The impact of the PhilippinesÕ conditional cash transfer program on consumption

The Pantawid Pamilyang Pilipino Program provides cash grantsÊto poor households qualified on predetermined investments inÊhuman capital. This study analyses the programÕs impact onÊconsumption using the 2011 Annual Poverty Indicators Survey.ÊAverage treatment effect on the treated (ATT) is estimatedÊthrough propensity score matching methodology. HeterogeneousÊimpacts are examined among the bottom 20 percent of income distribution.The study finds that among the total sample, per capitaÊtotal expenditures is not affected by the program. In terms ofÊmonthly per capita, only carbohydrates and clothing significantlyÊincreased. As expenditure shares, education and clothingÊregistered significant positive impact. No impact is observedÊon health spending, both in per capita terms and as a share ofÊexpenditure. The impact of Pantawid Pamilya on consumption isÊmore pronounced among the poorest-fifth of households.Results show that households have responded to program conditionalities but there is very little room to improveÊconsumption of other basic needs. The recent programÊmodification of increasing education grants to older children andÊextending support up to secondary school completion will helpÊhouseholds sustain induced behavioral changes over time. TheÊstronger impact on the poorest-fifth of households underscoresÊthe need to improve the targeting mechanism to address leakage issues.