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Narrowing the income gap in the Philippines

As in many developing countries, the Philippines runs a Conditional Cash Transfer (CCT) programme to help the poorest families.

Modelled on the ‘Bolsa Familia’ scheme which was first introduced in Brazil in the 1990s, the Philippines’ programme provides small monthly payments to low-income families on condition that their children attend school regularly and are also taken for medical checkups and immunisations. The scheme, called ‘Pantawid Pamilya’, now covers three million households in the Philippines, making it the largest of its kind in Southeast Asia.

In the week when representatives from more than 60 countries are attending the annual meeting of the Asian Development Bank in Manila, where one of the key topics is the rising inequality of Asian populations, Reuters has been reporting on how Pantawid Pamilya is faring in the Philippines. According to the World Bank, the programme is operated in line with the best-run practices for such schemes. So for example, Pantawid Pamilya expects an 85% attendance rate from children at school and checks all members of the family are complying with other necessary conditions, or grants are stopped completely. The system also undergoes rigorous checks and is scrutinised by independent auditors. In addition, and unlike other CCT programmes, as well as expecting pregnant women to have regular pre- and post-natal checkups, once children are born parents also have to attend ‘family development’ sessions.

Given the successful running of the programme, the government of the Philippines hopes to enlarge the scheme even further in the future, so that it will cover five million poor households. Already, the budget for Pantawid Pamilya has risen in 2012 to 900 million dollars, nearly four times the level of spending two years ago.

Talking to poor families who benefit from the scheme, Reuters found the extra money it provides (since its introduction in 2007) is seen as vital by struggling households. One mother of five told the news agency that with the extra allowance, she no longer has to choose between putting food on the table or sending her kids to school. And she isn’t the only one. The World Bank attests that already Pantawid Pamilya has had a “very strong impact” on education. Many poor families know that for their children, going to school and then hopefully gaining college qualifications, is the best way to improve their lives and break the cycle of poverty.

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