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PRESS RELEASE November 23, 2018

Social Safety Nets Can Improve the Poor’s Resilience to Shocks

MANILA, November 23, 2018 – Boosting existing social safety nets will enable countries like the Philippines to protect the most vulnerable citizens against the impact of natural disasters, according to the report The State of Social Safety Nets 2018 published by the World Bank in April 2018.

“Safety nets can provide cash, food, insurance, and other means to support the poor’s income and consumption when shocks occur, thus increasing households’ resilience,” said Oleksiy Ivaschenko, senior economist at the World Bank’s Social Protection and Jobs Global Practice and main author of the report. “When combined with complementary programs, such as those supporting sustainable livelihood activities and greater investments in health and education, social safety nets can enhance the resilience of these household in the long-run.”

These social programs not only provide immediate relief to those most affected by a shock, but they also help prevent household decisions with potentially detrimental effects in the long run. Poor households that receive no support through social safety nets may opt for “negative coping” strategies, such as removing children from school in order to seek some additional income for the household. Some may also decide to acquire high-interest loans or selling productive assets. In sum, receiving assistance from safety nets can help lessen the shock to the poor in the short, and help build resilience in the long term. 

Also called social assistance, social safety nets are designed to help poor or vulnerable individuals and households cope with chronic poverty, destitution, and vulnerability. Examples include unconditional and conditional cash transfers, noncontributory social pensions, food and in-kind transfers, school feeding programs, public works, and fee waivers.

In the Philippines, one of the biggest social safety net programs is the Pantawid Pamilyang Pamilyang Pilipino Program (4Ps) providing cash subsidies to poor households. In return, beneficiaries are required to keep their children in school and have regular health checkups.

Despite the relatively small amounts granted to 4Ps beneficiaries, the program has contributed to the reduction of poverty headcount, poverty gap and income inequality. Since 2016, the coverage of this and other safety net programs has reached 68 percent of the poorest quintile in the Philippines. Globally, social protection programs cover 56 percent of the poorest population.

The 4Ps also had a number of other positive effects on human capital outcomes per the impact evaluations conducted between 2012 and 2014, including:

  • 10 percent reduction in severe stunting among beneficiary children;
  • High school enrolment of elementary age children among 4Ps beneficiary households at 98 percent;
  • Higher enrolment rate for beneficiary high school students (6 percent higher among 4Ps beneficiaries); and
  • Decreased child labor days (7 days less a month for 4Ps beneficiary households).

The program has a potential to have even greater impact through increased coverage and benefit size. For instance, while globally social safety net transfers account for 19 percent of the welfare of the poorest quintile, in the Philippines they currently account for only 9 percent.

 


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