Conditional cash transfers: A boon for the ‘invisible poor’?

A homeless man sleeps on the sidewalk in Manila. Photo by: Frisno Bostrom / CC BY-NC-ND

Each day, millions of vehicles pass by the streets of Metro Manila. How many notice the homeless people huddled in the corners? How many choose not to notice? How many no longer notice because the homeless have already become a mainstay of our streets, the “invisible poor” of Philippine society?

Extreme poverty — brought by unemployment, disasters and even the death of a family member — is the main cause of homelessness. And among them, street children are the most vulnerable. Homeless children face educational disadvantages, are vulnerable to abuse and often experience psychological trauma as result of this harsh environment. All these translate into persistent weaknesses well into their adulthood, weakening their own chances to break from poverty. Homeless children are out in the open, but very much trapped in poverty.

Nonprofit Gawad Kalinga estimates that around 4.5 million Filipinos are homeless. GK builds homes for poor Filipino families through community participation, government collaboration, and volunteer work and donations. Interventions by the private sector and civil society groups are important, but so too is a more coherent and consistent program by the state.

Including the homeless in social protection

In response to myriad challenges attached to homelessness, the Department of Social Welfare and Development piloted last year the Modified Conditional Cash Transfer for Homeless Street Families program or MCCT-HSF.

MCCT-HSF intends to provide immediate support and services such as health, education, and housing grants to homeless families in Metro Manila. The program also aims to create a stable environment for homeless families, and help street children to go back to school and receive further investments in their well-being. The long-term goal is to empower beneficiaries to find a way out of homelessness and integrate them into the Pantawid Pamilyang Pilipino Program, or 4Ps, also known as the conditional cash transfer program of the Philippines. The World Bank, Australian Agency for International DevelopmentAsian Development Bank and UNICEF are among the international organizations providing financial and technical assistance to the 4Ps.

Despite widespread criticism, conditional cash transfers are gaining traction worldwide as their impact on poverty, inequality and human capital (education and health) are well-documented. CCT’s main thrust is that money given to poor families today — on the condition that their children should regularly attend school and that families are engaged in protective health care — can help in eradicating poverty in the short and long term. Through the program, the Philippine government hopes these children will grow up to be educated, healthy and productive members of society.

But CCT’s impact on marginalized and vulnerable groups, such as the homeless, is not as documented. Brazil, one of the first countries to implement direct income transfers, has only recently included homeless groups as beneficiaries of Bolsa Familia, its own CCT program. Likewise, the Philippines has just taken steps to modify 4Ps to include homeless groups as beneficiaries.

Records on MCCT-HSF’s initial beneficiaries suggest street dwellers in Metro Manila mostly originate from the poor regions of the Philippines or from regions that are closer to Metro Manila (see Figure 1).

Click on the image to see the larger version of the chart.

As noted by Director-General of the National Economic and Development Authority and Socio-Economic Planning Secretary Arsenio Balisacan, the Philippines experiences uneven economic growth, with more than 60 percent of the gross domestic product concentrated in several areas on the island of Luzon. The urban centers are magnets for job and opportunities seekers; but while many succeed, there are also many who fail. DSWD data shows that most of the indigent beneficiaries it is working with have no, little or volatile sources of livelihood in the city (see Figure 2).

Click on the image to see the larger version of the chart.

The data on education background is mixed — many of the beneficiaries have some elementary and some high school education, suggesting that perhaps there is still a chance to build skills and a path out of poverty (see Figure 3).

Click on the image to see the larger version of the chart.

Lessons from abroad

Social protection interventions for the homeless in various countries differ widely. Brazil’s Bolsa Familia seeks to include homeless beneficiaries into the main social protection system. South Africa’s assistance, on the other hand, focuses on providing transitional housing. India similarly has programs centered on housing provision and mandatory shelters for the homeless. In Chile, meanwhile, complementary psychosocial support addresses some of the more specific risks and vulnerabilities the homeless face.

Features of the Philippines’ pilot program for homeless families can be improved by taking lessons from international policy experience, such as devising an appropriate targeting approach for homeless beneficiaries. Also, program design features like inclusion of psychosocial support as well as use of temporary shelters may be considered to improve the pilot program.

Other countries are also trying to diagnose and address some of the root causes of homelessness in rapidly urbanizing environments. Rural regions hit by extreme poverty, conflict and natural disasters tend to induce more migration out of desperation. Coordination with local governments will be critical in order to provide social protection for many “would-be” indigent citizens — and this could help temper the flow of “would-be” homeless into urban centers. Of course, the other long-sought solution would be to promote a more balanced and inclusive growth process that provides opportunities and jobs in both urban and rural areas.

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About the author

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    Mari Chrys Pablo

    Mari Chrys Pablo is an economist at the AIM Policy Center, where she is involved with the center’s randomized control trial researches and social protection system policies. Chrys previously worked at the Department of Environment and Natural Resources and the Department of Agriculture. Her research interests include agribusiness marketing and trade, and consumer behavior.