities municipalities Total 1,038,833 100.0 782 municipalities Source: DSWD. 10 For the first two phases of Pantawid Pamilya expansion, all barangays within 13 The household assessment survey for the 2007 pilot program was conducted the selected municipalities were included in the program, while the number through universities, while subsequent surveys were conducted by DSWD of barangays included within the selected cities depended on targets set by through its regional offices. DSWD. 11 All implementation details of the Pantawid Pamilya targeting system are documented in the Operations Manual for the National Household Targeting System for Poverty Reduction (DSWD, 2009a). 12 The household targeting system uses the FIES 2006 poverty thresholds, which differ from the new poverty thresholds and new methodology for measuring poverty just released in March 2011 by NSCB. www.worldbank.org.ph 3 Overview of the Philippines’ Conditional Cash Transfer Program: The Pantawid Pamilyang Pilipino Program (Pantawid Pamilya) households, was conducted in municipalities where poverty Nonetheless, as in the case of Sets 1 and 2 beneficiary households, incidence was above 60 percent. The third phase of expansion Set 3 beneficiary households were selected using the NHTS-PR. (October 2009-December 2010), covering “Set 3” beneficiary Figure 2 shows the geographic coverage of the Pantawid Pamilya. households, did not take poverty incidence into account in selecting municipalities since the aim was to extend coverage nationwide. 2.2. Program Conditionalities Figure 2. The Pantawid Pamilya Geographic Coverage The health and education grants have different sets of conditionalities for the age-relevant members of the beneficiary household. For the health grant, household members are required to undertake activities that help improve preventive health care, particularly among pregnant women and children under 5 years (Table 2). The household has responsibility for bringing children aged 0-5 years to health centers for immunization and weight monitoring, while the children aged 6-14 years are required to take de-worming pills at schools. Pregnant women must avail of pre- and post-natal care, and delivery must be assisted by skilled personnel. The parents (including pregnant women) are also required to participate in Family Development Sessions conducted by DSWD in the Pantawid Pamilya areas. For the education grant, the conditionalities help improve the enrollment and school attendance rates of children. Children who attend pre-school or day care centers, primary school, or secondary school are required to maintain class attendance rates of at least 85 percent per month. The numerous conditionalities of Pantawid Pamilya have made it more difficult to monitor compliance. In the initial design stage, the Pantawid Pamilya conditionalities included school attendance of children aged 6-14 years and regular check-ups for children aged 0-5 years and pregnant women. More conditionalities were added as the program evolved, partly in response to criticism by several sectors that the program would foster laziness and over- dependence on the government. DSWD added the conditionalities of pre-school or day care center attendance for children aged 3-5 ! Source: Pantawid Pamilya database as of January 2011. Table 2. The Pantawid Pamilya Conditionalities Household Member Health Grant Conditionalities Education Grant Conditionalities • Visit health centers to avail of health services in • Children aged 3-5 years old who receive the periodicity defined by DOH protocol education grants must be enrolled in a day care Children aged 0-5 years or pre-school program and maintain a class attendance rate of 85 percent per month • Take de-worming pills twice a year at schools • Must be enrolled in elementary or secondary Children aged 6-14 years school and maintain a class attendance rate of 85 percent per month • Have at least one pre-natal consultation each Pregnant Women trimester during the pregnancy • Delivery is assisted by skilled health personnel • Attend family development sessions at least once Grantee a month Source: Operations Manual for Pantawid Pamilya. 4 PHILIPPINE SOCIAL PROTECTION NOTE Overview of the Philippines’ Conditional Cash Transfer Program: The Pantawid Pamilyang Pilipino Program (Pantawid Pamilya) On average, Pantawid Pamilya grants account for about 20 while it is highest for the households that have three or more percent of beneficiaries’ annual household income. Conceptually, children aged 6-14 years only as they receive both the health and the amount of grants an eligible household can receive depends education grants (26 percent). However, it is noteworthy that the on the number of eligible children in the household. Hence, beneficiary households who receive the least Pantawid Pamilya the share of grants to total annual household income differs by grants relative to their income account for the largest share of the household composition (Table 5). In the case of Pantawid Pamilya, total beneficiary households as they are also the poorest—they the share is lowest for the households that have children aged have the lowest average annual household income (PhP 45,540). 