Document of The World Bank Report No: ICR00003741 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-78050, IBRD-82180) ON A LOAN IN THE AMOUNT OF US$505.00 MILLION TO THE REPUBLIC OF THE PHILIPPINES FOR A SOCIAL WELFARE AND DEVELOPMENT REFORM PROJECT JUNE 23, 2016 Social Protection and Labor Global Practice East Asia and Pacific Region CURRENCY EQUIVALENTS Exchange Rate Effective June 23, 2016 Currency Unit = Philippine Peso (PHP) PHP 46.51 = US$1 US$1.42 = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank AF Additional Financing BIA Benefit Incidence Analysis BUS Beneficiary Update System CAS Country Assistance Strategy CCT Conditional Cash Transfer COA Commission on Audit CSO Civil Society Organization CVS Compliance Verification System DOH Department of Health DPO Development Policy Operation DSWD Department of Social Welfare and Development FDS Family Development Session FM Financial Management FMS Financial Management System GAC Governance and Anticorruption GDP Gross Domestic Product GoP Government of the Philippines GRS Grievance Redress System IAS Internal Audit Service IP Indigenous People IPPF Indigenous Peoples Policy Framework LGU Local Government Unit M&E Monitoring and Evaluation MDG Millennium Development Goal MIS Management Information System NEDA National Economic and Development Authority NHTS-PR National Household Targeting System for Poverty Reduction NPMO National Program Management Office OTC Over-the-Counter PAAA Programmatic Analytic and Advisory Activity PDO Project Development Objective PDP Philippines Development Plan PHRD Japan Policy and Human Resources Development PMED Project Monitoring and Evaluation Department PMO Project Management Office PMT Proxy Means Test POI Project Outcome Indicator RCT Randomized Control Trial RDD Regression Discontinuity Design SP Social Protection SCSP Subcommittee on Social Protection SDC Social Development Committee SP-VAM Social Protection Vulnerability and Adaptation Manual SWDRP Social Welfare and Development Reform Project TA Technical Assistance TF Trust Fund URBMES Unified Results-based Monitoring and Evaluation System Regional Vice President: Victoria Kwakwa Senior Global Practice Director Omar S. Arias Diaz (Acting) Country Director: Mara K. Warwick Practice Manager: Jehan Arulpragasam Project Team Leader: Aleksandra Posarac ICR Team Leader: Pablo Ariel Acosta PHILIPPINES Social Welfare and Development Reform Project TABLE OF CONTENTS Data Sheet A. Basic Information ............................................................................................................ i B. Key Dates ........................................................................................................................ i C. Ratings Summary ............................................................................................................ i D. Sector and Theme Codes................................................................................................ ii E. Bank Staff ....................................................................................................................... ii F. Results Framework Analysis .......................................................................................... ii G. Ratings of Project Performance in ISRs ....................................................................... vi H. Restructuring (if any) .................................................................................................... vi I. Disbursement Profile ...................................................................................................... vi 1. Project Context, Development Objectives, and Design ..........................................................1 2. Key Factors Affecting Implementation and Outcomes ..........................................................6 3. Assessment of Outcomes..........................................................................................................17 4. Assessment of Risk to Development Outcome.......................................................................25 5. Assessment of Bank and Borrower Performance .................................................................26 6. Lessons Learned .......................................................................................................................28 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ....................29 Annex 1. Project Costs and Financing .......................................................................................30 Annex 2. Outputs by Component ...............................................................................................31 Annex 3. Economic and Financial Analysis ...............................................................................42 Annex 5. Beneficiary Survey Results .........................................................................................45 Annex 6. Stakeholder Workshop Report and Results ..............................................................46 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ..............................47 Annex 8. Comments of Co-financiers and Other Partners/Stakeholders ...............................52 DATA SHEET Report No.: ICR00003741 A. Basic Information PH-Social Welfare and Country: Philippines Project Name: Development Reform IBRD-78050, IBRD- Project ID: P082144 L/C/TF Number(s): 82180 ICR Date: 06/23/2016 ICR Type: Core ICR GOVERNMENT OF Lending Instrument: Specific Investment Loan Borrower: THE PHILIPPINES Original Total US$405.00 million Disbursed Amount: US$505.00 million Commitment: Revised Amount: US$505.00 million Environmental Category: C Implementing Agencies: Department of Social Welfare and Development Cofinanciers and Other External Partners: B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 01/23/2008 Effectiveness: 04/07/2010 02/19/2010 Appraisal: 06/10/2009 Restructuring(s): 12/11/2012 Approval: 11/17/2009 Mid-term Review: 05/01/2012 06/25/2012 Closing: 06/30/2014 12/31/2015 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Highly Satisfactory Risk to Development Outcome: Moderate Bank Performance: Satisfactory Borrower Performance: Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Satisfactory Implementing Quality of Supervision: Satisfactory Highly Satisfactory Agency/Agencies: Overall Bank Overall Borrower Satisfactory Satisfactory Performance: Performance: C.3 Quality at Entry and Implementation Performance Indicators i Implementation QAG Assessments (if Indicators Rating Performance any) Potential Problem Project Quality at Entry No None at any time (Yes/No): (QEA): Problem Project at any Quality of Supervision No None time (Yes/No): (QSA): DO rating before Satisfactory Closing/Inactive status: D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Health 27 15 Other social services 27 40 Primary education 27 15 Public administration- Other social services 19 30 Theme Code (as % of total Bank financing) Social Protection and Labor Policy & Systems 16 30 Social Safety Nets/Social Assistance & Social Care Services 84 70 E. Bank Staff Positions At ICR At Approval Vice President: Victoria Kwakwa James W. Adams Country Director: Mara K. Warwick Bert Hofman Practice Manager/Manager: Jehan Arulpragasam Xiaoqing Yu Project Team Leader: Aleksandra Posarac Jehan Arulpragasam ICR Team Leader: Pablo Ariel Acosta ICR Primary Author: Pablo Ariel Acosta Thomas Vaughan Bowen F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project development objective (PDO) is to strengthen the effectiveness of DSWD as a social protection agency to efficiently implement the CCT program (4Ps) and expand an efficient and functional National Household Targeting System of social protection programs. Revised Project Development Objectives (as approved by original approving authority) No revisions were made. (a) PDO Indicator(s) ii Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Indicator 1: Share of all poor households registered in the NHTS-PR Value (Quantitative or 14% 100% 100% 100% Qualitative) Date achieved 06/30/2009 06/30/2014 12/31/2015 12/31/2015 Comments (including % Achieved achievement) Share of children 6–14 years old in poor beneficiary households attending school at Indicator 2: least 85% of the time Value (Quantitative or 76% 81% 81% 96% Qualitative) Date achieved 06/30/2009 06/30/2014 12/31/2015 12/31/2015 Comments (including % Surpassed achievement) Share of children 0–5 years old undergoing growth monitoring and checkups in Indicator 3: accordance with DOH protocol Value (Quantitative or 63% 68% 68% 94% Qualitative) Date achieved 06/30/2009 06/30/2014 12/31/2015 12/31/2015 Comments (including % Surpassed achievement) (b) Intermediate Outcome Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years At least 2 major national programs using the NHTS-PR for selecting their Indicator 1: beneficiaries Value (Quantitative 1 2 3 25 or Qualitative) Date achieved 06/30/2009 06/30/2014 12/31/2015 12/31/2015 Comments (including % Surpassed achievement) iii MIS designed and in operation including integrated data entry application, PMT Indicator 2: processing and data management, and sharing capabilities properly functioning Value (Quantitative 0 1 1 1 or Qualitative) Date achieved 06/30/2008 06/30/2014 12/31/2015 12/31/2015 Comments (including % Achieved achievement) Share of poor households registered in the database receiving benefits of social Indicator 3: programs Value (Quantitative 8% 50% 87% 100% or Qualitative) Date achieved 06/30/2009 06/30/2014 12/31/2015 12/31/2015 Comments (including % Surpassed achievement) MIS developed and functioning to support payments, verification, updates and Indicator 4: grievance system Value (Quantitative Under design Yes Yes Yes or Qualitative) Date achieved 06/30/2009 06/30/2014 12/31/2015 12/31/2015 Comments (including % Achieved achievement) Indicator 5: Share of beneficiary households receiving 4Ps grants regularly and on time Value (Quantitative 60% 80% 90% 99% or Qualitative) Date achieved 06/30/2009 06/30/2014 12/31/2015 12/31/2015 Comments (including % Surpassed achievement) Share of households meeting their education conditionalities regularly in accordance Indicator 6: with the OM Value (Quantitative 0% 80% 98% 98% or Qualitative) Date achieved 06/30/2009 06/30/2014 12/31/2015 12/31/2015 Comments (including % Achieved achievement) Share of households meeting their health conditionalities regularly in accordance with Indicator 7: the OM Value 0 80% 77% 97% (Quantitative iv or Qualitative) Date achieved 06/30/2009 06/30/2014 12/31/2015 12/31/2015 Comments (including % Surpassed achievement) Spot checks (for 4Ps) of schools, clinics, municipal links and beneficiary households Indicator 8: carried out annually Value (Quantitative No Yes Yes Yes or Qualitative) Date achieved 06/30/2009 06/30/2014 12/31/2015 12/31/2015 Comments (including % Achieved achievement) Indicator 9: Impact evaluation report based on first follow-up survey Value (Quantitative No Yes Yes Yes or Qualitative) Date achieved 06/30/2009 06/30/2014 12/31/2015 12/31/2015 Comments (including % Achieved achievement) Indicator 10: Social protection operational framework developed and adopted Value (Quantitative No Yes Yes Yes or Qualitative) Date achieved 06/30/2009 06/30/2014 12/31/2015 12/31/2015 Comments (including % Achieved achievement) Indicator 11: Framework for integrated service delivery developed and adopted Value (Quantitative No Yes Yes Yes or Qualitative) Date achieved 06/30/2009 06/30/2014 12/31/2015 12/31/2015 Comments (including % Achieved achievement) Indicator 12: Evaluation of two social protection programs completed and disseminated Value (Quantitative No Yes Yes Yes or Qualitative) Date achieved 06/30/2009 06/30/2014 12/31/2015 12/31/2015 Comments (including % Achieved achievement) v G. Ratings of Project Performance in ISRs Date ISR Actual Disbursements No. DO IP Archived (US$, millions) 1 07/28/2010 Satisfactory Satisfactory 50.78 2 02/18/2011 Satisfactory Moderately Satisfactory 72.05 3 02/05/2012 Satisfactory Moderately Satisfactory 141.45 4 11/21/2012 Satisfactory Satisfactory 233.73 5 09/24/2013 Satisfactory Satisfactory 323.68 6 04/09/2014 Satisfactory Satisfactory 390.02 7 12/06/2014 Satisfactory Satisfactory 401.58 8 06/04/2015 Satisfactory Satisfactory 436.54 9 12/22/2015 Satisfactory Satisfactory 485.81 H. Restructuring (if any) ISR Ratings at Amount Board Restructuring Restructuring Disbursed at Reason for Restructuring & Approved PDO Date(s) Restructuring Key Changes Made Change DO IP in US$, millions Additional financing of US$100 million for Component 2. Extension of closing date to 12/11/2012 S S 233.73 12/31/2015. Change in targets in a few project outcome indicators (POIs) and intermediate outcome indicators. I. Disbursement Profile vi 1. Project Context, Development Objectives, and Design 1.1 Context at Appraisal Country and Sector Background 1. At project appraisal, the Philippines was experiencing persistently high rates of poverty and vulnerability along with sluggish progress toward the Millennium Development Goals (MDGs). Despite a high and sustained rate of growth, a 2.9 percentage point increase in the poverty rate was registered in 2006, effectively returning the country to the same poverty rate it had in 2000. Indeed, many Filipinos were found to be living just above the poverty line, moving in and out of poverty due to vulnerability to shocks. Between 2003 and 2009, 44 percent of the population was poor at least once—and of that 44 percent, two out of three households moved in and out of poverty.1 Highlighting this vulnerability, the global financial crisis, and the food and fuel crisis of 2008, combined with Typhoons Ondoy and Pepeng in 2009 to create the perfect storm for the poor and the vulnerable in the Philippines. Moreover, the Philippines was found to be off target to meet the MDGs, particularly with regard to health and education, where school dropout rates and maternal deaths remained high and child immunizations low, particularly among the bottom 40 percent of the population. Consequently, policies and programs for poverty reduction and human capital promotion for the poor had become a priority for the Government of the Philippines (GoP). 2. However, a number of institutional and policy weaknesses were preventing the GoP’s effective use of social protection (SP) as a tool to reduce poverty and vulnerability among Filipino households. In 2007, spending on SP was low, at just 0.4 percent of the gross domestic product (GDP), mostly allocated to a poorly targeted rice subsidy program (the median developing country spends 1.1 percent of GDP on SP).2 In particular, the budget for the Department of Social Welfare and Development (DSWD), the agency with primary responsibility for social assistance, accounted for only 0.3 percent of the national budget (and about 0.05 percent of GDP) in 2007. Moreover, SP programming itself was fragmented, lacking coordination across several implementing line agencies, each undertaking their own, uncoordinated SP programs and employing their own methods of identifying beneficiaries. The lack of a rigorous program targeting for these fragmented programs meant that their impact was limited at that time, due in large part to high rates of program leakage of benefits to non-poor households, and under coverage of poor households, compromising the overall effectiveness of the social welfare system. 3. Recognizing the need to dramatically strengthen its social assistance system, given the context of poverty and vulnerability at appraisal, the GoP undertook a number of social welfare reform initiatives. Such initiatives included efforts to position the DSWD as the leader in SP, along with the development of a unified targeting system (the National Household Targeting System for Poverty Reduction, NHTS-PR, later rebranded as Listahanan) that would bring greater coherence to program targeting and, by extension, increase the impact of those programs. At the same time, a Conditional Cash Transfer (CCT) program called the Pantawid Pamilya Pilipino Program (originally also known as 4Ps, later simply as Pantawid Pamilya), was piloted in 2007 on 6,000 households, designed to provide income support to the poorest households while also incentivizing 1 World Bank. 2014. Country Partnership Strategy for the Republic of the Philippines for the Period FY2015 –2018. 2 World Bank. 2015. State of Social Safety Nets 2015, p. 21. 1 human capital accumulation. Given the recognized potential of CCT programs to tackle poverty and vulnerability, the DSWD was instructed to rapidly expand the CCT to cover 376,000 households by March 2009, with an additional target of reaching 1 million households by the end of 2010. By 2015, the Pantawid Pamilya would grow to be a national program reaching 4.4 million poor households. Rationale for Bank Assistance 4. The Social Welfare and Development Reform Project (SWDRP) played a significant role in enabling the GoP and DSWD to accelerate the pace of its SP reform, particularly through assisting in the continued and increasingly rapid expansion of the CCT and the set-up and update of the national targeting system. 5. There was a strong rationale for World Bank assistance to this end. Broadly speaking, the Bank works with client countries in every region of the world to assist in SP reform and program design and implementation through a mixture of financing and technical assistance (TA). Furthermore, the Bank has supported the design and implementation of most large-scale CCTs and targeting systems internationally. This has led to a significant amount of institutional knowledge and expertise in this area. In addition there was also demand for World Bank engagement to strengthen the program’s governance systems, both by the implementing agencies and other stakeholders. 6. In the case of the Philippines specifically, an existing strong partnership between the DSWD and the Bank around earlier social welfare reform efforts (detailed in section 2.1), including with regard to the initial design and development of the CCT pilot and the NHTS- PR/Listahanan, created a clear rationale for continued Bank assistance through this project. Indeed, the Bank assistance in this case was demand driven, explicitly requested by the GoP due to the relatively low capacity of the DSWD at that time, coupled with the highly ambitious nature of the social welfare reform and the scale-up of the CCT in particular. 1.2 Original Project Development Objectives (PDO) and Key Indicators 7. The PDO was to strengthen the effectiveness of DSWD as a social protection agency to efficiently implement the 4Ps CCT program and to expand an efficient and functional National Household Targeting System of social protection programs. 8. The project appraisal document stated that the achievement of the PDO would be measured with regard to the following indicators: Project Outcome Indicators (POIs) (a) Share of all poor households registered in the National Household Targeting System for Poverty Reduction (NHTS-PR/Listahanan) (b) Share of children 6–14 years old in poor beneficiary households attending school at least 85 percent of the time 2 (c) Share of children 0–5 years old undergoing growth monitoring and checkups in accordance with Department of Health (DOH) protocol. 1.3 Revised PDO and Key Indicators, and reasons/justification 9. Neither the PDO nor the key indicators were revised. 1.4 Main Beneficiaries 10. The primary beneficiaries of the project were those households receiving education and health grants through the Pantawid Pamilya CCT Program. Around US$325 million of the US$405 million IBRD loan (80 percent) was to be spent in the form of grants for health and education compliance, directly reaching targeted poor households. In 2012, additional financing (AF) was provided in the amount of US$100 million for the provision of grants to targeted poor households (see section 1.7 for detailed explanation of the AF). 