Cash transfers can play a key role in the economic recovery of individuals, small enterprises, and local and regional trading in the Philippines after Typhoon Haiyan, say experts.
"Cash transfers have the potential to bring dignity and empowerment back to people who have lost nearly everything while revitalizing devastated markets very quickly," Carla Lacerda, the Asia focal point for the UK-headquartered Cash Learning Partnership (CaLP), a consortium of five international organizations that aims to promote appropriate, timely and quality cash and voucher programming in humanitarian response and preparedness.
A newly created Typhoon Haiyan cash transfer working group, composed of 43 international NGOs, donors and humanitarian agencies, recently met in the Philippine capital, Manila, for the third time since the category 5 storm made landfall on 8 November, to discuss the use and targeting of cash transfers in recovery efforts.
An estimated 3.4 million people have been displaced, with the government reporting more than 5,000 dead and nearly one million houses damaged.
“We don’t prefer cash [over in-kind assistance] but it is one of the ways we can provide assistance quickly to get people back on their feet,” said Mathias Eick, the Bangkok-based regional information officer for ECHO, the European Commission’s humanitarian wing. ECHO, a member of the working group, has earmarked US$9.5 million for recovery efforts, including cash transfer programming.
Cash to beneficiaries - whether through direct transfers or vouchers, with or without spending conditions, and sometimes with a work component and in combination with in kind transfers - has increased globally from $5.6 million in 2007 to $188.2 million in 2010, according to a 2012 Global Humanitarian Assistance tracking report.
While the steep increase is partly due to mega-disasters in 2010, such as Haiti’s 7.0 magnitude earthquake in January, and Pakistan’s floods six months later, Lacerda said there has also been a “change in the humanitarian mind-set” to acknowledging the flexibility and rapid relief that cash assistance can give survivors.
When to inject cash
Tacloban city on the island of Leyte in the country’s centre was one of the areas hardest hit by the typhoon. According to the Office for the Coordination of Humanitarian Affairs, 138 ‘barangays’ (neighbourhoods) in Tacloban alone have suffered "severe" damage.
Overall, CaLP sees the Philippines as a good candidate for cash assistance programmes because of its resilience, as measured by the ability of vendors to recover quickly, the interconnectedness of its markets, which makes it easier for vendors to source and sell goods from many places, the governments’ flagship conditional cash transfer (CCT/ 4Ps) programme and its residents are already accustomed to receiving electronic cash payments
The UN noted in 2013 that Filipinos working overseas sent home nearly $20 billion annually to their families. In 2011, remittances accounted for some 10 percent of the country’s gross domestic product, according to the World Bank.
“The vibrant private sector’s remittance economy means that many people are already familiar with receiving money through transfers,” said Lacerda.
Cash transfers can revitalize markets, say aid workers. “I walked by a fish market on the way here. Lots of fish was on sale but people need the resources to buy it,” Leonard Doyle, head of digital media at the International Organization for Migration, told IRIN at a food distribution warehouse in Tacloban city.
Most of Tacloban’s markets were destroyed in the typhoon, but several have now reopened and residents can also travel to the neighbouring towns of Basey and Catbalogan in Samar Province to buy supplies, said a recent assessment by the NGO, Oxfam.
An estimated 2.5 million people need food, and because aid is limited to non-perishables, cash helps families afford fresh foods, researchers point out.
Rural areas outside of Tacloban, where there are fewer market connections, most likely “won’t be helped by getting cash” said Eick.
Some risks of using cash transfers in post-emergency situations include security issues for recipients when they pick up cash, and a potential inflationary effect on the market, noted Lois Austin, co-author of a 2011 report on cash transfers in emergencies, who stressed that communities should decide on the type of cash transfer programme they would like.
“Cash transfers are one way of giving survivors the power to choose whether they want to prioritize eating fresh foods, re-building their homes or starting up their livelihoods," said Lacerda.
While the benefits of cash transfers are clear, given the near-total destruction of infrastructure - including banking and telecommunications - implementation using phone technology is not yet feasible in the current crisis, say experts.
"We have to investigate further how it can be done, and the best ways," said ECHO's Eick.
Other modes for transfers, such as direct cash handouts or a market voucher system, may be more effective in the absence of electronic disbursements.
Overall, each NGO’s target population for receiving the transfers should be considered carefully in order to ensure that, for example “cash-for-work” activities such as clearing the debris-ridden streets of Tacloban, do not inadvertently exclude the vulnerable by only drawing in able-bodied people.
Humanitarian agencies, through the Typhoon Haiyan Cash Working Group, are looking to complement their initial needs assessments with a rapid market assessment on 8 December. This would allow strengthened aid response coordination and the ability to determine the most appropriate geographical locations for cash, voucher or a combination with in-kind transfers in a currently fluid and rapidly-evolving environment.