0-5 years only (13 percent) as they receive only the health grant Table 5. Grants by Type of Eligible Household Share of Eligible Ave. Household Health Grant/ Education Grant/ Total Grants Households House- Income/Year Year Year by Family Composition holds (Pesos) (Pesos) (Pesos) % of In Pesos (%) Income All children are 0-5 years old only 21 45,540 6,000 n/a 6,000 13 Children 0-5 years & 1 child 6-14 years 14 53,129 6,000 3,000 9,000 17 Children 0-5 years & 2 children 6-14 years 14 56,172 6,000 6,000 12,000 21 Children 0-5 years & 3 or more children 19 6-14 years 57,022 6,000 9,000 15,000 26 Only 1 child 6-14 years 11 53,268 6,000 3,000 9,000 17 Only 2 children 6-14 years 11 57,609 6,000 6,000 12,000 21 Only 3 or more children 6-14 years 10 61,872 6,000 9,000 15,000 24 Weighted Average 53,976 10,630 20 Source: 4Ps database for household income. The Pantawid Pamilya transfer size is comparable to those The payment of grants is also terminated if there are changes in of CCT programs in Latin America, which have been proven the household situation that make the household ineligible for the to serve as sufficient incentive for families to comply with grants, such as a change in family composition—for instance, the program conditionalities. At the same time, the transfer sizes youngest child in the household has turned 15 years old—or if the have been sufficiently low to avoid distorting labor market household moved to a municipality not covered by the program. decisions. In Mexico’s Oportunidades, the transfer size is about 21 percent of total annual household expenditures; in Colombia’s The Pantawid Pamilya grants are paid directly to beneficiary Familias en Acción, it represents about 15 percent of minimum households through their own Land Bank of the Philippines wage; and in Nicaragua’s Red de Protección Social, it represents (LBP) accounts. The LBP serves as the disbursing institution of the about 17 percent of total annual household expenditures.16 Pantawid Pamilya. Grants are remitted through the beneficiary households’ LBP accounts and can be withdrawn from automated Payment of Pantawid Pamilya grants is terminated if a beneficiary teller machines (ATMs) or through over-the-counter transactions. As household does not comply with the conditions of the program in most CCT programs, the Pantawid Pamilya gives the responsibility or no longer meets the eligibility criteria. Cash grants for a of managing the cash grants to the mother. Experience in CCT particular period are paid to beneficiary households within the programs shows that women make relatively better use of grant next two months. This procedure allows DSWD to check and money by using it to purchase food or other necessities such as verify household compliance with the program conditionalities medicines, transportation to and from school, and school supplies. during the reporting period before payments are released. If a If the mother is absent or no longer part of the household, the beneficiary household was found to be non-compliant with the Pantawid Pamilya allows another member of the household to be conditionalities in a particular month, the cash grant will not be the grantee, in the order of the father, grandparents, aunt/uncle, paid for that month. However, continued non-compliance will result or guardian, subject to verification, endorsement, and monitoring in termination of payments and suspension from the program.17 by the municipal social worker. Grants were paid quarterly during 2008-2010, but DSWD changed to bi-monthly payments starting the first quarter of 2011. 16 See IFPRI (2005). Due to lack of data across countries, it is not possible to have a single reference for comparison. Therefore, data are not strictly However, since some municipalities covered by the Pantawid comparable. Pamilya do not have LBP branches, not all beneficiary households 17 The Operations Manual for Pantawid Pamilya states that the third offense of receive their grants through the bank. The pilot spot check non-compliance results in termination of the grants and temporary suspension from the program (DSWD, 2009b). survey conducted in May 2010 in Northern Samar showed that 98 6 PHILIPPINE SOCIAL PROTECTION NOTE percent of the respondents received Pantawid Pamilya grants.18 All updates are encoded in the Updates System by the MIS unit of However, not all beneficiaries received the grants directly from the NPMO. With the updated household information, the system the bank. As of October 2010, only around 59 percent of Set determines and verifies the correct amount of cash grants the 1 and 71 percent of Set 2 active beneficiary