11. Specifically, the SWDRP contributed to financing ‘Sets’ 1 and 2 of the Pantawid Pamilya, while the AF contributed to Set 4. The grouping of the Pantawid Pamilya beneficiaries by ‘Sets’ refers to the sequential manner in which the Pantawid Pamilya CCT Program was scaled up, starting with the poorest provinces in the country. In total, the national program encompassed 7 sets of beneficiaries in 2014 (parallel financing from the Asian Development Bank, ADB, applied to Set 3). 12. Within Sets 1, 2, and 4, the project specifically financed households identified as poor with children of the following age compositions: health grants to targeted poor households with children ages 0–14 years; education grants to targeted poor households with children ages 6–14 years. Where education grants are concerned, this is particularly important to note because the Pantawid Pamilya CCT Program also financed education grants to households with children ages 3–5 years, and later (2014) also extended to households with high school age children 15–18 years. The decision by the project not to fund children ages 3–5 years was taken for a number of reasons, including a lack of consensus regarding sufficient availability on the supply side in many provinces of the Philippines (an absence of kindergarten facilities), and sufficient means with which to assess compliance of the children attending those facilities. 1.5 Original Components 13. The project was structured around three components. The first provided support to the development and implementation of Listahanan, for improved targeting of social welfare programs. Component 2 directly financed grants to targeted poor households through the Pantawid Pamilya CCT Program that was undergoing rapid expansion while also helping finance the development of the key operations and information management systems to ensure its efficient and effective functioning. Finally, Component 3 worked more broadly to build an enabling environment for the DSWD to play a leading role in social protection in the Philippines through strengthened policy and strategy making capability. 3 Component 1: Support to the National Household Targeting System for Poverty Reduction (NHTS-PR) (IBRD: US$64.5 million) 14. The objective of this component was to support the DSWD in implementing the NHTS- PR (from here on referred to as Listahanan) which was to be the mechanism used to better target the poor in key social assistance and SP programs of the DSWD, and other agencies. Subcomponent 1.1. Implementation of the Targeting Mechanism (IBRD: US$54.8 million) 15. This subcomponent supported the ongoing efforts to implement a national, standardized targeting mechanism. This included the costs of data collection, supervision, processing, and estimation of the Proxy Means Test (PMT) targeting method, maintenance of the database, hardware for processing information, the issuing of identification cards for poor/beneficiary households, and a survey and benefit incidence analysis (BIA) to measure targeting outcomes. Subcomponent 1.2. Implementation Support for Listahanan (IBRD: US$9.7 million) 16. 1.2.1. National project management office (NPMO) for Listahanan. Assisted in the establishment and strengthening of an NPMO for Listahanan. Specifically, it provided financing for the staffing of the NPMO, training to these staff members, social marketing for Listahanan, specialized TA, and vehicles to support its implementation. 17. 1.2.2. Development and implementation of a management information system (MIS) for Listahanan. The main outcome of the creation of such an MIS was its ability to maintain a standardized database of poor households. 18. 1.2.3. Spot checks for targeting. Supported the design and implementation of the ‘spot checks’ monitoring system that was used to assess the implementation of the Listahanan targeting mechanism. Component 2: Support to Pantawid Pamilya Pilipino Program (CCT) (Original IBRD: US$337.4 million; AF 2012: US$100.0 million) 19. This component assisted in the implementation of the Pantawid Pamilya CCT Program throughout its rapid scale-up from 1 million households at the point of project effectiveness to a national-level CCT Program. It did so primarily through the CCT grants that were to be paid to eligible Pantawid Pamilya beneficiaries in select poorest provinces and municipalities. This component also provided implementation support to the Pantawid Pamilya NPMO, its MIS, and to the program’s monitoring and evaluation (M&E). Subcomponent 2.1. CCT Grants (Total: IBRD: US$325.1 million, AF: US$100.0 million) 20. This subcomponent captured the largest share of the loan’s financing and was designed to cover 75 percent of the total cost of the health and education grants delivered to beneficiaries of the Pantawid Pamilya, in Sets 1 and 2 and later Set 4 through the AF. Subcomponent 2.2. Implementation Support for the CCT (IBRD: US$12.3 million) 4 21. In addition to funding the grants to beneficiaries of the Pantawid Pamilya, the project aimed to build the capacity of the DSWD to deliver the Pantawid Pamilya through the following activities of this subcomponent. 22. Support to the NPMO-CCT. This activity sought to finance consultants with international expertise in CCT systems development so that the requisite operations/information systems could be established within the NPMO: registration of beneficiaries, verification of compliance with conditions, payment system, implementing a grievance redress mechanism, undertaking M&E, and developing and use of a MIS. 23. Development of a MIS for the CCT. Given the central importance of an MIS to the efficient functioning of the Pantawid Pamilya and its multiple operations subsystems (registration, compliance, grievance, and payments), this subcomponent focused on the provision of hardware and software, network and communication connections, and training of relevant staff. 24. M&E of the CCT. This activity supported the M&E of the Pantawid Pamilya through assisting the DSWD in the design and implementation of spot checks and rigorous impact evaluations. This was done with a longer-term view of building the capacity of the DSWD to undertake M&E of the Pantawid Pamilya on its own in the future. Component 3: Building Institutional Capacity to Lead in Social Protection (IBRD: US$2.1 million) 25. The third and final component aimed to build the capacity of the DSWD to strengthen its leadership role in SP. This component contributed to the PDO by working to ‘strengthen the effectiveness of DSWD as a social protection agency’, beyond the financing of Listahanan and the Pantawid Pamilya CCT Program. In turn, the activities of Component 3 helped support the realization of Components 1 and 2, through creating a stronger enabling institutional environment for their implementation. Subcomponent 3.1. Policy and Strategy (IBRD: US$0.6 million) 26. This subcomponent assisted the DSWD in enhancing its policy and strategy making capacity through the provision of hands-on trainings, the development of operations manuals, and other capacity-building activities. Specifically, the subcomponent supported the formulation, dissemination, and adoption of key strategic plans that would define the operational mechanisms for integrated delivery of SP programs and services. Subcomponent 3.2. Implementation Support (IBRD: US$1 million) 27. This subcomponent supported Components 1 and 2 through delivering targeted support to three functional areas for the DSWD. The first functional area was social marketing, aimed at pursuing informed advocacy for SP and social welfare in the Philippines, and communicating effectively with beneficiaries, partners, and other stakeholders. Second, support was provided to improve the DSWD’s knowledge management and learning capacities so that, among other things, lessons learned from Listahanan and Pantawid Pamilya implementation could be captured and disseminated. Lastly, the subcomponent also supported capacity building on financial management (FM). 5 Subcomponent 3.3. Monitoring and Evaluation (IBRD: US$0.5 million) 28. This subcomponent supported building non-program-specific M&E capacity within the overarching Planning and Policy Bureau of the DSWD. The subcomponent allowed for a review of department-wide monitoring systems and developed a logical framework for design of guidelines and protocols for a broader unified monitoring system. The project also provided training to the DSWD staff in the operation of the unified monitoring system. 1.6 Revised Components 29. The components did not undergo any revision throughout project implementation. 1.7 Other Significant Changes 30. Additional Financing. In 2012, the AF from IBRD was approved for the SWDRP at the request of the DSWD, in the amount of US$100 million (Social Welfare and Development Reform Project Additional Financing, P122702). The counterpart/borrower (DSWD/GoP) financing amounted to US$33.4 million. 31. The AF did not result in any change in the PDOs or its design (aside from updating certain intermediate indicator targets in the Results Framework). Instead, the AF was leveraged to assist the DSWD in its continued scale-up of the CCT program, contributing to the continued expansion of coverage into additional geographic locations. Specifically, it assisted the DSWD in extending the Pantawid Pamilya to cover the CCT grant payments to household beneficiaries in the Set 4 areas. As with the grants from the original project, the AF from IBRD financed 75 percent of the health and education grants of these Set 4 household beneficiaries, with the Government financing the remaining 25 percent. The implementation period for the AF was set at three fiscal years, from FY2013 to FY2016. Consequently, the closing date of the proposed AF was set at December 31, 2015, and the original loan closing date moved from June 30, 2014 to that date. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design, and Quality at Entry 32. Background analysis and existing partnership. Since 2006, existing collaboration between the Bank and DSWD on SP reform and the Pantawid Pamilya CCT Program ensured quality at entry and informed project preparation and design. At appraisal, the Bank and DSWD had already developed a close partnership, with the Bank providing TA to the DSWD to design, pilot, and begin implementation of the CCT Program and the targeting system. These directly informed the SWDRP’s preparation and design: (a) National Sector Support for Social Welfare and Development Reform Project, 2006 (TF056971) (US$500,000). Project preparation grant from the Japan Policy and Human Resources Development (PHRD) Trust Fund whose development objectives were to (i) improve the outcomes of basic social welfare and development services in reducing vulnerability of the poorest and marginalized groups; (ii) improve the governance of basic social assistance and SP service delivery through integrated reforms at national and local 6 level; and (iii) build capacity of the DSWD and associated agencies in performance- oriented budgeting and management. (b) PH-Good Governance and Anticorruption in CCT, 2007–2008 (P111296) (US$700,000). This engagement was designed to assist the DSWD in the design and implementation of the pilot Pantawid Pamilya CCT Program, financed through an externally financed output from AusAid, now the Australian Department of Foreign Affairs and Trade. The Bank supported the development of control and accountability mechanisms within the Pantawid Pamilya design to minimize error, fraud, and corruption. It also directly assisted in the development of the Pantawid Pamilya targeting mechanism, MIS, and spot check monitoring system, and in the process risk mapping to assess key vulnerabilities to implementation. (c) Philippines Global Food Response Program, Development Policy Operation (DPO), 2008 (P113492) (US$200,000,000) (Supplemental financing of US$250,000,000 in 2010). This operation was prepared to help the GoP manage the impacts of high food prices resulting from the global food crisis, especially for poor and vulnerable households. Among its five sub-objectives, three were particularly relevant to the activities of the SWDRP: (i) improved policy coordination and institutional arrangements for social protection; (ii) improved targeting of poor households; and (iii) improved impact, efficiency, and efficacy of social safety nets through a CCT program. Concretely, the DPO supported the initial expansion of Listahanan and assisted the DSWD in attaining the goal of extending coverage of the CCT after the pilot. (d) Other prior projects: In addition, DSWD had had experience already with several Bank projects, such as Social Expenditure Management Projects (P065113 and P069916), the Early Childhood Development Project (P004566), and the Kapitbisig Laban sa Kahirapan- Comprehensive and Integrated Delivery of Social Services (KALAHI-CIDSS) Project (P077012). 33. Incorporation of lessons learned. These prior engagements, and in particular the piloting of the Pantawid Pamilya, provided numerous lessons learned on program design and implementation that featured in the design of the SWDRP itself. Moreover, these engagements enabled the Bank team to take senior DSWD counterparts to Colombia twice and to Mexico to learn from their respective CCT programs. 34. Assessment of risks. Among the risks identified at project appraisal, two in particular were judged to be Substantial. At the time of appraisal, there was a significant track record of corruption in the Philippines, at the national and local levels. Specifically, the risk assessment highlighted the potential for manipulation of the CCT program for political purposes. To manage this risk, a Governance and Anti-Corruption (GAC) Action Plan was designed for the SWDRP project. The Project also stated that it would implement strict protocols for geographic and household targeting using the PMT as mitigation. This would ensure that the targeting was objective and empirically driven, protected from political capture. Indeed, a primary motivation for pursuing Listahanan and the Pantawid Pamilya was to bring a greater degree of centralization to social welfare programming and better protect social assistance programs from local-level capture that had been an issue in the years preceding this engagement. 7 35. The second substantial risk that was identified concerned the rapid pace of the CCT scale- up and expansion, leading to scale-up beyond agreed project areas—at a rate that outstrips institutional and FM capacity—and/or in a manner that does not adhere to project protocols. While the Pantawid Pamilya did in fact scale up at a rapid pace from 2010 to 2014 (financed in part by a new loan from the ADB), to mitigate this risk the DSWD hired substantial additional staff and undertook capacity-building activities, according with the new program’s size and coverage. 36. Assessment of project design. The project’s objective and components were appropriate, fit for the situation, and adequately ambitious with regard to supporting the rapid advancement of social welfare in the Philippines through the Pantawid Pamilya CCT program and the Listahanan targeting system. Similarly, the project’s targets were appropriate and attainable. Instead of defining overly ambitious objectives with respect to targets for poverty reduction or improvements in inequality or social outcomes, the project instead focused on easily measurable outcomes and indicators pertaining to program performance. The risks and mitigation measures were also appropriately thought and implemented. 2.2 Implementation 37. Overall, the implementation of the project was highly satisfactory. The project was closed on time in December 2015 along with the AF package, executing all of the funds. It met each of its project development indicators (exceeding most targets) and consequently accomplished its PDO. The project was not at serious risk throughout implementation. 38. At appraisal, the DSWD lacked the institutional capacity to meet the ambitious SP reform objectives without outside TA. A contributing factor to the successful implementation of the SWDRP was the leveraging of a substantial amount of complementary TA in the form of two programmatic engagements (Programmatic AAA on Social Protection 2010–2015, P118853; and Programmatic AAA for Social Protection and Labor 2014–2016, P148753; a total of US$4,200,000) financed through the Australia-World Bank Philippines Development Trust Fund. Primarily funded through the Australian Department of Foreign Affairs and Trade, these extended TA engagements allowed the Bank team to continue delivering sustained technical expertise, ensuring to be readily available at DSWD request. The Programmatic Analytic and Advisory Activity (PAAA) encompassed a wide range of activities, assisting in the development of the operational nuts and bolts of the system and Listahanan and the CCT, M&E, advice on social communications, and the production of policy and analytical pieces.3 This complemented support provided by the loan which also addressed strengthening the capacity of DSWD for implementation of this program. 39. During the implementation period, several notable milestones were achieved that should be highlighted and were directly assisted by the SWDRP and accompanying PAAAs. They are presented by component. 3 For a detailed summary of the activities undertaken for the P118853 PAAA financed through the Australia-World Bank Philippines Development Trust Fund, please refer to the Bank’s Output and Completion Report: Philippines Programmatic AAA on Social Protection 2010–2015 (P118853), 2015. 8 Component 1: Support to the National Household Targeting System for Poverty Reduction (NHTS-PR) 40. The implementation of this component was highly satisfactory. The project outcome indicators (POIs) related to this component were achieved and surpassed at midterm review (June 2012) and remained as such until closing. The project contributed directly to this significant targeting milestone for social welfare and antipoverty-related programming in several ways: Listahanan Implementation and Updating 41. Due to the need to prepare a DPO as a response to the emerging crisis in 2009, the SWDRP became effective in February 2010. This meant that by the time the SWDRP was effective, many of the activities highlighted for engagement under ‘Implementation of the Targeting Mechanism’ were already funded by the Government’s own budget—specifically, the nationwide data collection household survey along with its validation, a monumental effort that led to the recording of data of around 11 million households (almost 60 percent of the Filipino households), of which 5.3 million were identified as poor and targeted for Government assistance. 42. Consequently, a substantial share of this funding was reallocated to ‘updating’ Listahanan. This decision was made with the view that the second round assessment would contribute to the project’s overall objective by ensuring that the Government’s database of poor and vulnerable households is regularly updated and remains relevant for targeting. SWDRP’s financing directly contributed to the updating of Listahanan, with data collection completed in November 2015, a process that included the collection of information from 15.1 million households, or 75 percent of all households in the Philippines. Listahanan 2015 was formally launched by the GoP in April 2016. Capacity Building for the Listahanan Project Management Office 43. Throughout implementation, the SWDRP has played a prominent role in financing the capacity building of the National Household Targeting Office that manages Listahanan and the development and implementation of its MIS. In particular, the SWDRP contributions to the MIS enabled automated data entry processes and validation routines, complete with an automated duplicate entry checker; the processes for processing the collected data through the PMT to determine poverty status; and the generation of reports for data and information sharing on households. With regard to hardware, the SWDRP assisted the DSWD in the procurement of laptops and tablets, with the latter having been fielded for the first time ever in the Philippines for mass data collection as part of the 2015 updating—dramatically enhancing the efficiency of that process as compared to a solely paper-based questionnaire.4 Component 2: Support to Pantawid Pamilya Pilipino Program (CCT) 4 From July to December 2015, 13,000 tablets were deployed in urban areas and collected data from 5.2 million households, or 34 percent of the total household coverage of the Listahanan 2015. This was the first time in the Philippines that tablet-assisted data collection was successfully carried out on such a massive scale. 