World Bank Documentdocuments.worldbank.org/curated/en/... · behind the target. The data were drawn from the FHSIS. Indicator 4: Evidence of a statistically significant improvement

Document of The World Bank

Report No: ICR2236

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-73950)

ON A

LOAN

IN THE AMOUNT OF US$ 110 MILLION

TO THE

REPUBLIC OF THE PHILIPPINES

FOR A

NATIONAL SECTOR SUPPORT FOR HEALTH REFORM PROJECT

January 21, 2013

Human Development Sector Unit East Asia & Pacific Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective January 15, 2013)

Currency Unit = Philippine Peso (PhP)

PhP40.56 = US$1

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS

BFAD Bureau of Food and Drugs

CAS Country Assistance Strategy

CBMS Community-Based Monitoring System

CDR Case Detection Rate

CHD Center for Health Development

COA Commission on Audit

DBM Department of Budget and Management

DOF Department of Finance

DOH Department of Health

DPL Development Policy Lending

DQC Data Quality Check

DSWD Department of Social Welfare and Development

EC European Commission

eNGAS Electronic National Government Accounting System

EPI Expanded Program of Immunization

ETS Expenditure Tracking System

F1 FOURmula ONE for Health

FDA Food and Drug Administration

FHSIS Field Health Service Information System

FIC Fully Immunized Children

GAA General Appropriations Act

GOP Government of the Philippines

HiB Hemophilus Influenza B

HRH Human Resources in Health

HSEF Health Sector Expenditure Framework

HSRA Health Sector Reform Agenda

IA Internal Audit

IP Indigent Program

IPPF Indigenous People Planning Framework

ISR Implementation Status and Results Report

JAPI Joint Assessment and Planning Initiative

LGUs Local Government Units

M&E Monitoring and Evaluation

MDGs Millennium Development Goals

MoU Memorandum of Understanding

MMR Measles, Mumps and Rubella

MNCHN Maternal, Newborn, Child Health, and Nutrition

MOA Memorandum of Agreement

MTR Mid-Term Review

NCB National Competitive Bidding

NEDA National Economic Development Authority

NG National Government

NHIA National Health Insurance Act

NHIP National Health Insurance Program

NHTS National Household Targeting System

NHTS-PR National Household Targeting System – Poverty Reduction

NPS National Program Support

NSS National Sector Support

NSSHRP National Sector Support for Health Sector Reform

OOP Out-of-Pocket

P4R Program-for-results

PAD Project Appraisal Document

PDO Project Development Objective

PHIC Philippines Health Insurance Corporation

PHOs Provincial Health Offices

PhP Philippine Peso

PMT Proxy Means Test

PPA Plans, Projects and Activities

QAG Quality Assurance Group

QER Quality Enhancement Review

QMS Quality Management System

SDAH Sector Development Approach for Health

SEMP Social Expenditure Management Project

SEMP 2 Second Social Expenditure Management Project

SLA Service Level Agreements

TB Tuberculosis

TBC Tuberculosis Control

THE Total Health Expenditures

TTL Task Team Leader

UHC Universal Health Care

UN United Nations

WHO World Health Organization

Vice President: Ulrich Zachau (EAPVP)

Country Director: Motoo Konishi (EACPF)

Sector Manager: Toomas Palu (EASHH)

Project Team Leader: Roberto Rosadia (EASHH)

ICR Team Leader: Sutayut Osornprasop (EASHH)

PHILIPPINES

NATIONAL SECTOR SUPPORT FOR HEALTH REFORM PROJECT

CONTENTS

Data Sheet

A. Basic Information

B. Key Dates

C. Ratings Summary

D. Sector and Theme Codes

E. Bank Staff

F. Results Framework Analysis

G. Ratings of Project Performance in ISRs

H. Restructuring

I. Disbursement Graph

1. Project Context, Development Objectives and Design ............................................... 1

2. Key Factors Affecting Implementation and Outcomes .............................................. 6

3. Assessment of Outcomes .......................................................................................... 12

4. Assessment of Risk to Development Outcome ......................................................... 22

5. Assessment of Bank and Borrower Performance ..................................................... 23

6. Lessons Learned ....................................................................................................... 27

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 28

Annex 1. Project Costs and Financing .......................................................................... 29

Annex 2. Outputs by Component ................................................................................. 30

Annex 3. Economic and Financial Analysis ................................................................. 31

Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 32

Annex 5. Beneficiary Survey Results ........................................................................... 34

Annex 6. Stakeholder Workshop Report and Results ................................................... 35

Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ..................... 36

Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 37

Annex 9. List of Supporting Documents ...................................................................... 38

MAP

A. Basic Information

Country: Philippines Project Name:

National Sector

Support for Health

Reform

Project ID: P075464 L/C/TF Number(s): IBRD-73950

ICR Date: 01/19/2012 ICR Type: Core ICR

Lending Instrument: SIM Borrower: REPUBLIC OF THE

PHILIPPINES

Original Total

Commitment: US$ 110.00M Disbursed Amount: US$ 104.72M

Revised Amount:

Environmental Category: C

Implementing Agencies: Department of Health

Cofinanciers and Other External Partners:

B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 07/25/2002 Effectiveness: 03/27/2007 03/27/2007

Appraisal: 03/06/2006 Restructuring(s): 08/16/2010

05/26/2011

Approval: 06/29/2006 Mid-term Review: 08/30/2008 02/08/2010

Closing: 06/30/2011 03/31/2012

C. Ratings Summary

C.1 Performance Rating by ICR

Outcomes: Moderately Unsatisfactory

Risk to Development Outcome: Moderate

Bank Performance: Moderately Unsatisfactory

Borrower Performance: Moderately Unsatisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)

Bank Ratings Borrower Ratings

Quality at Entry: Moderately

Unsatisfactory Government: Moderately Satisfactory

Quality of Supervision: Moderately

Unsatisfactory

Implementing

Agency/Agencies:

Moderately

Unsatisfactory

Overall Bank

Performance:

Moderately

Unsatisfactory Overall Borrower

Performance:

Moderately

Unsatisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation

Performance Indicators

QAG Assessments

(if any) Rating

Potential Problem Project

at any time (Yes/No): No

Quality at Entry

(QEA): No rating was provided

Problem Project at any

time (Yes/No): No

Quality of

Supervision (QSA): None

DO rating before

Closing/Inactive status: Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

Central government administration 10 10

Compulsory health finance 40 45

Health 40 45

Non-compulsory health finance 10 0

Theme Code (as % of total Bank financing)

Administrative and civil service reform 17 17

HIV/AIDS 16 0

Health system performance 33 40

Social risk mitigation 17 38

Tuberculosis 17 5

E. Bank Staff

Positions At ICR At Approval

Vice President: Ulrich Zachau Jeffrey S. Gutman

Country Director: Motoo Konishi Joachim von Amsberg

Sector Manager: Toomas Palu Fadia M. Saadah

Project Team Leader: Roberto Antonio F. Rosadia Loraine Hawkins

ICR Team Leader: Sutayut Osornprasop

ICR Primary Author: Sutayut Osornprasop

F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document) The project development objectives were:

a. improving priority public health outcomes and increasing the utilization of health

services by the poor in areas and for conditions or diseases subject to intervention under

the project.

b. increasing financial protection of indigents from health care costs.

Revised Project Development Objectives (as approved by original approving authority)

No changes were made to PDOs.

(a) PDO Indicator(s)

Indicator Baseline Value

Original Target

Values (from

approval

documents)

Formally

Revised

Target

Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 1: Increase coverage rate of fully immunized children by at least 10%

Value 80% 90% N/A 85%

Date achieved 12/31/2005 10/03/2010 N/A 12/31/2011

Comments

The target Fully Immunized Children (FIC) rate was not achieved by the

final year of the project. The latest FIC rate improved slightly from the

baseline, but fell below the target. The data for the FIC were drawn from

the Field Health Service Information System (FHSIS).

Indicator 2: Increase TB case detection rate from 72% to at least 80%

Value 72% 80% N/A 72%

Date achieved 12/31/2005 10/03/2010 N/A 12/31/2010

Comments

The target TB case detection rate was not achieved by the final year of the

project. The latest TB case detection rate is the same as the baseline. The

data were drawn from FHSIS.

Indicator 3: Increase TB cure rate from 81% to at least 85%

Value 81% 85% N/A 82%

Date achieved 12/31/2005 10/03/2010 N/A 12/31/2010

Comments

The target TB cure rate was not achieved by the final year of the project.

The latest TB cure rate improved very slightly from the baseline, but fell

behind the target. The data were drawn from the FHSIS.