households receive beneficiary household is entitled to receive. payments through LBP cash cards. Even for municipalities with LBP branches, issuance and distribution of cash cards to beneficiary The updates process involves several verification points to households have been particularly challenging due to factors such prevent beneficiary households from manipulating information. as mismatch of beneficiaries’ information in LBP and Pantawid As changes in household information may affect the amount of Pamilya Management Information System (MIS) databases and cash grants received, households have the incentive to manipulate documentary requirements to open accounts. DSWD has been information. For example, the death or departure of a legitimate exploring other channels for sending the grants such as Globe member of the household or a change in residence to a municipality Telecom’s GCASH Mobile program, which uses mobile phones to not covered by the program would reduce or terminate the grants. send and receive money. On the other hand, correcting the dates of birth of children to satisfy the age criteria would increase the grants. To prevent this type of 3. Management Information System (MIS) risk, the Updates System has validation routines and different levels for checking the veracity of updates. It does not allow an update A MIS created for the Pantawid Pamilya handles the database and without supporting documents such as birth certificate or proof all data processing requirements of the program. The MIS for the of enrollment. The updates are also presented during monthly Pantawid Pamilya manages all flows of information at the national, assemblies conducted by the Parent Leaders to increase the social regional, and municipal levels. The MIS as well as all Pantawid oversight of other beneficiaries in the area. The Municipal Links Pamilya processes are guided by the Operations Manual for the also conduct another round of reviews before sending them to the Pantawid Pamilya. The MIS uses information and communications DSWD regional offices. technology that handles all data processing requirements and maintains the database for the Pantawid Pamilya. It has built- 3.2. Compliance Verification System (CVS) in validation and duplicity checker routines, which help correct potential errors in the system. Essentially, the MIS helps ensure that The CVS links compliance with conditionalities to the payments every beneficiary household met all the eligibility criteria and is of grants. The CVS serves as a monitoring system for verifying receiving the correct amount of cash grant depending on its current beneficiary household compliance with conditionalities, status and compliance with program conditionalities. The MIS is controlling payments, and generating managerial reports and designed to include the following integrated modules: household progress indicators. The CVS involves the following steps: 1) NPMO information, registration, updates, compliance verification system, generates the Compliance Verification (CV) Forms; 2) RPMO payments, and grievance redress system. downloads and prints the CV Forms and disseminates them to cities and municipalities; 3) City/Municipal Links distribute the CV 3.1. Updates System Forms to schools and health centers (including day care and pre- schools); 4) schools and health centers record non-compliance with The Updates System helps ensure that the correct amount of conditionalities during the reported period;21 5) City/Municipal Links cash grants is provided to beneficiary households who remain collect the non-compliance data from schools and health centers, eligible for the grants. Beneficiary households are required to encode the data into the CVS program, and forward electronic report any changes in household information such as change in and hard copies to RPMO; 6) RPMO reviews the non-compliance address, change in school or health center where the children go, data and submits them to NPMO to serve as the basis for payment change in household grantee, and new enrollment of children. during that period; and 7) NPMO updates the database prior to the Changes in family composition such as birth, death, departure, or generation of CV Forms for the next reporting period. return of legitimate children aged 0-14 years old of the household19 must also be reported. The household grantee is responsible for 3.3. Grievance Redress System reporting the updates, which are verified by Parent Leaders, City or Municipal Links, and regional and national offices of DSWD.20 The Grievance Redress System (GRS) captures, resolves, and analyzes grievances about the program from beneficiaries and non-beneficiaries. This module includes the process of verifying 18 DSWD, in collaboration with the World Bank and financial support from and following up on complaints such as generating forms, updating AusAID, developed a methodology for spot checks for Pantawid Pamilya, which and processing information, assigning a tracking number to was pilot tested during February-May 2010 in 33 barangays in Northern Samar. every complaint as well as the person responsible for solving it, The survey covered 760 households, 57 schools, 16 health facilities and rural health units, and other program stakeholders. and producing reports of complaint resolution. The GRS design 19 Legitimate children are those who legally belong to the family (biological children or adopted, either of the head or the wife). 