World Bank backs subsidy for poor
Roderick T. dela Cruz
Manila Standard
The World Bank has expressed support for the Philippine government’s conditional cash transfer or subsidy program to help the poorest Filipinos cope with rising cost of living.
World Bank country director Bert Hofman said the bank is even willing to work with the Social Welfare Department to expand the scope of the program. The subsidy scheme has proven effective in addressing poverty in Brazil, Mexico and other Latin American countries.
“It is justifiable because it works very well for development,” Hofman said.
Conditional cash transfer seeks to reduce poverty through cash transfers to the poor, a scheme that is based on factors such as regular school attendance or the regular use of preventive health care services.
Under its conditional cash transfer program, the Social Welfare Department seeks to provide monthly cash allowance to 300,000 poor families.
The amount includes a health and nutrition cash assistance of P500 per month per household and an education assistance of P300 per month per child.
Opposition politicians criticized the program as a dole meant to ensure political gain for the Arroyo administration.
Social Welfare Secretary Esperanza Cabral said the program is not a dole but a sustainable long-term poverty reduction scheme.
Hofman said the target household beneficiaries of the program should be increased to make its impact more significant. He said better ways of identifying and targeting the poor should be prioritized.
Early this month, President Arroyo endorsed a three-year plan to provide P28 billion in annual subsidies to 4.7 million households living below the poverty threshold.
Incidence of hunger increased to 16.3 percent of the population in the second quarter from 15.7 percent in the first quarter, according to the Social Weather Stations.
As rice prices rose significantly, at least 2.9 million Filipino families experienced involuntary hunger in the last three months, the Social Weather Stations said.
The World Bank, in its assessment of conditional cash transfer program in Latin America, said there was clear evidence of success in increasing enrolment rates, improving preventive health care, and raising household consumption as a result of the program.
Apart from conditional cash transfer, a one-time P500 subsidy to lifeline users or families using 100 kilowatt-hours of electricity each month has also been added to the pro-poor project.
But Hofman said the level of electricity consumption that qualified for the subsidy should have been lowered.
Rice purchases by the poor have also been subsidized through the National Food Authority, which sells at only P18.25 per kilo, much cheaper than the P25 per kilo price of commercial rice.
There are also plans to extend P500 million in cash assistance for senior citizens not benefiting from pensions from the Social Security System and Government Service Insurance System; provide P1 billion for scholarships and student loans; and establish P1-billion credit facility for the conversion of public utility vehicle engines to make them run on alternative fuels.
Meanwhile, the House of Representatives approved a proposal seeking the creation of a Magna Carta for the Poor.
The measure aims to enhance the poor’s right to employment by giving them preferential access to job openings in private enterprises as well as in government programs and projects.
It will make the food subsidy a regular program for the poor and strengthen their right to free quality education by providing them access to study-now-pay-later plans in state colleges and universities. It also aims to provide the poor with decent housing at easy terms.
With Macon Araneta