Indicator 4: Evidence of a statistically significant improvement (wherever feasible) or

validation by an alternative method of improvement, in prevention, diagnosis or

treatment rates in participating LGUs for diseases or conditions subject to performance

agreements and grants

Value 0 LGU 15 LGUs N/A 0 LGU

Date achieved 10/03/2006 10/03/2010 N/A 03/31/2012

Comments

No method has been finalized. Department of Health (DOH) sees that it is

very difficult to come up with an evidence of a statistically significant

improvement. DOH has not been able to get a third party to validate an

alternative method, as planned. Nevertheless, DOH conducted a small

scale self-assessment by using LGU scorecards.

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target

Values (from

approval

documents)

Formally

Revised

Target

Values

Actual Value

Achieved at

Completion of

Target Years

Indicator 1: Increase in proportion of DOH budget allocated on the basis of criteria of

need and performance (from 0 to at least 5% of existing maintenance and other operating

expenses and at least 5% of any increment in DOH MOOE budget)

Value 0% 5% N/A 24%

Date

achieved 10/03/2006 10/03/2010 N/A 12/31/2010

Comments

DOH budget was allocated on the basis of need and performance. It rose

gradually to 5.4% in 2007, fell to 1.8%(during the world-wide economic

crisis), and reached 24% in 2010.

Indicator 2: Increase in number of development projects or programs using HSEF to

plan and program their health sector support (from 0 foreign assisted project to 100% of

FOURmula ONE PPAs)

Value 1 project 100% of projects N/A 100%

Date

achieved 10/03/2006 10/03/2010 N/A 12/31/2009

Comments

From 2009 onward, 100% of FOURmula ONE PPAs used HSEF to plan

and program their health sector support. This target was reached well

ahead of the project’s closing date.

Indicator 3: Increase in number of LGUs identifying the poor using acceptable, defined

methods of means testing and enrolling them in NHIP Indigent Program (from 0 to 993

LGUs)

Value 0 993 N/A 0

Date

achieved 10/03/2006 10/03/2010 N/A 03/31/2012

Comments

No LGU identified the poor using an acceptable, defined method of means

testing and enrolling them in the NHIP Indigent Program. With no

progress on the LGU front, the project shifted to support a nationally

developed means test, and was able to identify the poor using the NHTS-

PR, which is an acceptable, defined method of means testing. Although

this enabled enrollment of 5.2 million poor households in the NHIP

Indigent Program, unfortunately this change in approach was not formally

specified during the project restructuring. It should also be noted that the

number of “poor” households on the list adopted by LGUs was around 6-7

million. Out of these, only about 900,000 households were the same as

those identified by the NHTS-PR, raising the concern that many of the

households on the LGU list are not poor.

Indicator 4: Significant quantified reductions in date-expiry, stock-outs and losses of

public health commodity stocks at defined levels in supply chain

Value

Quarterly reporting on

inventory & method of

forecasting quantities

required of public

health commodities

satisfactory to the Bank

in place

Target agreed in

year 4 met N/A

No data are

available

Date

achieved 10/03/2006 10/03/2010 N/A 03/31/2012

Comments Information on stock-outs was not collected by the DOH beyond the level

of the Center for Health Development (CHD).

Indicator 5: LGU scorecard implemented and scores improve in convergence sites

Value

Scorecard methodology

and guidelines

completed and

disseminated by end of

year

End of term

evaluation finds

further progress

in scores

N/A

There is progress

on scores in 16 F1

provinces

Date

achieved 10/03/2006 10/03/2010 N/A 03/31/2012

Comments

LGU scorecards were generated in all 16 F1 provinces by 2008, and later

expanded to all LGUs. There was moderate progress on scores in 16 F1

provinces.

Indicator 6: Full compliance with the Borrower’s procurement law and standards,

monitored using agency procurement benchmark indicators

Value DOH procurement

Manual completed

Agency

indicators

maintained or

improved

N/A Agency indicators

slightly improved

Date

achieved 10/03/2006 10/03/2010 N/A 05/31/2011

Comments

There was continued full compliance with the Bank’s procurement

procedures and standards, monitored using agency procurement

benchmark indicators.