20 A Parent Leader is a point-person between the Pantawid Pamilya, LGU/ 21 As mentioned previously, the recording process focuses on non-compliance Municipal Link, and the household grantees at the barangay level. to reduce the burden of monitoring. www.worldbank.org.ph 7 Overview of the Philippines’ Conditional Cash Transfer Program: The Pantawid Pamilyang Pilipino Program (Pantawid Pamilya) for Pantawid Pamilya features a grievance database which tracks 5. Supply Side Assessment the nature, origin, location, and status of complaints such as targeting errors, payment irregularities, fraud, and corruption. By design, DSWD needs to undertake a supply side assessment to The GRS developed an application that is currently being tested determine the availability and utilization of education and health by the regions. The Pantawid Pamilya NPMO has set up complaint services in the municipalities prior to the implementation of Pantawid reporting mechanisms, including Text Hotline using the DSWD Pamilya. This ensures that the program has the required supply side SMS platform, email, Facebook, Google Site, and Twitter. In the interventions to respond to the increased demand for such services first quarter of 2010, about 13,500 complaints were received, over time. In the event of a lack or inadequate health and educational 83 percent of which related to payments. The pilot spot check facilities, DSWD will enlist the commitment of the local chief executive survey conducted in Northern Samar, however, showed that only through a Memorandum of Agreement, to provide the required 8 percent of respondents to the spot check survey had complaints services for the Pantawid Pamilya beneficiaries. The rapid program about payments. According to the spot check survey, complaints expansion however, did not allow for a more thorough analysis of on payments include delayed payments, having to pay for the availability of local services in the selected municipalities. DSWD transportation to go to the banks to receive the grants, or having has closely collaborated with AusAID for the development of a quick to pay somebody to collect the payments. supply side assessment tool coupled with a program for modeling and projecting demand for these services. DSWD is strengthening 3.4. Payments System its coordination with the Department of Health, Department of Education, Department of Interior and Local Government and the The Payment System controls and produces payments for Department of Budget and Management for ensuring the availability beneficiaries based on reports of compliance and updated and enhancing the provision of complementary services. household information. To release the cash grants, the NPMO generates a payroll for a specific area from the MIS Payment 6. Targeting Outcomes System. The information, including account names, account numbers, and amount of cash grants, is verified by DSWD’s Cash About 90 percent of Pantawid Pamilya beneficiaries belong to Division. Any discrepancies are reported back to the MIS for the bottom 40 percent of the population. Figure 3 shows the high updating of the database. Once the payroll is verified, the NPMO concentration of Pantawid Pamilya beneficiary households in the prepares a voucher and sends it to the Project Director and Project lowest income decile. About 52 percent of beneficiaries belong to Manager for approval then to the Financial Management Service the first bottom decile and about 20 percent of Pantawid Pamilya for processing. Even if the payroll has been verified and approved beneficiaries belong to the second bottom decile. In total about 72 on the DSWD side, it still needs to be verified by the LBP. The LBP percent of Pantawid Pamilya beneficiaries belong to the poorest checks the names and account numbers of the beneficiaries before 20 percent of the population in the Philippines, as obtained from payments are released. By design, this cycle could take at least incidence analysis conducted with the most recent Family Income and one month. Moreover, the release of cash grants is subject to the Expenditure Survey (FIES, 2009).22 This clearly indicates that most of beneficiaries’ compliance with program conditionalities. Hence, in the resources allotted for the program go to the poorest population. addition to the lengthy process, the processing of payments also Figure 3. Distribution of Pantawid Pamilya Beneficiary depends on the submission of CVS forms from the field. Households by Per Capita Income Deciles, Net of Pantawid Pamilya Transfer 4. Monitoring and Evaluation J!" #&" Monitoring and evaluation for Pantawid Pamilya is an integral #!" part of the program and consists of regular supervision, biannual L!" Spot Checks, Quantitative Impact Evaluation, and Qualitative K!" Studies. In addition to regular supervision conducted by DSWD &!" and the World Bank, biannual Spot Checks are conducted by a &!" %&" third-party firm. Spot Checks apply quantitative and qualitative %!" J" #" methods to assess program implementation by interviewing &" &" %" !" !" !" beneficiary households as well as other actors such as school M359>" ?