Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 20376-PH

IMPLEMENTATION COMPLETION REPORT(23920)

ON A

CREDIT

IN THE AMOUNT OF US$ 36.0 MILLION

TO THE

REPUBLIC OF THE PHILIPPINES

FOR THE

SECOND VOCATIONAL TRAINING PROJECT

MAY I5, 2000

Human Development Sector UnitEast Asia and Pacific Region

This document has a restricted distribution and may be used by recipients only in the

performance of their official duties. Its contents may not otherwise be disclosed without

World Bank authorization.

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ClJRRENCY EQUIVALENTS

(Exchange Rate Effective August 31, 1991)

Currency Unit = Philippines Peso (P)

P1 = USS 0.036US$ 1.00 = P28

FISCAL YEARJanuary I December 31

ABBREVIATIONS AND ACRONYMS

ADB Asian Development BankCTMD Curricula and Training Materials DevelopmentDACUM Developing a Curriculum method - DACUMDBM Department of Budget and ManagementDCA Development Credit AgreeementEDCOM Congressional Commission on EducationGES Guidance and Employment ServicesLGUs Local Government UnitsMETP Monitoring and Evaluation for Training PerformanceMPPC Manpower Platning and CoordinationMTR Mid-Term ReviewNGO Non-Government OrganizationNMIS National Manpower Inforrnation SystemNMYC National Manpower and Youth CouncilNSCP National Skills Certification ProgramPMU Project Management UnitPOS Peoples OrganizationsPSALM Policy Oriented Sector-Focused Area-Based Labor Market Driven ApproachSAR Staff Appraisal ReportSIC Strengthening Institutional CapacitiesSS Sector StudiesTAC Training Assistance ContractTCS De-yeloping the rraining Cointract SchemeTDIS Training Delivery System for the Infornal SectorTDP Trainer Development ProgramTESDA Technical Edcuation and Skills Development AuthorityTVET Technical and Vocational Education and TrainingUEFE Upgrading of Existing Facilities and EquipmentVTI Vocational Training InstituteVTP II Second Vocational Training Project

Vice President: Jemal-ud-din KassumCountry Manager/Director: Vinay K. Bhargava

Sector Manager/Director: Alan RubyTask Team Leader/Task Manager: Ompom Regel

FOR OMCIAL USE ONLY

CONTENTS

Page No.1. Project Data 1

2. Principal Performance Ratings I

3. Assessment of Development Objective and Design, and of Quality at Entry 1

4. Achievement of Objective and Outputs 3

5. Major Factors Affecting Implementation and Outcome 7

6. Sustainability 8

7. Bank and Borrower Performance 9

8. Lessons Learned 10

9. Partner Comments 11

10. Additional Information 22

Annex 1. Key Performance Indicators/Log Frame Matrix 23

Annex 2. Project Costs and Financing 27

Annex 3. Economic Costs and Benefits 29

Annex 4. Bank Inputs 30

Annex 5. Ratings for Achievement of Objectives/Outputs of Components 32

Annex 6. Ratings of Bank and Borrower Performance 33

Annex 7. List of Supporting Documents 34

This document has a restricted distinbution and may be used by recipients only in theperformance of their official duties. Its contents may not otherwise be disclosed witouWorld Bank authorizaon.

Project ID: P004538 Project Name: SECOND VOCATIONAL TR

Team Leader: Omporn Regel TL Unit: EASHD

1CR Type: Core ICR Report Date. May 15, 2000

1. Project Data

Name: SECOND VOCATIONAL TR L/C/TF Number: 23920

Country/Department: PHILIPPINES Region: East Asia and PacificRegion

Sector/subsector: EV - Vocational Education & Training

KEY DATESOriginal Revised/Actual

PCD: 09/10/89 Effective: 12/11/92

Appraisal: 04/05/91 MTR: 02/03/97

Approval: 06/18/92 Closing: 12/31/97 12/31/99

Borrower/lmplementing Agency: Government of the Philippines/NMYC - National Manpower and Youth Council(92-94); TESDA - Technical Education and Skills Development Authority (95-99)

Other Partners: None

STAFF Current At Appraisal

Vice President: Jemal-ud-din Kassum Guatum Kaji

Country Manager: Vinay K. Bhargava Callisto Madavo

Sector Manager: Alan Ruby Bradley 0. Babson

Team Leader at ICR: Omporn RegelICR Primary Author: William Cooper

2. Principal Performance Ratings

(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly

Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible)

Outcome: S

Sustainability: HL

Institutional Development Impact: SU

Bank Performance: S

Borrower Performance: S

QAG (if available) ICR

Quality at Entry:Project at Risk at Any Time: No

3. Assessment of Development Objective and Design, and of Quality at Entry

3.1 Original Objective:

The projectfs development objectives were to: (a) strengthen institutional capacities in policy fonnulation,

planning, management, research and evaluation of non-formal vocational training and employment services;- (b)

improve training quality and cost recovery; (c) upgrade training facilities; and (d) develop an investment strategy

and identify investment needs for technical education and vocational training. Embedded in these objectives were

social targets including gender and poverty concerns and private sector contributions to training.

3.2 Revised Objective:

The objectives remained unchanged and the design was not formally modified. However, the scope ofsome project components was expanded (in some cases significantly) as a result of the 1994/95 transfer ofresponsibility for project management from the National Manpower and Youth Council (NMYC) to the newlycreated Technical Education and Skills Development Authority (TESDA). A major consequence of this changewas an increase in the institutional development program (in particular the size and outreach of the NMIS) tosupport TESDA's responsibility for both formal and non-formal training. The establishment of TESDA in 1994with a broadened mandate included the transfer of over 100 TVET programs in technical secondary schools to itsjurisdiction. This, in turn required major adjustments in the focus of the project to accommodate the needs of thisformal sector of TVET. Also, new initiatives evolved over time, such as entrepreneurship programs and ruralsector manpower development which the project supported. These initiatives were consistent with the project'sdevelopment objectives and were accommodated within the existing design as described in the Development CreditAgreement.

The credit agreement was amended twice: (i) in September 1994, to establish a Special Account of US$2.0 million; and (ii) in July 1995, to finance the upgrading an additional training center.

The Closing Date was extended twice, in 1997 and 1998, respectively. The first one-year extension wasnecessary because the Government reorganized the NMYC (the original implementing agency) into the morecomprehensive TESDA. As a result, project implementation was delayed. The second extension was important toenable TESDA to respond to the financial crisis by supporting sustainable programs and support services aimed atproviding employment creation and entrepreneurship opportunities for unemployed youth, displaced workers andwomen. These programs and services were consistent with the original project objectives and description but theactivities carried out focused on the impact of the crisis.

3.3 Original Components:

Four investment programs supported the project's main objectives, as follows:

Program I - Institutional Development: (i) strengthening institutional capacity through a program ofmanagement development (SIC); (ii) establishing market-oriented capacities for manpower policy,planning and coordination (MPPC); (iii) developing and installing a national manpower informationsystem (NMIS); and (iv) conducting sector and pre-investment studies (SS).

Program 2 - Improvement of Training Quality: (i) improving the national skills certification program(NSCP); (ii) strengthening the trainer development program (TDP); (iii) supporting curricula and trainingmaterials development (CTMD); (iv) strengthening vocational guidance and employment services (GES);and (v) monitoring and evaluation of training performance (METP).

Program 3 - Development of Training Capacity: (i) upgrading of existing facilities and equipment(UEFE); (ii) developing the training assistance contract program (TAC); iii) developing the trainingcontract scheme (TCS); and (iv) expanding training delivery systems for the informal sector (TDIS).

Program 4 - Studies: aiming at defining strategy and investment plan and establishment of sectoralinformation to rationalize and improve technical and vocational education and training system; anddetermining the feasibility of establishing sector specific and advanced technology training centers.

Assessment of Project Objectives and Design: Development objectives supported the Government's 1991 policyon manpower development and were in line with the 1991 World Bank policy paper on Vocational and TechnicalEducation and Training. Objectives were very broadly stated and unfortunately not expressed in terms of

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output/outcome indicators (an abbreviated set of outcome indicators was developed after the 1997 mid-term review,and an impact evaluation study was added in 1998). With respect to design, the project was too complex, tooambitious, and seriously challenged the management capacity of the implementation agency. The large number ofconsultants used and the wide scope of the institutional development program contributed to implementation delaysand necessitated a first two-year extension of the closing date. The second one-year closing date extension wasgranted in 1998 to redeploy funds to enable TESDA to respond to the financial crisis by supporting sustainableprograms and support services aimed at providing employment creation and entrepreneurship opportunities forunemployed youth, displaced workers and women. These programs and services were within the original projectobjective and description but the activities were focused on the impact of the financial crisis.

3.4 Revised Components:

3.5 Quality at Entry:

Not available.

