Project Name. PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB4283 PH-Social Welfare and Development Reform
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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Project Name PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB4283 PH-Social Welfare and Development Reform Region EAST ASIA AND PACIFIC Sector Other social services (100%) Project ID P Borrower(s) GOVERNMENT OF PHILIPPINES Department of Finance 6/F DOF Bldg., Roxas Boulvard Philippines Tel: (63-2) / Fax: (63-2) Implementing Agency Department of Social Welfare and Development Quezon City Philippines Tel: (63-2) Fax: (63-2) Environment Category [ ] A [ ] B [X] C [ ] FI [ ] TBD (to be determined) Date PID Prepared February 8, 2009 Date of Appraisal February 26, 2009 Authorization Date of Board Approval September 22, Country and Sector Background Over the years, the Philippines has made gains towards achieving its human development goals for the Millennium Development Goals due to its various policies and pro-poor programs in place. However, the rate of achieving these gains has been quite slow, indicating the need for a social protection agenda that includes more integrated pro-poor programs and social reforms that will help the country move forward. To date, government efforts to address lagging poverty and human development outcomes, especially among the poorest and most vulnerable households have been compromised by several factors: Low overall spending on social sectors and particularly social assistance programs. In aggregate, total spending on social services (education, health, social welfare, housing and other transfers to local governments) at the national level, at 4.9 percent of the Gross Domestic Product is significantly less than the regional average and among those countries with similar per capita income. Fragmented and uncoordinated approach to social protection. While the National Anti- Poverty Commission is designated to coordinate anti-poverty efforts, there has historically been a lack of policy and institutional coordination in the broad area of social protection with 1
2 several Departments undertaking uncoordinated programs that address various aspects of social protection. Lack of a legitimate and functional system to target poorest households. The effectiveness of social protection services in the Philippines is severely compromised by the lack of an accurate and legitimate system to target poor households. Past programs have relied on faulty targeting systems which have often been manipulated for political intent. Currently, different targeting schemes are being used for different programs. Assessments of these schemes show high leakage rates to the non-poor and under-coverage of the poor. A sector reform effort is underway at the DSWD that can address some of these sectoral issues and put into place the main building blocks of a sound social protection program in the Philippines. Recognizing the challenges of addressing its new role in the context of decentralization, the DSWD articulated four discrete components to its reform: (i) Leading in Social Protection which involves the development and implementation of a social protection framework and the development of a targeting system for the poor; (ii) Faster and Better Service Delivery which focuses on reviewing and improving the Department s suite of programs, including putting into place a new program of conditional cash transfer (CCT) for households, and improving governance systems; (iii) Smarter Financing which entails securing more predictable funding for core DSWD functions, more strategic budget allocation, including for resource augmentation; and (iv) Improving Systems for Service Delivery which involves improving cross-cutting and systemic change, such as improving monitoring and evaluation systems and management information systems, and enhancing organizational capacity. To further this reform agenda, a key step was taken in 2008 with the creation of an inter-agency National Social Welfare and Social protection Cluster to consolidate programs of various government agencies into a single, national social welfare strategy. This development is expected to lead to the reallocation of resources to more effective social protection programs relative to less effective ones. DSWD was specifically assigned the coordination responsibilities of the NSWP. 2. Objectives The project development objective (PDO) is to strengthen the effectiveness of DSWD as a social protection agency to: (i) efficiently implement the new CCT program (4Ps) and (ii) expand an efficient and functional National Household Targeting System of social protection programs in selected areas. Achievement of the PDO will be measured in terms of the following monitoring indicators: (1) Share of all poor households registered in the National Household Targeting System for Poverty Reduction (NHTSPR); 1 (2) Share of children 6-14 years old in poor beneficiary households attending school at least 85 percent of the time; (3) Share of children 0-5 years old undergoing growth monitoring and check-ups in accordance with DOH protocol. 1 Based on baseline of poor households in the latest official household data of 2006 (4.7 million poor households total). 2
3 3. Rationale for Bank Involvement First, the Bank s support for this agenda is central to its Country Assistance Strategy (CAS). Given lagging outcomes, the CAS Progress Report of FY08 stressed the need for more effort in the area of social inclusion, a key pillar of the previous CAS. Importantly, this operation forms a corner-stone to the strategic objective of reducing vulnerabilities, one of the five building blocks of the new CAS (FY10-FY13) aimed at enhancing inclusive growth. Second, the Bank s intervention in this area is strategic. The proposed project could potentially leverage major change in how effectively the Government addresses social protection and target poverty reduction programs in the future. A successful CCT program could serve as a primary pillar of a coherent social protection program for the Philippines in the future, if successful. Promoting the systematic monitoring and evaluation of this Department s main programs will assist the Government toward its stated move to empirically based budgeting. Furthermore, this