/2,0<" N:35<" M,85>:" M3O:" ?3P>:" ?/Q/0>:" R3=:>" +30>:" N/0>:" principals, health providers, and DSWD staff. A scientifically G/23;/" G/23;/" G/23;/" G/23;/" G/23;/" G/23;/" G/23;/" G/23;/" G/23;/" G/23;/" rigorous impact evaluation applying Randomized Community ?:45/",-"LE9"C/0/123453/9" Trials and Regression Discontinuity is also being conducted by DSWD, with findings of the first round expected to be available Source: Author’s calculations with the FIES (2009) data which included a few variables to identify participants in Pantawid Pamilya. toward the end of 2011. Qualitative studies will then provide more in-depth understanding of how and why the program works. 7. For this analysis, Pamilya Beneficiaries Profile of Pantawid households in the FIES 2009 were ranked by their per capita 22 household income before the Pantawid Pamilya transfer. The average Pantawid Pamilya transfer in households indicates that the PMT the been identifying the The profile of beneficiary2009 according to administrative data of has program was about 12,000 PhP/year per household. beneficiary households appropriately. In beneficiary households belonging to the poorest income decile and residing in urban areas, the household heads and spouses finished Grade 6 or 8 Their counterparts in rural areas have are elementary graduates, on average (Table 6a).PHILIPPINE SOCIAL PROTECTION NOTE lower educational attainment (one year less on average) in comparison (Table 6b). Parents in households in the higher income deciles tend to have higher education levels, the highest being 7. Profile of Pantawid Pamilya Beneficiaries Parents in households in the higher income deciles tend to have higher education levels, the highest being high school graduate. The profile of beneficiary households indicates that the PMT Beneficiary households also have large family sizes, ranging from has been identifying the beneficiary households appropriately. five to seven household members, with those in the poorest In beneficiary households belonging to the poorest income income deciles having the largest families. Most households have decile and residing in urban areas, the household heads and more school-aged children who are 6-14 years old than children spouses finished Grade 6 or are elementary graduates, on average aged 0-5 years. The profile of beneficiary households coincides (Table 6a). Their counterparts in rural areas have lower educational with that of the poorest households in the FIES, indicating that the attainment (one year less on average) in comparison (Table 6b). PMT formula has captured the characteristics of the poor. Table 6a. Social Indicators of Urban Poor Pantawid Pamilya Beneficiary Households, by Income Deciles Per Capita Average Age Average Education Levels* Ave. No. of Children Income Aged 6-14 Household Size Deciles1 HH Head Wife Children HH Head Wife Children Aged 0-5 Years Years 1 43 39 11 7 7 4 1.4 2.5 7 2 42 39 11 8 8 4 1.3 1.9 6 3 42 38 11 9 9 4 1.2 1.8 5 4 41 37 10 10 10 4 1.2 1.6 5 5 43 40 15 11 9 7 … 1.8 5 6 to 10 … … … … … … … … Table 6b. Social Indicators of Rural Poor Pantawid Pamilya Beneficiary Households, by Income Deciles Per Capita Average Age Average Education Levels* Ave. No. of Children Household Income Aged 0-5 Aged 6-14 HH Head Wife Children HH Head Wife Children Size Deciles1 Years Years 1 43 39 11 6 6 4 1.4 2.4 6 2 42 38 11 7 8 4 1.2 1.8 5 3 42 38 11 8 8 4 1.2 1.7 5 4 43 38 11 9 9 4 1.2 1.7 5 … … … … … … … … … 5 to 10 Source: Pantawid Pamilya database as of January 2011. Notes: … means no entries. * Education Levels: 0 – no grade completed; 1 – Kinder or day care; 2 – Grade 1; 3 – Grade 2; 4 – Grade 3; 5 – Grade 4; 6 – Grade 5; 7 Grade 6 or elementary graduate; 8 – 1st Year High School; 9 – 2nd Year High School; 10 – 3rd Year High School; 11 – High School Graduate. 