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Use of Mobile Money platforms as a conduit for Conditional Cash Transfers in

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Conference Paper · September 2014

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Use of Mobile Money platforms as a conduit for Conditional Cash Transfers in the Philippines

Erwin A. Alampay & Charlie Cabotaje

Center for Leadership, Citizenship and Democracy

NCPAG, University of the Philippines

Abstract

Many developing countries are providing conditional cash transfers (CCT) to address
development challenges among its poorest people. In the Philippines, this has been expanded
significantly, such that in a span of five years, the amount of cash transfers to the poor has increased by
3300%, with Php34B given for 2013 alone. This rapid expansion has made the government logistics for
delivering cash transfers more complicated and difficult. As such, it has partnered with GRemit to tap
GCash’s network of merchants to help reach the poor in all areas in the country.

This paper evaluates its current implementation thru GRemit to determine if this system is more
efficient, secure and less costly, based on interviews with program implementers and randomized surveys
of 194 CCT beneficiaries in San Jose, Mindoro Occidental. Based on the survey results, the report
proceeds to analyze the feasibility of fully adopting mobile money systems in the community by applying
Van Dijk’s (2006) Stages of Access to digital technologies model.

Introduction

As part of its poverty reduction and social protection strategy, the Philippine government adopted
the Conditional Cash Transfer (CCT) program. Under this program, it provided cash incentives to poor
Filipino families to alleviate their immediate consumption needs and break the intergenerational poverty
cycle on the condition that they also invest in human capital through proper health, nutrition and
education. Locally called the Pantawid Pamilyang Pilipino Program (4Ps), or Pantawid Pamilya, it is one of
the core programs of the Department of Social Welfare and Development (DSWD) in partnership with the
Department of Health (DOH), Department of Education (DepEd), Department of the Interior and Local
Government (DILG), and Landbank of the Philippines (LBP) and other local stakeholders (Fernandez &
Olfindo, 2011).

The Pantawid Pamilya program was patterned after successful CCT programs in Latin American
countries, like the Bolsa Familia in Brazil and Opportunidades in Mexico (Fizbein & Schady 2009). It
targets poor households, which the National Household Targeting System for Poverty Reduction (NHTS-
PR) administers through a Proxy Means Test (PMT) has placed at 5,225,118 out of 10,909,456
households in the country (Department of Social Welfare and Development, n.d.). Depending on the
number of their children, beneficiaries may receive between PhP500 to PhP1,5001 per month for five
years.

Beneficiary households must meet four criteria in order to be eligible for the grant:

1) they must reside in poor areas identified and selected by the program through a multi-step
process based on official poverty incidence according to the National Statistics Office’s (NSO)
latest Family Income and Expenditure Survey (FIES), National Statistical Coordination Board’s
(NSCB) poverty incidence of Small Area Estimates (SAE), data on pockets of poverty and
other indicators;
2) they must be classified as poor through a household targeting system;
3) the household must have a pregnant woman or at least one child aged 0-14 years and
4) the household must be willing to commit to meeting program conditionalities such as
preventive health care among pregnant women and children, enrollment and attendance of
children in schools and participation of parents in Family Development Sessions or FDS.

Cash grants payment to a beneficiary household is terminated once the beneficiary no longer
meets these criteria or has not complied with all the conditionalities of the program (Fernandez & Olfindo,
2011).

Since its inception in 2007, the Pantawid Program has become one of the country’s largest social
protection programs. As of September 2013, there were already 3.9 million beneficiaries on record with
the DSWD, with the goal of expanding this to 4.3 million before the end of Pres. Aquino’s term in 2016.

However, the Pantawid Pamilya, like other CCT programs, also faces several challenges. One
challenge is the payment of cash grants. Pantawid Pamilya grants are managed by the Land Bank of the
Philippines (LBP), a government-owned bank and the program’s disbursing institution. These grants are
remitted through the beneficiary households’ accounts and can be withdrawn through automated telling
machines or over-the-counter transactions.