9 44. The implementation of this component was Highly Satisfactory. All result indicators for this component are either at or above the targeted values. The project assisted in this highly successful program implementation through two primary channels. Pantawid Pamilya Grants to Poor Households 45. The SWDRP financed 75 percent of the health and education grants of the Pantawid Pamilya CCT Program for households selected under Sets 1, 2, and 4. Rigorous impact evaluations have demonstrated that these cash grants have a significant impact on the health and education of poor children and on poverty and inequality (see box 1 in section 2.3). In this way, 80 percent of the SWDRP financing has contributed directly to the improved well-being of the Philippines’ poorest households and has directly helped the Government meet its objectives of reducing poverty and vulnerability. Support to the Pantawid Pamilya (4Ps) PMO 46. Aside from providing financing directly to the Pantawid Pamilya beneficiaries, the SWDRP provided financial support to the strengthening of the Pantawid Pamilya PMO and the development of the fundamental information systems required for efficient administration and management of the Pantawid Pamilya Program. The project, accompanied by the PAAA, made substantial contributions to the development of the overall MIS, particularly with regard to the Beneficiary Update System, Compliance Verification System (CVS), Grievance Redress System (GRS), and Payments System. These systems were continuously enhanced based on identified needs throughout the implementation of the project. 47. Furthermore, the project directly financed capacity building for M&E through enhancements to the dedicated M&E department of the Pantawid Pamilya PMO (Project Monitoring and Evaluation Department, PMED]), spot checks monitoring (a covenant for the SWDRP), and two rounds of impact evaluation. All of that has resulted in a wealth of data on program performance that has informed program improvement throughout implementation and, as a result, has increased both the efficacy and efficiency of Pantawid Pamilya. Component 3: Building Institutional Capacity to Lead in Social Protection 48. The implementation of this component was Satisfactory. The component had a broad objective that was not directly reflected in the PDO indicators, but that was nevertheless deemed critical to the project’s success. Specifically, the component assisted the DSWD in building its overall capacity to effectively lead the SP sector in the Philippines. In this regard, the objective appears to have been satisfactorily achieved, given the transformation that has occurred in the DSWD, implementing programs covering more than 30 million people (roughly 30 percent of the population) and holding a budget of close to 1 percent of the GDP (US$2.5 billion) in 2015. Nevertheless, ascribing causality to this outcome from the many outputs of the component is difficult. 49. The long list of the initiatives include the following: 10 (a) Significant policy and institutional change. This includes the adoption of a National Framework for Social Protection and the establishment of the SP coordination mechanism, the Subcommittee on Social Protection (SCSP), chaired by the DSWD. (b) Policy and strategy formulation. The formulation of policy initiatives and tools includes (i) the Social Protection Operational Framework; (ii) the Social Protection Vulnerability and Adaptation Manual (SP-VAM); (iii) and the Social Protection Handbook. Each of these are aimed at building participatory governance in SP, particularly for local government units (LGUs), other Government agencies, civil society organizations (CSOs), and communities. (c) Social marketing. To communicate effectively with its beneficiaries, partners, and other stakeholders, the project supported increasing capacity among the DSWD communications officers, through provision of training and coaching on various aspects of communication, organization of information campaigns, audiovisual products, and dissemination events. (d) M&E and knowledge management. The project also helped build the capacity of the DSWD on knowledge management of information and establishing M&E systems that can result in the systematic documentation and sharing of important lessons and insights from the DSWD interventions. (e) FM. The SWDRP also provided training to the DSWD’s Financial Management System (FMS) staff on relevant laws, rules, and regulations prescribed by oversight agencies in the processing of financial transactions. Further, the project also supported the capacity building of the Internal Audit Service (IAS). This capacity building in particular was seen as critical for the SWDRP’s success and in mitigating risks related to FM in the context of rapid program scale-up. 2.3 Monitoring and Evaluation Design, Implementation and Utilization 50. Robust M&E was recognized from the outset as being crucial to the SWDRP’s success, and central to the DSWD’s overall reform agenda. The project provided financing through Component 2 for the improvement of the Pantawid Pamilya monitoring system, implementation of a spot check monitoring system, and financing the production of two rounds of rigorous impact evaluations for the program. Throughout the life of the project, M&E capacity was consciously transferred to the DSWD so that they could undertake these functions independently in the future. Pantawid Pamilya Monitoring System 51. During project implementation, the DSWD instituted and implemented a highly complex, well-designed monitoring system that generates weekly monitoring reports on the Pantawid Pamilya for management and oversight agencies. The weekly monitoring reports of PMED present data on program coverage, compliance with conditions, payment of grants to beneficiaries, and the status of grievances and their resolution. This allows the DSWD to monitor the Pantawid Pamilya’s implementation, including by tracking and describing beneficiaries by sets and by geographic regions and to disaggregate program data by sex, age groups, and specific vulnerable groups like indigenous groups or disabled beneficiaries. This sophisticated monitoring systems has 11 enabled the DSWD detect any anomalies in the program’s implementation, including registration, irregular delisting/deactivation of beneficiaries, and changes in compliance rates. Pantawid Pamilya Spot Checks 52. Recognizing that spot checks can be an essential tool in program monitoring, the DSWD committed to undertake independent (external) spot checks as one of the conditions of the SWDRP loan. A spot check pilot was implemented with the Bank’s TA in 2010 and then through the SWDRP. For the first two years of project implementation, the DSWD committed to carrying out spot checks semiannually. Thereafter, spot checks were to be carried out on an annual basis. Notably, the findings from the pilot spot checks were regularly quoted by DSWD during the budget hearing process as evidence that the main components of the Pantawid Pamilya Program were in place and functioning.5 However, it should be highlighted that the DSWD has found it difficult to conduct spot checks on time due to persistent issues pertaining to the procuring of firms and consultants to undertake them. These issues primarily pertained to general procurement issues concerning terms of references and internal procurement coordination (discussed in section 2.4) but also a limited market for the services required to undertake spot checks. Nevertheless, the DSWD has found the spot checks very useful and as a result have now instituted their own spot check system (‘Composite Spot Checks’) to continue this form of monitoring beyond those required by the SWDRP. Pantawid Pamilya Impact Evaluation 53. The SWDRP contributed directly to two rounds of rigorous, quantitative impact evaluations to identify the causal impacts of a CCT. At the time of the first round of impact evaluations, the Bank provided the technical expertise necessary to undertake both a randomized control trial (RCT) and a regression discontinuity design (RDD).6 The RCT in particular is considered the ‘gold standard’ of evaluation methodologies, being the most rigorous approach to evaluating the impact of social programs like the Pantawid Pamilya. The DSWD took the lead in conducting the second round (RDD). Both rounds, as noted in Box 1, have found significant positive impacts of the CCT Program and represented a milestone by increasing the M&E capacity within the DSWD. Without these quantitative impact evaluations, there would be no way to know with any degree of confidence if the Pantawid Pamilya was having the desired impact(s); with them, several successes have now been concretely highlighted that—by extension—support the conclusion that the SWDRP has met its PDO and its POIs. Indeed, the impact evaluations directly contributed to the sustainability of the program through the provision of rigorous evidence in support of its impact at, for example, the GoP’s budget hearings. 5 For example, findings from the initial rounds of spot checks (2010) highlighted a large bottleneck in the program concerning payments. Consequently, the DSWD explored alternative payment methods, and payment modalities have since been diversified. As another example, two municipalities in the Autonomous Region in Muslim Mindanao were selected for spot checks in 2011, and the serious irregularities that were found in one municipality led to mitigating measures, including the use of biometric authentication for payouts to beneficiaries in that region. 6 RCT compared randomly assigned program areas and non-program areas to assess program impact. RDD compared the outcomes of poor households who received the program with similar poor households just above the poverty line . 12 Box 1. Impact Evaluation Findings for the Pantawid Pamilya CCT Program The Pantawid Pamilya has been subject to a rigorous impact evaluation to assess results in the increase in human capital accumulation among beneficiaries. The key findings of the impact evaluation reports are summarized below. An impact evaluation study of the Pantawid Pamilya Program was performed using RCT design during the first implementation phase (known as Set 1, which took place between June 2008 and April 2009) of the program, since the program’s scale-up plan was not yet in place. Among the most salient results found were the following:  Higher rates of school enrolment among children ages 3–11 years in the beneficiary households (by 10 percentage points for 3- to 5-year-olds and by 4.5 percentage points for 6- to11-year-olds), compared to poor households who did not receive the program.  However, the program had no significant impact on increasing the enrolment among older children ages 12–17 years, not a surprise because at the time the program was not explicitly designed to improve schooling of children above 14 years.  The program has helped improve the long-term nutritional status of younger children (6–36 months old) by reducing stunting by 10 percent compared to barangays that did not receive the program,  The program has also encouraged poor women to use maternal and child health services such as antenatal care, postnatal care, regular growth monitoring, and receipt of Vitamin A and deworming pills. In addition, it has helped increase health care-seeking behaviors among beneficiaries when their children become ill.  The program changed the spending patterns of poor households, with beneficiary households spending more on health and education than poor households who had not received the program.  The study also found that beneficiary households spent less on adult goods such as alcohol and that the program may have contributed to increased savings among beneficiary households.  Since the program experienced fast expansion, the second round of impact evaluation study performed in 2013 could not use an RCT design due to the absence of a randomly assigned counterfactual group. Instead, it employed the RDD methodology which compares households that are very close to a pre-identified cutoff (for example, those just below and those just above the poverty threshold). It was based on a sample of households from 30 municipalities which were introduced into the program between 2008 and 2011 and assessed in 2013. The key findings from this more recent study were the following: o The program successfully keeps older children in school. The gross enrolment rate for high school children (ages 12–15 years) is higher for Pantawid children living near the poverty threshold. However, no impact is found in the enrolment of younger children. o Pantawid children (ages 10–14 years) work seven days less in a month compared to non-Pantawid children. o The program encourages women to try modern family planning methods at least once. It also promotes facility-based deliveries and access to professional postnatal care for 7 in 10 live births among Pantawid mothers, compared to 5.5 in 10 births among nonbeneficiary mothers. o It improves children’s access to some key health care services (Vitamin A, iron supplementation, deworming pills) and regular weight monitoring in health centers. However, no discernible impact was found among children below six years on wasting, underweight, and stunting. o The program stimulates households’ investments in education. Results show that Pantawid households spent PHP 206 more per school-aged child per year at the threshold compared to nonbeneficiary households. o Pantawid Pamilya does not disincentivize work. Findings reveal that adults in beneficiary households work as much as their nonbeneficiary counterparts. In addition, Pantawid households do not spend more on vice goods such as gambling, tobacco, and alcohol. o The program seems to have improved parents’ perception of their situation and of their children’s future. Pantawid parents have higher hopes of their children finishing college compared to non-Pantawid parents. Source: World Bank. 2015. “An Update of the Philippine Conditional Cash Transfer’s Implementation Performance.” 13 Results Framework 54. The Project results framework was in general appropriately designed, consistently updated in each supervision mission with reports received from DSWD, and used as needed to make midcourse corrections (as it happened when targets were increased following the Mid-Term evaluation). However, there is a mismatch in some of the elements of the PDO and the POIs proposed to measure success, in particular related to measuring “strengthening the effectiveness of DSWD” portion. As explained in Section 3.2, the achievement of this portion of the PDO can still be measured through some of the intermediate outcome indicators. 2.4 Safeguard and Fiduciary Compliance 55. Safeguards. Indigenous People (IP) benefited from the project as direct beneficiaries of the Pantawid Pamilya grants. Consequently, the Bank’s policy on Indigenous Peoples (OP/BP 4.10) was triggered. In 2009, the DSWD issued an Indigenous Peoples Policy Framework (IPPF) (memorandum circular No. 01 Series of 2009) which defined the major policy guidelines to identify and classify IPs, ensure the full participation of IP representatives in all aspects of the project, and develop strategic adjustments to ensure that the project responds to the IPs’ specific needs. Compliance with OP/BP 4.10 has been satisfactory throughout the SWDRP implementation. Among the total Pantawid Pamilya beneficiary households, 576,000 (13.1 percent) were identified as IP households in March 2016. Where the SWDRP sets are concerned, almost 200,000 households (11.5 percent) were found to be IP households.7 The implementation support mission noted the particular efforts and initiatives of the DSWD to continuously reach out to IPs and adjust the CCT Program implementation to ensure that they are included in the program and enabled to comply with its requirements. Table 1. Program Coverage of IPs Frequency Percentage Pantawid Pamilya, total Total households 4,162,270 100.0 (all sets) IP households 392,455 9.4 Pantawid Pamilya, Total households 1,703,735 100.0 SWDRP Sets 1, 2, and 4 only IP households 196,304 11.5 56. The final SWDRP Implementation Status Results Report noted the continued compliance of the project with the IPPF throughout the project implementation. Key accomplishments were summarized in a report on the IP dimensions of the Pantawid Pamilya implementation 2009–2015. The report highlights the following: a) IP households can be clearly be identified in Listahanan, enabling not only the assessment of their poverty status but also providing a wealth of information on their social and economic situation, which can be analyzed and used to inform IP-specific policies; b) IP representatives are members of all Pantawid Pamilya advisory committees at all government levels and, in addition, dedicated focus group discussions were held regularly to capture feedback from the IP grantees of the Pantawid Pamilya; c) Various aspects of the Pantawid 7 Data from Pantawid Pamiliya Monitoring System (PMED). 14 Pamilya Program (and other DSWD interventions) were adjusted to be culturally sensitive; and d) the focus group discussions with IPs were also used as a venue for the program monitoring and assessment of the responsiveness of the program. 57. Financial Management. At appraisal, the Project agreed specific actions and mitigating measures to strengthen FM capacity. These measures included (a) implementation of action plans to address the Commission on Audit (COA) findings on noncompliance with internal controls and accounting policies; (b) completion of the rollout of the electronic bookkeeping segment of the Electronic National Government Accounting System in the remaining regions in the DSWD; (c) filling of the key vacant positions in the IAS Unit with qualified staff; (d) semiannual internal auditing of the agency and concurrent strengthening of the IAS’ capacity by independent reputable audit consultants; (e) implementation of a grievance monitoring reporting system and conduct of spot checks by an independent third party; and (f) preparation of annual audited project financial statements and unaudited quarterly interim financial reports. 58. The DSWD complied with the FM related covenants of the SWDRP loan, including the following mitigating measures; (1) engaging services of audit consultants with qualifications and TOR acceptable to the Bank, to strengthen the internal control systems including its audit unit; (2) filling the Operations Audit Division Head position in IAS and establishing an FM group including an officer and key staff; (3) submitting to the Bank annual audited financial statements covering the Project; (4) preparing and furnishing to the Bank quarterly unaudited interim financial reports, in the form and substance satisfactory to the Bank. Consequently, the FM capacity of the DSWD significantly increased during the life of this project. Component 3 dedicated funds for the improvement of the FM within the DSWD, in support of the project, but also to build long-term and lasting financial capacity within the DSWD. Specifically, a separate unit, the unified FM Unit, was created and institutionalized. Moreover, building on early partnership with the Bank around the GAC TA for the CCT pilot, the Australian Department of Foreign Affairs and Trade also decided to engage with the DSWD by providing TA to improve the DSWD’s internal audit capacity. 