1 Households are ranked by estimated per capita income using the PMT. 8. Take-Up Rates This difference resulted in varying take-up rates—meaning the proportion of active beneficiary households relative to all eligible In the first phase of expansion, about 90 percent of eligible poor households in a given municipality—across Sets. The average poor households in the selected municipalities became active take-up rate for Set 1 was 87 percent, compared to 75 percent for Pantawid Pamilya beneficiaries, but this figure declined as Set 2, which can be attributed to factors such as implementation Pantawid Pamilya expanded. During the first and second phases pressures (tight deadlines), low institutional capacity at the of expansion, the Pantawid Pamilya aimed to enroll almost all municipal level where the enrollment process happens, and lack eligible poor households in the selected municipalities. For the of information dissemination to potential households about the third phase, each selected municipality was given a quota for the enrollment process. The take-up rate for Set 3 was low at only number of households that could be enrolled in the program. 35 percent. Figure 4a shows take-up rates for all municipalities www.worldbank.org.ph 9 Overview of the Philippines’ Conditional Cash Transfer Program: The Pantawid Pamilyang Pilipino Program (Pantawid Pamilya) covered by the program and the corresponding poverty incidence poverty incidence, particularly for Sets 1 and 2. Take up rates are at the municipal level, while Figures 4b to 4d show those for expected to increase as program expansion proposed to increase each Set. Take-up rates were higher in municipalities with higher coverage of Set 3 municipalities by end of 2010 and early 2011. Figure 4. Poverty Incidence and Take-up Rates of Pantawid Pamilya Beneficiary Households, by Sets (a) Total (b) Set 1 (c) Set 2 (d) Set 3 Source: Authors’ calculations using Pantawid Pamilya database as of January 2011. 10 PHILIPPINE SOCIAL PROTECTION NOTE 17 9. Poverty Impact of Pantawid Pamilya: (computers and IT systems), and financial resources necessary for Preliminary Estimates23 program operation. Moreover, the Pantawid Pamilya was scaled up when the systems were still under development. DSWD has Ex ante simulation analysis shows that the Pantawid Pamilya worked closely with technical experts on CCT programs from the can reduce poverty in the targeted areas significantly.24 Based World Bank and AusAID to mitigate the implementation risks.27 on Pantawid Pamilya data, it is estimated that 62 percent of the population in municipalities covered in the first and second phases The rigid institutional structure and weak procurement system of program expansion live below the poverty line. The cash transfer have constrained the expansion of human and capital support to beneficiary households, which increases their household income, for the Pantawid Pamilya. Despite the urgency to expand the is estimated to reduce poverty incidence in these areas by as much Pantawid Pamilya, DSWD’s institutional structure has not allowed as 2.6 percentage points. Potential impacts of Pantawid Pamilya on for an increase in staff to work on the Pantawid Pamilya. Although it the income gap of the poor and on the severity of poverty in targeted created the NPMO, the unit made use of existing personnel. By the areas also appear to be substantial.25 In particular, simulations end of 2010, staffing at the NPMO was 69 percent of what it should using the Pantawid Pamilya data show that the cash transfer could have been based on the number of approved positions.28 Of the 109 reduce the income gap of Pantawid Pamilya beneficiaries by 5.3 approved positions, only 75 positions were filled. Likewise, the level percentage points and poverty severity by about 4.3 percentage of staffing at RPMO was 74 percent of the approved positions.29 points. The average increase in per capita income among Pantawid Limited manpower in the field was also evident as one Municipal Pamilya beneficiaries is 12 percent. Although based on predicted Link, which was supposed to handle 1,000 beneficiary households, income figures, these estimates are consistent with the results of actually handled as many as 3,000 beneficiary households. Moreover, impact evaluations of comparable CCT programs in other countries. the weak procurement system in DSWD caused delays in some key Poverty was reduced by 17 percent in Progresa communities in implementation processes. The Pantawid Pamilya requires IT systems Mexico, while the Familias en Acción program in Colombia reduced that can handle the massive data collection and management, but IT the poverty gap by more than 6 percentage points.26 constraints at the regional level pose a major bottleneck, delaying the processing of payments. 