4. Achievement of Objective and Outputs

4.1 Outcome/achievement of objective:

The project achieved its development objectives and is expected to maintain them after the project isclosed. The justification for this assessment is based on (i) satisfactory project outputs, as summarized below; (ii)sustained Government commitment throughout project implementation; (iii) good private sector participation intechnical and vocational education and training (TVET) activities; and (iv) an effective implementation agency.Based on these factors, the overall outcome of the project is rated satisfactory.

4.2 Outputs by components:

Program I - Institutional Development (ID)

The scope of the ID program as implemented was considerably larger than that originally designed forNMYC, and supported all TESDA operations, offices and staff. The ID program was complex and not easy toorganize and manage. Initially ad-hoc, staff development programs became structured in 1995 when acomprehensive training program was adopted. The NMIS was expanded from the original design. Its successfulimplementation is a major accomplishment of the ID program. The outcome of the ID program is rated as fullysatisfactory.

fa) Strengthening Institutional Capacity (SIC): Designed to train about 300 NMYC operational staff (SAR target),the component was expanded to meet TESDA's manpower needs of about 2,000 persons at central, regional andprovincial levels, as well as private sector partners. Initially slowed down by the NMYC/TESDA transition, theproject eventually trained or upgraded over 10,000 TESDA staff which exceeded by far the SAR target of 300 (ref.Annex 1: Key Performance Indicators). SCI program offerings contributed significantly to satisfying TESDA'sneeds to upgrade the technical knowledge and skills of its personnel. A systematic monitoring and evaluationmechanism was developed and is now fully functional. The component's objective of strengthening institutionalcapacity has been fully met.

(b) Manpower Policy, Planning and Coordination (MPPC): This component was adjusted to strengthen TESDA'scapacity for manpower policy development and planning, data analysis and system coordination. At projectcompletion, the following was achieved: (i) a manpower planning system (the Policy Oriented Sector-FocusedArea-Based Labor Market Driven approach - PSALM approach) was put in place; (ii) a reliable manpower databases for planning and investment priorities were established; (iii) approximately 900 Technical Education andSkills Development Committee members at the regional and provincial levels were trained in management,

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investment programming and strategic planing; and iv) more than 2,000 TESDA staff and staff of public andprivate training institutions were trained, mostly through short-duration seminars. The focus of training wasbroad-based and included manpower-planning concepts; policy formulation; labor market analysis, cost-benefitanalysis, finance and budget review; and TEVT system development and operation. Collaboration with othergovernment agencies and the private sector was strengthened through this component. A consultancy by an ILOexpert was effective in developing a workable policy planning framework.

(c) National Manpower Information System (NMIS): The final NMIS design was expanded from the originallimited concept of a manpower data base serving NMYC, to an integrated information system serving TESDA'srequirements for the administrative management of the TEVT system and for data collection and dissemination onTEVT programs and operations. It has been installed and tested, and currently links TESDA's Manilaheadquarters with 15 regional offices (a decision to include provincial offices was taken only in late 1998,contributing to the second extension of the project closing date). About 90% of total TESDA personnel received ITtraining. The NMIS is networked with associated agencies such as the Commission on Audits and the Departmentof Labor. About 2,500 system users throughout the TESDA network have been trained. Data encoding is stillongoing and the system is expected to be fully on stream in early 2000. TESDA's website is fully operational.Factors that might hinder the realization of bringing the system fully on stream in early 2000 include: i) Lack ofcoherent support from agencies such as the National Computer Center, the Commission On Audit and theDepartment of Budget and Management; ii) The absence of guidelines for the implementation of the proposedTESDA reforms for middle level education and training (UTPRAS and TOQCS); and iii) inadequate support fromend-users.

Program 2 - Improvement of Training Quality

This program has been implemented as originally designed, with only minor changes in scope or content.The overall outcome of this program is satisfactory.

(a) National Skills Certification Program (NSCP).: This program has: (i) published 240 occupational tradecategories; (ii) set skills standards for more than 270 occupational titles; (iii) set up and accredited 15 skills testingcenters; (iv) trained over 5,000 trade testing officers in TESDA and industry, and accredited 2,500 of them; and (v)tested over 340,000 workers and certified about 200,000 of them. With respect to NSCP, achievement isimpressive as shown by: improved attitude of workers and employers towards the certification program, improvedcapability of central/regional program implementors and industry partners to carry out skills certification program,and the development of quality and quantity skills standards. At project completion, the NSCP was fullyinstitutionalized within TESDA and is expected to continue as a regular program activity.

(b) Trainer Development Program (TDP): Designed to improve the quality of vocational instructors (trainers), theTDP has successfully: (i) conducted an inventory of vocational trainers and set up a data base; (ii) developed jobstandards and trainer training programs; and (iii) conducted skills upgrading training for about 14,000 trainerswhich absorbed most of the resources allocated for this component. Responsibility for trainer training has beenfully decentralized to the regional TESDA offices and guidelines for course offerings to address regional marketneeds have been developed. The TDP is fully integrated within the TEVT system and is expected to be sustainedas a regular TESDA activity.

(c) Curriculum and Training Materials Development (CTMD): The original objective of this component wasrevised and limited to the production or adaptation of curricula for about 20 vocational training programs.Existing curricula and course materials for seven generic programs have been reviewed and updated; nine dualizedprograms (combining in-school and in-plant training) have been developed; and training regulations have beenissued for five industrial sectors. The component provided for upgrading and maintenance of CTMD equipment toimprove production capacity, and the adoption or development of additional curricula and training materials. Inaddition, CTMD staff has been trained in curriculum development (Developing a Curriculum method - DACUM).This output covers only a relatively small portion of the total requirement of curriculum and materials developmentand CTMD activities will need to be continued beyond the project through outsourcing the development of thecourses to commercial providers. Adequate institutional capacity (facilities, equipment and staff) has been

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established and the focus has shifted to materials development and production in line with the objective of thiscomponent.

(d) Guidance and Employment Services (GES). This program has been successfully implemented. Its mainoutputs include: (i) established 15 Placement Assistance Centers; (ii) developed and disseminated high qualityguidance support materials which involved the provision of career information, career planning, employmentsearch and guidance for successful technical and vocational careers; (iii) effectively trained about 2,400 staff ofregional and provincial training centers in advocacy promotion and guidance services; (iv) assisted some 200,000TEVT graduates with job placement, referral or further training; (v) established an awards program for TEVTgraduates; (vi) established a " work ethics and values" training program to train GES facilitators in TESDA'sregional and provincial centers; and (vii) published "Blue Collar Magazine" and its dissemination to TESDA'sregional and provincial offices.

(e) Monitoring and Evaluation of Training Performance (METP): A system-wide monitoring and evaluationinstrument has been developed and linked to the NMIS. The program is designed to be institutionalized withintechnical-vocational education and training schools and training centers, both private and public. The METP wasin its initial stage in 1999. Since then, the instrument has been revised and guidelines prepared and disseminatedto TESDA's 15 regional offices for implementation. So far, only six regions have implemented and provided theCentral Office with data. Follow up with the remaining regions is being carried out. Objectives of this programhave been partially achieved due to: i) the limited capacity of TESDA's regional and provincial staff to conductthe METP activities as a result of TESDA's recent reorganization; ii) absence of the system for statistical analysisof data because NMIS which provides the backbone of METP is not yet fully operational; and iii) the relativecomplexity and comprehensiveness of the METP framework developed by consultants.

Program 3 - Development of Training Capacity

This program was slightly modified from its original version to make a clear distinction betweenprograms to develop the training capacities of post-secondary vocational institutes (TAC) and those supportingenterprise-based training programs (TCS). The outcome of the training capacity-building program is satisfactory.

(a) Upgrading of Existing Facilities and Equipment (UEFE): This component was implemented with only minorchanges from the original plan. The physical facilities of 28 regional and provincial training centers wererehabilitated and/or extended and upgraded with workshop equipment, tools, vehicles and furniture. In addition,the national training center in Manila was upgraded and its capacity expanded. A comprehensive maintenanceprogram for TEVT facilities has been developed and installed in the TESDA centers. The facilities upgradingprogram has been satisfactorily completed.

(b) Training Assistance Contract Scheme (TA:C) This component was designed to assist in developing the trainingcapacities of public and private vocational training institutions (VTI). The program focused on upgrading theskills of almost 13,000 VTI-based technical/vocational trainers, supervisors, administrators, and non-academicsupport staff. Generally, skills upgrading programs consisted of short-duration training sessions (1-6 weeks).Leadership in technical education was also developed through post-graduate studies in local universities for seniorVTI staff. This program has been highly successful and is considered one of the better-implemented examples ofcapacity building in the region. However, its measurable impact on the training capacity build-up is uncertain.