59. Initially, the Pantawid Pamilya CCT faced some issues pertaining to the slow liquidation of the grants paid to beneficiaries through the over-the-counter (OTC) payment mode that uses the Land Bank of the Philippines as a payment conduit. Since the program inception, the CCT has relied on two modes of payment to deliver grants to beneficiaries: cash cards and OTC. For a number of reasons beyond the DSWD’s control (such as broad GoP regulations), OTC delivery has remained a dominant mode of payment of the CCT grants, although the share of cash cards has been increasing. Over time, this problem in reporting and liquidation has been reduced due to the DSWD’s request that the Land Bank engages additional conduits—including rural banks, e- payments (GlobeCash), post offices, and so on. The engagement of the conduits has also made the payment of the grants easier for beneficiaries by bringing the payment closer to their place of residence. It is for these reasons and despite continuous efforts, improvements, and overall adequate FM performance, the FM ranking remained at Moderately Satisfactory throughout most of the project’s implementation. 60. Procurement. Significant efforts were made to ensure that the necessary capacity and processes existed for expeditious procurement under the project. The Bank provided a number of trainings to procurement and the DSWD’s technical staff on Bank procurement procedures, so that 15 there was clear understanding of the rules and requirements. However, delays in the processing of terms of references affected the timely implementation of some activities. These delays were caused by the coordination issues internal to the DSWD, between the operational units (Project Management Offices, PMOs) and the centralized PS. Often, terms of references submitted to the PS by the PMOs were not deemed of sufficient quality and were returned to the PMOs for redrafting. In many cases, this iterative process took a significant amount of time before approval would be obtained. 61. One specific issue pertained to the procurement of the firm(s) to conduct the Pantawid Pamilya spot checks turned out to be more challenging than originally envisaged. Initially, it was difficult for the DSWD to find firms with the requisite skills to undertake the spot check work, and the contract with the firm hired for the third round had to be cancelled because of poor quality of work. The DSWD worked to overcome this issue by, for example, agreeing to single source firms that had previously been selected through competition, to expedite the process. Nonetheless, the delays have had a domino effect and out of the eight planned spot checks, only six were completed. 62. Despite delays, before Project ended a large amount of procurement activities were successfully undertaken by the DSWD for the update of Listahanan in 2015, when the DSWD efficiently hired 40,000 enumerators, encoders, supervisors, and other needed staff to conduct the collection of information from 15.1 million households. The final procurement rating was Moderately Satisfactory and acknowledges this advances over time. 2.5 Post-completion Operation/Next Phase 63. A follow-up operation, the Social Welfare Development and Reform Project II (SWDRP II; US$450 million) was approved by the Bank’s Board of Executive Directors on February 19, 2016, still pending declaration of effectiveness. The SWDRP II is a direct extension of the SWDRP, which focuses on the continued support to financing of the Pantawid Pamilya CCT Program. Its PDO is to “support the National Program Support for Social Protection of DSWD to improve the use of health and education services of poor children.” Primarily, the SWDRP II will support the continuous delivery of the Pantawid Pamilya CCT Program to poor households with children. It will continue to finance the health and education grants given to the CCT beneficiaries nationwide over a period of four years. Financing would amount to about 7.3 percent of total cash grants of the entire CCT Program. The beneficiary households—poor households with children ages 0–18 years—will continue to be selected using Listahanan. 64. The main rationale for SWDRP II is to consolidate the gains from the CCT Program and to continue strengthening it through a political transition and under a new administration starting July 2016. In addition to financing, the new loan will be a vehicle for continued technical cooperation and support to the CCT Program and more broadly to SP and poverty reduction strategies, both during the project supervision and through non-lending TA and related policy dialogue. Particularly important over the next several years will be to (a) maintain and further enhance Listahanan as a backbone of antipoverty programs in the country; (b) maintain and continuously enhance the CCT Program and its operations systems; and (c) continue strengthening the capacity of the DSWD to develop SP policies and implement them, in particular through the introduction of an integrated data management system, strengthened policy development and M&E, and enhanced social communications functions. 16 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design, and Implementation Relevance of objectives: High 65. The PDO was, and remains, highly relevant to the country’s priorities of poverty and vulnerability reduction. The Philippines Development Plan (PDP), 2005–2010, laid out an agenda for poverty reduction, good governance, and efficient service delivery, and recognized the growing vulnerability to social and economic shocks and that the Philippines was lagging behind in the achievement of the MDGs. The SWDRP supported the rapid improvements in social protection to enable the Government to take on these challenges. Specifically, the Pantawid Pamilya CCT Program concretely enabled the Government to incentivize improved educational and health attainment among the poorest households. 66. At project close, the continued relevance of SWDRP’s objectives remain high. Social protection is one of its cross-cutting strategies of the Philippine Development Plan (PDP) 2011- 2016 (including its Midterm Update in 2014) whose main objectives are inclusive growth and sustained poverty reduction. To achieve these goals, the PDP calls inter alia for a broad-based access to development opportunities through increased investment in human capital (education and health) and improved access to infrastructure, finance, land, and other assets. For effective social protection, the PDP lays out the needs for developing effective and responsive safety nets, in particular providing direct CCTs to the poor, and converging social protection programs for priority beneficiaries and target areas. The relevance of SWDRP’s objective is also demonstrated by the latest World Bank Country Assistance Strategy, 2015-2018, for which one of the five engagement areas centers on the “empowerment of the poor and vulnerable”. The engagement highlights the necessity of continued effort to improve health and education outcomes and strengthen social safety nets in the Philippines, namely through the continued implementation and consolidation of the Listahanan and the Pantawid Pamilya8. The new World Bank SWDRP II Project will continue supporting this agenda. Relevance of design and implementation: High. 67. The SWDRP’s comprehensive and ambitious design aimed to address the core aspects of social welfare development reform in the Philippines at the time. Component 1 supported the institution of an objective, rigorous household targeting system that would dramatically improve the targeting of social programs. Listahanan enabled the identification of poor households to benefits from the Pantawid Pamilya CCT Program that was the focus of Component 2 and of the SWDRP. The majority of the project financing was structured toward Component 2, funding the CCT grants to poor households complying with the health and education related conditions. Component 3 ensured that investments were made to build capacity of the DSWD, to execute its responsibilities, including Listahanan and the Pantawid Pamilya CCT Program, more efficiently and effectively, thus also increasing its capacity to implement the SWDRP. Taken together, the project’s design aimed at providing the GoP with the SP tools to be able to tackle poverty and vulnerability, as measured by both income and non-income indicators of poverty (access to health 8 World Bank, CAS 2015-2018, pp. 25-26 17 and education). As described in the next sub-section, the project achieved all objectives and indicators, ultimately surpassing any reasonable expectation of program performance at the outset, given the context at appraisal. 3.2 Achievement of Project Development Objectives (“Efficacy”) Efficacy: High 68. All POIs and intermediate indicators were achieved, and many of them were significantly surpassed (see Table 2 and data sheet). Indeed, an excellent track record in implementing complex, large-scale operations such as in relation to the Listahanan and the Pantawid Pamilya CCT Program, has established DSWD as an effective government agency that delivers. 69. The success in achieving the PDO can be demonstrated by the manner in which each of the SWDRP’s Project Outcome Indicators and Intermediate Outcome Indicators were successfully achieved or surpassed. The individual elements of the PDO can be divided as follows: (i) strengthen the effectiveness of DSWD; (ii) efficiently implement the CCT; (iii) expand a functional national household targeting system. These sub-objectives align to the POIs and IOIs in the following ways. Table 2 associates each PDO element with the main indicators that can track their performance. Table 2. PDO, indicators (POIs, intermediate) targets, revisions, and achievements Original Revised PDO Type of Baseline Status at Indicator Target Target Element Indicator (%) Close (%) (%) (%) Social protection operational Achieved: framework developed and IOI No Yes Yes Yes adopted Strengthen Framework for integrated the Achieved: service delivery developed and IOI No Yes Yes effectiveness Yes adopted of DSWD Evaluation of two social Achieved: protection programs completed IOI No Yes Yes Yes and disseminated Share of children ages 6-–14 years old in poor beneficiary Surpassed: POI 76 81 95 households attending school at 96% least 85% of the time. Share of children ages 0-–5 years old undergoing growth Surpassed: monitoring and check-ups in POI 63 68 87 Efficiently 94% accordance with DoH implement protocol. the CCT MIS designed and in operation including integrated data entry application, PMT processing Achieved: IOI 0 1 1 and data management, and 1 sharing capabilities properly functioning MIS developed and Under Achieved: IOI Yes Yes functioning to support design Yes 18 payments, verification, updates and grievance system Share of beneficiary Surpassed: households receiving 4Ps IOI 60% 80% 90% 99% grants regularly and on time Share of households meeting their education conditionalities Achieved: IOI 0% 80% 98% regularly in accordance with 98% the OM Share of households meeting their health conditionalities Surpassed: IOI 0 80% 77% regularly in accordance with 97% the OM Spot checks (for 4Ps) of schools, clinics, municipal Achieved: links and beneficiary IOI No Yes Yes Yes households carried out annually Impact evaluation report based Achieved: IOI No Yes Yes on first follow-up survey Yes Share of all poor households Achieved: POI 14 100 100 registered in Listahanan 100% Expand a At least 2 major national functional Surpassed: programs using the NHTS-PR IOI 1 2 3 national 25 for selecting their beneficiaries household Share of poor households targeting registered in the database Surpassed: system IOI 8% 50% 87% receiving benefits of social 100% programs Note: POI (Project Outcome Indicator); IOI (Intermediate Outcome Indicator). Strengthen the effectiveness of DSWD 70. While no POI is directly associated to this portion of the PDO, it has been discussed already how the DSWD was transformed significantly during the life of the project, having dramatically increased its capacity to efficiently and effectively perform its functions, including through the implementation of the Pantawid Pamilya CCT Program and through the establishment and operation of an efficient household targeting system—Listahanan. The Philippines is now one of the largest countries in the world with a comprehensive national registry of the poor that is regularly updated and used by a wide range of social programs. The Pantawid Pamilya CCT Program expanded much faster than originally anticipated, scaled-up at a rate faster than any other country in the world, reaching all eligible poor households with children in the Philippines by 2014 (identified as such by Listahanan). The Pantawid Pamilya is now the third largest CCT in the world (behind Brazil and Mexico), in terms of population coverage. Commensurately, the budget allocation to the CCT Program has increased substantially from 0.1 percent of GDP in 2010 to 0.5 percent of GDP in 2015 and is implemented by 13,000 DSWD staff members located across the country at local, regional, and national levels. It is also among the CCT programs with the best compliance rates regarding the health and education services attendance. The role of DSWD in Cabinet and national decision making is much greater now than in the past. It now chairs the Cabinet sub-committees of the Social Protection Cluster, and of the Human Development and Poverty Reduction Cluster. IOIs related to the development and adoption of the Social Protection 19 Operational Framework, the framework for integrated service delivery, and the evaluation of at least two social protection programs were achieved, and contributed to strengthen the effectiveness of DSWD as the lead social protection institution in the country. Efficiently implement the CCT 71. The project’s engagement with the Pantawid Pamilya CCT Program was highly successful, surpassing each of the relevant POIs and associated intermediate outcomes. At project closing, 96 percent of Pantawid Pamilya children ages 6–14 years attended school at least 85 percent of the time and 94 percent of Pantawid Pamilya children ages 0–5 years underwent growth monitoring checkups in accordance with DOH protocol, clearly exceeding targets for these POIs (especially for health). Beyond the monitored POIs, two rounds of rigorous impact evaluation confirmed that the program as a whole is delivering on its objectives of increasing access to and use of education and health services by the poor. 72. All related IOIs, which were aligned to the activities undertaken in Component 2 of the Project, were achieved or surpassed. These included: MIS developed and functioning; share of beneficiary households receiving Pantawid Pamilya grants regularly and on time; share of households meeting conditions of the program regularly; annual spot checks conducted; impact evaluation conducted. Most importantly, successive impact evaluations have proven that the Pantawid Pamilya is not simply large in scale and efficiently delivered, but that it is successful in achieving its stated objectives of incentivizing long-term poverty reduction by keeping poor Filipino children healthy and in school, objectives that have been highlighted as core priorities for the country as a whole. Expand an efficient and functional national household targeting system . 73. Success in achieving this sub objective was demonstrated by the POI that monitored the expansion of the Listahanan, growing from containing information on 14 percent of all poor households at appraisal to 100 percent at Project close. Indeed, the first wave of household data collection for Listahanan collected data on close to 11 million households (60 percent of all households in the Philippines), of which about 5.3 million were identified as poor. The project ensured that an MIS was designed and in operation, inclusive of an integrated data entry application, PMT applications, and data management sharing capabilities. Moreover, with the 2015 update of Listahanan, it even expanded further collecting information from 15.1 million households (75 percent of all) and ensuring that it remained relevant for targeting. 74. As envisaged by the SWDRP, Listahanan grew to include details on every poor household in the Philippines, dramatically improving the GoP’s ability to objectively identify, target, and reach the poor with poverty reduction programs, including SP programs like the Pantawid Pamilya, PhilHealth, and others (25 national programs, many more subnational). This achievement is captured by two intermediate objective indicators. The efficiency of Listahanan is also manifested by the outstanding targeting performance of the Pantawid Pamilya CCT as discussed in the next subsection. 20 3.3 Efficiency Efficiency: High 75. The Project has dramatically improved the targeting of social programming in the Philippines through its engagement with Listahanan. Prior to the Listahanan, social program targeting was fragmented, with each implementing agency using their own disparate methods of targeting assistance to poor households. Moving from fragmented targeting to the Listahanan has dramatically reduced leakage in social program spending, as well as inclusion and exclusion errors. It has also meant that other programs can now leverage this resource instead of funding and maintaining their own piecemeal targeting systems. 9 For instance, prior to Listahanan it was estimated that the universal rice subsidy program leakage to the non-poor was at 60% in 2009, and for PhilHealth insurance that used before ad-hoc LGU-driven scheme of beneficiary identification resulted in 85% of program leakage in 2010 (only 15% of the 6 million households enrolled under the program were identified as poor in the first version Listahanan).10 Its cost is also minimal in relation to the programs they serve, and only expands in times of massive data collection (in the Philippines, every four years). It is estimated that in 2009 and 2010, the cost of Listahanan was 11 and 7 percent respectively of the budget of Pantawid Pamilya CCT, but in 2011-2013 it oscillated between 0.1 and 0.5 percent of the CCT budget, and this does not take into account the benefits from usage of the targeting instruments by multiple programs in the country. 11 The estimated cost at USD 4.30 per household assessed (up to 2013) is clearly minor relative to savings by improved targeting accuracy among many social programs as discussed next. 76. Indeed, Listahanan is already showing its effects in improving targeting accuracy of the Pantawid Pamilya. A recent assessment concludes that Pantawid Pamilya is among the best targeted CCTs in the world. Of the program’s beneficiaries, 65 percent were found to be income poor and 35 percent food poor in 2013 (Figure 1). In terms of income quintiles, 53 percent of beneficiaries belong to the poorest 20 percent of the population (Q1), and the next 29 percent belong to the second-lowest income group (Q2). Internationally, this is an excellent targeting performance, better than that of many other CCT programs. Available data suggested that among countries with large CCT coverage, only Brazil’s Bolsa Familia has a more accurate targeting performance than the Philippines’ Pantawid Pamilya. 