3.7.

Community-driven program KALAHI CIDSS

The Kapit-Bisig Laban sa Kahirapan- Comprehensive and Integrated Delivery of
Social Services (KALAHIC or KC) aims to reduce poverty by empowering
communities through control over the resources and the decisions in the design and
implementation of the sub-projects.
Key Features. The first components of KALAHI is social preparation, capacity
building and implementation support wherein training sessions and workshops
strengthens the capacity of the community for project management.
The second component is the community grants released in tranches to a village
account in the nearest Land Bank branch.
The third component is monitoring and evaluation by the community (participatory),
project management (internal) and by consultants, civil society and academia
(external).
Each municipality undergoes 3 cycles of Kalahi implementation for 6-8 months each
consisting of 4 stages i.e. social preparation, project identification, project selection
and project implementation.
Coverage and Targeting. The project is targeted to the poorest municipalities, the
chronic poor in all dimensions of poverty, using a poverty mapping and targeting
protocol. It covers 4,229 barangays in 12 regions as of 2008 with the average
poverty incidence of 53% in 2003 (compared to the overall average of 24%).
Economic Impact. At the end of 2008, the funding of Php 4.8 billion pesos to 4,364
communities covered the (1) basic social services, (2) basic access to infrastructure,
(3) community production, economic support and common service facilities, (4)
environmental protection and conservation projects, (5) skills training and capability
building and (6) lighthouse/ eco-tourism subprojects.
21% rate of return of subprojects
Overall the internal rate of return is 21% with the rate of returns for various
subprojects ranging from 16% for day care centers to 65% for water supply projects.
Correlation between community participation and project sustainability
Ensuring better operations and maintenance (O&M) of sub-projects will strengthen
community participation and local governance and realize the benefits from the
subprojects based on the findings that participation in barangay assemblies is
positively correlated to O&M ratings while reliance on barangay captains for
decision-making is negatively correlated to O&M ratings.
O&M is generally lower for road subprojects as compared to those characterized by
toll goods.
Responsive to local preferences
There is a high correlation between the preferences of households and the actual
portfolio of subprojects e.g. the most commonly cited problem were bad road

conditions and poor water supply, which accounts for 69% of the distributed of
funds for subprojects.
Fiscal Impact
Local governments were responsive to the local counterpart funding requirement of
the projects with 84% allotting 50% of their development fund. However, the midterm contributions declined by phase 2, probably due to the uncertainties over the
release of the IRA.
The counterpart contributions of the LGUs, communities and private sources
accounted for 35% of total project costs with the community counterpart comprising
of 9.5% of the total project costs.
Cost efficiency of subprojects
The unit cost of small infrastructure subprojects are lower than those of government
agencies with the cost difference ranging from 8% for school buildings to 76% for
water supply projects due to savings from contractors profits (15%-20% of the
cost), 10% VAT and costs for right of way.
3.8. Assistance to Persons with Special Vulnerabilities
DSWD provides social assistance to groups with special vulnerabilities through
residential and non-residential centers and community-based services. It currently
operate 41 residential facilities for children that provides (1) psychosocial services,
(2) temporary shelter, and (3) protection, care, treatment and rehabilitation services
for those recovering from substance abuse and exploitation and those with
behavioural problems and in conflict with the law. It also provides 3 homes for
senior citizens, 1 for abandoned and neglected children with special needs and
another as a halfway home for females recovering from mental illnesses and a
temporary shelter for strandees, vagrants and mendicants.
DSWD also operates 7 non-residential facilities for clients with families or those
undergoing developmental activities, some of which also provide vocational/ social
rehabilitation and skills training for persons with disabilities and psychosocial
support for bereaved mothers for grief management.
DSWD provides programs to mobilize the family and the community to provide the
following services for those who are in need or at risk:
Child Protective Services, Therapy Services for Abused Children, Alternative
Family Care, Travel Clearance to Minors and Special Social Services for
Children in Armed Conflict.
Such services are also provided for older persons in the form of enhancing the
caregiving capacity of the family e.g. training of volunteers as resource persons on
the proper care of older persons. Another program would be the Sheltered
Workshop for Persons with Disabilities that provide training and employment for
PWDs such producing and selling goods or services.
DSWD Php 543 million for 2007 and Php 730 million for 2008 for social assistance to
persons with special vulnerabilities; however, such assistance are non-targeted and