(c) Training Contract Scheme (TCS): The objective of this program was to strengthen the capacity of small andmedium enterprises to undertake employee training on their own. The success of TCS was partly attributed to thefact that the program was recasted within the context of a more comprehensive Industry Capability Build UpProgram (ICBP), which is industry-led and addresses the needs of 15 export growth sectors. Under the project, theTCS has addressed the manpower development needs identified in the ICBP, the export development plans of theDepartment of Trade and Industry and the technology development plans of the Department of Science andTechnology. The TCS has supported enterprise-based training through staff and program development; hasstrengthened the dual training system (enterprise/training institution), and has trained over 20,000 industry-basedtrainers. The Industry Board (IB) representatives endorsed TESDA's TCS program which has had a very positive

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impact on improving the productivity of workers in the various sectors. A consensus emerged that cooperativeinitiatives between the enterprise, labor, training providers and TESDA was imperative for the establishment ofsector-specific training centers. The IB representatives emphasized that the TCS should continue to be animportant "window" for enhancing the training capacity of the centers. This program is considered highlysuccessful and is well received by industry.

(d) Training Delivery System for the Informal Sector (TDIS): This component was not implemented as originallyplanned but was redefined to: (i) institutionalizing community-based programs; (ii) developing the capacity of theLGUs to design, deliver and monitor training programs; (iii) develop a national network of Community Trainingand Employment Coordinators CTECs; and (iv) define a framework through which LGUs, NGOs and GOs canshare and coordinate their responsibilities in promoting grass roots employment and economic revenue generatinginitiatives. It focused on the need for livelihood, basic skills and entrepreneurship training of women,out-of-school youth and under-employed and unemployed adults. It was rated among the most successful TESDAprograms during the 1997 Mid-Term Review. The TDIS was extended with an added focus on community-basedtraining and (micro) enterprise development (CBTED) in response to the 1997-98 Asian crisis and Government's "pro-poor pro-market" stance. The National Training and Development Center for Women also refocused itstraining programs to support this thrust. CBTED is designed to encourage and support grass-roots generatedproposals leading to enterprise formation with the involvement and co-operation of Local Government Units(LGUs), non-government agencies (NGOs), Peoples Organizations (POS) and business and other organizations.Specific accomplishments include over 1,200 LGUs provided with funds for equipment; outreach training coursesfor regional staff and about 50 NGOS, and an extensive and on-going series of training and motivational programsfor more than 1,600 Community Training and Employment Coordinators (CTECs). Nineteen enterprise-creatingpilot programs selected from over 150 locally generated proposals were successfully implemented by the closingdate. These programs demonstrated a high initial success rate and long-term sustainability. TESDA intends thisto be one of its integrated core activities.

Program 4 - Studies (SS)

A series of sector studies were conducted beginning with: i) the preparation of implementing rules andregulations of TESDA; ii) the preparation of background papers on the Philippines TVET system (1994); iii)transfer of responsibility for industrial skills development from the government to the private sector (1995); iv) astudy on the economic feasibility of industrial branch specific training facilities and advanced training centers(1995); v) a study on the role of industry boards in TESDA (1996); vi) an integrative study (1998); vii) a TVETfinancing study (1998); viii) a TVET sector review (1998); (ix) a review of TESDA Act and other relevant laws(1998); x) a transparency and internal control study (1998); xi) a study on overseas employment and its impact ontechnical education and skills development (1999); and (xii) an evaluation of VTP 11 (1999). The studies were ofhigh quality and the output of this component exceeds original objectives.

4.3 Net Present Value/Economic rate of return:

Net Present Value was not worked out in the SAR, therefore it cannot be calculated at the completion ofthe project.

4.4 Financial rate of return.

As in 4.3

4.5 Institutional development impact:

Because of the complexity of the project, the assessment of the project's impact on TESDA is relativelydifficult. The initiatives under subcomponent I (institutional development) have had the highest impact onTESDA. There is strong evidence that this subcomponent has strengthened TESDA's capacity for manpowerpolicy formulation, as well as for the planning, coordination, delivery and monitoring of TESDA's services. In all

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the provinces surveyed, the regional and provincial training centers were actively providing a wide range ofTESDA-supported services to industry.

In the second subcomponent (improvement of training quality and cost recovery) however, evidence of theimpact of the project is mixed. While TESDA's guidance and employment services appear to be generally wellreceived by workers and employers, there appears to be a lack of employers' acceptance of the benefits of theTESDA-endorsed skills certification of workers, limited adoption of TESDA-developed curricula and trainingmaterials, and lack of evidence of the benefits and impact of training of trainers' programs.

The impact of the training capacity development initiatives (in subcomponent 3) is positive. TESDA'scapacity for the development and management of skills programs in enterprises as well as in the informal sectorhave been strengthened and improved as a result of the project. There is no evidence, however, that TESDA hasbeen successful in affecting improvement in the delivery of technical education and skills development by privateservice providers.

5. Major Factors Affecting Implementation and Outcome

5.1 Factors outside the control of government or implementing agency:

Stagnant economy: The project was negatively affected by the stagnant economy during the early years ofimplementation (1993-1995) which in particular constrained the Government's ability to provide counterpartfunding and slow employment creation, constraining the placement record of graduates from the training centers.In addition, the Asian Financial Crisis in 1997-98 further impacted on the Government's already difficult financialposition and led to across-the-board reductions in budget allocations for most departments (including TESDA) anda slowdown in most project activities. To catch up on these delays and help achieve the project's developmentobjectives, the Bank agreed to extend the project closing date by two years.

5.2 Factors generally subject to government control:

Implementation delays due to:

- delays in ratification of the Credit Agreement as a result of the national election which led to asix-month delay in project effectiveness.

- the reorganization transition from NMYC to TESDA (1994-95). This transition was prompted by therecommendations of the Congressional Education Commission (EDCOM) in 1994 to establish TESDAwith a mandate to cover TVET programs in all three sectors: formal, nonfonnal and informal. TESDAcontrol over the curricula and programs of technical secondary schools (and technical programs in somegeneral secondary schools) in the formal sector has contributed to the prolonged confusion about itsmission and culture during the transition period.

Cash flow problems due to low level of budgetary allotments and slow release of project funds by theDepartment of Budget and Management (DBM). This problem was partly resolved through theestablishment of the Special Account in the amount of US$2.0 million in 1994.

5.3 Factors generally subject to implementing agency control:

Procurement delays. Implementation was delayed by about two years as a result of cumbersomeprocedures especially for consultant contracts; delays in preparing or approving specifications; andre-tendering.

Limited implementation capacity. Project activities ran in parallel with other ongoing TESDA programsthat strained existing staff, causing delays.

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Financial management: Accounting problems, including claims for reimbursement of tax components;unfunded liabilities; delays in audit report submissions

5.4 Costs andfinancing:

Despite some delays during the start-up phase resulting from: i) rigidities in the budget process, ii) thelack of a Special Account in the original project design, and iii) slow progress on components with which NMYCwas unfamiliar, namely institutional strengthening, policy studies and long-term training, the project wassuccessfully completed. There was no cost overrun. Audit reports, including separate opinions on SOEs, weresubmitted throughout the implementation period. Other covenants were in full compliance.

Disbursement were satisfactory, although there were disbursement lags throughout the implementationperiod due partly to the delays mentioned above and the relatively slow processing of large procurement packages.The total actual disbursements were XDR 24,396,450.96 or about 96 percent of the original credit amount. Theamount of credit cancellation was XDR 2,003,549.04 or about 7 percent of the original credit amount.

6. Sustainability

6. 1 Rationale for sustainability rating:

Prospects for sustaining the project's outcomes are likely. At the policy level, the Government remainsstrongly committed to the promotion and development of high-quality technical and vocational training, in fullpartnership with employers. Successful initiatives supported under the project, such as in-plant training,community-based programs in entrepreneurship and special programs for women are expected to be vigorouslypursued under upcoming projects, with earmarked funding from Government resources. At the institutional level,TESDA and its regional offices, under strong leadership, have acquired the technical capacity to efficientlyimplement sector investments while assuring the quality and relevance of its programs. The NMIS, installed underthe project, will be a particularly effective tool for TESDA to support the future development of the TVET sector.

Notwithstanding the positive factors mentioned above, there are a number of risks that could affect thesustainability of TESDA activities in the future. These include: the possibility that TESDA would receive lowlevels of yearly budgetary allotments from DOF for its operations and a slow release of funds by the DBM. It mustalso be noted that there is a continuing need for rigorous procurement and financial management. This is likely tohappen, at least in the medium term, because donors are continuing to fund projects through TESDA and thesefunctions will remain in place. However, in the long termn, procurement and financial management issue maybecome a limiting factor for the sustainability of this effort.

6.2 Transition arrangement to regular operations:

Most programs supported by the project are fully integrated activities within the TESDA structure and areexpected to continue without any special provisions (other than budget allocations). It is expected thatresponsibility for operating and managing training institutions will increasingly be transferred to the regionalTESDA offices, and to the private sector, with TESDA focusing on policies, development strategy and qualityassurance. This is a positive move which is fully in line with the recommendations of the Education Sector Studyconducted jointly by the ADB and the Bank in 1999. Furthermore, this will further strengthen the TVET systemand help sustain the project's achievements.