9 By the time of the ICR, 25 national programs were using Listahanan for selecting beneficiaries. They include (a) CCT; (b) Social Pension for Indigent Senior Citizens Program; (c) Sustainable Livelihood Program; (d) KALAHI- CIDD; (e) PhilHealth Indigent Program; (f) Rotavirus Vaccination and Catastrophic Benefit Package; (g) Compack Program; (h) War on Worms; (i) Expanded Student Grant-in-Aid Program; (j) Rural Electrification Program; (k) Socialized Housing Project; (l) Special Program for the Employment of Students; (m) Child Labor Program; (n) Livelihood Emergency Employment Program; (o) SP Floor; (p) Government Internship Program; (q) National Program for Municipal Fisherfolk Registration; (r) Targeted Actions to Reduce Poverty and Generate Economic Transformation; (s) Food First Project; (t) Special Training for Employment Program; (u) Sagana at Ligtas na Tubig Para sa Lahat; (v) Grassroots Participatory Budgeting Process; (w) National Greening Program; (x) Responsible Parenthood/Family Planning Program; and (y) National Intensification of Household Electrification Project. 10 World Bank (2013), “Targeting the Poor: Why Invest in the Listahanan?” 11 World Bank (2013), ibid. 21 Figure 1. Pantawid Pamilya CCT Coverage and Distribution of Beneficiaries in 2013 (Percentage of the Population within a Referenced Group) 57.0 52.8 52.5 of beneficiaries in bottom 20% 50.4 40.6 39.5 37.0 % Philippines Brazil Indonesia Mexico Jamaica Colombia Ecuador (2013) (2009) (2014) (2010) (2010) (2010) (2012) Source: World Bank 2015. 77. Consequently, Pantawid Pamilya has demonstrated that it is a particularly efficient means of delivering targeted assistance to poor households. Based on the most recent budget data for the program, it only costs the government an additional PHP 10.1 in administrative costs to deliver PHP 100 of cash grant to program beneficiaries. This already includes the cost of setting up and maintaining Listahanan.12 In addition to the targeting system, program administrative costs also include staff and personnel costs, M&E, bank fees, and cost of equipment.13 This cost-benefit ratio is much lower than that found for the rice subsidy program in 2009, estimated to cost PHP 68.40 per PHP 100 of direct assistance. Moreover, the Pantawid Pamilya program has gained efficiency over time. Originally, in 2009, the full cost of the targeting, information systems, and other administrative costs of the Pantawid Pamilya was estimated at 18 percent (Figure 2). Since then, it has declined and settled at about 8–10 percent of the total annual program budget, which is consistent with the international evidence that places administrative costs for mature, well targeted conditional and unconditional cash transfer programs at 8-15 percent of program costs.14 12 The cost-benefit ratio for the Pantawid Pamilya was previously compared with the rice subsidy program in 2009. The latter was found to cost the Government PHP 68.40 to deliver a PHP 100 direct assistance to its beneficiaries (Fernandez and Velarde 2012). 13 Calculation of program administrative costs is extremely challenging and as such, these estimates should be taken as a first approximation. Several indirect costs should also be considered (for example, staff from different agencies and LGUs in areas where the program is implemented) and other investment costs (for example, setting up of Listahanan and updating spread out across time and different user programs). 14 Grosh, del Ninno, Tesliuc, and Ouerghi (2008). “For Protection and Promotion: The Design and Implementation of Effective Safety Nets”. World Bank. 22 Figure 2. Cost Breakdown of the Pantawid Pamilya CCT Program Source: DSWD Appropriated Budget (various years). 3.4 Justification of Overall Outcome Rating Rating: Highly Satisfactory 78. The previous three sections of this report have documented that ratings pertaining to the Project’s relevance, efficacy and efficiency were each “high”. Indeed, the SWDRP (a) was and remains highly relevant to the Philippines’ development priorities; (b) successfully achieved and surpassed its stated PDO and POIs, ultimately, increasing the effectiveness and efficiency of social welfare provision in the country; and (c) helped dramatically increase the capacity of the DSWD to efficiently and effectively implement Listahanan and the Pantawid Pamilya CCT Program, both among the most sophisticated and large-scale SP instruments anywhere in the world. All of this was accomplished in the context of rapid and demanding scale-up of both Listahanan and the Pantawid Pamilya CCT Program. Given this context and complexity of these two large-scale programs, the successful achievement of the stated PDO and POIs is especially notable and indeed commendable. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 79. Poverty impacts. An implicit objective of this project was poverty reduction through human capital development among poor beneficiaries of the Pantawid Pamilya CCT Program. The project rightly did not commit to poverty reduction as an explicit outcome, since CCT programs promote human capital development to break intergenerational transmission of poverty, which by definition takes a long time—much longer than the project duration. Nevertheless, being a cash transfer, the CCT helps also mitigate poverty in the short run. Using household survey data, the most recent BIA finds that the cash grants provided through the Pantawid Pamilya CCT Program have reduced poverty among beneficiaries from 64.5 percent to 58 percent (figure 2). Among the food-poor Pantawid Pamilya beneficiaries, the program has decreased the food poverty rate from 35.2 percent before the transfer to 28.5 percent. These figures are aligned to the simulations done at the project appraisal stage, which predicted a decline in poverty incidence of 6.1 percent. At the 23 national level, the Pantawid Pamilya also had a positive effect on the poverty gap and the national incidence of food and overall poverty. However, the program reduced the poverty gap from 9.1 percent to 8.2 percent, lower than what was originally expected at appraisal stage (7.6 percentage points) due to the non-adjustments of benefit levels (and erosion in real terms) since the start of the Pantawid Pamilya program. This translates to a reduction of PHP 61 in the nominal poverty gap for every PHP 100 spent on the Pantawid Pamilya. The program is also estimated to have reduced both total poverty and food poverty by 1.4 percentage points each: from an estimated pre- Pantawid Pamilya rates of 26.4 percent for total poverty and 12.5 percent for food poverty. 80. For comparison, the BIA highlights that these estimates are in between those found in two other national CCT programs: Mexico’s Prospera was estimated to have reduced total poverty by 1.8 percentage points, while Brazil’s Bolsa Familia was estimated at 0.5 percentage points. Moreover, the Pantawid Pamilya contributed to reducing national income inequality as measured by the Gini coefficient, by a 0.5 point to 48.7 in 2013 with the Pantawid Pamilya from 49.2 if without the program. Figure 1. Poverty Rates with and Without the Pantawid Pamilya CCT Program Source: World Bank 2015. 81. Gender aspects. The Pantawid Pamilya CCT Program, and by extension the project, has been highly gender sensitive since its inception. For example, the Pantawid Pamilya’s Operations Manual stipulates that the grant recipient should be the mother in a family; as a result, 90 percent of all the Pantawid Pamilya cash grant recipients are mothers. Almost all parent leaders (99 percent), an important feature of the implementation design, are also mothers. Furthermore, the Pantawid Pamilya monitoring system is designed in such way that all indicators can be and are disaggregated by gender. Qualitative studies suggest that FDSs have played a significant role in empowering women—through sessions such as citizens’ rights, spousal relationship, or maternal health. The impact evaluations supported by this project were able to confirm that the program was being equally effective for boys and girls, with no gender differences found in program impacts on outcomes related to education and health service use. 24 (b) Institutional Change/Strengthening 82. The DSWD has been transformed during the life cycle of this project, from a small line agency with among the lowest budgets of all Government departments, nominally presiding over a fragmented set of small social assistance programs, to the country’s leading authority for SP delivery. As already highlighted, DSWD now implements programs covering more than 30 million people with a budget of close to 1 percent of the GDP. Throughout the project implementation, combined with the Bank analytical and advisory services, capacity-building activities were systematically and persistently implemented, with an emphasis on transferring the necessary institutional learning to the DSWD, so that it would become less reliant on external assistance in the future. More broadly, as previously mentioned, the project also contributed significantly to capacity development of critical department-wide systems such as strategy and policy planning and development, FM, IASs, social marketing/communications, data management and information systems, M&E, and staff training. (c) Other Unintended Outcomes and Impacts (positive or negative) 83. From South-South knowledge receiver to South-South knowledge provider. At the outset of this engagement, the Bank facilitated the provision of a significant amount of South- South knowledge on the CCT design, implementation, and scale-up, as well as on social registry implementation, to the senior-level DSWD staff through learning trips to Turkey, Colombia, and Mexico. This ultimately helped galvanize political will in the DSWD and the Philippines to implement the Pantawid Pamilya CCT Program and Listahanan. An excellent track record in implementing those inteventions, and a series of innovations, such as community validation in Listahanan, or social marketing and the FDSs in the Pantawid Pamilya, have more recently attracted visitors from other countries, including Cambodia, Vietnam, Timor-Leste, Palestine, Bangladesh, Indonesia, Egypt, and Pakistan, to name a few. 84. The myriad of other, unintended impacts of the CCT Program. Aside from the increase in use of health and education services, the Pantawid Pamilya CCT Program has positively influenced many other household behaviors. For instance, the RCT impact evaluation showed that the program has helped improve the long-term nutritional status of younger children by reducing stunting by 10 percent compared to barangays that did not receive the program. The program also changed the spending patterns of poor households, with beneficiary households spending more on health and education than poor households who had not received the program. The study also found that beneficiary households spent less on adult goods such as alcohol and that the program may have contributed to increased savings among beneficiary households. The RDD impact evaluation also found additional effects on Pantawid children who worked seven days less in a month compared to non-Pantawid children. The program also encouraged women to try modern family planning methods at least once. The program did not disincentivize work. The program seems to also have improved parents’ perception of their situation and of their children’s future. The Pantawid parents have higher hopes of their children finishing college compared to non- Pantawid parents. 4. Assessment of Risk to Development Outcome Rating: Moderate 25 85. Both the Pantawid Pamilya CCT Program and Listahanan are currently well aligned with PDP and with the DSWD’s Medium Term Economic Plan. However, a new Government administration will take charge in July 2016, and thus the political transition imposes some risk related to potential changes in vision and priorities. Based on the currently available information, it looks unlikely that the new administration would depart from the use of the well-established CCT Program or from the use of Listahanan to identify the CCT beneficiaries. Listahanan was instituted as the national household targeting system by the president’s executive order and has been an important contributing factor to the sound poverty targeting and good governance of the CCT Program. A CCT bill is also under discussion in Congress, whose passage would help protect the program and guarantee funding in the future. 86. Moreover, the good macroeconomic performance of the country over the past several years and increasing Government revenues reduce the likelihood of negative macroeconomic impacts on the PDOs from financing difficulties. SWDRP II and a recently approved loan by ADB will continue providing financial support for up to a combined 15 percent of the CCT budget until 2019. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Satisfactory 87. At the time of entry, the Bank was already engaged with the DSWD in several key TA activities and general budget support, all of which informed the project design. The SWDRP was thus an outcome of these prior engagements that had supported the initial activities of the DSWD’s social welfare and development reform agenda. The success of the Pantawid Pamilya pilot and the subsequent demand for its scale-up provided the specific impetus. The whole preparation process of the SWDRP was led by an experienced task team leader, supported by a number of diverse and cross-global practice staff (from Social Protection and Labor, Education, Health, Social Development, and Governance) and consultants that ensured a high-quality preparation process. 88. Two caveats can be mentioned, with the observation that both stem from the factors beyond control of the project preparation task team. The project took more time (two years) than anticipated to prepare due to a series of crisis events in 2008, including the global financial crisis, the food and fuel crises and typhoons Ondoy and Pepeng. Focus then shifted to respond to a request from the GoP for assistance in confronting the consequences of these events through a DPO. The second aspect concerns an overly complex Loan Agreement that stipulated too many program design parameters and restrictions (for instance, including the grant amount, sets of coverage, age groups, and so on) that should have been better suited to specify only in the program Operations Manual to allow for more flexibility and adaptation to policy changes. The decision to include such parameters in the Loan Agreement was based on high governance and substantial stakeholder risks at the time of the preparation. (b) Quality of Supervision 26 Rating: Satisfactory 89. Three task team leaders and a number of staff took part in the project implementation. Rigorous supervision missions were conducted by the project team biannually, all complemented with field visits at different locations of the country for first-hand impressions on the project performance and implementation. Detailed and discerning back-to-office reporting was submitted in the form of exhaustive Aide Memoires and succinct Implementation Status and Results Reports. These reports predominantly reported a satisfactory rating for the project’s implementation. The project was closed on time in December 2015 along with the AF package, executing all of funds. 90. Aside from supervision missions, an important contributing factor to the successful implementation of the SWDRP was leveraging of the substantial amount of accompanying, complementary TA. This prolonged TA engagement ensured that any technical expertise the DSWD needed during the project implementation was readily available. This represented a best practice in the Bank operations and played a significant role in supporting the notable outcomes of the SWDRP. 91. One caveat concerns the decision at the time of processing the AF of not including Listahanan 2015 update as one of the key indicators. By the time the SWDRP was effective, many of the activities highlighted for engagement under Component 1 were already funded through other means and consequently, a substantial share of this funding originally allocated to ‘implementing’ Listahanan was reallocated to ‘updating’ Listahanan. However, this reallocation of focus was not captured in a restructuring of the results indicators of Component 1, as would have been appropriate to reflect the strategic decision in allocating a large proportion of project funds. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory 92. Overall Bank design and implementation of the SWDRP has been Satisfactory. A very small number of minor caveats have not affected the performance. 5.2 Borrower Performance (a) Government Performance Rating: Satisfactory 93. Today, the Philippines has a stronger SP system than it did in 2009, when the SWDRP was prepared. Several key factors have contributed to this development, including the following: a) SP features prominently and is one of the key crosscutting strategies of the 2011–2016 PDP; b) the establishment and use of Listahanan has increased efficiency and effectiveness of public spending but also improving SP governance by removing the ever present political patronage from distribution of public resources to citizens; c) the coordination mechanism through the SCSP has played an important role in coordinating SP policies and programs development; d) the convergence policy of the GoP has served as a vehicle for various Government agencies involved 27 in SP to work together more, exchange information, and coordinate actions better; e) focus on administrative data system, programs assessment, and results of impact evaluation has helped choose a more poverty-oriented course of public action; f) finally, efforts to improve programs implementation mechanisms and staff capacity have been an important element in the improved delivery of the national SP programs to beneficiaries. (b) Implementing Agency or Agencies Performance Rating: Highly Satisfactory 94. The SWDRP has been a critical partner and witness to the extraordinary transformation of the DSWD into the leading national SP agency. Before the DSWD started to implement the Pantawid Pamilya CCT Program or undertook the enormous effort of building the first national database of the poor, the DSWD was a minor Government department with regard to budget and impact. During the SWDRP implementation, the DSWD allocated sufficient resources and staff to execute activities, using its own department structures as opposed to the ad hoc project implementation units, as happens in many other countries. The DSWD staff actively participated in all supervision missions, field visits, and training activities organized by the Bank and other development partners and in closely monitoring consultancies and TA activities, eager to incorporate lessons to improve performance in its operations. Testimony of that is the steady improvement in fiduciary capacity despite an especially low initial capacity base (in both FM and procurement, with periods of moderate unsatisfactory project ranking but improving over time), reaching a milestone in 2014 when the COA issued an unqualified report to the DSWD for the first time on the audited project financial statements. Additionally, DSWD embraced the integrity of GAC agenda and the improved M&E, with impact evaluations and spot checks incorporated as regular tools to assess the impact of interventions. (c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory 95. As explained previously, the overall SP sector in the Philippines and its main executing agency, the DSWD, has been enormously strengthened since 2010, when the SWDRP started to be implemented. This strong track record and commitment from the GoP ensured that not only has the SWDRP reached its development objectives, but more importantly that the SP policies and programs have steadily increased their impact in improving the welfare of the poorest population in the country. 6. Lessons Learned 96. This engagement has demonstrated that the use of a PAAA in support of a lending operation such as the SWDRP should be a best practice. The PAAA allowed the Bank to work in full partnership with the DSWD throughout its SP reform process and the implementation of the SWDRP. Structured as it is, the PAAA meant that every tool in the TA tool kit could be leveraged under its broad TA umbrella: from just-in-time policy advice, to in-the-field supervision of implementation, to rigorous analytical pieces and more. Taken together, this comprehensive use of Bank resources in response to the evolving client demands directly assisted Listahanan, the 28 Pantawid Pamilya, and the overall social welfare reform, fostering an ongoing partnership between the Bank and DSWD that together played a significant role in the satisfactory implementation of the SWDRP. 