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Street Kids Learn to Save in Times of Crisis

 IPS 19 May 2019

(Originally published: 02/2010) Since he dropped out of elementary school, 17-year old Cenen has been making a living for himself driving a borrowed motorised sidecar in the crowded streets of Binondo, a bustling business district in Manila, capital of the Philippines. The youngest of six kids, Cenen no longer lives with his parents. He has been financially independent for some time. He pays a "boundary" fee every day to the owner of the vehicle, pays for all his meals, and sets aside a portion of his earnings toward his goal of buying a motorcycle of his own. His friend JR, also 17, finished only second year of high school. He contributes some of his earnings to his parents while saving the rest. Both Cenen and JR, who declined to give their full names, are graduates of the non-profit organisation (NGO) Childhope’s financial education programme. It teaches children living on the streets the value of money and encourages them to save, an important safety net in times of hardship, says the NGO. They are just two of the hundreds of thousands of street children in the South-east Asian country trying to survive the economic crunch. Kara Santos reports from the Philippines.  - Kara Santos

IPS

MANILA, Philippines - Since he dropped out of elementary school, 17-year old Cenen has been making a living for himself driving a borrowed motorised sidecar in the crowded streets of Binondo, a bustling business district in Manila, capital of the Philippines.

The youngest of six kids, Cenen no longer lives with his parents. He has been financially independent for some time. He pays a "boundary" fee every day to the owner of the vehicle, pays for all his meals, and sets aside a portion of his earnings toward his goal of buying a motorcycle of his own.

"So I have money to spend when I really need it," he reasons when asked why he saves. At the moment he is not thinking of going back to school yet.

His friend JR, also 17, finished only second year of high school. He contributes some of his earnings to his parents while saving the rest.

"I'm saving money to go back to school and so that I have something for the future," he says.

Both Cenen and JR, who declined to give their full names, are graduates of the non-profit organisation (NGO) Childhope's financial education programme. It teaches children living on the streets the value of money and encourages them to save, an important safety net in times of hardship, says the NGO.

They are just two of the hundreds of thousands of street children in the South-east Asian country trying to survive the economic crunch.

The United Nations Children's Fund (UNICEF) estimates that there are around 250,000 street children in 65 cities around the country. Metro Manila alone has about 85,000 street children. About 70 percent of children most visible on the streets are boys, says Childhope.

Because of their age, children are one of the most vulnerable sectors in society.

They may not know there is an economic crisis going on in the world, but they definitely feel the surge in prices of food and basic goods that they need to survive every day, says Darwin Anolin, coordinator of Childhope's Financial Education Programme.

"Last year, because of the rise in the prices of basic goods, a lot of the kids had a hard time saving," shares Anolin, who oversees ten communities around Metro Manila and checks the progress of the kids' savings.

Studies by the International Labor Organization (ILO) show that women and children are particularly vulnerable to the economic crisis, as women typically make up the bulk of the labour force. They are therefore more likely to be employed in the informal sector with lower earnings and less social protection.

Children in Asia are vulnerable too, as the region is home to the largest number of poor people in the world, with a large proportion employed in the informal sector, according to UNICEF.

For children without families who eke out a living on the streets, often in hazardous working conditions, the situation is even harder.

Some are called 'tak-tak' kids (short for 'takbo' or run), because they weave through traffic to beg or to sell cigarettes, candies, sampaguita leis, and rags to drivers and commuters. Others stay outside churches selling flowers or help commuters park and offer to "watch your car" for loose change. The most common job for children, however, is scavenging.

Their meagre earnings are primarily spent on food, but extra money is sometimes wasted on vices like gambling, drinking alcohol or sniffing glue.

"The (Childhope) programme empowers street children who are earning a living to put their money towards a better purpose. We encourage them to save instead of spending it on vices, so that in the future when they need money for important things like going back to school or if someone in the family falls sick and they need money for medicine, they will have savings to fall back on," explains Anolin.

The programme works like a bank system, with each child holding a savings account. It specifically targets children living on the streets independently, or with no families to rely on, those who have a source of income on the streets, however minor, and those free from vices or drug abuse.

Originally, Childhope targeted street children within the 14-18 age bracket, but later lowered its scope to include 12-year-olds to accommodate interested younger kids.

At the end of each day, street kids turn over their savings to area-based street educators, who record all the transactions. These educators also provide lessons on topics like basic literacy, child rights and values formation.

To withdraw money, the kids have to submit in writing the amount they need and the reason for the planned withdrawal. Those who can maintain good records or have the highest savings each week are given incentives in the form of clothes or basic supplies.

"The programme is good because our money's not just lying around where we or anyone else can easily get it. The money is in a safe place," says Cenen.

For JR, his savings are a measure of his financial independence. He is not obligated to give money to his parents, but does so voluntarily while still keeping something for himself.

"I'm still in control of my own finances. I don't need to borrow money from my parents if I need to buy something, he says.

Findings from a Citibank Financial Quotient Survey in 2008 showed that less than five percent of Filipino youngsters regularly saved money. The study conducted by Australia-based CxC Consulting further showed that Filipinos had a financial intelligence quotient of only 47.5, less than half the maximum score of 100.

To develop the habit of saving and proper money management among children in public elementary schools, the country's central bank and Department of Education has launched a financial education programme. Other NGOs like 'Lingap Pangkabataan' (Caring for Children) have been operating microfinance and savings programmes for the urban poor communities, including children.

"Most of our clients are vendors and some elementary or high school students studying in public schools. Commercial banks consider them a 'high-risk' group," says Norman Franklin Agustin, branch manager of the NGO's microfinance programme.

Typical commercial banks deny credit to customers who have an unstable source of income or cannot meet a minimum balance or deposit.

"People in the community have tried to maintain accounts at commercial banks but feel embarrassed to go there; they are denied entry if they're not properly dressed. They prefer to go to our facility because we accommodate them, no matter what their background is or how much they are going to deposit," says Agustin.

On the average, clients deposit about 10 pesos (21 U.S. cents) a day into Lingap's savings programme. In the past year, however, most people's savings dipped because of the frequent withdrawals for food and school expenses.

Why not just save money at home on their own?

Agustin says that having a facility they can trust makes them feel secure about their savings. Some clients have tried stowing away money in jars. However, sometimes other household members get hold of the money, or they themselves end up spending extra money on betting games like 'bingo', a favorite pastime among Filipinos.

Though most of the clients are currently families or students, Lingap is currently assessing mechanisms to allow street children in the area to open their own savings accounts.

For Childhope, teaching street children to save for the rainy days is just the first step. They also help beneficiaries of the financial education programme to help them find a more stable source of income instead of what they are doing on the streets.

Vocational courses in cosmetology, reflexology, waiting tables/restaurant services, and other small businesses are offered to street children who consistently save to move them away from a hand-to-mouth existence.

Anolin says one former street child who has graduated from the course has been able to set up her own small burger stand business.

"We motivate the kids to see that they have a potential to save and see the purpose of their savings. They start to have this sense of goal-setting in life, where they save their own money so they can have a better future," says Anolin.

Since starting the programme in 1997, Childhope has helped 90 kids manage their own finances. There are currently 50 active savers who deposit an average of 20 pesos (43 cents) each day.

ILO estimates that the Asia-Pacific region is home to some 120 million children under the age of 15 years who are working. They account for close to 19 percent of the 650 million children between the ages of five and 14 in the region.

This feature was produced by IPS Asia-Pacific under a series on the impact of the global economic crisis on children and young people, in partnership with UNICEF East Asia and the Pacific.

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