An impact evaluation study was added to the project. The results of this study were consolidated toimprove existing monitoring and evaluation mechanisms and to make them a more permanent feature of the TVETsystem.

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7. Bank and Borrower Performance

Bank7.1 Lending:

Identification was based on good economic and sector work. The main elements of project design alsotook account of lessons learned under the first Vocational Training Project. Project development was consistentwith the Government's TVET sector policies and in line with the Bank's policy paper on TVET. Preparation andappraisal teams were adequately staffed and appraisal was thorough and comprehensive. But the appraisal teamover-estimated the Borrower's implementation capacity and produced a project that was too complex, tooambitious, and severely strained the capacities of the implementation agency. Design shortcomings include theabsence of a special account that delayed payments to contractors (this was corrected in 1994 through aDevelopment Credit Agreement amendment) and the lack of perfonnance indicators that made project trackingdifficult (indicators were eventually added after the 1997 Mid-Terrn Review).

7.2 Supervision:

Implementation progress was adequately reported and project performance realistically rated. Problemswere correctly identified and promptly addressed, and covenants were strictly enforced. Staff gave significantadvice and showed considerable flexibility in solving implementation problems, including a reduction in therecovery rate of the advance to the special account at the end of project implementation to lessen shortage of fundsand to ensure successful completion of project activities. Supervision missions, at six-month intervals, weregenerally adequately staffed but in the early years of implementation did not include financial expertise. This wascorrected in 1997 when the Resident Mission Manila assigned procurement and finance officers to work withsupervision missions and assist the Borrower in these areas after mission departure. On balance, more frequentsupervision and more attention to project finance and procurement, particularly during project start-up, would havereduced implementation delays. The only significant deviation from Bank policies concemed Credit disbursementsfor taxes that were erroneously included in withdrawal applications. This was corrected and the Bank has beenfully reimbursed. Despite the high turnover of task managers, supervision was of consistently high quality and thegood working relationship between the Bank and the Borrower was not affected, and therefore there was noadverse effect on the development outcomes of the project . The mid-term review was conducted, with excellentinput from the Borrower.

7.3 Overall Bank performance:

Overall, the Bank's performance is rated satisfactory

Borrower7.4 Preparation:

The Borrower (NMYC) participated actively in project identification, preparation and design and madesignificant contribution to the soundness of its concept and scope.

7.5 Government implementation performance:

Government was (and remains) strongly committed to TVET sector development, as evidenced by theadoption of its basic training policy prepared under the auspices of NEDA (1991). This commitment wasreinforced by the creation (1994) of a separate agency (TESDA) responsible for all formal and non-formaltechnical and vocational education, and the presidential appointment of its director-general. Provision of projectfunds by the DBM was occasionally delayed, particularly at the end of the budget cycle. There is no evidence ofdirect Government intervention in operational decisions.

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7.6 Implementing Agency:

The NMYC/TESDA transition in 1994/95 slowed implementation as adjustments were made in someproject components and TESDA geared up to handle its responsibilities. In retrospect, these delays wereunavoidable. There were weaknesses in procurement (inadequate bid document preparation, cumbersomeprocurement procedures) and financial management (treatment of taxes, reconciliation of project accounts). Auditreports prepared by the Commission on Audit (some of them qualified) confirmed these shortcomings. Theseweaknesses were effectively addressed during implementation. However, additional procurement, financialmanagement and audits will continue to require attention by TESDA management beyond the life of this project.

Despite some initial delays in project implementation mainly due to the time needed during the start upphase to set up the necessary systems and procedures, the management and coordination of this complex project,involving a large number of institutions and a wide range of activities, was well handled by TESDA/PMU.Procurement of equipment was achieved as scheduled, following Bank Procurement Guidelines. TESDA wastimely in its submission of the seventeen progress reports during the entire period of July 1992 and October 1999,providing the necessary data base for effective Bank supervision missions. The objective of the project have beenfully met and all components have been well implemented. Contribution to the ICR was fully satisfactory.Moreover, cooperation with Bank missions during the whole project cycle was commendable. Based on thesepositive achievements, TESDA has proven to be an effective implementation agency, with strong leadership andcommitted staff at all levels. Overall, performance of the implementing agency - NMYC (1992-94), TESDA( 1995-99) - was satisfactory.

7. 7 Overall Borrower performance.

Overall, the Borrower's performance is rated satisfactory.

8. Lessons Learned

Key lessons learned from this project are:

Assessing Project Outcomes. As with many projects of that era, this was an input-oriented operation thatdid not lend itself easily to the assessment of improvements in the quality and relevance of vocational training. Afuture operation should establish a Performance Management Framework to provide early and continuousassessment of both outcomes and impact of the project on all stakeholders. This should include evaluations tomeasure the effect of investments in capacity building, improved training facilities and better-trained staff, and thecost effectiveness of public sector training.

Clarity of Project Implementation Procedures. It is important that project implementation norms andprocedures be fully understood and accepted by local authorities at the time of project preparation, and that projectmanagement staff be fully trained at the outset to properly apply administrative and financial managementprocedures, including procurement and disbursement. No specific provision was made in this project to strengthenfinancial management and procurement functions and supervision missions did not focus, at least in the first 3 or 4years, on capacity building in these areas. In future operations, special care should be taken during projectpreparation and appraisal to include measures to strengthen these functions within the project design.

Project Design. The project design was complex, with fourteen separate components, and led to manyunavoidable implementation delays. The design of future projects should be straightforward to ensure successfulimplementation. Emphasis should also be placed on careful assessment of experience and capacity of theimplementing agency and capacity building measures should be fully in place at an initial stage of implementation.The Mid-Term review for this project was successfully carried out and allowed opportunity for corrective actions tobe taken during the second phase of implementation.

Role of the Resident Mission. The effectiveness of supervision improved when Resident Mission staff

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were assigned to support project implementation, not only during supervision but more importantly as an ongoingactivity. This was particularly helpful in the finance and procurement areas but could be usefully extended to themore substantive aspects of a project as, in this case, technical education and vocational training.

Training Relevance. The training activities for TESDA personned funded under the project should bemore focused and targeted to capability building based on career development plans. Greater effort should also beplaced on the demand-driven approach in designing skills upgrading programs. Closer collaboration/linkagesbetween TESDA and the private sector could lead to effective development of occupational skills standards andcompetency assessment instruments.

9. Partner Comments

(a) Borrower/implementing agency:

I. INTRODUCTION

This Report is intended as a GOP submission to complement the Implementation Completion Report(ICR) being prepared by the World Bank in connection with the Second Vocational Training Project (IDA CreditNo. 2392 PH).

The main contribution of this Report lies in the greater amount of detail and attention given to theanalysis of institutional factors that hampered the smooth implementation of the project. Likewise, this Reportindicates the institutional learning that the various sub-component focal teams have gained in regard to the design,implementation and management of a project of this nature and scope.

II. BACKGROUND OF THE PROJECT

In response to the perennial problems of unemployment and underemployment in the Philippines, thegovernment through TESDA developed and implemented the Second Vocational Training Project (VTP II) fromI December 1992 to 31 December 1999 with a US$36.0 Million financial assistance from the World Bank andGOP counterpart of US $5.8 Million. Its objectives were translated into the following major components andsub-components.

SUB-COMPONENTS GENERAL OBJECTIVES COST(based on SAR) (in US$M)

Strengthen capabilities in policyformulation, planning and

Institutional Development management of non-formal 11.4vocational training and employment.

a. Strengthening Institutional Enhancing capability of TESDA to 2.6Capacity (SIC) manage and administer Secretariat

functionsb. Manpower Policy, Planning and Enhancing capability of TESDA 6.4

Coordination (MPPC) member agencies on manpowerpolicy, planning and coordination

c. National Manpower Information Enhancing capability of TESDA on 2,4System (NMIS) the development and establishment

of computer network-basedinformation systemStrengthen training support services

Improvement of Training Quality and develop mechanisms towards 8.8& Cost Recovery equitable cost sharing and training

cost recovery.

