EDITORIAL - Replacing the 4Ps

Anyone can start a business. Making it turn a profit is another story. There are many elements that come into play, even in fly-by-night micro enterprises operating from ambulant carts. There is no guarantee of regular income, especially for those lacking in financial literacy; market forces can be cruel.

These are useful to remember amid a proposal to replace the conditional cash transfer program with seed capital to allow the very poor to start their own businesses.

Family beneficiaries of the Pantawid Pamilyang Pilipino Program have chorused their opposition to the replacement of the 4Ps with seed capital for a business. First introduced during the Arroyo administration and patterned after the conditional cash transfer in Brazil, the 4Ps cash transfer requires beneficiaries to keep children in school and for mothers to access reproductive and other medical health services regularly.

Beneficiaries are identified and selected by the Department of Social Welfare and Development. During the initial years, this was done with the help of the biggest supporter of the program, the World Bank. The cash aid is withdrawn through ATMs, which keeps the DSWD-administered program out of the hands of politicians.

A better proposal has been put forward by Sen. Panfilo Lacson, who wants all state-funded ayuda programs to be placed under an expanded 4Ps, to de-politicize government aid and cut opportunities for corruption.

Aid programs such as an expanded 4Ps can go hand-in-hand with the promotion of micro entrepreneurship among the poor.

Apart from free seed capital, poor families interested in venturing into micro businesses such as sari-sari stores need access to credit so they need not resort to usurious lenders to keep their enterprises going. The government must ensure that the seed money and the borrowed funds are truly used for the enterprises.

Free seminars on basic financial literacy and business management must also be provided to those interested in becoming micro entrepreneurs. It’s not enough to get budding entrepreneurs started; the business must be sustained and must turn a profit. For all types and sizes of enterprises, this is easier said than done.