97. Several critical factors were instrumental to the major achievements in expanding social safety nets in the Philippines and serve as lessons for good practice globally. Among them were: a) how the desire for better governance was an entry point (and motivation for change) that the DSWD harnessed to launch both the CCT Program and Listahanan; b) how critical the communication agenda was, managing some initial negative public perceptions toward the CCT design and implementation, and their potential effect on magnifying the risk of political interference during implementation; c) relatedly, the importance of the impact evaluation agenda as a communication tool to document scientifically the impact that the CCT program has; f) finally, the establishment of inter-ministerial coordinating bodies (National Advisory Committee and the SCSP) to help improve program implementation. 98. The extension of the Pantawid Pamilya CCT Program to cover children in secondary school was a very important change for maximizing impact. The justification for an expansion to cover secondary education in the CCT Program is that at this level, enrolment rates among poor children are still much lower than those among non-poor children. Only about 70 percent of poor children ages 15–16 years were attending school in 2013, in comparison to about 80 percent of the non-poor children in the same cohort. Therefore, it was advisable to extend CCT coverage to this at-risk population group to foster school retention. 99. A strong CCT program can be a leading driver of empowerment among the poorest and most vulnerable, as well as poverty reduction – but complimentary investments are needed. The Philippines has made impressive progress in expanding SP coverage to the population. However, this has mostly been driven by the expansion and strengthening of the national social safety net programs implemented by the DSWD, as supported by the SWDRP. On the other hand, performance of the social security system and labor market regulation and policies as SP instruments has been constrained by the structure of the economy where low productivity, precarious jobs in the informal sector dominates. This partly explains the overall slow improvement in poverty reduction, despite safety net expansion. Social security remains out of reach for most of the population, and labor market regulation protection is limited to the formal sector workers, leaving most of the labor force out of its reach. Labor market programs, despite efforts, remain relatively small, significantly fragmented, and poorly coordinated, with little knowledge of what works and where to place the emphasis. These aspects should be tackled in the next SP reform agenda in the Philippines. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners 100. The GoP, through the implementing agency of this project, DSWD, agreed with the main conclusions of this ICR report, and this is also reflected in the own GoP Project Completion Report. The summary of the implementing agency’s Project Completion Report is presented in Annex 7, along with confirmation of general agreement on the main conclusions of the World Bank’s ICR report. 29 Annex 1. Project Costs and Financing (a) Project Cost by Component (in US$, millions equivalent) Actual/Latest Percentage Estimate Components Appraisal Estimate (US$, millions) of (US$, Appraisal millions) Original AF Total Support to the National Household Targeting System for Poverty Reduction (NHTS-PR) and Building Institutional 61,900,000 – 61,900,000 43,848,102 71 Capacity to Lead in Social Protection (Components 1 and 3) Support to Pantawid Pamilya Pilipino Program (CCT) 336,400,000 99,750,000 436,150,000 459,889,398 105 (Component 2) Total Baseline Cost 398,300,000 99,750,000 498,050,000 503,737,500 101 Physical Contingencies 1,500,000 – 1,500,000 – – Price Contingencies 4,200,000 – 4,200,000 – – Total Project Costs 404,000,000 99,750,000 503,750,000 503,737,500 100 Front-end fee IBRD 1,000,000 250,000 1,250,000 1,262,500 – Total Financing Required 405,000,000 100,000,000 505,000,000 505,000,000 100 (b) Financing Original Additional Actual/Latest Estimate Financing Percentage Source of Funds Estimate (US$, (US$, of Appraisal (US$, millions) millions) millions) IBRD 405,000,000 100,000,000 505,000,000 100 Borrower 107,000,000 4,260,000,000 3881 30 Annex 2. Outputs by Component Component 1: Support the National Household Targeting System for Poverty Reduction (NHTS-PR) 1. The project supported data collection for two rounds of Listahanan. 2. First household assessment (Listahanan). The first nationwide household assessment was conducted from 2009 to 2011 and was supported by the Bank through various TA activities during the SWDRP preparation process. The implementation comprised three stages. (a) Identification of an enumeration strategy for provinces and municipalities that were covered. The geographic selection of provinces, cities, and municipalities that were prioritized for enumeration was guided by the 2006 poverty estimates from the Family Income and Expenditure Survey 2003 and data from the Presidential Commission for the Urban Poor on pockets of poverty. (b) Interview of households. It was done using the Household Assessment Form that was designed to collect data on household composition, education, housing conditions, and access to basic services. The information thus collected was used to estimate the per capita income of the household using a PMT. The estimated incomes were then compared with official poverty thresholds at the provincial level to identify households living below (poor) or above (non-poor) the threshold. (c) Community validation. Listahanan also allows communities to challenge the list of poor once the preliminary results of the household poverty status assessment become available. 3. The first household assessment identified 5,255,118 poor households of the total 10.9 million households assessed in 1,640 municipalities and cities. The PMO also managed on-demand applications of a total 1,267,445 households and validated 1,441,874 complaints and appeals.15 4. Second household assessment (Listahanan 2015). The second nationwide household assessment was conducted in 2015. As in the first assessment, the second assessment was also guided by the four-phase project cycle (preparation, data collection and analysis, validation and finalization, report generation and management). The duration of phase III was extended to allow longer time for the conduct of validation activities in the validation and finalization phase of the project cycle.16 As of December 2015, Listahanan profiled barangay community characteristics of all 42,026 barangays nationwide, and about 15.1 million households were assessed, encoded, and synced. Community validation was completed in February 2016 and the dissemination of Listahanan 2015 completed in April 2016 (launch event financed through the Bank’s Programmatic AAA for Social Protection and Labor, P148753). 5. The project also supported the PMO and the development and implementation of an MIS, including laptops, tablets, and staff training. 15 SWDRP Midterm Review 2014. 16 Listahanan Operations Manual 2015. 31 Support to the PMO  Procured and delivered 4,363 laptops on June 25, 2015; all 12,881 tablets on June 26, 2015 (333 remaining for NCR); 9.8 million FAFs and stickers on June 1, 2015  Hired, trained, and deployed 38,995 field staff Development and Implementation of an MIS for Targeting  Completed the enhancement of the data entry application and its support systems (user management system, barangay community characteristics data entry, duplicate checker, operations monitoring reporting system, and so on) in March 2015  Completed the installation of version 7.0 and configuration of 12,881 tablet devices in May 2015 6. Spot checks. While it was originally envisaged as one of the project activities, the project team agreed with the DSWD in September 2015 not to undertake spot checks for Listahanan 2015 due to the extreme workload of Listahanan staff and difficulties in finding a competent contactor. Spot checks will be carried out by the DSWD’s IAS in 2016. Component 2: Support to Pantawid Pamilya Pilipino Program (CCT) Provision of Cash Grants 7. This component financed 75 percent of the health and education grants of the Pantawid Pamilya CCT Program for households selected and enrolled under Sets 1 and 2 from 2008 to 2009 in 255 municipalities and 15 cities. It should be mentioned that during implementation, the Bank team decided not to participate in the financing of the Set 3 extension and instead at midterm review agreed to finance 75 percent of Set 4 with AF. This decision was made because the selection of households and provinces for Set 3 differed from the pre-agreed method of rolling out the program from the poorest provinces to the second poorest and to third poorest (and so on) provinces in a sequential manner. This was contrary to the original scale-up plan and was felt to pose a risk with regard to the project. Instead, the DSWD secured financing from the ADB for Set 3. 8. The health grant was set at PHP 500 (US$11) per household per month, regardless of the number of children ages 0–14 years. The health grant required that households fulfill the following conditions: (a) all children ages 0–5 years should attend the health center or rural health unit to get the services appropriate for their age, according to the DOH protocol; (b) pregnant women must attend a health center or rural health unit according to the DOH protocol; (c) all children ages 6 – 14 years in primary school should take deworming pills twice per year; and (d) for households with beneficiary children, the household grantee (mother) and/or spouse shall attend family development sessions (FDSs) at least once a month. 9. The education grants of the Pantawid Pamilya were delivered to poor households with children ages 6–14 years. The education transfer was set at PHP 300 (US$6) per child per month, up to a maximum of three children. Beneficiary households receive the education transfer for each 32 child between ages 6 and14 years as long as they are enrolled in primary or secondary school and maintain a class attendance rate of 85 percent every month. Implementation Support Activity 1: Support to the NPMO 10. Key to the program’s success is a strong and efficient NPMO capable of developing and implementing all key activities of the program cycle. With the continuous expansion of the program in scope and coverage, the NPMO has also been continuously expanding its human resources. A total of 13,710 technical and administrative positions assigned to the national and regional offices (including personnel assigned in provinces and cities and municipalities) have been approved for the program. As of December 31, 2015, 12,933 positions or 94 percent were filled up. A total of 8,709 staff members (or 67 percent of hired personnel) who were originally hired under a ‘Memorandum of Agreement’17 have been issued a contract. This was a response to the concern raised in the midterm review of the project where the lack of job security resulted in high staff turnover. Activity 2: Development of an MIS for Pantawid Pamilya 11. The Pantawid Pamilya has gone a long way in the development of an MIS for the effective implementation of the program. Developed in 2010, the following systems are operated by the Pantawid NPMO: BUS, CVS, and GRS. In addition, the NPMO operates the payment system jointly with the relevant financial units of the DSWD. These systems were continuously enhanced based on the needs identified throughout the implementation of the project.  Beneficiary data management. This efficiently tracks the changes in the data/status of the beneficiaries while enrolled in the program. Beneficiary updating used to be done to a large extent manually, but with the development of the data management system, the process has been improved and it will soon become fully automated, including at the source. From just being focused on the updates of information on beneficiaries, the BUS has been improved to capture, for instance, the reasons for school nonattendance. This information is then used to follow up with the household. With the continuous system enhancement, the BUS was able to capture more updates, reaching a 6 million mark in 2014 and reporting 6,332,206 updates in 2015.  CVS. This system monitors how the beneficiaries comply with the conditions set by the program. It processes compliance data until it is ultimately used as basis for payment. The program consistently reaches above target rates (95 percent) for the compliance on health and education conditions. Before the grants payroll is generated, the BUS and the CVS systems’ data are crosschecked.  GRS. This system seeks to capture and resolve all grievances in a systematic, transparent, effective, and expeditious manner. It is the venue for both the program beneficiaries and general public to voice their concerns regarding the program. The project supported an 17 Memorandum of Agreement workers are those who are hired without benefits and whose employment is based on the contract of service. 33 assessment and provided recommendation for the enhancement of the business process of the GRS. The success of the engagement is evidenced by the improved grievance resolution rate of 71.8 percent. The GRS also accounts for the total number of delisted and deactivated households since 2009. Deactivated households are households whose status as program beneficiaries is suspended due to inconsistencies in beneficiary data, validation process, and other issues. Delisted households, on the other hand, are households that have been removed from the program due to fraudulent acts and inclusion errors and households that have waived their inclusion into the program.18  Payment system. After the DSWD’s regional director approves the encoded registration forms, the NPMO confirms and prepares the final list of the registered households within two weeks. This validated roster of each beneficiary household serves as the basis for the NPMO to prepare the Notice of Approved Payroll Action, which is then submitted to the FMS for payroll processing. The release of grants to household beneficiaries is according to the mode of payments identified for a specific geographic area, in agreement with the Regional Action Center, which is composed of a DSWD and Land Bank representative in each region, to ensure that the cash grants are delivered to beneficiaries at the least transportation cost to them, and to facilitate timely release of cash grants. Activity 3: Strengthening of M&E of the Pantawid Pamilya 12. This activity supported the M&E of the Pantawid Pamilya with a view to build the DSWD’s capacity in these areas as a step toward more evidence-based planning and policy—one of the objectives of the DSWD’s reform agenda. More specifically, this activity assisted in the design and implementation of (a) a spot check methodology to monitor Pantawid Pamilya operations that produces the information required for informed and timely policy decisions and adjustments; (b) methodologically rigorous impact evaluations which the Government and public would use as evidence of program impact, which is key for program sustainability; and (c) regular monitoring of the whole project. 13. Spot checks. Spot checks are periodic process monitoring activities that are conducted to verify if the implementation is done as intended and if the desired outputs are being produced. The SWDRP contributed greatly to the strengthening of the M&E of the program. The five spot checks (phase I–IV, and VI) produced a wealth of monitoring information that afforded the program a closer view of program implementation which could be used to verify the program information received through other reporting channels. 14. Recognizing that spot checks can be an essential tool in program monitoring, the DSWD committed to undertake independent (external) spot checks as one of the conditions of the SWDRP loan. A spot check pilot was implemented with the Bank’s TA in 2010 and then through the SWDRP. For the first two years of project implementation, the DSWD committed to carrying out spot checks semiannually. Thereafter, spot checks were to be carried out on an annual basis. Notably, the findings from the pilot spot checks were regularly quoted by the DSWD secretary 18 As of December 31, 2015, 50,229 household beneficiaries had been delisted based on the program existing policies, while 381,405 had been deactivated and were pending validation by the field offices. 34 during the budget hearing process as evidence that the main components of the Pantawid Pamilya Program were in place and functioning. 15. Results from the six external spot checks that were successfully conducted in 20 municipalities reveal that the program is well implemented, albeit with some areas for improvement. Moreover, spot checks were able to inform policy decisions to address them. For example, findings from the initial rounds of spot checks (2010) highlighted a large bottleneck in the program concerning payments. Consequently, the DSWD explored alternative payment methods, and payment modalities have since been diversified. As another example, two municipalities in the Autonomous Region in Muslim Mindanao were selected for spot checks in 2011, and the serious irregularities that were found in one municipality led to mitigating measures, including the use of biometric authentication for payouts to beneficiaries in that region 16. However, it should be highlighted that the DSWD has found it difficult to conduct spot checks on time due to persistent issues pertaining to the procuring of firms and consultants to undertake them. These issues primarily pertained to general procurement issues concerning terms of references and internal procurement coordination (discussed in section 2.4) but also a limited market for the services required to undertake spot checks. Nevertheless, the DSWD has found the spot checks very useful and as a result have now instituted their own spot check system (‘Composite Spot Checks’) to continue this form of monitoring beyond those required by the SWDRP. 17. Impact evaluation. The main objective of the impact evaluation was to address the issue of whether the Pantawid Pamilya has any significant statistical impact on the main project outcomes along the dimensions of health and education of children and poverty reduction. In particular, the evaluation quantifies whether the Pantawid Pamilya CCT Program had any impacts on the following outcomes: (a) Health: (i) pregnant women getting adequate medical care during and after their pregnancy and delivery; (ii) stunting among children ages 0–5 years; and (iii) use of preventive and immunization health services among children ages0–5 years (b) Education: (i) school attendance, enrolment, and attainment and (ii) child labor (c) Others: (i) poverty, (ii) food expenditures, and (iii) expenditures on nutrient-rich foods 18. Under the project, two waves of impact evaluation were conducted in 2011 and 2013:  The first wave impact evaluation used two methodologies: (a) an experimental design using an RCT and (b) a quasi-experimental design using RDD. The RCT ensured a methodologically rigorous evaluation to establish the causal effect of the program while the RDD, used in conjunction with the RCT, investigated the robustness of any findings and established a baseline to compare future results based on this method. Qualitative information on program impact was also collected. The qualitative assessment sought to identify social impacts on addressing gender needs and women’s empowerment.  