-I11-.

a. National Skills Certification Enhancing the 2.4Program (NSCP) promotion/installation of a national

certification programb. Curriculum and Training Enhancing capability of curriculum l.9

Materials Development (CTMD) and training materials developmentc. Trainers Development Program Enhancing evolvement and 3.4

(TDP) implementation of trainersdevelopment plan; establishment ofArea Trainers Training Centers; andinstitutionalization! licensing schemefor trainers

d. Guidance and Employment Enhancing vocational guidance and 1.0Service (GES) placement system

e. Monitoring and Evaluation Enhancing training center 0.1Training Program (METP) management and operations

SUB-COMPONENTS GENERAL OBJECTIVES COST(based on SAR) (in USSM)

Improve facilities and programs forTraining Capacity Development non-formal vocational education and 23.1

training by upgrading TESDAtraining centers; providingincentives for the private sector toassume greater role in skilldevelopment; improvingapprenticeship program; andsupporting rural skills and livelihoodtraining program for women as wellas unemployment and out-of-schoolyouth.

a. Upgrading Existing Facilities Upgrading of RMTCs and PMTCs 10.5and Equipment (UEFE) facilities and the National Skills

Training Center to produce 2nd and3rd class levels of skilled manpower

b. Training Contract Scheme (TCS) Enhancing capabilities of industries 1.2to undertake training

c. Training Assistance Contract Enhancing capabilities of VTls to 3.8(TAC) deliver relevant voc-tech programs

d. Training Delivery System for the Establishing training and delivery 4.7Rural Informal Sector (TDIS) system in the rural areas which shall

be devolved to the LGUs.d.I Community-based Training and Enhancing support for the 2.9

Enterprise Development development and implementation of(CBTED) regional micro-enterprise pilot

projects thru training and related___support services

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Define strategy and investment plans

Studies and establish sectoral information 0.7to rationalize and improve technicaland vocational education andtraining system; and determine thefeasibility of establishing sectorspecific and advanced technologytraining centers.

a. Sector Studies (SS) Enhancing the conduct of sub-sector 0.7studies/feasibility works on TVE andtraining programs for theestablishment of advanced andsector-specific training centers

Crosscutting Concerns 1.0

a. Women Economic Empowerment Enhancing empowerment of poor 0.3(WEE) and displaced women workers thru

center/region based training,counseling and services leading toemployment. _

b. Project Management Unit (PMU) Enhancing the capability of the 0.7Secretariat to better manage VTP 11implementation

It is noted that the Project was originally scheduled for completion in 1997 but was extended in 1998 and

finally restructured in 1999. When VTP 11 was restructured, however, it was expanded to cover a crosscuttingconcern on gender sensitivity. Hence, the sub-component Women Economic Empowerment (WEE) was born

together with the implementation of an off-shoot of the original TDIS, the Community-based Training and

enterprise Development (CBTED). These were the central focal sub-components under the Restructured VTP II.

111. ASSESSMENT OF THE PROJECT

A. OVERALL PERFORMANCE

In general, VTP II implementation has been rated by the World Bank as "Satisfactory".

The Bank's rating of "Satisfactory" was concurred by the NPCTs. Based on individual perspectives,

NPCTs gave the project an average Project Achievement Rating of "Satisfactory" with a numerical equivalent of3.67 (using a scale of 1-5 with 5 as Highly Satisfactory).

A separate rating was likewise done by the NPCTs on Project Performance for which the average rating

was "Satisfactory" with a numerical equivalent of 3.34 (using a Scale of 1-4 with 4 a Highly Likely/Highly

Satisfactory).

The Financial Performance of the Project was likewise rated as "Satisfactory" with the Bank, particularlyits Country Mission, extending significant level of assistance, notably on the procedures of procurement and

disbursement of goods and services. During the World Bank's periodic appraisal, input indicates clear cooperative

efforts from the review mission members who are equipped with consistently high quality of supervision. For the

Borrower, an indication of strong, active participation and contribution from the various national project

component teams (NPCTs) and project support units (PSUs) was noted dovetailing the guidance, integrative and

coordinative capability of the project implementing office.

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On the Project Cost Component, the percentage of appraisal is indicated at a 90.33% utilization level withthe high factor attributed to the Institutional Development component. For the Project Cost by ProcurementArrangement, the level is in the vicinity of US $30.47 million incurred from major deliveries of goods and servicesby the last remaining years of the project. This is 27% below the appraisal estimate (or US $41.80 million).

On Project Financing by Component, the loan amount and the government counterpart had utilizationlevels of 86.06% and 99.71% respectively. The three (3) major contributory components consisted of InstitutionalDevelopment, Development of Training Capacity and Improvement of Training Quality. There is a difference ofUS $5.02 million or (14%) between the Bank's appraisal estimate and actual/latest estimate. It should be notedthat as of this reporting date, financial reconciliation is being undertaken by TESDA and that the above figuresmay change.

B. NPCT OUTPUT/ACCOMPLISHMENTS AND IMPACT

The "Satisfactory" rating given by the various NPCTs reflects their realization that more could have beendone for the Project. Also, some outputs were not in accordance with the desired outcomes/key indicators specifiedin the SAR. Following are the major output/accomplishments of the various NPCTs and the impact of these output.

SUB-COMPONENT MAJOR OUTPUT/ACCOMPLISHMENT IMPACT(1992-1999)

SIC * Trained 10,376 personnel (including Rate of attrition improved from 18%-20%overseas) to 6%; mobility rate improved from 12%

* Developed DACUM/job analysis for staff to 52%; impact evidence strongpositions

o Developed framework of SIC PlanMPPC * Trained 6,373 TESDA employees and Strengthened capability on manpower

TESD local stakeholders policy, formulation, planning and* Developed PSALM manual, ROs coordination; more responsive policies

database, RIPPs and PIPPs and TESD and plans; impact evidence strongcapability building

* Established 165 RTESDCs/PTESDCs* Prepared training cost-outcome analysis

manualNMIS * Established TESDA LAN and WAN: Could not yet provide much information

CO-80%, ROs-70% and POs-36% vital to policy formulation and decision* Developed MIS (system design) - 98% making; some evidence of impact* Trained IT: 1,265 graduates (Stage 1);

20 IS coordinators (stage 2) and 175 AS(Stage 3)

* Completed 1999 data encoding: missioncritical 96%, admin system - 85% andRO - 20%

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NSCP * Trained 485 competency-based TESDA certificates regarded by workersdevelopers; 280 coaches/experts; 35 as achievement in itself; however,COs/ROs staff on workers guilds; 4,906 employers do not necessarily preferPTT officers; 471 STT officers and 969 TESDA certified workers overOSS develop. :s; 2,487 PTTOs, 15 non-certified; some evidence of impactRTESDCs/PTESDCs/ public and privateVTls

* Accredited 28 testing venues* Established 35 workers guilds* Published 240 occupational trades* Developed/revised 270 OSS* Tested 342 workers* Certified 195,359 workers

SUB-COMPONENT MAJOR OUTPUT/ACCOMPLISHMENT IMPACT(1992-1999)

CTMD * Trained 124 facilitators, trainers and R/PTESDCs are using TESDA curriculadevelopers and 146 technical staff in their training programs; however,

* Printedl000 pieces TRS and 7,000 copies for most TVET providers including TESDA35 occupational titles; distributed 1,500 supervised schools are usingcopies of TRs self-designed curricula and training

* Reviewed/updated 7 generic courses materials; some TVET providers ate* Developed QSS standards for Maritime using minimum TRs course

sector; TRS (76 occupations) and 640 requirement; some evidence of impactlearning guides (16 occupations)

* Converted developed curricula/trainingmaterials into CD ROM (7 generic trades)

* Dualized 25 curricula occupations* Established training resource center

(TRAMCEN)* Procured various hardware equipment,

softwares and books/resource materials

TDP * Developed module for teachers/trainers under Most graduates/trained workers believeddual approach; trainer job standard; that trainers were very knowledgeable;guidelines for course offering based on skills number of trade test passers amongpriorities; and trainer program TESDA-trained workers TESDAimplementation framework supervised schools/private VTls

* Included TVET teachers category in the remained low; little evidence of impactMetro Bank search for best teachers

* Trained and skills upgraded 13,591 trainersand administrators

* Established trainer database* Completed studies on Trainer Population of

the Philippine Association of PrivateTechnical Institution (PAPTI); and onEstablishment of Trainer DevelopmentAcademy

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GES * Launched/conducted in 1997 the search for Most RIPTESDC s and TVET providersPRMOFWA; achieved 83% and 100% for have guidance and employment servicesregional and national categories respectively in place, however, average placement,

* Updated/repackaged career materials job referral and OJT rate is 24.4% only;* Promoted skills thru subscription and monitoring of graduates is very minimal

dissemination of Blue Collar Magazine(380,050 copies from 1993-1998); careerguidance materials (18,425 copies from1997-1998); and promoted non-traditionaltrades thru Oras ng Kababaihan (TVprogram)

* Trained 3,394 participants from TVETsector; LGUs and industry sectors

* Provided clients with career guidance -490,980; placement - 96,542; job referrals -125,291; and OJTs - 25,201

* Completed study of the guidance placementsystem of NMYC

* Procured LCD Display Unit

METP * Prepared/disseminated among 15 ROs M&E Only 6 regions furnished data onTVET system manual METP; all TVET providers, except for

few TESDCs have yet to undertakeMETP; little evidence of impact

UEFE * Procured ICB 11 and III and books/resource 14 RMTCs, 13 PMTCs and 2 NITVETmaterials and delivery 100% completion centers now conducting skills training

