Conquering Policy Brief S E N a T E E C O N O M I C P L a N N I N G O F F I C E

poverty has been the fundamental development goal of every administration in the country. However, despite the government's various poverty reduction programs, the increase in the number of poor remains unabated. Given the ineffective and wasteful subsidy programs in the past, the government's preparedness to implement an intervention like the CCT, which requires large budgets and exceptional administrative capacity, is being met with doubts and cynicism. Nonetheless, the Aquino administration has requested Congress and the public to grant the CCT a chance to work, given its success in reducing poverty in Latin American countries and its huge potential to do the same in the Philippines. Improving inclusiveness of growth through CCTs The twin challenges to Philippine growth The Philippines posted its highest annual domestic growth rate since the post‐Marcos era at 7.3 percent in 2010. This is a welcome progress following the sluggish growth in the last two years, which is largely attributed to the global economic crisis. The barely year‐old Aquino administration is optimistic that the healthy economic growth will be sustained in the medium term. 1 However, it has to be noted that while the economy has been registering growth year after year since 2001, the acceleration has been described as erratic and lackluster compared to other countries in the region. Moreover, the growth, being narrow, hollow and shallow, hardly made an impact to poverty reduction in recent years, as reflected in the country's progress reports on the Millennium Development Goals 2 Therefore, aside from accelerating and sustaining higher growth rate, the new leadership is also faced with the challenge of ensuring that such growth benefits a broader spectrum of the economy and more important, reduces poverty. In pursuit of making " economic growth statistics real to the people, " the Aquino administration on its first year scaled up the Pantawid Pamilyang Pilipino Program (4Ps) of the previous administration by expanding household coverage by 1.3 million and doubling the program's budget. The 4Ps under the 2011 National Budget has four components: Supplemental Feeding Program; Food for Work Program for internally displaced persons; Rice Subsidy Program; and Conditional Cash Transfer (CCT) Program. The CCT program gets the bulk of the 4Ps budget. The said program is seen as a social protection instrument and a tool to empower people to rise above poverty by increasing household income and improving human capital, among others. 2 The new methodology for estimating poverty is …