The government is finalizing talks with the Asian Development Bank (ADB) for a $200-million conditional cash transfer (CCT) loan next year, a senior finance official said.

The ADB CCT loan was originally only $100 million but recent discussions are now exploring doubling this amount up to $200 million.

Finance Undersecretary for International Finance Rosalia de Leon said talks are still ongoing for the release of the CCT loan early in 2010.

CCTs are tools for poverty reduction. The budget and finance departments prefer CCTs to direct subsidy to controlled corporations and agencies.

The International Monetary Fund said governments should program more subsidies to help the poor while the World Bank said CCT programs are “ new type of social assistance program that represents an innovative approach to the delivery of social services.”

Basically, CCT programs provide money to poor families “conditional upon investments in human capital,” for example sending children to school.

ADB released $500 million short-term fiscal stimulus loan under ADB’s Countercyclical Support Facility last October and this loan has its own CCT component which will be implemented this year.

Earlier this year the ADB released a study that CCT programs and social policy complements each other. However for CCTs to be effective, it has to be transparent with constant program monitoring.

The most recent CCT loan that the government has finalized was the $400 million funding from the World Bank.

De Leon said CCT subsidy will be disbursed over a spread of five years.