However, because the unanticipated scaling and rapid expansion of the program, DSWD and LBP
has encountered logistical difficulties in its implementation (Zimmerman & Bohling 2013). For one,
because the country is composed of many islands, many municipalities and remote areas covered by the
program had no Land Bank branches or automated teller machines (ATMs). As such alternative ways to
help beneficiaries claim their grants efficiently and conveniently had to be explored. As such, the LBP and
DSWD have teamed up with other financial institutions such as including private and rural banks. Five

1  Between  $12-­‐36  US  dollars  per  month.  

years into the program, only 40% of the beneficiaries could be paid electronically using LBP’s cash card
and instead had six primary payment service providers (PSP) to help out (Zimmerman and Bohling 2013).

One of these PSPs was GRemit. On November 5, 2010, DSWD and LBP engaged the services of
Globe Telecom in the pilot implementation of the distribution of cash grants using the GCASH Remit
service, the telecommunication company’s cash pick-up service. Since the pilot, which was carried out in
far-flung areas in the provinces of Palawan and Quezon, was deemed a success, the DSWD decided
expand to more areas using the same service (http://69.163.149.64/news/news13e8f3.html). Now, the
service is serving about 300,000 beneficiaries and distributing about PhP 1 billion grants to almost 70
areas in 16 regions. This has helped make claiming of grants more convenient for beneficiaries who used
to spend money and time for their transportation to, and queuing up in banks and distribution centers
and has also spurred local economic activities as the beneficiaries now spend their grants at the
community level (Bold, 2011). This claim made by the Globe’s G-Xchange company that operates the
telco’s m-commerce business, however had not been independently validated, and is a focus of this
study.

Background of the PPPP

The conditional cash transfer program was started in the previous administration of President
Gloria Macapagal Arroyo in 2008. This was continued and further expanded in the term of President
Benigno Aquino III. During Aquino’s administration, the number of beneficiaries in the program has
grown fourfold (see Figure 1), and the amount disbursed annually growing to about Php34B pesos.
Given the growth in scale of its implementation over such a short period, there are obvious logistical
challenges in the distribution of cash.

Figure 1: Number of CCT Beneficiaries, National

 Because of this, the Department of Social Welfare and Development (DSWD), the agency in
charge with the implementation of the program, partnered with other groups in the disbursement of
these funds. One strategy was to use GRemit as a partner in the distribution of cash transfers.

As such, in 2010, GRemit became a conduit in the implementation of these cash transfers. Its
implementation was first piloted in some island municipalities in Palawan and Quezon Province.

Based on data provided by the DSWD, GRemit currently services approximately 12% of all its
beneficiaries, and peaked at
29% in 2011 (see Figure 2).
However, there has also
been other modalities over
the years, through other
partners, even as the value
of the amount coursed
through GRemit has
increased, from Php980M to
4Billion (peaking at 6B in
2012). Source: DSWD

Methodology

This interim report is based on interviews of personnel from DSWD Central Office and DSWD
Region IV regional office regarding the implementation of CCT through Gremit, field observations in
Mindoro Occdental where GRemit was the conduit for delivering conditional cash transfers (CCT) in San
Jose, Occidental Mindoro, and field surveys in Occidental Mindoro.

Survey

Conditional cash transfers (CCT) were distributed in San Jose, Mindoro Occidental for three days
in October 29-31, 2013. Based on the schedule provided by DSWD, they expected to have 4093 CCT
beneficiaries for those three days.

There were eight payout venues in San Jose, Occidental Mindoro and barangays were clustered
together in these different payout venues. Payout venues were usually open spaces in the barangay that
can accommodate a large number of individuals (e.g., open park, barangay hall, and school ground).
There were 192 respondents randomly selected from thirteen barangays out of the twenty-two identified
CCT barangays in San Jose, Occidental Mindoro. Respondents from six barangays were interviewed on
the first day of the payout, four barangays during the second day and three barangays on the third day.