intervention is aimed to promote the emergence of a strong institutional leader in the social protection sector. Third, the Bank has extensive global expertise in the general area of social protection as well as in CCTs which will be a particular focus of this project. The Philippines can benefit from the Bank s global experience and knowledge. Fourth, given the above, the Government and the DSWD has specifically asked the Bank for its assistance in this area. The World Bank and DSWD have had a close partnership over the years, with DSWD having implemented the Bank s Social Expenditure Management Projects (SEMP1 and SEMP2) and the Early Childhood Development project (all rated satisfactory), while also currently implementing a major community driven development project (KALAHI) funded by the Bank. The World Bank is the DSWD s major external partner, and the Department has articulated the value it places in the Bank s technical and fiduciary expertise in undertaking its reform. 4. Description The project has three components as described below. 3
4 Component 1: Implementation of a National Household Targeting System for Poverty Reduction This component supports the DSWD in developing and implementing a national household targeting system (NHTS) which will be used to better direct to the poor a number of social assistance and protection programs of DSWD and other government agencies. The NHTS will consist of a set of uniform, objective, and transparent criteria to select the poor for the different programs thus reducing the overall cost of targeting, improving coordination, and promoting efficiency and effectiveness of social programs. The NHTS will be an undertaking of DSWD that will develop a database of potential poor beneficiaries to be shared electronically or through other means with social programs including the 4Ps, and other programs. The implementation of NHTS is a key component of the Social Welfare and Development Reform Agenda of the Government. DSWD has already made considerable in-roads in developing an objective and transparent targeting system as shown by rapid implementation of such a system in selecting beneficiaries, to date, of the government s conditional cash transfer program. DSWD is proposing to extend this experience to the national level and eventually build a database that will contain all the poor and eligible population (about 4.7 million poor households representing 27 percent of the total households) for the major social programs. This is a major step forward as in the past a variety of targeting instruments have been used by central government agencies including self-targeting, geographical targeting, community-based monitoring systems and unverified means tests. International experience such as in Brazil, Mexico, and Colombia indicates that a single national system with uniform and simple criteria can be created in countries as diverse as the Philippines. This project component will have two sub-components: (i) implementation of the targeting mechanism to build a database of poor households in selected areas; and (ii) implementation support to the National Targeting Management Office, the development and implementation of a Management Information System and spot checks to monitor implementation of targeting. Component 2: Pantawid Pamilyang Pilipino Program (4Ps) This component will support the first phase of the roll-out of the 4Ps program covering about 376,000 households in 2009 to The 4Ps is a conditional cash transfer program aimed at addressing poverty and supporting improved health and education outcomes of poor children and pregnant women. It provides cash grants to poor households on the condition that they meet certain health and education requirements of the program. The health and nutrition grant is given to households with children 0-14 years of age and/or pregnant women on the condition that children and pregnant women attend health centers and posts to get regular preventive health check ups and immunizations, according to the Department of Health s protocol. The education grant is given to households with school-aged children 6 to 14 years of age on condition that these children enroll in schools and attend school classes at least 85 percent of the time. This component constitutes the core element of the social reform agenda undertaken by DSWD as it seeks to assist poor households with cash transfers to improve their consumption levels 4
5 while encouraging greater use of basic and essential public services by the poor. The 4Ps will serve as a laboratory through which DSWD will operationalize the rest of the reform agenda and cascade the implementation of its reform agenda to the local government units. The expected outcomes of 4Ps include: for children 0-5 years old, an increase in full immunization rate, increase in the number of children who undergo growth monitoring and check ups. For children 6-14 years old, an increase in net enrollment rate among beneficiary households, according to results framework. This component will have two subcomponents: (i) 4Ps grants, and (ii) implementation support to the Project Management Office, develop an MIS system for 4Ps, and strengthen monitoring and evaluation of 4Ps. Component 3: Building Institutional Capacity to Lead in Social Protection This component would support the strengthening of basic institutional capacity of DSWD to assume a leadership role in social protection by (i) developing the enabling policy environment for sustained implementation of the Philippines CCT program and broad adoption of the national targeting system, and (ii) installing technically sound monitoring and evaluation system. In doing so, this component would strengthen DSWD s policy and strategy capacity so that it can play a leadership role in social protection. It also supports strategic social marketing activities to ensure broader engagement of internal and external stakeholders in the policy development, monitoring and evaluation processes. 5. Financing Source: ($m.) Borrower International Bank for Reconstruction and Development Total Implementation The overall institutional arrangement for implementation of the Project is as follows: The DSWD Executive Committee chaired by the Secretary and includes all the Undersecretaries and Assistant Secretaries as members shall have oversight responsibility for the project. The Undersecretary for Policy and Programs Group (PPG) will be the Project Director and overall coordinator of SWDRP. A designated Undersecretary will be responsible for each of the components of the Project. While overall oversight and management of SWDRP will be mainstreamed and placed with the office of the Undersecretary for Policy and Program Group, two discrete implementation units will be supported by the project: (i) the Targeting Management Office (TMO) that will be charged with implementing the National Household Targeting System; and (ii) the 4Ps Program Management Office (PMO) that will be charged with implementing the 4Ps component. 5