The second wave impact evaluation used RDD as an alternative approach. The continuous expansion of the program made randomized design more difficult to 35 implement. RDD compares observations (for example, households) that are very close to a pre-identified cutoff (for example, the poverty threshold). Households just below (poor and eligible) and just above (near-poor and not eligible) the poverty threshold should have similar characteristics. The evaluation is based on a sample that is national in scope and covers Set 1 to Set 4 program areas, which were introduced into the program between 2008 and 2011. The beneficiary households in the sample areas were exposed to the program for two to four years at the time of data collection from October to December 2013. The sample includes 5,041 households from 30 municipalities in 26 provinces. In addition, a part of the second wave impact evaluation is the panel analysis using the first wave RCT data. Households sampled for the first wave impact evaluation RCT report were re-interviewed in the second wave. The panel analysis compares outcomes among components of the population, or cohorts that share similar characteristics. 19. These studies provided the department evidence that the program works, and the positive results became handy in convincing oversight agencies, stakeholders, and the general public of the effectiveness of the CCT Program. It is particularly useful during congressional budget hearings in justifying the continued expansion of program coverage over the years. 20. Regular program monitoring. During project implementation, the DSWD has instituted and implemented a highly complex, well-designed monitoring system that generates weekly monitoring reports on the Pantawid Pamilya for management and oversight agencies. The weekly monitoring reports of PMED present data on program coverage, compliance with conditions, payment of grants to beneficiaries, and the status of grievances and their resolution. This allows the DSWD to monitor the Pantawid Pamilya’s implementation, including by tracking and describing beneficiaries by sets and by geographic regions and to disaggregate program data by sex, age groups, and specific vulnerable groups like indigenous groups or disabled beneficiaries. This sophisticated monitoring systems has enabled the DSWD detect any anomalies in the program’s implementation, including registration, irregular delisting/deactivation of beneficiaries, and changes in compliance rates. The Pantawid Pamilya NPMO regularly disseminates monthly, quarterly, and annual monitoring reports. Component 3: Building Institutional Capacity to Lead in Social Protection 21. The objective of the third component was to support the strengthening of basic institutional capacity of the DSWD to strengthen its leadership role in SP. It focused on enhancing the department’s core competence on policy analysis and strategic planning, M&E, social marketing, and knowledge management/learning development and in building capacity for FM and internal audit to strengthen internal controls. Policy and Strategy 22. In support to the reform agenda 1 on Engaging the Sector in Establishing Strategic and Results-Oriented Policies on Social Protection, this subcomponent assisted the DSWD in enhancing its capacity in policy and strategy formulation which is among its core functions as a leader in SP. This is also in response to the Government’s priority to reform and reinforce its SP system. Being the chair of the SCSP and Ad Hoc Working Group on Social Protection Statistics, the DSWD has embarked on SP-related efforts and initiatives and has continuously worked on 36 strengthening collaboration with other government agencies, LGUs, nongovernmental organizations, basic sectors, and other SP service providers to help achieve the goal of improving the lives of the poor and vulnerable. Activity 1: Support to SP 23. This project supported the formulation of an SP Handbook and SP-VAM among other policy tools on SP. The SP Handbook is envisioned to empower and capacitate LGUs specifically by providing guidelines in delivering SP services. This activity also supported the hiring of additional staff to assist in the day-to-day tasks in project implementation and provide technical secretariat support for the Social Development Committee (SDC) SCSP. SP The handbook was finalized after the presentation to the members of the SDC SCSP on October 30, 2013. 24. A consultant was also hired to help with the crafting of the SP-VAM in October 2012 through the conduct of meetings and initial consultation with nearby LGUs and DSWD field offices. The SP-VAM was finalized in October 2013 and forms part of the SP Handbook. Subsequently, a trainer’s training was conducted in November 2013 and was attended by the DSWD regional planning and information officers. Currently, capacity building on the use of the SP-VAM in assessing risks and vulnerabilities is part of the trainer’s training and Rollout Orientation/Training on the Use of SP Handbook is continuously being conducted. Activity 2: Support to the SDC SCSP 25. With the assistance of the consultant hired for the project, the SP Operational Framework was adopted and approved by the NEDA-SDC Cabinet level on May 18, 2012 through SDC Resolution No. 3, series of 2012. The core of the framework is the underlying purpose and objective of social protection, which is better and improved quality of life for its beneficiaries. The framework is directly linked and placed within the overall inclusive development goals and overall poverty strategy of the country and it will serve as the overall framework for SP interventions in the country. With the approval of the SP Operational Framework, orientations were conducted for the SCSP members, the DSWD SP focal persons, nongovernmental organizations, and academe, among others. Institutional Strengthening Activity 3: Social Marketing 26. The DSWD sought to continue advocacy work for the promotion and protection of the rights of the poor and vulnerable. While it was imperative to implement effective programs, the DSWD also saw the need to strengthen its capacity in social marketing to communicate effectively with its beneficiaries, partners, and other stakeholders. Through the project, the following activities were accomplished:  Materials development. An online magazine was piloted in November 2011 and then issued regularly every month starting January 2012. In 2012, the DSWD Core Messages was developed and distributed. The DSWD Core Messages source book is an internal document meant to guide the DSWD officials and staff in issuing a unified stance on key concerns on SP, poverty reduction, convergence, and others that may be raised by the 37 public. This was used as a basis for developing various information, education, and communication materials to be shared for public consumption. The DSWD Core Messages were regularly updated from 2012 to 2015.  Information technology equipment and goods. To enable the DSWD’s social marketing service to perform its tasks, information technology equipment were purchased as part of the project. The following equipment were purchased through the project: three computers, two network printers, one laserjet duplex network, two SLR cameras, one licensed in- design software, one LED monitor, and one boom microphone. Other goods purchased through the project were executive chairs and a table, a photo exhibit panel, and books related to social marketing.  Consultancy services. Two consultants—internal and external communication advisers— were hired through the project. The internal communication adviser developed the DSWD branding guidelines and communication protocol (internal and crisis communications) and provided coaching to the DSWD information officers from 2014 to 2015. The external communications adviser will develop the DSWD Crisis Communications Manual.  Training. Various workshops were conducted from 2011 to 2015. These include Strategic Communication Planning Workshops (May 12–14 and October 24–28, 2011); National Communication Planning Workshop (December 15–17, 2011); Pantawid Pamilya Communication Planning Workshop (2012); Communication Review and Evaluation Workshops (2012 and February 16–22, 2014); and Communication Planning Workshops (May 28–June 1, 2013, and March 16–20, 2015). 27. The social marketing subcomponent of the project contributed to the improvement of capacities of the DSWD communications officers through provision of training and coaching on various aspects of communication. They were able to participate in the communication review and evaluation workshops where the social marketing plans were reviewed and the activities were reported and assessed against the objectives. The DSWD communications officers were also provided with the needed TA to formulate their communications plans that will contribute to the overall communication objectives of the department. Activity 4: Knowledge Management 28. The project also helped build the capacity of the DSWD on knowledge management of information and establishing M&E systems that can result in the systematic documentation and sharing of important lessons and insights from the DSWD interventions. The project financed the development of the department’s Knowledge Management Framework, the Knowledge Management Agenda, and a Knowledge Audit Report which investigated the gaps between the agency’s knowledge needs in relation to its resources and practices. The latter paved the way for the establishment of the Knowledge Exchange Center (KEC) with supporting policies for knowledge sharing. The Knowledge Exchange Center has catered to the DSWD internal staff, foreign visitors, students who requested for orientation about the DSWD and those conducting research and has served as venue for meetings and knowledge exchange exercises. Activity 5: FM 38 29. At appraisal, the Project agreed specific actions and mitigating measures to strengthen FM capacity. These measures included (a) implementation of action plans to address the Commission on Audit (COA) findings on noncompliance with internal controls and accounting policies; (b) completion of the rollout of the electronic bookkeeping segment of the Electronic National Government Accounting System in the remaining regions in the DSWD; (c) filling of the key vacant positions in the IAS Unit with qualified staff; (d) semiannual internal auditing of the agency and concurrent strengthening of the IAS’ capacity by independent reputable audit consultants; (e) implementation of a grievance monitoring reporting system and conduct of spot checks by an independent third party; and (f) preparation of annual audited project financial statements and unaudited quarterly interim financial reports. 30. Consequently, the FM capacity of the DSWD significantly increased during the life of this project. Specifically, a separate unit, the unified FM Unit, was created and institutionalized. Moreover, building on early partnership with the Bank around the GAC TA for the CCT pilot, the Australian Department of Foreign Affairs and Trade also decided to engage with the DSWD by providing TA to improve the DSWD’s internal audit capacity. 31. Still, the Pantawid Pamilya CCT faced some issues pertaining to the slow liquidation of the grants paid to beneficiaries through the over-the-counter (OTC) payment mode that uses the Land Bank of the Philippines as a payment conduit. Since the program inception, the CCT has relied on two modes of payment to deliver grants to beneficiaries: cash cards and OTC. For a number of reasons beyond the DSWD’s control (such as broad GoP regulations), OTC delivery has remained a dominant mode of payment of the CCT grants, although the share of cash cards has been increasing. Over time, this problem in reporting and liquidation has been reduced due to the DSWD’s request that the Land Bank engages additional conduits—including rural banks, e- payments (GlobeCash), post offices, and so on. The engagement of the conduits has also made the payment of the grants easier for beneficiaries by bringing the payment closer to their place of residence. In addition, regional coordination between the Land Bank and DSWD has improved over time, reducing the time required for reconciliation. 32. Some other factors that have affected the payment process include (a) weak preventive controls over information processing enforced by information technology applications such as edit checks to validate data entry; (b) slow update of the beneficiaries’ information; (c) highly centralized process in aspects related to opening bank accounts (that is, cash cards are produced in Manila by the Land Bank and mailed to the region, instead of using local branches); (d) high turnover of personnel in the UFMS; and (e) limited information system capacity to disaggregate and facilitate data analysis that resulted early in the project implementation disbursements to the CCT beneficiaries ages 3–5 years using loan proceeds (reconciled by loan closing). It is for these reasons and despite continuous efforts, improvements, and overall adequate FM performance, the FM ranking remained at Moderately Satisfactory throughout most of the project’s implementation. 33. The project also supported several initiatives of the DSWD in strengthening institutional capacity for FM. Before project implementation, the FMS hired dedicated FM staff for the project. The newly hired staff were then provided training on the basics of government accounting, budgeting, and cash management. During project implementation, the issues and concerns with regard to financial reporting and management were institutionalized in the Annual Financial Management Conference Workshop and during consultation dialogue with resident COA auditors 39 on the DSWD programs and projects. The issues and concerns discussed at these venues were not only limited to accounting and budgeting rules and regulations, cash management and internal controls but also with regard to the diversified techniques in the implementation of various programs, projects, and activities of the DSWD. 34. The results of those trainings have been important. First, for cash management, the FMS had successfully installed the Cash Allocation and Utilization Monitoring System. This is a Microsoft Access database program, developed in-house by the information technology staff of the DSWD and designed to manage/monitor the department’s financial transactions, especially the disbursements made on per fund basis being used by the central office and has been rolled out to 16 DSWD field offices. Activity 6: Internal Audit 35. This subcomponent supported the capacity building on internal audit through the provision of TA, which is one of the critical elements for ensuring the project’s social accountability. Although the department has installed an IAS, there was a need to build the capacities of its staff to international standards. Under this subcomponent, hiring of consultants, trainings, and workshops to enhance the capacities of the IAS was conducted since 2012. These capacity- building activities include those related to quality assurance and improvement, baseline assessment and internal control system, risk identification and risk management, and other audit-related activities. 36. A consulting firm was hired on September 1, 2011, to continue strengthening the organization’s capacity on internal control and internal audit. In 2012 and 2013, the rollout of the Risk Identification and Risk Management Manual as part of the Public Financial Management Program was conducted. Internal auditors attended trainings and workshops on quality assurance and improvement programs, follow-up audits, baseline assessment of internal control systems and risk management trainings (four batches). Management and Audit Analysts of field offices were trained on the standard process of PDAF Liquidation Report Audits on November 2012. Selected management and audit analysts also joined the IAS in the conduct of national audits and field office audits regarding delineation and segregation of functions in March 2013 and May 2013, respectively. Management and audit analysts were also oriented and trained on the use of the revised DSWD Internal Auditing Manual on June 19–21, 2013. Activity 7: M&E 37. The project also supported the need to strengthen M&E by way of capacity building of its human resources. Lodged under the Policy Development and Planning Bureau, a dedicated M&E Unit was created with the support from the project. The unit is mandated to spearhead the establishment of a department-wide M&E system for the DSWD. After four years, in 2015 the M&E Division became a full-fledged division mandated to operationalize the unified results-based monitoring and evaluation system (URBMES). Through an engagement with a consultant, the DSWD M&E Manual (later renamed as the URBMES Operations Manual) was developed in 2012 and finalized in 2013. The manual serves as the core reference of the M&E units of the department, particularly the PDPB, in the conduct of its general M&E activities. The manual has been updated 40 as of January 2015 to incorporate the enhancements consolidated from its first year of implementation. 38. In addition, various capacity-building activities and TA along with M&E were conducted for the organization. These include training on basic M&E skills and knowledge (March 26–30, 2012); impact evaluation (August 21–24, 2012); BIA (October 16–19, 2012 and December 18, 2012); and Logical Framework (October 28–31, 2012). A consultation workshop and orientation on the URBMES Operations Manual was also conducted in 2013. To further harmonize the URBMES with existing frameworks and systems within the department such as the Performance Governance System a workshop and subsequent technical sessions were also conducted in 2013. During June 16–19, 2015, another milestone was successfully reached with the conduct of the first Annual M&E Conference. It was attended by Planning Unit heads and the newly hired M&E officers in the field offices. The activity aimed at orienting the newly hired M&E officers on the URBMES and the newly developed URBME-Information System and other existing data systems of the department. 39. Lastly, continuous provision of TA was conducted based on the needs of various offices, bureaus, services, and units and field offices in the implementation of the URBMES and use of the URBME-Information System. 40. To apply the various skills on M&E, the PDPB conducted three M&E studies as part of the project.  In 2012, the PDPB conducted its first M&E study titled ‘Rapid Assessment of Pantawid Pamilya Pilipino Program on its IP Beneficiaries in Abra Ilog’. The study was completed and disseminated on March 2012. The study aimed to assess the selected IP beneficiaries of the Pantawid Pamilya CCT Program based on the level of changes associated with the program intervention on education and health, and on the level of program compliance of the IP beneficiaries.  To further improve the operations of the selected DSWD programs, the PDPB conducted a BIA of the Pantawid Pamilya CCT Program and the Kapitbisig Laban sa Kahirapan- Comprehensive and Integrated Delivery of Social Services (KALAHI-CIDSS) Project. The findings were initially presented to the key stakeholders on February 18, 2014, at the DSWD auditorium and subsequently, the final BIA Report and Policy Digest were submitted on February 21, 2014.  Finally, in 2015, the M&E Division accomplished another milestone through completing the evaluation study titled ‘CSAP: A rapid assessment of its implementation in Peñablanca, Cagayan’. The study aimed at evaluating the effectiveness of the program implementation, particularly on targeting of beneficiaries, adequacy of budget, and quality of TA needed for the program. 