Almost all the respondents were women.2 This is because by design the cash transfers are
intended to be given to women beneficiaries. Most of the respondents walk , and among those who have
to pay for transportation, their mean travel cost is Php15.99 (s.d. 10.6). Also, although the average
travel time to the distribution center is only 28 minutes, there is a large variance in this, with one person
reporting that she travelled for a day and spends Php100 for the trip3, whereas others said they walk to
the distribution point within a few minutes. The respondents’ ages range between 15-53.

During the payout of cash grants, the survey respondents were randomly identified by selecting
every fifth CCT beneficiary in the payout line. To ensure representation of CCT beneficiaries from
different barangays, enumerators were distributed on the different lines designated for each barangay. In
the afternoon of the first day, when a simultaneous payout was scheduled, the enumerators were divided
into two teams in for the two locations respectively.4 However, it turned out that the simultaneous payout
was only good up to the validation stage since the beneficiaries in Murtha barangay hall still had to wait
for the same GRemit merchant to arrive, once it was finished with its disbursements in the other venue.
Due to the limited personnel of the merchant, the merchant had to finish first the payout in the town of
La Curva before proceeding to the town of Murtha. Based on field observations, the waiting time took
longer than an hour. Furthermore, distribution for barangays in Ilin Island was conducted on another
day. The distribution point was in Barangay Pawican.

FINDINGS

Interviews

Based on interviews with the program implementers from DSWD at the regional level, the
implementation of the 4Ps has also evolved over the years. For instance, it was originally done quarterly
(every 3 months), but now it is done bi-monthly, and there is some interest among the DSWD leadership
to do the releases monthly. Also, the partnerships forged as far as actual distribution of the CCT has also
changed over time (see Table 1), along with the fees charged for these services. For instance, the
amount charged for GRemit has gone down from Php75 in 2010, to only Php42 in the last bid they

2  There were a few cases where the husbands or children collected the funds because of unavoidable reasons.
3
She was from the town of Natondol in Ilin Island. Although it had a different distribution point in the same island
(bgy Pawican), it was noted that the mean travel time for people there was higher than the ones travelling from
towns nearer San Jose. Because she wouldn’t require riding a boat, this would nonetheless indicate differences in
road/transportation infrastructure in the area, which can be said in many dispersed communities in the country.
4
One was scheduled in La Curva’s barangay hall and another one in Murtha’s barangay hall.  
submitted. This amount was the ceiling that was set, after the previous round of bidding wherein
MLhuillier5 submitted and won with that bid.

Since benefits may vary per family depending on the number of children and their compliance to
the conditionalities made as part of the program6, it also entails a significant amount of backroom
operations not only for the distribution, but also in the monitoring of beneficiary compliance, and
computations in the benefits they will receive.

Table 1: CCT Transaction costs for DSWD

Conduit/Modality  (period)   Cost/Remarks

Cashcard initial  Php50,  no  transaction  costs  thereafter  (Landbank  
ATMs);  Php20  other  ATMs  (interbank  fees)  
Philpost Php50
GRemit  (2010-­‐11) Php75
GRemit  (2012) Php  60  (negotiated)
Mlhuillier  (2013) Php42  (Gcash  was  disqualified/late)  
GRemit  (2013) Php42  (Mlhuilllier  did  not  participate,  42  became  the  
ceiling  set,  LBC  was  diqualiflied)  

The implementation also varies, depending on the availability of banks and other partners in the
areas. The most ideal mode would be through Landbank (which is a government owned bank). If the
Landbank is present, beneficiaries would be able to access their CCTs in Landbank, through a cashcard.
There will be an initial Php50 cost to make the card, but thereafter, there will be no transaction costs
incurred per withdrawal, except if withdrawn from other bank ATMs.

Should Landbank be absent, DSWD considers other options, like rural bank partners, or the
Philippine Postal Office (Philpost). Should this also be unfeasible/unavailable, only then does it consider
alternative conduits. Overall, around 40% have cashcards, and the rest have either Philpost, Gcash.etc.
Ms. Anotoniette Duero, of the DSWD Financial Management Service estimates that DSWD only has issues
with 20% of the areas (with the other 80%, being more manageable because of Landbank, rural banks
or Philpost providing them with viable options).