* Rehabilitated/upgraded/expanded physical in high value added manufacturing andfacilities of 28 RMTCs, PMTCs and 2 services; has enabled TESDA to catchNITVET centers, 100% completion up on training capacity; strong evidence

* Developed national maintenance of VTs of impactfacilities and equipment, TEMMS, disk andoperators manual/instructions

SUB-COMPONENT OUTPUT/ACCOMPLISHMENT IMPACT(1992-1999)

TCS * Assisted 100 focal organizations, 7 148 firms conducting training of ownindustry boards and 41 industry workers and subsidizing 30% of trainingassociations cost; regional industry boards and

* Trained 20,259 trainers associations had taken over a significantpart of training functions; strong evidenceof impact

TAC * Trained in various skills and non- skills Various skills and non-skills upgradingupgrading 12,592 tech-voc teachers; programs effected 55% of total number ofeffected 1.5% decrease in unemployment formal TVET teachers; training capabilityrate per student-graduates of TAC build-up of TVET providers could not bebeneficiary teachers determined

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TDIS * Printed and disseminated 3,865 copies of Created enabling environment and

CTECs directory awakened entrepreneurial spirit; initiated

* Procured books and resource materials LGUs and NGOs involvement in

worth P572,000 community-based enterprise development

* Completed CTECs impact evaluation programs; strong evidence of impact* Trained in TPPMCBT 104 regional

officers, staff, 260 participants from POs,SHGs and TVET schools, 47 PESOmanagers, 53 NGOs and 1,611 CTECs;17 TDIS implementors in UNDP DCTP,I NPCT member in micro-enterprise and30 CTECs for ARMM; 30 pax attendedTRUGA and 595 CTECs in enskilling

CBTED * Operationalized CBTED guidelines and No impact yetPWGs (69)

* Availed local consultancy services fordocumentation of best practices, MEFsand M&E of IEDP and SZOPAD-MNLF

* Conducted enskilling courses (18 in 14ROs) at 30 pax

* Conducted 2 national conferences forCBTED regional focal persons andSCCPD-TESDA Joint Consultative

* Conducted experts meetings; nationalconsultancies on distance training,system methodologies and devolutionAssisted in the form of skills training -19 Regional and 78 provincial models, 24SZOPAD-MNLF CBTED projects andZONTA

* Provided common servicefacilities/equipment for 19 regionalmodels and 24 SZOPAD-MNLF CBTEDprojects

WEE * Trained 100 pax in skills and Impact is yet to be determinedempowerment and 1,500 pax inentrepreneurship

* Completed situational ana!ysis study

PMU * Completed Staff development in project Anchored VTP II completion smoothlyimplementation (2 courses)

* Conducted superviion various phases ofproject implementation

* Procured equipment and consultancyservices for smooth projectimplementation

PSU * Availed staff development (FISFAP), Services provided inadequateequipment and consultancy services

* Monitored fund utilization

C. LESSONS LEARNED

One of the major lessons learned is the need for performance indicators in the Project design. VTP 11 had

these indicators only in 1997. Moreover, a project logical framework, identification of outcomes and benchmarking

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would have greatly assisted project planning and implementation. The NPCTs have likewise identified invaluablelessons which they have learned in the course of project implementation. They have likewise identified possibleaction points for each issue/concern so that management and implementation of future projects could be improved.These are as follows:

ISSUES/CONCERNS RECOMMENDATIONS

1. General/Project Management

a. Absorptive capacity of National and * Mix co-location & contractuals for program implementationRegional Component Team and coordination arrangement, respectively

* Manpower needs reviewed vis-a-vis regular and specialproject assignments

b. Efficiency/effectiveness of * Co-location for program implementationco-location arrangement * Contractuals for administrative/finance support coordination

* Team composition maintained

c. Fast tumover of staff and * Continuity and familiarity in project managementmanagers * Effecting appropriate work turnover plan

d. Unclear roles across implementing units * Role delineations among PMU and PlUs in ExecutiveOffices, Regional Offices

e. Perceived over-centralization of authorities in * Delegation of authorityODG (1992-1998) * Responsibility coupled with authority and accountability

* Approved framework at project start

2. Monitoring/Evaluation

a. Lack of performance indicators * Output indicators defined at project startin 1992

b. METP not adopted * Simplified built-in M&E with clear outcomes* Motivation required for adoption* Integration between METP and NMIS

3. Financial

a. VTP II perceived to be financier rather than * Proper orientation of project implementors and beneficiariescatalyst or partner of reform

b. Unclear mix of regular and loan * Clearer delineation of funds use:funds for regular operations * Fund 101 - regular operations

* Fund 102 - institutional development

c. Delayed access to financial * Strengthen FISFAP for use by decision-makersinformation by management

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d. Delayed fund reconciliation * Reconciliation starts by 2nd year of implementation* Closer collaboration between IA and COA* Agreements to be set on government/ commercial accounting

requirements

e. Problems on tax/withdrawal * Periodic WB/GOP staff trainingApplication

f. Inadequate financial management * Separate loan management unit at IA

4. Programs

a. Training did not always match * Need more focused and targeted capability building based onneeds TNA and career development plans

5. Policy/Research

a. Absence of clear policy research * Need clear policy research agenda at project startAgenda

b. Inability to transform research * Need clear articulation from research to policy to programsstudies into policies and to execution/ implementationprograms

6. Procurement

a. Slow procurement * Periodic staff training on procurement of goods and servicesrequirements

* Reduce bureaucratic requirements* Include after-sales service in contracts* Set up procurement support unit (PSU)

b. Inadequate oversight * Strengthen Procurement and Services Division (PSD)management

* Adopt contract management scheme

IV. RECOMMENDATIONS FOR FUTURE PROJECTS

Based on the foregoing findings, the following are recommended to sustain gains achieved under theProject and correct gaps/issues in project implementation. This will further strengthen TESDA's capability andreadiness to effectively manage upcoming foreign-funded projects:

1. Policy Directions

* Provide targeted priority assistance and other resources to SIC, NSCP and TDIS.* Review TESDA's direction vis-a-vis major issues/concerns and challenges confronting it at this time and

review TVET reforms vis-a-vis TESDA's direction.* Review TESDA's "housekeeping" rules and practices particularly at the ODG and OCSA and check

inter-office relationships at CO and between CO, ROs, POs and Tls.* Institute measures and mechanisms to avoid the perennial problems of delayed releases of funds.* Sustain the relentless effort of pursuing foreign funds and prepare adequately and accurately for the

implementation and management of upcoming foreign-funded projects. Consider the lessons learned fromVTP 11 and observe the proposed options and strategies.

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* Have executive will to pursue/implement plans and reformns and make systems work.

2. Proposed Resolutions and Options

Some concrete options for each sub-component are presented below:

2.1 Institutional Development

a. SIC* Development of career pathing at CO, ROs, POs and TESD centers* Installation of measures to ensure sustainability of staff development program

b. MPPC

* Re-assessment of PSALM approach of planning and updating of database under regular activities ofROs and POs

* Preparation of more sector studies* Strengthening of capability build-up for POs and R/PTESD Centers on planning by mentoring,

coaching or secondment of R/PTESD Centers administrators

c. NMIS

* Full scale operation and utilization of the system by decision makers and development of executiveinformation system

* Review of the whole NMIS concept and system by a really competent 3rd party before plunging intohardware, systems and staff upgrading activities

* Linkage with relevant GOP agencies like NSO, NSCB, DOST, DOLE, DTI, NEDA , etc., andintegration of FISFAP/INFODOS

* Periodic upgrading and preventive maintenance of computers and enhancement of on-line system forCO, ROs and POs

* Executive will to make systems work

2.2 Improvement of Training Quality & Cost Recovery

a. NSCP

3 Upgrading or revision of trade test packages and inclusion of more trade areaso Formulation of mechanism to fast track development and validation of assessment packageso Policy of moving into assessment and certification instead of direct training and selling of materials

to recover part of the cost* Translation of test packages into dialects* Installing measures to ensure sustainability of pool of accredited assessors* Full implementation of TOQCS* Strengthening of linkage with industry associations to eventually transfer the implementation of

TOQCS.

b. CTMD

* Pilot testing of one true/model CBTESD program to show its viability prior to full scale developmentof more TRs

* Development of more TRs that are competency-based and revision of TRs based on technologicaladvancement

* Distribution of available materials to recover reproduction cost

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* Inventory of existing materials, off-the shelf procurement and adoption of more measures to fasttrack CTMD

