The Board of Directors of the Asian Development Bank (ADB) approved a US$ 400 million loan to support the expansion of the Philippines’ conditional cash transfer (CCT) program, known locally as the Pantawid Pamilyang Pilipino Program (4Ps).
The first loan of the Aquino administration is expected to benefit more than 500,000 poor Filipino households.
The 4Ps is a cornerstone of the country’s social reform efforts in the wake of the global economic crisis.
Under the 4Ps, families can qualify for a maximum monthly stipend of P1,400 or US$ 31. Of this amount, families can receive P500, or $ 11, per month for meeting health conditions, and an additional P300 ($ 6.50) per child per month for meeting educational conditions.
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.
Social Welfare and Development Secretary Corazon Juliano-Soliman said the US$ 400 million loan would increase the number of families receiving monthly cash grants to 2.3 million by end of 2011.
“The additional funding will go a long way in expanding the reach and coverage of the program,” Soliman said.
Currently, more than 900,000 Filipino households benefited from the government’s CCT program.
Soliman also said that of the P34 billion budget next year, P23 billion were allocated for CCT program.
“The 4P program has already led to significant increases in school enrollment, child immunization, and prenatal medical care,” Soliman said.
Camilla Holmemo, Poverty Reduction Specialist in ADB’s Southeast Asia Department, said the project would help families escape poverty while ensuring people of better opportunities for advancement.
“There is no better investment in a country’s future than an investment in children,” she said.
The ADB said financial barriers were a major reason children and pregnant women from poor families did not regularly seek out preventive health care.
The cash transfer project directly addresses this problem, giving an average impoverished family a 20 percent boost in annual income.
“Conditional cash transfer programs have proven to be an effective way of keeping children healthier and in school... These programs help families break free from the cycle of poverty,” Holmemo said.
There are two types of cash transfers under the ADB-supported project, the first for child and maternal health care, 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 percent every month.
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 percent per year.
