Philippines seeks $600-million loan for 4Ps program

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THE GOVERNMENT continues to implement the Pantawid Pamilyang Pilipino Program (4Ps) to help poor families amid the pandemic. — PHILIPPINE STAR/EDD GUMBAN

THE Philippines is seeking a fresh $600-million (P29.1-billion) loan from the World Bank (WB) to extend its conditional cash grants to poor families amid the coronavirus disease 2019 (COVID-19) pandemic.

Documents from the World Bank showed the proposed Beneficiary FIRST Social Protection Project is expected to be approved on Sept. 15.

Proceeds of the loan will partially fund the proposed $10-billion (P485- billion) Pantawid Pamilyang Pilipino Program (4Ps) in the next five years.

The project aims to mitigate the impact of the pandemic on low-income families and boost the Department of Social Welfare and Development’s (DSWD) social protection delivery systems.

The bulk of the funds or $580 million (P28.1 billion) will support the cash handouts under the 4Ps.


“This combines financing support for the DSWD to mitigate the negative welfare impacts of the COVID-19 on 4Ps households with longer-term resources to enable DSWD’s efforts to prepare for future shocks,” the document read.

Of the $580 million, $300 million (P14.5 billion) will be used immediately to disburse cash grants for 4Ps beneficiaries as the pandemic continues.

“Rapid financing would be disbursed against the statement of expenses for cash grants paid to 4Ps beneficiaries during the first year of the project implementation, given the urgent needs for funds during the response phase of the COVID-19 pandemic,” it said.

Around $280 million (P13.6 billion) is expected to be disbursed from the second year onwards, although it will depend on the achievement of performance targets.

The remaining $20 million (P970 million) will be used to modernize the payment delivery system of the DSWD, the main implementing agency of the program, and help it establish its own grievance redress system for beneficiaries.

The project will also support DSWD’s medium-term digital transformation strategy, development of its information technology system for assessment of recipients, and improvement of its database of beneficiaries.

The World Bank said the contingent emergency response component (CERC) currently has no funding allocation but will allow funds to be reallocated when needed.

“The government can request the WB to urgently activate CERC and reallocate the undisbursed balance to support the implementation of the government’s emergency plan. Additional financing can also be mobilized to fully or partially replenish the funds reallocated to the CERC in accordance with the WB’s requirements,” it said.

As the project aims to mitigate the impact of the pandemic, the World Bank warned of social risks such as delays in services, increase in student drop-outs, rise in child labor, and higher malnutrition among children.

“The Pantawid program has contributed to overall poverty reduction in the country, and has proven its consistent and lasting impacts on health/educational outcomes of children from poor households, as evidenced in various studies,” it said.

Poverty rate has steadily declined to 16.6% in 2018 from 26.6% in 2006, while the unemployment rate went down to 5.1% in 2019 before it surged to 17.7% in April at the height of the lockdown.

“The slowdown of the economy due to COVID-19 is likely to reverse the substantial progress in poverty reduction. The extended quarantine period has adversely affected jobs, particularly among informal workers, which had been fueling growth in household incomes among lower income groups,” it said.

Since 2008, the World Bank has been providing financial and technical support to 4Ps, the country’s flagship safety net program where cash grants were given to poor families to ensure their children’s health and education.

The World Bank said last month it will lend $1.9 billion in fresh loans to the country in the remaining months of the year to help the economy get back on track. It said three loans worth $1 billion will be approved this month.

From April to early August, the bank has released $1.67 billion in loans to the Philippines — $500 million for the government’s COVID-19 response, $500 million for disaster risk management and $200 million for social protection in budgetary support; and $470 million in two project loans. — B.M. Laforga