* Training on curriculum and training materials development should involve direct implementers (TCtrainers)

c. TDP

* Development of private financing scheme using regular funds* Establishment of National Institute for TVET out of existing resources of NITVET and external

financing* Updating of inventory/profile of trainors* Preparation of impact evaluation studies every after 5-10 batches

d. GES

* Expand career guidance initiatives to first year high school students* Continue close linkage with PESO, PHILJOBNET, etc., and explore more partnership with industry* Sustain RM award as part of regular activities, providing full support to its implementing arm

(Galing Pinoy Foundation)* Scout for new publisher of BCM (probably PIA).

e. METP

* Full implementation of impact-driven M&E system linked with NMIS and prioritization of M&Eprojects

* Adoption of more measures for METP and ROs utilization* Education drive among TVET schools, ROs and POs on M&E activities using regular funding and

more staff training in conducting various kinds of research works

2.3 Training Capacity Development

a. UEFE

* Development of equipment acquisition plan based on requests and specifications of ROs, POs,R/PTESDCs and TESDA schools

* Full implementation of a maintenance management system and regularize preventive maintenanceprogram to be monitored by NITVET

3 Explore co-management scheme with industry to maximize use of workshops* Development of standards n/s layouts, space requirement, systems, etc.

b. TCS

* Assess P1 - P12 capability of partners and include ICBP in regular activities of ROs* Expand co-management of training programs with industry* Institutionalize DTS by pursuing linkage-building with industry and providing incentives for training

dualization* Review DTS implementation vis-a-vis industry's concerns and adopt more creative options in lieu of

DTS* Strengthen the Apprenticeship system.

c. TAC

* Installation of measures to ensure sustained training of public and private TVET school teachers

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* Linkage with DA to avail of AFMA budget for agri-fishery TVET school teachers program* Development of institutional development/action plans by TAC beneficiaries regarding application of

training received as well as transformation/reengineering that occurred and adoption ofannual/periodic perfornance evaluation.

d. TDIS

* Sustaining the pool of CTECs and harnessing the trained ones* Full implementation of CBTED projects and other rural development projects* Inclusion of community-based training in municipal development Plans.

2.4 Crosscutting Concern

a. WEE

* Adopt co-management scheme to reduce overhead/admin cost, thereby enhancing expansion of WEEprograms

* Establishment of pilot women development centers for gender equity and entrepreneurship incoordination with other GOP agencies engaged in GAD.

b. PMU (for future projects)

* Co-location scheme for the implementation/operation aspect of projects but centralized monitoringand evaluation by a strong PMU

* Adoption of project benefit M&E, i.e., not just quantity of output but more on quality prior to projectimplementation; key performance indicators should be clearly specified

* Preparation of cost-benefit analysis for each project component in future projectsa Preparation of impact evaluation study at the end of the project with transition plan as part of its

recommendation* Sufficient number of competent technical and support staff at PMU* Permanency of PMU head and personnel during project implementation* Creation of electronic filing system backed up by systematic record keeping system to ensure

continuity of projects as planned in the event that PMU personnel be re-assigned or promoted* Designation of Regional PMUs* Strengthening of newly created IDFO in bridging completed and follow-up projects.

c. PSU (for future projects)

* Strengthening of PSU to fast track financial management and procurement activities of the project* Organization and performance review of PSU to ensure appropriate and effective support* Staff development relative to FAPs implementation.

(b) Cofinanciers:

(c) Other partners (NGOs/private sector):

10. Additional Information

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Annex 1. Key Performance Indicators/Log Frame Matrix

Outcome I Impact Indicators:: . I _ .. ̂ A: _ _ _ .' u !-0 4 .1 11 0

Outcome indicators which were not includedin the design of the project and for which nobase line data existed indude: a)improvement in the intemal and externalefficiencies in the design and delivery oftraining and skills development programs bypublic and private providers; b) improvementin the satisfaction of employers with trainedworkers; c) increased productivity of trainedworkers; d) increased eaming of trainedworkers; and e) reduction in unemploymentof trained workers.

Output Indicators:

The design of this project, as indicatedearlier, involved an agency, the NationalManpower and Youth Council NMYC, whichwas involved in the management as well asthe delivery of skills development programsin the non formal sector. The original designof the project and the related supervisionframework focused on the use of input/outputindicators of quantifiable factors such as thenumber of people successfully completingtraining in a given program, the quantity ofequipment procured or training materialspurchased, the number of workshopsimplemented, centres upgraded, and numberof categories of skills standards compiled.Base line information was established forthese indicators and supervision missionscontinued to report on the progress achievedusing these indicators. This approachcontinued after the establishment of TESDAin 1994 with an expanded mandate, andsupervision missions including the midtermevaluation mission reported on the progressin the project using the existing indicatorframework.

I. Institutional Developmenta. Strengthening Institutional Capacities Train 300 NMYC central and regional staff in a. Over 10,000 TESDA staff trained (575(SIC). management functions. executives, 1,370 managerial, 6,170

technical, 2,260 administrative).

b. Approximately 1,000 training programsconducted.

c. About 280 ongoing scholarship and 26Ateneo Graduate School graduates.

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b. Manpower policy, planning, and Implement staff training program:coordination (MPPC).

a. Policy analysis and coordination. a. Market-onented planning methodologyestablished (PSALM approach).

b. Manpower planning and training needs b. Planning data bases established (NMISanalysis. linked).

c. Resource allocation and management. c. Training program on TEVT planning andorganization conducted.

d. Private sector training and incentives. d. About 2,000 TESDA staff trained invarious operational areas.

e. Cost effectiveness analysis.

f. Cost and impact evaluation.

c. Developing a National Management a. Develop and install NMIS computer a. NMIS installed in TESDA HQ andInformation System (NMIS) network at central and regional NMYC networked to 15 regional offices.

offices.

b. Train policy analysts, computer b. About 2,500 system users trained.programmers and data processors.

c. Consultancy Services. c. TESDA Web Site developed andpublished; Installabon/development andoperationalization of softwares.

d. Procurement of Equipment. d. Procured 76 micro computers, 8 printersand 54 notebooks.

d. Project Management Unit (PMU) Supervision of project implementation. a. Coordinated 19 implementationreview/supervision missions.

b. Coordinated 6 annual implementationplanning workshops.

c. Coordinated 14 semester implementationworkshops.

d. Implemented SWIG, CPM, FISFAP andSOLOMON IV.

e. Monitored consultancy services forVTP II integration and evaluation.

2. Improvement of Training Qualitya. National Skills Certification Program a. Consolidate existing trade standards. a. Skills standards for about 250(NSCP) occupational titles set .

b. Train testing officers. b. 5,000 officers tested, 2,500 accredited.

c. Set up central test bank. c. 240 trade categories established.

d. Equip testing centers. d. Central test item bank established.

e. 15 skills testing centers established andaccredited.

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b. Trainer Development Program (TDP) a. Conduct needs analysis. a. Analysis conducted.

b. Set up licensing and qualification system. b. Job standards and qualificationsdeveloped .

c. Private sector financing of trainer training.c. 14,000 trainers attended training coursesof varying duration.

d. Trainer training/skills upgrading.d. Total output of trainers reached 13,591.

c. Curricula and Training Materials a. Produce andlor adapt training curricula a. Updated 7 curricula.Development (CTMD) for 20 vocational programs.

b. Develop, print and distnbute training b. Dualized 9 curricula.materials.

c. Train staff in curriculum and materials c. Developed training regulations in prioritydevelopment. areas (49 occupational titles) and 640

learning guides.d. Commercial printing of trainingregulations. d. Trained about 140 CTMD staff.

e. Procured and distrbuted multiple trainingmaterials.

f. Printed 3 occupational titles and 430copies of trade regulations in Info Tech andmetals.

d. Guidance and Employment Services Upgrade 70 staff in GES delivery. a. Trained about 56 placement and guidance(GES) officers, 200 regional and provincial line

officers and 45 facilitators.

b. Developed and disseminated careerguidance materials.

c. Placed 90,000 graduates in jobsProvided referral assistance to 125,000graduates .

e. Monitoring and Evaluation of Training Develop and implement systems to monitor a. M&E system has been developed andPerformance (METP) and evaluate performance of facilities, staff partially implemented.

and students.b. Instruments to measure intemal andextemal efficiencies have been designed.

