Cash transfers in the Philippines: A way to connect the development and humanitarian agendas

Economic and climate change-related shocks have a profound impact on vulnerable communities. The Philippines, often affected by typhoons, floods and other natural disasters, has demonstrated how social safety net transfers can diminish the impact of those crises by providing communities with the needed support in complex situations. To share and exchange experiences and results on how to converge the development and humanitarian agendas in the Philippines, the recent ‘Nexus Lab’ brought together multiple actors, including government entities, development organisations, NGOs and the private sector. The event was organized by the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) and the Office of the Resident Coordinator, in partnership with Better than Cash Alliance and NORCAP.

Preparing for disasters

Given that the global annual mean temperature is rising, scientists at PAGASA are expecting not only more erratic weather events in the Philippines, but that these events will have greater and more significant impact. Acting in anticipation of predictable disasters is an important direction now being taken by the UN and its NGO and Red Cross partners in most-at-risk regions of the country. Cash transfers are well suited to this type of programming due to their minimal logistics and administrative requirements and lower operational costs. Digital payments in particular present unique advantages because they cut delivery time, where time is of the essence.

Responding to disasters

Both the Government of the Philippines and humanitarian actors use cash transfers as a primary modality of assistance in emergencies. Global evidence shows that cash transfers are an effective path to meeting basic needs in places where markets are functioning and can have a positive multiplier effect for the local economy. The responses to Typhoon Haiyan (2013) and Typhoon Rai (2021) showed that our collective capacity in the delivery of cash assistance in the Philippines has been steadily increasing as a share of total assistance and is projected to increase further in the future.

The role of social protection

The Philippines has one of the most mature social protection systems in Southeast Asia with one of the largest cash transfers programs in the world (Pantawid Pamilyang Pilipino Programme - the 4Ps). However, not even the most advanced systems cover the entire vulnerable population and gaps are inevitable. The Department of Social Welfare and Development, which manages the 4Ps, expressed an openness to its augmentation by partners. In the words of the Assistant Secretary Irene B. Dumlao from DSWD, “the system can be expanded both horizontally and vertically to support people in need”. A concurrent modernization efforts of its registry could further strengthen the system’s targeting. 

Shock-responsiveness and the role of digital payments

With a large population living below poverty and the prevalence of natural disasters, the Philippines is a context in which a social protection system may greatly benefit having a shock-responsive element. Such a design is in progress in BARMM, where the Ministry of Social Services and Development (MSSD) leads these discussions with the Cash Working Group. Mr Hasim Guiamil, MSSD Chief of the Disaster Response and Management Division, is adamant that “shock-responsiveness is an essential element of a social protection system in disaster prone areas, as are digital payments - there are many options of enhancing government cooperation to enable two-way channels to send and receive digital payments at the last mile.”

Responsible digitization of payments and the benefits it brings, such as financial inclusion, in the DNA of the Better than Cash Alliance, were at the core of the debate, which was conducted under the auspices of the Department of Information and Communications Technology (DICT) of the Government of the Philippines. “Three areas of work are linked to the promotion of responsible digitization of social safety nets: improving services and infrastructures for digital payments, promoting financial literacy and generating synergies among stakeholders,” commented Ivan John Uy, DICT Secretary,

In his opening remarks, Mr Gustavo Gonzalez, the UN Resident Coordinator in the Philippines, underlined that “cash assistance equals empowerment”. As cash transfers are used across the development and humanitarian spectrums as well as by the Government, the path to empowerment may already be paved, albeit not without limitations relating to coverage and accessibility.  “Digitalization of cash transfers not only help to increase efficiency and transparency in social protection delivery, but also in response to emergencies and for early recovery and preparedness against climate-induced events,” explained Isvary Sivalingam, Southeast Asia Lead at the Better Than Cash Alliance.

The digitization effort, however, still needs a push – both programmatically and financially – to achieve country-wide reach. As does scaling up of the shock-responsive social protection, which at the moment is in the development stage in BARMM where our collective efforts – with notable support from Australia - are to test this innovative approach and its suitability to the unique Philippines context. [Ends]