5  MLhuillier is the country’s largest pawnshop network, and is also the most popular conduit for sending domestic
remittances in the Philippines. An estimated 23% of domestic payments is coursed through MLhuillier
(Zimmerman & Bohling 2013).  
6  Benefits are 500/mo plus 300/child (up to 3children)=ranges from 1600 to 2800 (if done bi-monthly), and 800 to
1400 if done monthly.  
Figure 3: CCT funds released thru GRemit
Reason for using GRemit

The original reason for using

GRemit appears to be more
pragmatic. As a regional officer
from DSWD shared, they were
already satisfied initially just to
have a partner with a presence in
the area. In Palawan’s case, for
instance, they partnered with
GRemit because they could not
find any other alternative at that
time. Likewise, there were also
perceived cost savings from the end of DSWD/Landbank as an implementer as compared with other
alternatives they’ve done in the past (e.g. using helicopters; boats); and would also reduce the logistical
complexity of the task by passing this on to partners.

According to regional DSWD implementers interviewed, it was reported that the ‘Gcash’
transaction in the process was not direct to the beneficiary, but rather to partner merchants. In the first
iteration of the implementation, there was a process of ‘verification’ between the partner merchant and
GRemit, that slowed the process.

They described the initial implementation to be as follows:

There is no use of (mobile money or mobile phones) technology among the

beneficiaries. Instead, beneficiaries are given transaction slips by DSWD with
codes. They gave this to the GRemit merchant who will enter the code for
verification before remitting the cash. It is only the merchant who has a GCash
account in this arrangement. They put the code that DSWD generated at the
central office, and texts this back to GRemit. They needed this then because they
could not verify the GCash transfer without the code. This was done individually,
and not in bulk, as a control measure in case the beneficiary did not appear on
the day of the release for funds. Merchants then get paid per transaction (per
beneficiary who are able to collect their CCT).

In the past, it was reported that distribution took longer, because cell signals were unreliable. In
bad weather, when there is no cell signal at all, then they might stop altogether. But they do not close
until everyone is served. There were times it finished at night.
 Over time, as they were continuing implementation, one feedback they had to contend with were
concerns that some beneficiaries were still spending a large amount in terms of transportation costs just
to collect on the cash transfers. “pag-minsan Php300-500 ang gastos nila” (sometimes they end up
spending Php300-500), and yet the grants were only Php5200 (when it was done quarterly).

As such, their criteria for partner conduits or merchants has already changed. If initially they
were already satisfied to have conduits whoe were present at the municipal level, now their standard is
to have a partner that can go down as close to the barangay level, and if possible, even be delivered to
the home. Also, ideally, no one should be spending more than Php100 when collecting their CCT. Even
for those using cash cards. This is the DSWD’s benchmark, according to Mr. Vincent Obcena of the
DSWD regional office. In the GRemit model, they also admitted it was difficult to generalize if they do go
down to the barangays level because it was also dependent on GRemit’s merchant partners capacity on
the ground. A recent CGAP study, noted that this is a problem, especially for those living outside of the
National Capital Region, where some would travel more than two hours and pay twice the maximum (php
100) just to get to a pay point (Zimmerman & Bohling 2013).

Observations

In San Jose, it was observed that the two

types of m-money providers, GCash and
SMART money, were present.

Although GRemit is a mobile money

remitting service, the actual transfer by
DSWD of CCT to beneficiaries did not
really take advantage of the key features
of mobile money, in their case the Gcash
platform. Figure 4: CCT funds released thru GRemit in San
Jose, MO

It was observed that as currently implemented in San Jose, Mindoro Occidental the step of GCash
text verification in the process was no longer done during the disbursement of CCT itself. Hence, how
GRemit’s merchant partner’s operated, was no different from other remittance channels, since it was not
automated, and depended largely on DSWD personnel verifying identities of beneficiaries and GRemit
partner merchants directly handing out money after these people have been verified.