6 A dedicated National Targeting Management Office (NTMO) will be set up to oversee the day-to-day management of the national household targeting system, headed by a Director. The DSWD has also organized a National Targeting Advisory Group composed of representatives from the academe, statistical offices, non-government organizations and private sector to provide advice. A dedicated Program Management Office (PMO) was also established to carry out the day-to-day operations of the 4Ps. The 4Ps PMO is headed by a Director. The 4Ps National Advisory Committee (NAC) was organized since May 2008 to ensure coordination with key government agencies. The NAC is chaired by the 4Ps Project Director and composed of representatives from the National Anti-Poverty Commission (NAPC), National Economic and Development Authority (NEDA), Department of the Interior and Local Government (DILG), Department of Health (DOH), Department of Education (DepEd), Philippines Health Insurance, Inc. (PhilHealth) and National Nutrition Council. The Advisory Committee is replicated in all regions through the Regional Advisory Committee (RAC) which includes the counterpart of all the member-agencies of the NAC and provincial representatives. 7. Sustainability There are several factors underlying the sustainability of the project and its results. First, there is strong ownership of the program by the implementing agency, which considers it a core element of its overall reform agenda, oversight agencies and the administration. It should be noted, though, that long-term sustainability of this nascent program will be contingent on the credibility and quality of the program and its perceived results, pointing to how critical the first years of the program, slated for support by the Bank, are to the longer-term sustainability of such a program. Second, the program is sustainable from a fiscal standpoint. It has been included in the Department s medium term expenditure program and vetted by the Department of Budget Management. One of the project s objectives, that of better targeting of social protection programs, would enhance fiscal sustainability of more effective programs. Third, the program s outcomes in terms of impact on poverty, health, and education outcomes are expected to be sustained from the perspective of beneficiary families, particularly based on experiences from other CCT programs. The human capital gains to beneficial children and their families are irreversible. 8. Lessons Learned from Past Operations in the Country/Sector Lessons learned from previous World Bank operations and from the pre-pilot of the 4Ps program and incorporated in the project design include the following: (i) CCT programs improve educational attainment and health and education indicators according to various impact evaluation results of countries such as Mexico, Brazil, Colombia, Nicaragua, among others. 6
7 (ii) (iii) (iv) (v) (vi) (vii) CCT programs require a high administrative capacity of the institution in charge. It is important to take into account the implementation capacity of the key agencies in designing the project. Keep the project design simple while concentrating on development objectives, outcomes and implementation with the least complex institutional design and arrangements. Definitions of the rules and procedures as well as the responsibilities of the agents involved in the operational manual are crucial for the success and sustainability of the program. Extensive training of the staff at central and local level in all the operational steps of the program is a necessary condition for the success of the program. Design of a Management Information System that allows information to flow smoothly is key to the implementation of a CCT program. Rigorous impact evaluation is needed to measure the progress of the program in the longer term, while is needed rapid assessment, including process assessments, are to assess implementation and to measure medium term indicators. 9. Safeguard Policies (including public consultation) Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [ ] [X] Natural Habitats (OP/BP 4.04) [ ] [X] Pest Management (OP 4.09) [ ] [X] Physical Cultural Resources (OP/BP 4.11) [ ] [X] Involuntary Resettlement (OP/BP 4.12) [ ] [X] Indigenous Peoples (OP/BP 4.10) [X] [ ] Forests (OP/BP 4.36) [ ] [X] Safety of Dams (OP/BP 4.37) [ ] [X] Projects in Disputed Areas (OP/BP 7.60) * [ ] [X] Projects on International Waterways (OP/BP 7.50) [ ] [X] Among the Bank s safeguards policies, only the Indigenous Peoples policy (OP/BP 4.10) is triggered. This Indigenous Peoples policy is triggered because the project is likely to deliver direct and indirect benefits to Indigenous Peoples (IPs) through the 4Ps, which targets poor areas where IPs may be present. IPs are also likely to benefit indirectly from the policy reforms outlined in the first three project components. Since the exact locations of the project are yet to be identified, the DSWD is currently preparing an Indigenous Peoples Policy Framework which defines the plan for ensuring participation of affected IPs during the project implementation and to address their concerns as part of the proposed reforms. 10. Contact point Contact: Jehan Arulpragasam Title: Human Development Country Sector Coordinator Tel: / * By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties claims on the disputed areas 7
8 Fax: Location: Manila, Philippines (IBRD) 11. For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C Telephone: (202) Fax: (202) pic@worldbank.org Web: 8
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