Indicator 7: eNGAS roll out; quarterly reports to managers on performance against plan

and budget under General Appropriations Act (GAA) program structure

Value

eNGAS training in 16

regions; installation of

eNGAS in 8 regions;

reporting formats

agreed

Quarterly

Report generated

from eNGAS

N/A

eNGAS has been

fully used in 5

regions

Date

achieved 10/03/2006 10/03/2010 N/A 03/31/2012

Comments

By the end of the project, the eNGAS was used fully in 5 CHDs, while 7

CHDs were in a transition phase, and the eNGAS still needed to be rolled

out in another 4 CHDs. In all CHDs, under the GAA program structure,

quarterly reports were submitted to managers on performance against plan

and budget. DOH should be congratulated for its persistence in expanding

the eNGAS, despite COA’s decision to suspend the national roll-out of the

eNGAS in 2008.

Indicator 8: Internal Audit (IA) staff trained; annual IA plan of scheduled audits

implemented; updating and improvement in agency IA benchmark indicators

Value

IA conducted

for 2006; IA plan

developed for 2007

At least 80% IA

staff trained;

2010 IA plan

N/A

Over 80% IA staff

trained and annual

IA plan of audits

implemented implemented

Date

achieved 10/03/2006 10/03/2010 N/A 03/31/2012

Comments

G. Ratings of Project Performance in ISRs

No. Date ISR

Archived DO IP

Actual

Disbursements

(US$ millions)

1 11/28/2006 Satisfactory Satisfactory 0.00

2 10/23/2007 Satisfactory Satisfactory 6.68

3 04/18/2008 Satisfactory Moderately Satisfactory 6.68





H. Restructuring (if any)

Two level-II restructurings took place in August 2010 and May 2011.

I. Disbursement Profile

1

1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

1. At the time of the project appraisal, the Philippines had been making progress on

health reforms at the aggregate level, but the major disparities in health outcomes (across

provinces, and across income quintiles) had not been addressed. Overall health

expenditures as well as public expenditures on health were lower than the average for

other middle-income countries. Out-of-pocket (OOP) payments as a percentage of total

health expenditures (THE), was large (54 %) which threatened the financial security of

the poorest households. The country was still grappling with the impacts of two major

reforms – the 1991 decentralization of health services to Local Government Units

(LGUs) and the 1995 reform of the National Health Insurance Program (NHIP) that had

expanded health insurance coverage for the population and established the Philippines

Health Insurance Corporation (PHIC) or PhilHealth. The decentralization reforms led to

extreme fragmentation in health financing and the delivery system. While the 1995

national health insurance reforms addressed some of this fragmentation, as well as

providing funds through PhilHealth, progress in providing healthcare for the poor was

still limited.

2. The Health Sector Reform Agenda (HSRA), effective from 1998 to 2004, had

begun to address the problems described above; however, progress was slower than

expected. The HSRA aimed to achieve: increased financial protection for the poor and

sick; supply-side measures to upgrade public health facilities in all communities to meet

PhilHealth’s accreditation standards; more effective regulation of the private health sector

and of drugs and commodities; a stronger results-orientation and coordination between

the Department of Health (DOH) and LGUs in delivering public health programs; and

development of structures and processes to increase coordination among neighboring

LGUs, the DOH and the private sector in planning local health systems. As

implementation of HSRA’s recommendations was too slow, in 2002, the DOH adopted a

phased implementation strategy, beginning with select “convergence” provinces, and

sought development partner assistance to support HSRA in these sites.1

3. It has been recognized that the HSRA had limited success due to: (1) limitations

in prioritizing a complex reform agenda and translating it into achievable, fiscally

realistic action plans, (2) limited coordination between the DOH and PhilHealth over the

reform strategy, (3) limited capacity in results-based management, (4) excessively

cautious behavior by PhilHealth in scaling up the NHIP, (5) fragmented donor support,

(6) constrained fiscal space, and (7) challenges with fragmented, autonomous LGUs.

4. By 2005, a new Secretary of Health had taken stock of progress, and in

collaboration with development partners, defined “FOURmula ONE for Health” (F1).

1 Convergence provinces are pilot provinces that have committed to implement reform components in their locality.

2

Building on HSRA reform, F1 was set up to tackle major health sector problems, e.g.

disparities in health outcomes and financial protection for the population. F1 was to

organize the critical reform initiatives into four implementation components: health

financing, health regulation, health service delivery, and good governance in health. F1

was particularly aimed at ensuring access to and availability of essential health packages;

assuring the quality and affordability of health goods and services; securing better and

sustained financing for health; and, improving health system performance in the medium

term.