A person still had to physically bring the money to the locations, and these were, in turn, also
distributed in the form of actual cash to each beneficiary. As such, the merchant partners’ efficiency in
distribution was also dependent on the number of people they had on the ground, and the number of
desks they had in place. In the case of distribution in San Jose, because distribution was manual, and the
same merchant serviced multiple distribution points, it was not simultaneously done. Hence even if
distribution was relatively fast, the beneficiaries in other location still had to wait for distribution to finish
in the other location. As such, long lines were observed largely because they had to wait for merchant
partners to set-up, even if processing may take only a minute/beneficiary.

It was also observed that vendors proliferated in the locations where CCT was distributed. When
the distribution was finished, and moved to another area, some vendors also moved to set-up in the
other location.

When asked about their security, the merchants’ replied that they did not feel adequately secure
in the present arrangement.

Even as the current method for delivering CCT does not use mobile technology among its
beneficiaries, would a m-money based CCT be feasible and more cost-effective?

This was investigated through a survey of current beneficiaries in Occidental Mindoro.

SURVEY RESULTS

The survey was based on Van Dijk’s model of accessing technology. In particular we wanted to know:

1. MENTAL ACCESS: Whether they could be interested in accessing CCT through the mobile phone.
2. MATERIAL ACCESS: Whether they had a mobile phone.
3. SKILLS ACCESS: Whether they knew how to receive mobile money.
4. USAGE ACCESS: Whether they have previous experience getting mobile money.

FIGURE 5: Stage of Access for Beneficiaries with respect to receiving CCT via mobile money
 When asked on whether they’d be interested in receiving CCT through the mobile phone, a
majority of the respondent beneficiaries (71%) were willing. Relative distance to known
claim/redemption centers for mobile money (whether GCash or Smart Money) was also
statistically significant to willingness (Chi 12.96, df=1, a=.000). Those who were closer to a known cash
out center were more willing.

In terms of ownership of cellphones, almost half (49%) of the respondents owned a mobile
phone, and most of those who had a mobile phone were SMART subscribers (86 of 90 or 90%). This is
an important factor to consider, should CCTs be delivered thru a mobile money form, since SMART has a
different mobile currency, SMART Money, whereas GCash is delivered only thru the Globe Telecom
network. Interestingly, ownership of a mobile phone was not statistically significant as to
whether they were interested in m-money for CCT (Chi=2.89, df=1, a=.089). This means that
even those who currently do not own a mobile phone are open to having this option. In fact, some of
those who said they did not have a phone, actually reported knowing how to receive money through the
cellphone. This suggests that ‘borrowing’ or ‘sharing’ of mobile phones occurs even with respect to
sending remittances, or this might be indicative of a ‘control’ issue as to who handles the phone in the
family. This though would require further investigation in the future.

Overall, 34% reported knowing how to receive money using their mobile phone. This figure is
interesting, since WolrdBank’s Findex data shows that in 2011, only 12.5% of Filipino adults received
money on their mobile phone. Although the figure is lower for the bottom 40% in income at 11.8%, the
figures are higher for receiving money through the mobiles phones among women (13.2%) and among
adults in rural areas (16.0%)7. Nonetheless, this difference might suggest peculiarity of the sample and
location, and implies the sensitivity of the mode of delivery to local conditions.

Of those in the sample who knew how to receive m-money, more were familiar with SMART
Padala centers than Gcash merchant partners. The survey also showed that Pre-existing Knowledge
to use m-Money services was statistically significant to willingness to use this as a conduit. Those who
already know how to use were more likely to be willing to have CCTs delivered thru their mobile phone
(Chi=7.729, df=1, a=.005).

Finally, in terms of experience in using/accepting m-money, 33% had experience using SMART
Money Padala, compared to only 1.5% who have used GCash. Furthermore, those who have had
previous experience using mobile money were also those who reported greater interest in considering the
option of receiving their CCT through mobile phones.

