Philippines shields the poor amid income gap
Feature
She earns about $100 a month washing clothes and her husband used to
bring in about $70 a month driving a motorcycle taxi until he went blind.
But things are better than they used to be.
Through a program in the Philippines called Pantawid Pamilya (Family
Subsistence), 3 million poor households like Ms. Capco's get small
grants from the government if they keep their children in school and
take them regularly to health centers.
"It's really a big help because now we don't have a problem about
whether we can have food to eat or if the kids have money to go to
school," Ms. Capco, 43, said with her two-year-old daughter Rihanna on
her lap.
A high school graduate with gleaming eyes and a ready smile, Ms. Capco
has been in the ramshackle community for 18 years.
With a quarter of its people below the poverty line as the population
crests 100 million, the Philippines points to the need for developing
Asia to reverse worsening inequality and broaden the benefits of the
region's tremendous economic growth.
Conditional Cash Transfer schemes like Pantawid Pamilya -- so-named for
conditions imposed to qualify for benefits -- were pioneered in Brazil
and Mexico and have proven very effective in giving immediate help to
the poor and breaking vicious cycles of poverty by improving health,
education and opportunities.
Narrowing the wealth gap has become as pressing as poverty alleviation,
making it a key theme of this week's annual meeting of the Asian
Development Bank (ADB) in Manila with government officials, bankers and
civil society groups from 67 countries.
Inequality is rising in 11 countries making up 82% of Asia's population,
the ADB says. That list includes China, India and Indonesia -- three
huge economies driving much of the growth.
"Relative to other regions, the recent period of growth in Asia has been
both less inclusive and less pro-poor," the International Monetary Fund
said in a report.
For Rajat Nag, ADB's managing director-general, growing inequality
"threatens to undermine the region's stability."
Governments in Asia have the resources to promote inclusive growth, he
said in mid-April, and they should adopt more targeted social spending.
That means rolling back poorly focused schemes like the fuel subsidies
in Indonesia that the government finds costly but politically difficult
to kill.
"Countries have often felt that they first need to grow and they need to
grow fast," Mr. Nag said.
"But a principle of rising tides will lift all boats makes an assumption
that no boat has a hole in the hull."
Conditional Cash Transfer schemes in the Philippines and Indonesia --
and more limited ones in Bangladesh, Pakistan and Cambodia -- are seen
as one of the best ways to target spending.
Pantawid Pamilya, piloted in 2007, is now the largest social protection
scheme in the Philippines. Monthly grants of up to P1,400 go to the
mother, as experience shows women tend to spend the money on food,
medicine and school supplies.
"From the beginning, the program was very well designed," said Nazmul
Chaudhury, the World Bank's point person for Pantawid Pamilya. "In terms
of sophistication of an integrated program, the rigor of the poverty
targeting database and potential for this as a larger social safety net,
there's nothing like that in the region."
The benefits are clear to Ms. Capco, who plans to set up a small stall
selling snacks.
"My hope is for all my kids to finish college," she said. -- Reuters
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