5. An important strength of F1 was a more comprehensive approach to health

reforms and aligning them with public expenditure management and governance reform.

Using the medium-term Health Sector Expenditure Framework (HSEF) and the annual

budgeting process, a performance-monitoring framework for DOH, PhilHealth and

convergence provinces linked budgeting and resource allocation to outputs and

intermediate results. These links were intended to reduce obstacles to reform. With regard

to fragmentation in financing, the Sector Development Approach for Health (SDAH) was

adopted under F1 to align development partner-supported reform activities across the

entire health sector under a single national implementation plan and under harmonized

local health investment plans in each convergence province.

6. The Country Assistance Strategy (CAS) 2006-2008 focused on supporting public

expenditure management reform, improved governance, and better targeting of public

expenditure at a time when the country’s fiscal situation was fragile. The approach of the

new CAS was well suited to supporting the F1 strategy by linking the health budget with

reforms to health expenditure management.

7. The above-mentioned circumstances led to the design of this project, which was

intended to support the overall F1 reforms, which included both PhilHealth and LGU

reforms, based on the national sector support approach. Hence, the project was to finance

a slice of the overall health sector reform program as part of the appropriated budget, i.e.

similar to sector budget support but with no financial increments to the sector. It was also

agreed that the project’s outcome measures were to be based on the overall sector

outcomes, rather than outcomes from specific Bank financing.

Major Milestones in Philippine Health Reform

1991 Local Government Code Devolution of administrative and other functions

(including health services) from the national

government to local government units (LGUs)

1995 National Health Insurance Act Compulsory coverage under the National Health

Insurance Program (NHIP)

1998 Health Sector Reform Agenda

(HSRA)

Adjustment for impacts of devolution and

implementation of the NHIP

2005 FOURmula ONE for Health (F1) Accelerating gains under the HSRA

2005 Sector Development Approach for

Health (SDAH)

Rationalizing and harmonizing donor support

3

1.2 Original Project Development Objectives (PDOs) and Key Indicators

i. Improving priority public health outcomes and increasing the utilization of health


the project.

ii. Increasing financial protection of indigents from health care costs.

8. The Loan Agreement included the following outcome indicators:

Increase coverage rate of fully immunized children by at least 10% (from 80% to

90%)

Increase TB case detection rate from 72% to at least 80%

Increase TB cure rate from 81% to at least 85%

Evidence of a statistically significant improvement (wherever feasible) or


treatment rates in participating LGUs for diseases or conditions subject to

performance agreements and grants (from 0 LGU to 15 LGUs)

9. Two additional outcome indicators were included in the project appraisal

document (PAD), but were not included in the Loan Agreement:

Increased number of indigent families enrolled in NHIP using acceptable, defined

means test (up to at least 1.51 million indigent families)

Insured indigent households have lower OOP spending on health, compared to

uninsured households, and compared to prior periods

1.3 Revised PDOs (as approved by the original approving authority) and Key Indicators,

and Reasons/Justification

10. No changes were made to the PDO and key indicators.

1.4 Main Beneficiaries,

11. The primary beneficiaries of the project were poor households identified by the

means test and enrolled in PhilHealth’s Indigent Program. Other beneficiaries across the

Philippines included users of Government of the Philippines (GOP)-financed primary

healthcare services, especially for vaccinations.

1.5 Original Components

12. Project activities were grouped into four main components: health financing,

health service delivery, regulation of pharmaceuticals, and health system governance.

4

Component A: Health Financing (US$50 million at appraisal; US$40 million

approved)

13. The component was intended to provide health insurance for indigents through

financing GOP’s payments to PhilHealth under the national contribution subsidy. To

identify beneficiaries, LGUs were to use acceptable, defined methods of means testing,

that were acceptable to PhilHealth and the Bank. Bank financing of premiums for

indigent households was expected to increase over the life of the project as more LGUs

implemented community-based poverty mapping (or other acceptable means tests) and

used this as a basis for identifying indigent beneficiaries.

14. In support of project objectives and the health reform strategy, PhilHealth was to

pursue the following reforms: (1) sustainable expansion of the regular Indigent Program;

(2) better targeting of the poor through (i) collaboration to encourage LGUs to scale up

community-based poverty mapping to identify poor households, and (ii) development of

a policy on acceptable alternative means tests; (3) development of a partially subsidized

health insurance scheme for the near-poor; (4) increased financial protection for NHIP

members through (i) improved membership services, (ii) preferred provider agreements

that limited extra billing, and (iii) incremental enhancement of the benefits package

targeted at cost-effective services, especially services benefiting the poor and helping to

achieve the Millennium Development Goals (MDGs); and (5) fostering synergies and a

convergent approach through coordination with other agencies concerned with the health

sector reform program.