7  Taken from http://databank.worldbank.org/Data/Views/VariableSelection/SelectVariables.aspx?source=1228  

FINANCIAL/TECHNICAL FEASIBILITY OF USING M-MONEY AS AN ALTERNATIVE

According to Ms. Duero of the Financial Management Service DSWD-Central Office, the DSWD
Secretary would prefer more frequent releases at smaller amounts. However, if the DSWD does this, the
operational costs for doing this would be greater, largely because of manpower costs and expenses
directly connected to its distribution and compliance monitoring (note: the operational costs increase as
more frequent disbursements occur). Costs wouldn’t be as high if there is less human resources involved
in the process (as would be case if the distribution takes advantage of the features of mobile money). In
2013, DSWD already employed more than 10,000 people to manage the program, most of whom were
employed at the regional level (Zimmerman & Bohling 2013).

We explored whether m-money still provide a viable option in such a case?

Table 2: Comparison of SMART Money vs. Gcash costs for sender per remittance range

SMART MONEY8 GCash

Remittance Range Charges Total (Max) (for Charges (Php20 per
sender 1000)
Ph1-Php500 Php5 Php5 Php20
Php 501-1000 Php5 Php5 Php20
1001-1500 Php 5 + 2.5 Php7.50 Php40
1501-2000 Php 5 + 5 Php10 Php40
2001-2500 Php 5 + 7.50 Php12.50 Php60
2501-3000 Php 5 +10 Php15 Php60
above 3000 Php 5 + 2.50/Php500 Php 15 ++ Php80++
above 1000

From Table 2, it can be seen that at smaller increments (cash transfers lower than 2000), both
GCash and SMART Money can be delivered at a rate that is lower than what is currenty being charged by
DSWD’s conduits (whether it is MLhuillier or GRemit), which was last reported to be Php42. SMART
Money charges for the sender is also lower than what GCash would charge (Php10 vs Php40
respectively). Higher than Php2000, GCash becomes less viable, whereas SMART Money continues to be
a viable alternative. At present, the maximum benefit provided on a bi-monthly release is Php2800. This
would cost Php15 for the sender if coursed thru SMART Money, and Php60 if coursed thru GCash.

8  Note that there’s a one-time initial card application fee of Php100 for SMART.  Effective November 1, SMART Money
Padala, stoped charging airtime fees. A Sender’s SMART money account will be debitted with Php% service fee for
the first hp1000, and Php2.50 for increaments of Php500.  
 Table 3: Comparison of SMART Money vs. Gcash costs for recipients per remittance range

Remittance Range SMART thru ATMS SMART merchant ( Gcash merchant

1% per tnx)
Ph1-Php500 Php5 (BDO); Php 15 Php 1-5 None
other networks
Php 501-1000 Php5 (BDO); Php 15 Php-5-10 None
other networks
1001-1500 Php5 (BDO); Php 15 Php10-15 None
other networks
1501-2000 Php5 (BDO); Php 15 Php15-20 None
other networks
2001-2500 Php5 (BDO); Php 15 Php20-25 None
other networks

From interviews with m-money providers, as well as online resources from SMARTMoney and
GCash, costs on the part of the cash transfer recipients were also compared (see Table 3). Note that for
CCT recipients at present, their only cost is the cost of travel. In this respect, SMART Money has
additional charges, whereas GCash does not. It was also noted that the different cash out centers we
interviewed in San Jose differed in their policy as far as cashing out was concerned. This indicates lack of
uniformity in how cashing out rates are implemented on the ground (as far as ordinary remittances thru
m-money are concerned).

TABLE 4: Comparison of m-money Total Transaction Costs (DSWD+beneficiary)

Remittance Range Current GRemit SMART Money Gcash Direct model

model
Ph1-Php500 Php42 Php10 Php20
Php 501-1000 Php 42 Php 15 Php 20
1001-1500 Php 42 Php17.50 to Php 22.50 Php 40
1501-2000 Php 42 Php25-30 Php 40
2001-2500 Php 42 Php32.50- Php 60
Php37.50
2800 Php 42 Php 43 Php 60

