To w a r d m o r e A c c e s s i b l e a n d Inclusive Social Assistance Delivery A GEOSPATIAL ANALYSIS IN THE PHILIPPINES Yasuhiro Kawasoe1 EXECUTIVE SUMMARY • The Philippines' experience in implementing the Social Amelioration Program (SAP) in response to the COVID-19 pandemic highlights the pressing need for financial inclusion, especially among the poor. Beneficiaries of the existing social assistance program Pantawid Pamilyang Pilipino Program (Pantawid or 4Ps) received their first SAP payment on time as a top-up to their regular grants. However, the non-4Ps beneficiaries had to go through paper-based registration and manual payments, which resulted in duplication of beneficiaries2 and significant delay in payment delivery. • The absence of a national ID system and low bank account ownership posed a challenge in the delivery of SAP. The lack of identification documents is one of the reasons for being unbanked in the country where only 29 percent of adults have a bank or mobile money account. This is an issue with the Philippines being one of 23 countries in the world without a foundational national-scale ID system. Global experience in scaling up social protection during the COVID-19 pandemic shows that countries could provide cash transfers promptly and accurately when they have foundational ID systems that uniquely identify and verify data about members of the population, coupled with advanced government-to-person (G2P) payment ecosystems. 1 The author thanks Yuko Okamura and Julia Michl Clark of the World Bank for their valuable comments. The World Bank Social Protection and Jobs team in East Asia Pacific (Yoonyoung Cho, Robert Palacios, Ruth Rodriguez, and Yasser El-Gammal) and Jonathan Marskell also provided guidance and comments. Gio Santos and Arianna Zapanta provided excellent support in geocoding the address of ATMs to longitude and latitude. Moria Enerva helped in editing. Support from the DSWD is greatly appreciated. This work would not have been possible without the generous financial support from the G2Px Trust Fund from the Bill and Melinda Gates Foundation. 2 For instance, DSWD reported 51,563 duplicate aid beneficiaries after distributing the first tranche in June 2020. https://www.pna.gov.ph/articles/1106778 Public Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure Authorized • The Government of the Philippines (GoP) expedited the development and registration for the national ID system (PhilSys) and used the opportunity to facilitate bank account opening. PhilSys helps people without a bank or mobile money account meet the requirements for opening an account using an identity verification function to meet Know-Your-Customer (KYC) requirements. Through its unique ID system and by ensuring the integration and interoperability of registries, such as the Unified Beneficiary Database (UBD) of the Department of Social Welfare and Development (DSWD), PhilSys can help government agencies avoid the potential duplication of beneficiaries. The UBD, for example, can store the payment account information of beneficiaries where cash can be transferred quickly and digitally during an emergency. • Not only ownership of bank or mobile money accounts but also accessibility to financial services is essential for financial inclusion. With the country's sprawling archipelago and an uneven distribution of the population, spatial accessibility to financial service points varies. Currently, DSWD has a partnership with the state-owned Land Bank of the Philippines (LBP) for the payment of 4Ps beneficiaries as well as for the opening of accounts at the PhilSys registration centers. This means long distance travel for beneficiaries because many localities, especially remote communities, do not have LBP financial transaction points (i.e., automated-teller machines or ATMs and branches) nearby. • This study assesses the challenges and opportunities in financial inclusion, especially among the poor in remote communities. First, the study carries out a mapping of all financial transaction points and estimates the travel time to the nearest point. Second, the map is superimposed with the poverty and potential vulnerability of families in remote communities. Finally, the study assesses the coverage of 4Ps in remote areas in view of the potential challenges in implementing the social assistance program in hard-to-reach communities. • The main findings of the study are as follows: o Travel time to the nearest financial transaction point is more than 30 minutes on foot for nearly half of the population who have no vehicles. Over 42 million people live in the barangay, which is more than 30 minutes away on foot from the closest ATM. If only LBP ATMs are considered, the number increases to 64 million. o 4Ps beneficiaries face difficulties in accessing ATMs. Over 65 percent out of arou