41 Annex 3. Economic and Financial Analysis Economic Analysis Poverty Reduction 1. At Project appraisal, the Economic Analysis simulations predicted important impacts in terms of human capital accumulation and poverty reduction from the Pantawid Pamilya CCT program, which were in line with those found during Program implementation . Estimated poverty incidence reduction impacts were also aligned, even surpassed by posterior estimations from the most recent BIA analysis, though not in terms of poverty gap due to erosion of benefit levels in real term (they were not adjusted since start of the program) (Table 3.1) Table A3.1: Impact of 4Ps on poverty in beneficiary areas Latest BIA At Project Appraisal (2013) Percentage Percentage Without 4Ps With 4Ps point change point change Poverty incidence (% of population in 4Ps areas) 63.5 57.4 -6.1 -6.5 Income gap (% of poverty line) 39.7 32.1 -7.6 -0.9 Severity of poverty (% of poverty line) 12.5 7.7 -4.9 Source of data: DSWD-4Ps 2008 administrative data. (November, 2008) Improvement in Education Outcomes 2. Findings from the latest impact evaluation study using RDD confirm that Pantawid Pamilya households living near the poverty threshold spent PHP 206 more per school-aged child per year compared to the non-Pantawid Pamilya households. Higher household investment in education has translated into higher gross enrolment rates of the Pantawid Pamilya children. The increase in enrolment rates was not only observed within those in the age group of 6–11 years, but also within the age group of 12–14 years. These increases make enrolment rates in both age groups equally high among poor and non-poor children (above 90 percent). More importantly, based on the Annual Poverty Indicators Survey 2013 data, the likelihood of completing elementary education among Pantawid Pamilya children ages 13–16 years (83 percent) is higher than among those of the same age group poor, but non-Pantawid Pamilya, children (79 percent). 3. Having higher education attainment and hence bigger chance to participate in employment and to get a better job (and earn a higher wage) is vital for escaping poverty. A recent study by the Bank on Labor Market Determinants of Poverty in the Philippines identified poor education as one of the key factors behind in-work poverty. Workers with less than secondary education, which represent nearly 80 percent of the working poor, face a high risk of poverty. The study results also show that the completion of secondary education lowers the risk of in-work poverty quite significantly to less than 10 percent. Improvement in Health Outcomes 42 4. In relation to health outcomes, the RDD impact evaluation indicates that Pantawid Pamilya promotes facility-based deliveries, where at the poverty threshold, 7 in 10 live births in the past five years by Pantawid Pamilya mothers were delivered in health facilities, in comparison to only 5.5 in 10 births among non-Pantawid Pamilya mothers. The study also indicates that Pantawid Pamilya promotes access to professional postnatal care where 80 percent of Pantawid Pamilya mothers were checked by a skilled health professional after giving birth, compared to 59 percent incidence of non-Pantawid Pamilya mothers. In addition, there were more Pantawid Pamilya mothers (72 percent) who had their postnatal checkup in health facilities than those of non-Pantawid Pamilya mothers (55 percent). 5. The evaluation results also reveal that Pantawid Pamilya children, in comparison to those in the non-Pantawid Pamilya cohort, have significantly more access to basic health services that are vital for improving children’s health outcomes. A recent study by the Bank which draws on data from six nationally representative Philippines survey over 20 years confirms that there has been improvement in child health status and coverage of child health interventions among poor families over time.19 Undeniably, better access to basic health services, including those through Pantawid Pamilya, plays a significant role in achieving those improvements. 6. Compared to other countries in South and East Asia, the Philippines performs well on infant mortality, child mortality, and antenatal care; however, performance on immunization and diarrhea related interventions is below the regional average. Similarly, the evaluation results also suggest that there is no significant difference between the Pantawid Pamilya and non-beneficiary children below six years who suffer from wasting, underweight, and stunting. These results signify the need for continued support to the program’s implementation, in particular to strengthen the monitoring process of each mother and child visiting the health facility to meet the CCT health-related conditionality—it is critically important that they do receive health services according to DoH protocols. 19 Bredenkamp, Caryn, and Leander Buisman. Forthcoming. Twenty Years of Progress on Maternal and Child Health in the Philippines: An Equity Lens, 2015. 43 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Responsibility/ Names Title Unit Specialty Lending Jehan Arulpragasam Country Sector Coordinator EASHS Task team leader Maria Loreto Padua Social Development Specialist EASPS – Lynette Perez Education Specialist EASHE – Luisa Fernandez Extended Term Consultant EASHS – Rashiel Velarde Extended Term Consultant EASHS – Supervision/ICR Nazmul Chaudhury Country Sector Coordinator EASHS Task team leader Aleksandra Posarac Program Leader EACPF Task team leader Pablo Acosta Senior Economist GSP02 Task team leader (ICR) Rashiel Velarde Economist GSP02 – Thomas Vaughan Bowen Social Protection Specialist GSP02 – Yuko Okamura Economist GSP02 – Junko Onishi Senior Social Protection Specialist GSP04 – Maria Loreto Padua Senior Social Development Specialist GSU02 – Aisha de Guzman Financial Management Specialist GGO20 – Rene Manuel Senior Procurement Specialist GGO08 – (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including No. of staff weeks travel and consultant costs) Le nding 2006 7.63 57,651 2007 27.85 141,571 2008 40.06 232,493 2009 34.55 180,387 2010 43.6 129,859 2011 7.11 8,580 2012 0 1,366 Total: 160.8 751,907 Supervision/ICR 2010 17.5 87,705 2011 53.98 175,292 2012 75.49 311,958 2013 50.12 148,862 2014 41.82 79,486 2015 23.31 83,091 2016 23.35 86,375 Total: 285.57 972,769 44 Annex 5. Beneficiary Survey Results Not applicable 45 Annex 6. Stakeholder Workshop Report and Results Not applicable 46 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR Extracted from “Social Welfare and Development Reform Project Completion Report”, prepared by DSWD and submitted to the World Bank on June 15, 2016. Executive Summary 1. The Social Welfare and Development Reform Project (SWDRP) was developed by the Department of Social Welfare and Development (DSWD) and World Bank in support to the implementation of the DSWD Reform Agenda. The SWDRP (Loan No. 7805) amounting to USD 405 million is a social sector program support loan that was signed and approved on 07 January 2010, with closing date 30 June 2014. In January 2013, the SWDRP Additional Financing (AF) (Loan No. 8218) amounting to US $100M was approved, extending the implementation of SWDRP to 31 December 2015. The project development objective (PDO) of the SWDRP is to strengthen the effectiveness of DSWD as a social protection agency to efficiently implement the conditional cash transfer (CCT) program and expand an efficient and functional National Household Targeting System of social protection programs. 2. The SWDRP Completion Report was prepared to assess the extent to which the Project has achieved its objectives, including the overall performance of the DSWD and World Bank. Challenges from Project experience are documented to serve as lessons for both organizations moving forward after Project closing. 3. Overall, the DSWD has met the objectives of the Project and even exceeded the targets set forth in the Results Monitoring Framework. The Project was able to (i) develop and implement a strong targeting system that properly identifies and monitors the poorest households in the country; (ii) implement a successful and efficient conditional cash transfer program that gives cash grants to the poorest households when they invest in the human capital of their families; and (iii) create national policy support for social protection and strengthen basic institutional capacity of DSWD to assume the leadership role in social protection. The Completion Report provides a narrative of how DSWD was able to achieve these objectives and the challenges faced throughout Project implementation. 4. Overall, project objectives, design, implementation and operational experience have been satisfactory. There were no major changes in project design throughout implementation. The World Bank Project Team have been generally responsive to the needs of DSWD for the Project. The Project has played a significant role in the development and/or enhancement of various systems of Listahanan and Pantawid Pamilya, which greatly contributed to the achievement of results. 5. Moving forward, DSWD highlights the following potential strategies to sustain the efforts and valuable gains from the Project: (i) obtain support from the new leadership to continue Listahanan and Pantawid Pamilya and to safeguard its integrity; and (ii) continue strengthening the leadership role of DSWD in social protection, towards developing a comprehensive social protection system and rallying all stakeholders to pool efforts in addressing the needs of the near poor and the chronic poor. 47 6. With the updated Listahanan database of poor households, DSWD will once again advocate for national government agencies, local government units and civil society organizations to make use of the database in selecting beneficiaries. The rich information from the database can also be used for planning and policy development. The Department is optimistic that the database will pave the way for convergence and directing government’s scarce resources to the poorest households. 7. The DSWD will also work on creating a steadfast and effective transition strategy that will ensure that the identified non-poor and near-poor Pantawid Pamilya families will stay out of poverty. In January 2016, President Aquino has already declared that the Listahanan identified near poor families will still be covered by Pantawid Pamilya. With the dwindling value of cash grants, the Department will also explore balancing coverage and benefit level given that the value of grants has not been adjusted since 2007. DSWD will also continue to advocate and strengthen partnerships and collaboration with other NGAs, LGUs and CSOs in ensuring that program objectives are met and complementary services are also provided. Assessment of World Bank Performance 8. Overall, project objectives, design, implementation and operational experience have been satisfactory. There were no major changes in project design throughout implementation. Development objectives and results in the Results Monitoring Framework adequately captures project progress. Major challenges met during project implementation have been discussed in the narrative above. Although some agreed activities were not implemented due to various reasons, these did not affect the achievement of the PDO. 9. The World Bank Project Team have been generally responsive to the needs of DSWD for the Project and have actively monitored project progress throughout implementation. A recurring concern in project implementation from all Component Teams is the difficulties in procuring goods and services. Procurement Facilitation Meetings serve as a good venue to discuss various procurement concerns requiring technical advice from World Bank. Another good practice in project implementation include the collaboration of various development partners through technical working groups such as those for impact evaluation studies of Pantawid Pamilya. 10. Evaluation studies of the World Bank and other development partners provided evidence that the program is working well and these were used as basis for policy decisions, advocacy and responding to program critics. 11. The World Bank Project Team has also played a significant role in the development and/or enhancement of various systems of Listahanan and Pantawid Pamilya, including the provision of technical inputs to various Project endeavors.. 12. For future operations of the project, the DSWD would like to recommend for Implementation Support Missions (ISMs) to be conducted only once a year instead of semi- annually. If possible, ISMs can be conducted jointly with other development partners. In the past five years, at least four missions were conducted by development partners every year and these are time-consuming for DSWD officials and staff involved in project implementation. The DSWD 48 would also recommend to simplify the Project Implementation Plan, to include only relevant information for Project objectives, activities and monitoring. 13. For future impact evaluations, DSWD also recommends for a technical documentation of the sampling procedure. World Bank provided generous technical assistance throughout the conduct of the first and second wave IE however, both parties overlooked the necessity to build on the technical knowledge and capacities of the DSWD staff in implementing impact evaluation, especially in performing sampling which is key to any credible quantitative form of research such as impact evaluation. Way Forward 14. The DSWD remains steadfast in its commitment to continue its pursuit of the reforms laid out in the Reform Agenda. Despite the various challenges faced throughout project implementation as discussed above and in detail in the regular progress reports and aide memoires, the Department sustained its commitment to achieve the Project’s development objectives. This report has highlighted accomplishments and results realized by DSWD through the implementation of the Project. Moving forward, DSWD highlights the following potential strategies to sustain the efforts and valuable gains from the Project. Obtaining support from the new leadership 15. With the upcoming change in leadership, obtaining support from the new set of leaders of the next administration is imperative in sustaining the gains of the Project. Although all Presidential candidates during the election period have expressed support to continue Pantawid Pamilya, it is still uncertain whether the original design of the program will remain unchanged. Any modifications to the program design have to be carefully studied to ensure that program objectives will still be met and program integrity remains intact. This includes guaranteeing reliability of the targeting mechanism used by Pantawid Pamilya – the Listahanan. 16. Delays in the conduct of Listahanan assessments, as observed in the second round of assessment, have implications on the implementation of the project cycle and ultimately its data users. In order to be a relevant source of information, the database has to be updated every four years as designed. This requires continuous advocacy to ensure that financial resources are allocated for the maintenance of the database and timely conduct of assessments. The new leadership and various stakeholders (legislators, NGAs, LGUs, CSOs and beneficiaries) should be well aware of the value of having a reliable targeting mechanism in reducing poverty. 17. To safeguard Pantawid Pamilya’s integrity, DSWD is advocating for institutionalization of the program through the passage of the CCT bill in the 16th congress. The Department is hopeful that that the proposed version submitted to the Senate will be adopted. Additionally, the Department is also hopeful that empowered beneficiaries will also aid DSWD in safeguarding the program. Strengthening leadership role in Social Protection 49 18. As the Chair of the SDC-Subcommittee on Social Protection and the Human Development and Poverty Reduction Cluster, the DSWD was able to push through with activities that laid the foundation for Social Protection in the country. Today, awareness on Social Protection among NGAs and LGUs has increased and a conscious effort towards convergence among these actors have also emerged. Moving forward, DSWD needs to reinforce effective coordination and collaboration among SDC-SCSP member agencies and various stakeholders to sustain the gains of the present administration. 19. The Department’s leadership role in social protection is strategic to the development of a comprehensive social protection system that will cater to not just to Pantawid Pamilya beneficiaries but to all individuals and households that are exposed to risks and shocks. In succeeding years, the Department’s role in social protection is especially important as the organization moves towards facilitating the graduation of Pantawid Pamilya families from the program and from poverty. Holistic strategies for providing needed assistance to the near poor and chronic poor require the conscious efforts of all social protection stakeholders. Sustaining the gains of Listahanan 20. With an updated database containing richer information on the country’s poor, DSWD will once again advocate for NGAs, LGUs and CSOs to use the database in planning and implementing social protection policies, programs and services. Studies have shown that the Listahanan maintains targeting accuracy as compared to targeting systems around the world. Challenges and lessons learned from the conduct of the first and second round of assessment will be harnessed to further improve the targeting system until the next round of assessment. 21. Going back to the objectives of Listahanan, the Department is optimistic that the database will pave the way for convergence and directing government’s scarce resources to the poorest households. Its significant impact will be reducing severity of poverty in a cost-efficient manner. Sustaining the gains of Pantawid Pamilya 22. After eight years of implementation, the program recognizes remaining and emerging challenges ahead that remain to be addressed. DSWD will ensure that the program meets its desired objectives by installing the right policies that are responsive to present and emerging needs, enhancing efficiency in program implementation and continuously developing partnerships that will provide support and/or complement the program. 23. In January 2016, President Aquino has already declared that the Listahanan identified near poor families will still be covered by Pantawid Pamilya. The challenge for DSWD is to create a steadfast and effective transition strategy that will ensure that the identified non-poor Pantawid Pamilya families and the near poor Pantawid Pamilya families will stay out of poverty. For this purpose, DSWD will continue discussions on enhancing internal and external referral systems converging DSWD programs and the programs of other NGAs and LGUs. 24. In the previous years, the national government has focused on rapidly expanding program coverage to include all eligible poor households. However moving forward, the Department also 50 needs to explore balancing coverage and benefit level given that the value of grants has not been adjusted since 2007. The dwindling value of cash grants may negatively affect participation of poor households to the program and affect achievement of program objectives. Policy decisions on the benefit levels and inclusion of the near poor and “new” poor to the program will have fiscal implications that need to be carefully studied. 25. DSWD will also continue to advocate and strengthen partnerships and collaboration with other NGAs, LGUs and CSOs in ensuring that program objectives are met and complementary services are also provided. Major strides have already been undertaken with the national government covering PhilHealth premiums of all Pantawid Pamilya beneficiaries and classroom shortages being reduced. NGAs and LGUs should improve not just the quantity but also the quality of services they provide. Government Comments to the World Bank ICR 51 Annex 8. Comments of Co-financiers and Other Partners/Stakeholders Not applicable 52 53