10. Implementation Challenges Rapid expansion has also posed challenges to supply-side Like most CCT programs, the Pantawid Pamilya has faced several readiness in areas where Pantawid Pamilya is implemented. challenges, particularly in the early stages of implementation. A supply-side assessment is conducted for the areas selected Inherent in CCT programs are the implementation challenges by geographic targeting, which involves meeting with the local associated with the administratively complex nature of the program. government unit and conduct of surveys to assess the availability The rapid expansion of the Pantawid Pamilya in a short period of of health and education services in the area. In the municipalities time exacerbated the implementation challenges. For example, or barangays where the supply-side facilities have been assessed DSWD needed to survey at least double the targeted number of as adequate, DSWD’s regional offices facilitate activities leading beneficiary households, as it was estimated that almost half of up to implementation of the Pantawid Pamilya. However, given the surveyed households would be identified as poor and would the pressure to expand the program—particularly to areas with a be eligible for the program. Because of this, DSWD faced several high concentration of poor—some municipalities with inadequate challenges mostly related to the limited resources available for the education and health facilities have also been included in the program, such as the number of personnel, physical equipment program. The lack of health facilities and schools in these areas has major implication for beneficiary compliance with conditionalities, thus potentially limiting program impact. Both the AusAID CCT 23 A more detailed analysis of poverty impact of the Pantawid Pamilya will be Quick Supply Side Assessment and World Bank pilot spot check discussed in the Philippines Social Protection Note No. 3 (forthcoming). surveys, for example, found a poor state of day care centers, school 24 World Bank estimates based on analysis of Set 1 and Set 2 beneficiary households, where NHTS surveyed at least 80 percent of the total households. infrastructure and an inadequate number of teachers in schools Household cash transfers (health and education grants) were computed attended by children of beneficiary households.30 according to the actual demographic composition of beneficiary households and per capita income predicted using the PMT. The transfer was adjusted by the latest compliance rate for education (77 percent) and health (70 percent) 27 Apart from the AusAID-funded World Bank TA, AusAID has embedded based on the Compliance Verification System (CVS) - Management Information an international CCT Expert in DSWD to help it manage and consolidate the System (MIS) - Pantawid Pamilya Database for the first quarter of 2011. program’s rapid scale up, providing strategic guidance at key junctures of the 25 Poverty incidence refers to the share of the poor population to the total program’s rapid expansion and implementation. population. Poverty gap measures the average income shortfall of the poor 28 AusAID TA has helped DSWD developed an organisational structure for expressed as a share of the poverty line. Poverty severity is the squared income the PMO with clear resource requirements and delineation of roles and shortfall of the poor expressed as a share of the poverty line. Compared to the responsibilities among units. poverty gap, poverty severity is more sensitive to the income distribution of the 29 One of the reasons to low staffing is the lengthy procedure to hire employees poor so that a higher value of the poverty severity reflects a worse distribution in government. of income . 30 The spot check survey found a teacher-student ratio of 1:41 in elementary 26 See Hoddinott and Skoufias (2004) and Institute for Fiscal Studies, schools, compared to the national average of 1:36, and one-fifth of the schools Econometrica and SEI (2006) for Mexico and Colombia, respectively. employed multi-shifts, indicating lack of classroom infrastructure and/or teachers. www.worldbank.org.ph 11 Overview of the Philippines’ Conditional Cash Transfer Program: The Pantawid Pamilyang Pilipino Program (Pantawid Pamilya) 11. Conclusion Pantawid Pamilya, in terms of financial resources as well as efforts to build technical and program implementation capacity within DSWD Despite the early challenges, the government successfully rolled and its regional and local counterparts. Thanks to these efforts, the out the Pantawid Pamilya to reach the poorest households government has a pioneer social protection program that takes into in the Philippines. To date, the Pantawid Pamilya is the largest account international best practice and methods. The Pantawid social protection program in the Philippines and has been able to Pamilya is the only social protection program in the Philippines in achieve the widest coverage of the poor. The concerted efforts and which control and accountability mechanisms are embedded in the commitment of DSWD and its partner institutions in implementing core program design. Other government agencies implementing the pilot program and establishing the household targeting system social protection programs can take advantage of the investments were critical to program expansion. The pilot program imparted made by DSWD in creating the Pantawid Pamilya and