demand-driven i.e. 26,738 were provided 1,388,872 person-days of services in the

centers provided by DSWD while 56,062 were extended community-based services.
3.9. Emergency Assistance
The emergency assistance programs are need-based and demand-drive with no
active targeting mechanism wherein the beneficiaries are walk-ins for most part and
are those who are not assisted enough or not at all in coping with risks and shocks
of various kinds.
Danger relief and rehabilitation The bulk of the funds of the releases for disaster
relief and rehabilitation went to shelter assistance (73%), relief assistance (21%),
administrative costs (3%), cash/food for work (2%) and livelihood assistance (1%).
The funds were released to augment the resources of the LGUs affect by natural and
man-made disasters.
Assistance to individuals and households in crisis situations (AICS) The DSWD
through its Crisis Intervention Units (CIUs) provides integrated services to
individuals and families in crisis situations such as financial assistance, psychosocial
intervention and referral to appropriate DSWD units, government agencies or nongovernment organizations. The DSWD maintains 16 CIUs in the field and one in the
central office.
In 2007, 64,000 persons were provided assistance with a budget allocation of Php
1.037 billion (lowered to Php 889 million in 2008).
3.10. Credit-based livelihood program
Access to credit is important for social protection, consumption during crisis and as
capital for their livelihood. Loans are usually from relatives, friends or moneylenders
that charge high interest rate due to the stringent requirement and inadequate
information on financing sources making borrowing by the poorer households from
formal financial institutions difficult, especially due to the high transaction cost
involved in processing small loans.
The Self-Employment Assistance-Kaunlaran (SEA-K) of DSWD suggest that the poor
can be good credit risks if there are screening, monitoring, and enforcement
mechanisms with community organizations as good conduits for the disbursement
of funds.
Key features of program design. The SEA-K, a community-based microfinance
project aimed at building the capabilities of the organization to self-administer the
provision of socialized credit, provides the organization with seed capital of at most
Php 150,000.00 at 0% interest rate to lend to its members for livelihood needs. The
average seed capital given is Php 33,500 with the average individual loan at Php
5,000.
The 25-30 members are subdivided into smaller groups of 5, acting as a pressure
group to enforcement of payment. The penalty of non-payment is the obligation of
the other members to pay the amount or the non-release of their loans. Each group
is encouraged to save an annual amount of 50% of their loan amount for expenses
and emergencies.

Coverage and Targeting The SEA-K is a broadly-targeted but demand driven

program with the beneficiaries mostly being women (11%) alongside scavengers,
out-of-school youth, street children and persons with disabilities, poor families,
single parents, the unemployed and senior citizens. It is the DSWD officers that help
identify and vet prospective beneficiaries, with a statistical showing that there is a
positive relationship between the distribution of the beneficiaries across provinces
and the distribution of poor families across provinces.
Effectiveness, cost and budgetary implications 50% of the beneficiaries are
engaged in trade and commerce, which are low value-adding, with only 2.5% of the
projects graduating to the 2nd level. It is the trading activities with quick turnaround
times that are most suitable for SEA-funding because he beneficiaries will be able to
start amortizing their loans weekly; thus, production activities with longer time
horizon are typically ineligible for funding.
The program has successfully encourage the members to save with a high
repayment rate at 90% due to the preparation of the SKAs, the consistency of the
loan size and the borrowers capacity with low administrative cost. However, since
the loans are interest free, the cost for operations is not recoverable.
In 2008, there is a decline of repayment rate to 74% and savings to 30% of the
prescribed amount, highlighting the need for continuous infusion of funds to keep it
operational. This indicates that such program is financially unsustainable on a longterm basis.
4. ACTIVE LABOR MARKET PROGRAMS
Active labor market programs are aimed at increasing employment and income by
improving the employability of workers, the function of the labor market and job
creation. It is oriented towards moderating cyclical downturns, reducing structural
imbalances in the labor market, increasing productivity and supporting
disadvantaged or at-risk workers and employees.
4.1. Pangulong Gloria Scholarship (PGS)
Key Features PGS, targeting a 50% employment rate (down from 90%), is designed
to provide skills and competencies to job seekers through appropriate training
programs that are linked to existing jobs and immediate employments. It seeks to
enhance the employability of the beneficiaries for the hard-to-fill and in-demand
skills in emerging industries e.g. BPO and healthcare, and address the mismatch
between the skills requirement of available jobs and the skills of the unemployed
and geographical location of the job and the job-seeker.
Coverage This open to any high school graduate or college undergraduate from 18
to 55 years old, with plans to enrol 100,000 in 2007 and double that amount in
2008.
This accounts for 43% (PHP500M) and 56% (PHP1B) of the national government
spending on active labor market programs for 2007 and 2008 respectively.
Effectiveness, cost-effectiveness The program had a dropout rate of 3% with only
45% of the graduates being employed. In 2008, the dropout rate increased to 6%