For smaller transfers (CCTs in this case), Gcash and SMART Money is very competitive and even
better than the current amount DSWD pays for delivering the amount per beneficiary, especially for
transactions below Php2000. Gcash doesn’t become viable with bigger transactions (higher than 2000),
whereas Smart Money becomes less attractive once it is higher that 2700. Note, however, that SMART
Money can also have an ATM withdrawal option, to make this cost comparable. Furthermore, a recent
interview with Lito Villanueva9 of SMART’s Innovations group, suggests that costs for beneficiaries
cashing out can be waived, as is the case in their current project for delivering cash payments for their
cash for work program in the ongoing rehabilitation projects for Taiphoon Haiyan victims.10 In such a
case, SMART Money will be less costly compared to the current ceiling of Php42.

Another alternative is Globe Banko, which is also partly owned by Globe Telecom and Bank of the
Philippine Islands (BPI). This makes use of GCash’s infrastracture, and earns interest, and provides debit
cards that can withdraw from ATMs.

Nonetheless, there would still be limitations on where m-money may be viable. It would still be
dependent on the scale of availability of these services, and accessibility of their cash out centers in the
areas being served. In the case of San Jose, Mindoro, for instance, SMART Money and GCash services
were present, with SMART Money also being more prevalent, as noted in the survey and field
observations. But ATMs are also not commonplace, and the transportation costs for beneficiaries for
accessing these should still be considered.

FINDINGS

As far as the how CCTs are delivered via GRemit as currently implemented is concerned, the
benefits in terms of better efficiency and security was not apparent. The implementation was no different
from other modes for sending remittances/cash transfers (e.g. pawnshops, rural banks, Philpost) since
the technology of using mobile money was not integral to its delivery. The actual overhead cost (for
distribution of transfers) was not yet known, but rather based on bidding with variable costs for
beneficiaries in terms of transportation costs to the access points. Nonetheless, DSWD is committed to
making the cost for access among beneficiaries to not exceed P100.

This however, also does not conclusively show that the use of mobile money for CCTs is not
viable. In fact, this has been done in other countries (see Aker), and is also something that is being
piloted by the United Nations thru SMART Money in its Yolanda operations as a way for paying for work
in the rehabilitation (see Lee-Brago 2013). Given that this is also something that DSWD is involved in,
scaling this for conditional cash transfers may be a possibility in the future.11

Feasibility of using a mobile money model in San Jose, Mindoro

9  Mr. Villanueva was interviewed on December 16, 2013 at the SMART Tower office in Makati City regarding their
planned mobile money cash transfers model with the United Nations for Yolanda/Taiphoon Haiyan victimes.
10
See http://www.philstar.com/headlines/2013/12/24/1271559/undp-rolls-out-mobile-cash-transfer-typhoon-areas  
11  According to Mr. Lito Villanueva, they did not know about the bidding for CCT conduits in the past. He did not
mention if SMART Money would be considering this in the future.
 Based on computations using the current pricing for SMART Money and GCash for regular
remittances, the cost using SMART Money or Gcash can be potentially lower compared to what DSWD
currently pays, especially for smaller and more frequent cash transfers. SMART Money would also be a
more technically feasible alternative should direct transfers to mobile phones are considered in San Jose
Mindoro since they have more centers, and most of the beneficiaries who have mobile phones are
subscribed to a SMART network.

SMART Money may also be more viable if the service is to be scaled up nationwide, largely
because SMART is the dominant carrier in the Philippines with 2/3 of the market share (Hanouche &
Rotman 2013). As such, the value of the network, given it is much larger, is also more beneficial. The
adoption of GCash, as an initial standard, appears to be just by ‘chance’12, and not so much from a
technical comparison of similar alternatives. Mendes, et.al (2007) reports for instance that there are
more registered SMART Money users than GCash users. In large part , this is also due to the fact that
SMART controls a larger market segment. In the first Q of 2012, SMART has a 68% market share,
compared to Globe’s 32% share.13 But alternatively, partnerships can also be selective per province,
given that the presence of these alternatives also vary greatly from one locality to another in the
Philippines.