in improving several lessons that were essential in improving the core design of the targeting and delivery systems of the program. the Pantawid Pamilya and in preparing the systems for rapid scale- up. Although the expansion brought several challenges for DSWD, References the agency managed to get the program running and has continually improved the systems necessary for program operation. Bangko Sentral ng Pilipinas (2011), Peso per US dollar rate, website: http://www.bsp.gov.ph/statistics/spei_new/tab25.htm The PMT-based targeting system combined with geographic Castaneda, T. (2007), “The Conditional Cash Transfer Program of the Philippines”, draft. targeting has helped minimize the inclusion and exclusion Department of Budget and Management (2011), General errors,31 thereby enhancing program impact. The combined Appropriations Act, website: http://www.dbm.gov.ph approach of a standardized targeting mechanism to select potential Department of Social Welfare and Development (2009a), Operations beneficiaries for the program and a registration process to validate Manual for the National Household Targeting for Poverty the information gathered have been key to the credibility and Reduction. acceptance of the program. This process was complemented by the Department of Social Welfare and Development (2009b), Operations GRS, which allows people to present complaints about inclusion Manual for the Pantawid Pamilyang Pilipino Program. errors, exclusion errors, and program operations and which has Department of Social Welfare and Development (2011a), National clear guidelines for complaint resolution. Household Targeting System for Poverty Reduction, website: http:// nhts.dswd.gov.ph/ The targeting system based on PMT has produced good targeting Department of Social Welfare and Development (2011b), Pantawid Pamilya, website: http://pantawid.dswd.gov.ph/ outcomes. About 90 percent of Pantawid Pamilya beneficiaries Fernandez, L. (2009), “Targeting Mechanism Used to Select belong to the bottom 40 percent of the population. This outcome Beneficiaries for the Pantawid Pamilyang Pilipino Program,” Social has been achieved by combining geographic targeting based Welfare and Development Journal, 3(1): 11-16. on poverty maps with a rigorous and standardized household Fiszbein, A., Schady, N., Ferreira, F., Grosh, M., Kelleher, N., Olinto, assessment, including validation of poor households with local P. and Skoufias, E. (2009), Conditional Cash Transfers: Reducing communities. Present and Future Poverty, World Bank, Washington, DC. Hoddinott and Skoufias (2004) “The impact of Progresa on Food Nearly three years since its launch, the Pantawid Pamilya has Consumption,” Economic Development and Cultural Change, already shown positive impacts on beneficiary households. The 53(1):37-61 cash grants increase the household incomes of the poor, while the Institute for Fiscal Studies, Econometrica and SEI, (2006) “Evaluación del conditionalities have helped improve the education and health Impacto del Programa Familias en Acción – Subsidios Condicionado de la Rede de Apayo Social” Bogota: Departamento Nacional de of their children. Anecdotal evidence shows that net education Planeación. enrollment rates of children in beneficiary households have risen, and International Food Policy Research Institute, IFPRI (2005). Impact the number of children who undertake de-worming at schools and Evaluation of a Conditional Cash Transfer Program. The Nicaraguan avail of vaccines from health centers has also increased. In addition, Red de Proteccion Social. Maluccio, J. and Flores, R. Research report field reports indicate that beneficiary households benefit from the 141. Washington, D.C. seminars and development sessions in their communities.32 National Statistical Coordination Board (2011a), “Philippine Poverty Statistics”, website: http://www.nscb.gov.ph/poverty/2009/table_1. Other social protection programs in the Philippines can learn from asp the best practice methods developed in the Pantawid Pamilya. A National Statistical Coordination Board (2011b), MDG Watch: Statistics considerable amount of resources has been invested in setting up the at a glance of the Philippines’ Progress based on the MDG indicators, available: http://www.nscb.gov.ph/stats/mdg/mdg_watch.asp Stephens, M. (2009), “Governance and Anti-Corruption in the Pantawid Pamilyang Pilipino Program,” Social Welfare and Development 31 Error of inclusion occurs when unintended individuals or households get to Journal, 3(1): 27-34 the roster of beneficiaries. On the other hand, error of exclusion occurs when World Bank (2010), “Philippines: Fostering More Inclusive Growth”, deserving individuals or households are missed out, not permitted or not able available: http://go.worldbank.org/2FY5ZEWCV0 to participate in the program. 32 An impact evaluation of Pantawid Pamilya will be conducted in 2011. 12 PHILIPPINE SOCIAL PROTECTION NOTE