with the employment rate increasing to 47%. In 2007, the costs of the dropouts
were Php 35 million with the unemployment rate costing Php 568 million.
While the BPO sector has the lowest dropout rate (20%) and highest employability
(51%), it is still much lower than the first target of 90%.
4.2. Special Program for the Employment of Students (SPES)
Key Features Students are paid 60% of the prevailing minimum wage while DOLE
gives them the remaining 40% in the form of vouchers with the period not less than
15days nor more than 45 days during the summer and not less than 10 days but not
more than 15 days during Christmas vacations.
Coverage It is open to all students whose parents combined net income does not
exceed Php 36,000 per annum. Employers must have minimum of 50 employees to
participate in SPES.
Effectiveness While SPES was able to place 65% of its applicants, it is only 2.3% to
3.2% of the poor population aged 15-24 years old. The verification of the net
income of the parents appears to be weak, being based only on income tax returns.
The income provided per year is generous, representing 17% to 42% of the cut-off
household income.
4.3. Work Appreciation Program (WAP)
Coverage Those 18 years old to 25 years old, unemployed and physically fit to
undertake the apprenticeship program are eligible only once a year for a maximum
period of 3 months. Any entity willing to provide training opportunities and willing to
pay up to 75% of the minimum wage as qualified to participate as employers, as
long as the trainees comprise not more than 10% of the workforce
Effectiveness The placement rate was 81% of the applicants but covered only
0.03% to 0.07%of those aged 18-25 years old.
Critique The stipend of WAP is less than those of SPES. Very few employers are
willing to shoulder the full cost of the stipends while others may exploit the workers
at a pay rate of less than 25%.
4.4. Employment Facilitation and Job Search Assitance
DOLE, through the Public Employment Service Offices (PESOs), provides
employment facilitation and placement assistance services to reduce the
transaction cost of job search. PESO is a community based and maintained largely
by LGUs, NGOs, or community-based organizations and state universities and
colleges.
PESOs provide various job search assistance services e.g. access to Phil-JOBNET,
matching, referral and placement services. PESO enjoys a placement rate of 65% to
67% which represent 2% of the total employment and 20% to 23% of those who are
unemployed.

In spite of having encountered difficulties in skills search, only a small fraction of

employers use this facility. However, due to the small amount allotted to PESO and
the cost-effectiveness of the job facilitation services abroad, there operations of
PESO can be improved by increasing awareness of employers regarding PESO
services, increased accessibility and improved quality of data. It is also suggested
that coaching for interviews, pre-employment testing and issuance of preemployment requirements should be included in the services performed by PESO.
4.5. Livelihood/Self-employment Support Programs
These programs include the Rural Employment through Self-Employment and
Entrepreneurship Development Program (PRESEED) and the Women Workers
Employment and Entrepreneurship Development (WEED) Program which targets
assetless rural workers and underemployed women in the informal sector,
respectively for entrepreneurship development.
4.6. Workers Protection and Welfare Services
This is largely focused on the protection and welfare of OFWs who find themselves
in distress abroad, as well as providing skills training to help them find gainful
employment/livelihood in the domestic economy.
5. SUMMARY AND RECOMMENDATIONS
National government spending on social protection, including active labor market
programs and community driven development projects is less than half than the
mean spending on social safety nets and lower than the median spending on social
safety nets of a group of 87 surveyed countries. The success of the government in
providing a stimulus to economic activity from the previous low utilization of their
budgets will help ensure that some of the negative impulses coming from the
international markets will be mitigated and the need for increased spending on
social protection programs will be reduced.
It is problematic that the bulk of national government spending on social safety nets
went to a program that has been proven to be the least effective in reaching the
poor. The NFAs rice price intervention is shown to have a high leakage rate (71%)
because it is an untargeted program that benefits all households and were found to
be vulnerable to fraud as evidenced by the development of a black market for the
subsidized commodity. Additionally, the objectives as well as intended beneficiaries
of a number of programs overlap and operate in the same geographical areas.
There is clearly a need for a social protection program that will not only provide
transfers to address the immediate needs of the chronically poor but will also
provide adequate incentive to these households to invest more in the education and
health of their children because that is the only way they would be able to escape
the poverty trap.
Sustained funding for the is critical if the long-term gains in terms of increased
investments in human capital are to be realized. There is need to strengthen

