Benjie Oliveros | Solving Poverty the Wrong Way


In a big urban poor community in Quezon City, mothers, with children in tow, could be seen lining up at the local health center. Most of the children being brought to the center were not sick. They were there so that the mothers could get a certification that the children had their check up, a requirement for the cash transfer amounting to P1,400 ($31.64) per family being offered by the Department of Social Welfare and Development to poor families.

Last September 3, 2010, Social Welfare Sec. Dinky Soliman announced that the Asian Development Bank (ADB) approved a $400 million loan to enable the government to fight poverty by distributing cash grants to 1 million poor families. Earlier the Philippine government also received a $120 million loan from the Millennium Challenge Corporation. Soliman added that by the end of 2011, the government intends to increase the number of beneficiaries of the cash grants to 2.3 million families. This figure is half of the 4.7 million families that fall below the government’s very low poverty threshold of P41($0.93) per person per day as of the year 2006.

Poor families could qualify for the grant if they fulfill the following requirements: children 6 to 14 years old must be enrolled in school and attend at least 85 percent of the classes, pregnant women must receive prenatal and postnatal care, parents must attend Family Development Sessions, children under 5 years of age must receive regular preventive health checkups and vaccinations, and children in elementary schools must receive deworming treatment at least twice a year.

Camilla Holmemo, ADB poverty reduction specialist, reportedly said, “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.”

However, even Soliman and Socioeconomic Planning Sec. Cayetano Paderanga are not optimistic that the country would achieve the Millennium Development Goal of reducing poverty by half in 2015. President Benigno Aquino III is more optimistic. Aquino claimed that the country’s targets could still be achieved by reducing corruption for more efficient use of funds intended for the Millennium Development Goals.

Surely, poor families would welcome the monthly cash grants as it would augment the family income and, for families with no stable source of income, it would assure them of P1,400 ($31.64) per month for as long as the program lasts.

The cash grants would also make poverty statistics look good. It would artificially jack up the income of 2.3 million families by approximately a dollar a day.

However, the increase in the income of these families would be temporary. Without stable employment and a decent income, poor families would be back to where they were before the program when it ends. Even the ADB admits that this program should be complemented by generating investments and jobs. But the previous Arroyo administration had practically done everything, short of charter change, to attract foreign investments, still the unemployment and underemployment situation is at its worst.

Would it ensure that pregnant women receive prenatal and postnatal care, children are checked up and vaccinated regularly and are kept in school? This again depends on the income of the families and their access to government services.

Most children of poor families drop out of school for two reasons: the family could no longer afford the school expenses – transport fare, meals and snacks, school supplies – and children are forced, at a young age, to contribute to the family income.

With regards access to health services, a lot depends on the availability of doctors, nurses, and medicines in government health centers, which are chronically lacking in staff, supplies, and medicines, and the poor’s access to government hospitals. Sadly, the proposed 2011 budget reflects a reduction in the budget for health services. According to Ibon Foundation, the subsidy for the National Health Insurance premium for indigent patients was effectively reduced by P1.67 billion ($37.7 million) ; the budget for 55 government hospitals was reduced by P363.7 million($8.2 million) ; the budget for government specialty hospitals was reduced by P970.6 million($21.9 million) ; the budget for 12 major government hospitals was reduced by P4 million($90,000) . Likewise the subsidy to indigent patients for confinement or use of specialized equipment was reduced by P20 million ($451,000).

The reduction in the budget for health services is in line with the IMF-World Bank prescription of reducing the government deficit and the globalization policy of privatizing government services, which, in turn, is consistent with the neoliberal agenda of limiting government intervention in the economy to prop up the private corporate sector. These very same policies were pursued by the previous Arroyo administration resulting in the worsening of the unemployment and poverty situation, and further limiting the access of the poor to essential services such as health and education.

The only form of safety net for the poor that is acceptable to multilateral agencies such as the IMF-World Bank and the Asian Development Bank is the distribution of cash grants. To supplement this, private and non-government charitable organizations are mobilized to provide services to the poor. This is a drawback to the years before World War II when the church was mobilized to organize relief services such as soup kitchens, providing temporary shelter, and free clinics.

In capitalist countries, these were done during times of crisis in the hope that when the economy booms again, it would no longer be necessary to provide cash grants and charitable services. But in a backward, cash-strapped economy that does not generate enough wealth and capital for the country because of conditions of chronic crisis, such as in the Philippines, these would never make a dent in the poverty situation. It would merely provide immediate, temporary relief to a few poor families.

Meanwhile, the poor majority, which according to estimates by Ibon Foundation constitute 70 percent of the population, would sink deeper into the quagmire of poverty. In the past, these same policies only widened income disparities and worsened inequities. What needs to be done is to reorient and transform the economy to respond to the needs of majority of the Filipino people, and not that of big foreign and local corporations. (

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  1. Conditional cash transfer (CCT) programs are the rage now in development policies. From the point of view of its funding agency, mainly the World Bank, it’s a tool to “break the intergenerational transmission of poverty,” by encouraging the poor’s participation in education, health, and nutrition programs. It appears that it’s part of efforts to reorient, again, development policies towards more social spending, to cushion the deleterious effects of structural adjustment programs. Perhaps, this is why Brazil’s Lula and its Worker’s Party supported CCT programs? It’s all well, and perhaps good. I know many families who can use the cash to buy much needed food, in exchange for the condition that they send their kids to school, etc. But as you pointed out, it does not solve poverty. In the Philippines’ case, and as its now evident in the administration’s proposed budget, the CCT program requires counterpart funding at the expense of other much needed programs. I’m sure that the CCT will have so-called multiplier effects, such that commodity sales will go up, benefitting local traders who are already part of this society’s ruling, exploitative class. Not much new business generated there, therefore the CCT is not much of a stimulus program for the economy. In my view, the proposed budget should prioritize its spending to increase the production of basic goods, such as rice and other food commodities. I know many farmers, who own their meager plots of land who can’t increase their yields for lack of capital to buy fertilizers and pesticides. The CCT may put meager food on their tables, temporarily, thus the social risk of rebellion is lessened. Sounds familiar?

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