3. Development Training Capacity

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a. Upgrade existing facilities (UEFE) a. Upgrade 28 regional and provincial a. Upgraded 15 regional, 13 provincial andtraining centers. one national training center.

b. Implement facilities maintenance system. b. Installed maintenance system and trainedstaff in its use (1998).

a. Support Training Assistance Contractb. Expand enterprise-based training (TCS & Scheme (TAC). a. TAC: upgraded skills of 2,670TAC) industry-based trainers (1992-94) and

upgraded skills of 12,800 staff ofpost-secondary vocational training institutes(1995-99).

b. Support Training Contract Scheme(TCS). b. TCS: 300 senior staff trained in

enterprise-based training programdevelopment, delivery and quality control;over 20,000 industry-based trainers trained.

a. Support local communities to deliver and a. Trained 1,229 LGUs, 1,621 CTECs andc. Training Delivery System for the Rural deliver skills training and entrepreneurship 222 local staffInformal Sector (TDIS) development programs.

b. Provide equipment and training materals. b. Implemented 16 pilot projects inCommunity-Based Training &

c. Train staff. Entrepreneurship Development (CBTED)

c. Implemented and evaluated twowomen's programs.

a. Investment strategy for developmnent ofthe formal TEVr system a. Sector review, ten-year strategy, and

4. Sector Studies (SS) five-year investment plan (1998).b. Feasibility study of sector-specific &advanced training centers. b. Investment Strategy for the formal TVET

study completed (1994) and feasibility studyon TVET investment needs completed(1994).

c. Numerous other studies.

End of project

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Annex 2. Project Costs and Financing

Project Cost by Component (in US$ million equivalent) ._

Appraisal ActuaVLatest Percentage ofEstimate Estimate Appraisal

Project Cost By Component US$ million US$ millionInstitutional Development 9.50 17.97 163.16Improvement of Training Quality 7.00 5.58 64.29Development of Training Capacity 16.00 22.24 109.88Sector Studies 0.60 0.24 30

Total Baseline Cost 33.10 46.03Physical Contingencies 8.70

Total Project Costs 41.80 46.03Total Financing Required 41.80 46.03

Project Costs by Procureme nt Arrangements (Appraisal Estimate) (US$ million equivalent)

Procurement MethodExpenditure Category ICB NCB Other' N.B.F. Total Cost

1. Works t 0.00 2.50 0.10 0.00 2.60(0.00) (2.00) (0.10) (0.00) (2.10)

2. Goods 10.10 1.10 2.80 0.00 14.00(8.90) (0.90) (2.40) (0.00) (12.20)

3. Services 0.00 0.00 15.80 0.00 15.80(0.00) (0.00) (15.80) (0.00) (15.80)

4. Training 0.00 0.00 5.90 0.00 5.90(0.00) (0.00) (5.90) (0.00) (5.90)

5. O & M 0.00 0.00 0.00 3.50 3.50(0.00) (0.00) (0.00) (0.00) (0.00)

6. Miscellaneous 0.00() () () 0) (0.00)

Total 10.10 3.60 24.60 3.50 41.80(8.90) (2.90) (24.20) (0.00) (36.00)

Project Costs by Procureme t Arrangements (Actual/Latest Estimate) (US$ million equival nt)Procurement MethodExpenditure Category ICB NCB Other2 N.B.F. Total Cost

1. Works 0.00 2.40 0.00 0.00 2.40(0.00) (0.90) (0.00) (0.00) (0.90)

2. Goods 7.70 2.19 0.86 0.00 10.75(7.40) (2.00) (0.10) (0.00) (9.50)

3. Services 0.00 14.60 0.00 0.00 14.60(0.00) (1.77) (0.00) (0.00) (1.77)

4. Training 0.00 2.50 0.00 0.00 2.50

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(0.00) (3.80) (0.00) (0.00) (3.80)

5. 0 & M 0.00 0.00 0.00 0.22 0.22(0.00) (0.00) (0.00) (0.00) (0.00)

6. Miscellaneous 0.00

()____________________________ _ () ) ()0 (0-00)Total 7.70 21.69 0.86 0.22 30.47

_ (7.40) (8.47) (0.10) (0.00) (15.97)

Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies.

2I Includes civil works and goods to be procured through national shopping, consulting services, services of contractedstaff of the project management office, training, technical assistance services, and incremental operating costs related to(i) managing the project, and (ii) re-lending project funds to local government units.

Project Financing by Cormonent (in US$ million equivalent)Percen tage of Appraisal

ApE EXpraisal Es te1 ActV u/Latest Estiate iBkX0 Gosvt :A iC:oF i Bank 0 :Govt : CoF k Bank Govt. CoF.

Institutional Development 9.00 3.90 10.80 4.70 120.0 120.5 0.0Improvement of Training 7.60 1.30 4.50 59.2 0.0 0.0QualityDevelopmentofTraining 18.80 1.40 15.50 2.08 82.4 148.6 0.0CapacitySector Studies 0.60 0.10 0.18 30.0 0.0 0.0TOTAL 36.00 7.00 31.00 7.00 86.1 100.0 0.0

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Annex 3: Economic Costs and Benefits

These were not calculated for this project.

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Annex 4. Bank Inputs

(a) Missions:

Stage of Project Cycle No. of Persons and Specialty Performance Rating(e.g. 2 Economists, I FMS, etc.) Implementation Development

Month/Year Count Specialty Progress Objective

IdentificationlPreparation 3 Technical EducationNov 1989 - Oct 1991 Specialist/Education Specialist!

Engineer

Appraisal/NegotiationApril 1992 4 Technical Education

Specialist/EducationSpecialist/Engineer/Architect

SupervisionJuly, 1992 2 Technical Education HS HS

Specialist/Architect

Nov, 1992 2 Technical Education HS HSSpecialist/Architect

May, 1993 2 Technical Education S HSSpecialist/Operations Officer

Nov, 1993 3 Operations Officer/Procurement S HSSpecialist/Policy Advisor

June, 1994 3 Technical Education S SSpecialist/EducationSpecialist/Procurement Specialist

Sept, 1994 3 Technical Education U SSpecialist/EducationSpecialist/Procurement Specialist

April, 1995 3 Technical Education S SSpecialist/EducationSpecialist/Procurement Specialist

Sept, 1995 2 Education Specialist/Architect S SEducation S S

March, 1996 3 Specialist/ProcurementSpecialist/Operations Officer

Mid Term Review 2 Technical Education S SFeb, 1997 Specialist/Procurement SpecialistMay, 1997 1 Technical Education Specialist S SNov, 1997 3 Technical Education S S

Specialist/ProcurementSpecialist/Architect

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June 1998 5 Technical Education S SSpecialist/Architect/OperationsOfficer/ProcurementSpecialist/FinancialManagement Specialist

Sept, 1998 5 Technical Education S SSpecialist/OperationsOfficer/ProcurementSpecialist/FinancialManagement Specialist/InformalSector Specialist

March, 1999 5 Technical Education S SSpecialist/OperationsOfficer/ProcurementSpecialist/FinancialManagement Specialist/InformalSector Specialist

ICRCompletion 5 Technical Education S SOct, 1999 Specialist/Operations

Officer/ProcurementSpecialist/FinancialManagement Specialist/Informal Sector Specialist

(b) Staff

Stage of Project Cycle Actual/Latest EstimateNo. Staff weeks USs (,000)

Identification/Preparation 64.9 156.2Appraisal/Negotiation 63.3 148.7Supervision 127.22 271.06ICR 10.00 20.00Total 265.42 595.96

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Annex 5. Ratings for Achievement of Objectives/Outputs of Components

(H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable)

RatingJMacro policies O H OSUOM ON * NA

• Sector Policies O H OSUOM O N O NA• Physical O H *SUOM 0ON 0 NAZ Financial O H OSUOM O N O NAZ Institutional Development 0 H O SU O M 0 N 0 NAZ Environmental O H OSUOM O N * NA

SocialZ Poverty Reduction O H OSUOM O N O NAZ Gender O H OSUOM O N O NAD Other (Please specify)

Z Private sector development 0 H O SU 0 M 0 N 0 NAO Public sector management 0 H 0 SU OM 0 N 0 NA2 Other (Please specify) 0 H O SU O M 0 N * NA

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Annex 6. Ratings of Bank and Borrower Performance

(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory)

6.1 Bank performance Rating

O Lending OHS OS OU OHU0 Supervision OHS OS OU OHUO Overall OHS OS O U O HU

6.2 Borrowerperformance Rating

OI Preparation O HS * S O U O HUO Government implementation performance 0 HS 0 S 0 U 0 HUO Implementation agency performance 0 HS 0 S 0 U 0 HUE Overall OHS OS OU O HU

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Annex 7. List of Supporting Documents

IDA. Development Credit Agreement. July 6, 1992.

IDA. Final Supervision/Completion Mission Aide-Memoire. October 1999.

IDA. Supervision Reports. 1992-1999.

IDA. Staff Appraisal Report. May 11, 1992.

Leverage International Inc. The Impact of the Second Vocational Training (92-98). December 1999.

Sam Mikhail. The Quality, Relevance and Impact of the Project's Programs. September 1996.

Smart Research Services, Inc. Transition Plan for VTP II, Volumes l and Il. December 1999.

TESDA. 1993-1998 Accomplishement Report. October 1999..

TESDA. Project Completion Report. December 31, 1999.

TESDA. Progress Reports. 1993-1999.

TESDA. Regional Status Report for the CBTED Component. December 1999.

TESDA. Women's Economic Empowerment Accomplishment Report 1999.

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