After Five Years of Pantawid, What Next?

When the Pantawid Pamilyang Pilipino Program was designed, the government publicly promised to limit to five years the giving of the education and health grants. This five-year limit is almost over for the first set of beneficiaries by 2013. The natural policy question then is: Would it be wise to keep the promise or would an extension be better? This paper presents five arguments and evidence why the extension of the program is better than keeping the promise to limit it to five years. The five arguments include: (a) the problems that the Pantawid had been designed to address continue to be high priority issues; (b) Pantawid remains credible as an effective and valuable instrument for poverty alleviation in the short run and for reducing the transmission of intergenerational poverty in the long run; (c) the extension could provide great opportunities to produce a much greater positive impact on the welfare of the poor; (d) the extension could buy much-needed time for developing and implementing an adequate and workable transition promotion strategy to help beneficiaries outgrow their need for CCT assistance and, therefore, facilitate its termination; and (e) secondary education enrollment and completion produces high returns in terms of increased earning and is achievable with a moderate amount of subsidy. The paper ends with cautionary notes including articulating that Pantawid remains a bridging program; the need for a careful study to ensure affordability and maximize its cost effectiveness; the need to continue to generate better estimates of key parameters such as income elasticities; and possible phasing for affordability and recognition of possible supply-side constraints.