The caption preceding that portion of the video says, "half human/half frog anecephalic baby". If you check this page on the anencephaly disorder: http://en.wikipedia.org/wiki/Anencephaly it seems that, as horrifying as this condition seems, it may in fact be a birth defect that is 'naturally' occurring.
That said, and from the other clips on the video, I seriously doubt that there isn't any serious DNA tinkering and cross-breeding of humans with animals. This all reminds me of the 'beasts' that were purportedly created in the times of Atlantis. And if this time, now, is in many ways a repeat of events in prior cycles, then it would make sense that "civilization" is now engaged in making these things again.