verification mechanisms, monitoring and evaluation components of the program in

order to ensure that it is implemented in a cost-effective manner.
The capacity of the transient poor and the near poor, many of whom belong to the
informal sector, to cope with the income risk arising from loss of employment or
reduction in earnings that are typically associated with a macro-economic crisis is
limited. This is so because they have little or no assets to tide them over during
difficult times. However, the coverage of the informal sector in the social security
system (SSS and GSIS), the social health insurance scheme (PhilHealth) and many
of the noncontributory social protection programs that are currently in place is
severely inadequate.
Hastily designed programs launched in response to crisis situations are usually not
very effective in reaching the poor and the vulnerable. This is especially true if a
credible targeting system covering the entire country is not in place. There is a need
to put in place a program/s that can be scaled up rapidly in times of crisis to provide
protection to the informal sector, the transient poor and the near poor.
The experience of other countries suggests that a public workfare program is one
such program, primarily because it can have a built-in self-targeting mechanism if
designed properly.
During the 1986 crisis, the government implemented a Food-for-Work program, a
public workfare program, in Negros Occidental and five other sugar producing
provinces in order to mitigate the impact of the sharp decline in world sugar prices
at that time. In the land development projects, farmers were given rice to help tide
them over until they could harvest their own crops and to encourage them to
practice agroforestry in uplands. In this case, the value of the food given to the
farmers was less than the market wage rate, since farm output accrues to the
farmers themselves. In the case of the infrastructure development projects, workers
were paid the local market wage rate, partly in the form of cash and partly in the
form of rice. Since the actual price of rice was higher than price used by the
program in its computations, workers were effectively paid PhP 104 PhP 108, close
to 20% more than the market wage rate. Thus, many laborers were willing to work
for as little as PhP 60 per day or about two-thirds of the market wage rate. Because
of this, the non-poor were also attracted to the program. In other words, the wagesetting procedure that was used negated the potential of the program to be selftargeting
The international literature emphasizes two points that are critical to the success of
public workfare programs: (i) setting the wage rate at the appropriate level, and (ii)
selecting projects that are enhances productivity and which are pro-poor. Setting
the wage rate for the workfare program at a level that is lower than the prevailing
market wage rate will ensure that only those who truly have difficulty finding work

will participate in the program and that they will voluntarily drop out of the program
when the labor market improves and better paying jobs becomes available.
A workfare program will be self-targeting but the cost-effectiveness of the workfare
program has been found to vary with the quality of the assets created in terms of
the degree to which said assets enhance the productivity of the local community in
the future and the extent to which the poor actually benefit from them. Although
the list of eligible projects include productive infrastructure project, it is the lessproductive activities tend to capture a bigger share of the budgetary resources
allocated to the program. There should be a complementary program that will
support local communities as they articulate their demand and put increased
pressure on LGUs and the national government to improve the supply of needed
basic services and synergies could also harnessed when workfare projects are
implemented as the greater participation of the local community in the
identification of projects will help ensure that the projects selected are those that
are most valuable to the community.
Expanding the coverage of the Sponsored Program of PhilHealth and improving the
selection of beneficiaries are critical for two reasons. First, PhilHealth provides the
poor financial protection against illness. Second, achieving universal coverage of
PhilHealth supports the health sector reform agenda and make the health system, in
general, and the public hospital system, in particular, more sustainable.There are
indications that some of the so-called poor households who are currently enrolled in
the program are not poor, bringing the undercoverage rate up to 50% or more. As a
result, poor households which are not covered under the Sponsored Program have
no recourse but to go to the no-pay wards of government hospitals and/ or line up
for emergency assistance at the DSWD/ LGUs. At present, proposals for the national
government to shoulder 100% of the premium contributions for indigents and for
LGUs to take care of partially subsidizing the informal sector appear to be in the
right and will eliminate the political economy issues associated with the present
practice of LGUs identifying the beneficiaries under Sponsored Program. These
proposals also appear to be consistent with the current practice in a number of
LGUs which ask the enrolled beneficiaries in the Sponsored Program to co-share the
premium contribution.
A common theme that emerges from the assessment of the different social safety
net programs above is the importance of a good targeting system in enhancing
program effectiveness. Admittedly, the institutionalization of the proxy means test
does not come cheap. However, if the same proxy means test is used in selecting
the beneficiaries then the investment in the targeting system could be costeffective. At present, the leakage rate is estimated to be 24% at best.
Recently, in the wake of the global financial and economic crisis and the ensuing
rise in the unemployment rate, there is renewed interest on the introduction of
unemployment insurance in the country. It is argued that unemployment insurance

is not feasible because (i) the share of the informal sector is high (roughly 50% of
employed persons are in the informal sector), (ii) both unemployment and
underemployment are high, ranging from 7% to 8% and 19% to 26%, respectively,
in the last 5 years, (iii) the proportion of the poor among the unemployed is low in
relative terms (e.g., in 1997 only 12% of the unemployed are poor but the overall
poverty incidence is 25%), and (iv) administrative capacity to monitor the
employment status and job search behavior is weak. Given these conditions,
unemployment insurance will tend to create inefficiencies and dis-incentives.
Esguerra et al. (2002) notes that by imposing contributions to be levied on wages,
the cost of labor may increase, contributing to the further growth of the informal
sector and the increase of the equilibrium level of unemployment. By intensifying
job search and prolonging unemployment spells, unemployment insurance tends to
increase the unemployment rate.