The findings associated with the feasibility of using current mobile platforms are consistent with
findings on the use of similar services among microfinance institutions (Hanouch & Rotman 2013).
There, it found agent proximity, knowledge of services and comfort level as critical factors in interest and
sustainable use.

Finally, what also limits the potential of using mobile money for cash transfers is the need for
cash out centers. If mobile cash is delivered and then used in the communities without need to cash out,
then the model can be made even more efficient and secure. This would require working with retailers,
especially merchants to whom CCT beneficiaries quickly consume their funds, such that
retailers/merchants should be capable of transacting with m-money. However, at present, payment
service providers (including GRemit partners) commonly motivated of the opportunity of 4Ps payments as
a service and haven’t been motivated about possibility of attracting the recipients as downline clients for
other services (Zimmerman & Bowling 2013).

12
see Donovan 2012:2650 for discussion on chance standards. He says some standards are arrived at through
accidental convergence, or purely arbitrary in its adoption
13
https://gsmaintelligence.com/analysis/2012/05/philippines-mobile-market-becomes-two-horse-
race/336/
 References:

Aker, Jenny, C. , Boumnijel, R.; McClelaland, A.; and Tierney, Niall (2011) ‘Zap it to Me: The short-term
Impacts of a Mobile Cash Transfer Program. Center for Global Development, working paper 268,
September 2011.

Alampay, E. and G. Bala (2010) Mobile 2.0: M-Money for the BOP in the Philippines, Information
Technologies & International Development, Volume 6, Number 4, Winter 2010, 77–92
Bold, C. (2011). GCASH supports the Philippine Government’s Poverty Alleviation Programmes. from
http://www.cgap.org/blog/gcash-supports-philippine-government%E2%80%99s-poverty-alleviation-
programmes. Date retrieved: 05 November 2012
Department of Social Welfare and Development, (n.d.). Pantawid Pamilyang Pilipino Program: For
Information of the General Public.
Fernandez, L. and Olfindo, R. (2011). Overview of the Philippines’ Conditional Cash Transfer Program:
The Pantawid Pamilyang Pilipino Program (Pantawid Pamilya). Philippne Social Protection Note, May
2011, No. 2. The World bank Group and Australian Government Aid Program.
Fizbein, A. and Schady, N. (2009) Conditional Cash Transfers: Reducing Present and Future Poverty. The
World Bank. Washington D.C .
Hanouche, M. and Rotman, S. (2013) Microfinance and Mobile Banking: Blurring the Lines? CGAP Focus
Notes, No. 88, August 2013.
Lee-Brago, P. (2013) ‘UNDP rolls out mobile cash transfer in typhoon areas’ The Philippine Star,
http://www.philstar.com/headlines/2013/12/24/1271559/undp-rolls-out-mobile-cash-transfer-
typhoon-areas (accessed 3 Jan 2014).
Mendes, S; E. Alampay, E. Soriano and C. Soriano (2007) The innovative use of mobile applications in the
Philippines- lesson for Africa. Department for Infrastructure and Economic Development. SIDA.
Van Dijk, J. (2006). The network society: Social aspects of new media. Thousand Oaks, CA: Sage
Publications.
Zimmerman, J.M. and Bohling, K. (20130) ‘Striving for E-payments at Scale: The Evolution of the
Pamtawid Pamilyang Pilipino Program in the Philippines (November 2013). CGAP and UK Aid.

Online resources:

Worldbank Global Financial Inclusion Database (accessed May 23, 2014):

http://databank.worldbank.org/Data/Views/VariableSelection/SelectVariables.aspx?source=1228

Interviews:

Mr. Hector ___ - CCT link, Puerto Princesa City

Mr. Vincent Obcena – DSWD Regional Field Office Region IV-B (MIMAROPA)

Ms. Jan Veronica Arapeles – DSWD Regional Field Office Region IV-B (MIMAROPA), Monitorign and
Evaluation

Mr. Lito Villanueva – SMART Telecoms Innovations group

Ms. Antoinette Duero – DSWD Central Office, FMS group

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