News Update Anti-Poverty Chain

MANILA, Philippines - The Conditional Cash Transfer (CCT) program has been successful in other countries and it should be also here. The warning is that it is subject to fraud or siphoning to non-intended recipients. That is a normal risk. From the Development Academy of the Philippines experience it is known that the Department of Social Welfare and Development has some of the most dedicated government personnel. We can only wish them good luck and God speed which they need beyond dedication. The CCT is a stop-gap measure. We need to go beyond it with jobs, investments, savings, and successful enterprises. It is a chain that can be approached on any of its links but the chain as a whole has to be addressed and the government alone cannot do it. Public Private Partnership is a good idea. Everyone needs to pull to make the cargo move. Not fully a chain in which a missing link negates the whole chain since you cannot pull on it this chain has most of the chain characteristics. We need jobs and most jobs are created by small business. Big enterprises make their contribution but the experience all over the world has been that small business carries the brunt of it. This is true of this country. Micro finance within the last three decades has helped at least two million families create jobs for themselves. It is a success story now threatened with extinction by the Bureau of Internal Revenue. They are not to blame since they are just doing their job. The blame is in Congress since they have not exempted microfinance from taxes.

The last Congress had two bills, one of former House Speaker Nograles and one of Congresswoman Chato. Neither one was able to pass. The Nograles bill taxed the industry a small amount whose proceeds were to be used to promote the industry but the Chato bill exempted the non-profits completely. This is preferable since tax money is always subject to bureaucracy and delays. The Ramos anti-poverty bill acknowledged the contribution of micro-finance but stopped short of saying that it was tax-exempt. Like CCT, micro finance is anti-poverty. Furthermore, micro-finance preserves the dignity of the poor. They actually are addressing different kinds of poor. Micro-finance can help only the entrepreneurial poor. CCT moves directly to the hunger poor. A third category is of the able bodied poor but who are not capable of entrepreneurship but can work if told what to do. Joey Concepcion and Dan Songco's BDS is the next rung in the ladder. This kind of small business is different from micro-finance in that they hire people beyond the immediate family. This is the category that will really push the economy but it needs all the help it can get. Training in record keeping, in marketing, links to technology, and sourcing more funds are critical for this sector to grow. It can use big-brother coaching and sub-sourcing from the bigger enterprises. Knowledge on how to do business can be found in books but is a long way from successful operation which has to face all sorts of pitfalls like fraud, inefficiency, and competition.

here are other internationally successful systems besides CCT and micro-finance that can be adopted to fight poverty in this country like Saemaul Undong, where local governments are given grants which are not repeated if the first grant is not used properly. The ones who develop their communities well are encouraged with further grants. The chain to fight poverty is known, namely, jobs, investments, savings, entrepreneurship, dedicated help from the bigger boys. Everyone has a role and no one can fold his arms or sit on them and just cheer or boo the government and the others who are participating.