Component B: Health Service Delivery: Public Health (US$48.5 million at

appraisal; US$38.5 approved)

B.1 Disease Prevention, Control and Elimination Programs (US$48 million at appraisal;

US$38 million approved)

15. The component was intended to support disease prevention and control measures

to eliminate, or reduce and control infectious diseases and micronutrient deficiencies.

This would be through provision of: Expanded Program of Immunization (EPI) vaccines

(including hepatitis B vaccines); tuberculosis control (TBC) drugs; laboratory supplies;

HIV/AIDS drugs; micronutrients; other drugs and related commodities; as well as

information and education materials to help eradicate malaria, rabies, leprosy,

schistosomiasis and filiarisis. Some of the commodities provided under this component (a

minimum of around US$5 million) were to be allocated on the basis of LGU performance,

as indicated under sub-component B.2.

B.2 Performance-based Resource Allocation for Public Health (US$0.5 million at

appraisal and as approved)

16. The project was intended to support the development of: (1) pilot service

performance agreements between the DOH and participating LGUs for carrying out Part

B.l of the Project; and (2) pilot performance-based public health award schemes for those

5

LGUs that met or exceeded their performance targets for measurable improvement in

disease prevention and control in carrying out Part B.l and Part B.2 of the project.

Component C: Regulation of Pharmaceuticals (US$0.5 million at appraisal and as

approved)

17. The component was intended to support implementation of a master plan to

upgrade the services of the Bureau of Food and Drugs (BFAD) in regulating the

manufacture, importing and distribution of pharmaceuticals. This was to be achieved

through support for the operating costs associated with new business processes, including

greater fiscal autonomy for the BFAD; improved services at its drug quality control

laboratories; and implementing a new program of providing “quality seals” to certify

pharmacies that offer quality drugs at competitive prices. Subject to resolution of a legal

question regarding use of the BFAD’s fee income, at the GOP’s request, the project

provided an option for the unallocated portion of the loan to finance US$5 million worth

of equipment upgrades in BFAD laboratories.

Component D: Health System Governance (US$10.725 million at appraisal and as

approved)

D.1 Health Human Resources (US$0.5 million at appraisal and as approved)

18. The sub-component was intended to support the development of strategic national

initiatives in the DOH’s human resources in health (HRH) master plan, especially the

deployment of health professionals to rural areas to reduce the shortage of doctors and

other health professionals, and provision of training, career path development, and job

information services for health professionals in rural areas.

D.2 Sector Management and Coordination of Local Health Systems Reform (US$10.225

million at appraisal and as approved)

19. The sub-component was intended to support the DOH’s contribution to an EC-

financed program of performance-linked local health systems reform grants for 16 F1

“convergence provinces”. 2 This was to assist LGUs in implementing the HSRA

implementation plan. DOH was to finance local capacity building, systems development,

and monitoring and evaluation (M&E). In coordination with support from other

development partners, this sub-component was designed also to finance DOH’s

contribution to a sector-wide program of M&E for the implementation of the health

sector reform program.

2 The EC-financed program provided performance-linked local health systems reform grants to LGUs in 16 F1

“convergence” provinces. The program, which was worth a total of US$15 million over three years, also provided US$ 1.2 million to the GOP to help strengthen the DOH’s internal management systems.

6

D.3 Strengthening the DOH’s Internal Management Systems (funded by the EC Trust

Fund)

20. Building on earlier financial management reforms under the Second Social

Expenditure Management Project (SEMP 2), the project was to: strengthen DOH’s public

financial management systems; integrate DOH management information systems;

upgrade DOH materials management systems through provision of hardware, software

and technical assistance; and train DOH staff in financial management, inventory and

materials management, procurement, and internal audit. This part of the project was

financed from a US$1.2 million grant to the GOP from the EC, and administered by the

World Bank as a Trust Fund.

21. The Loan Agreement also earmarked an unallocated expenditure category of

US$20 million to be allocated at a later date to project components with the fastest pace

of reform.

1.6 Revised Components

22. The components were not revised.

1.7 Other significant changes

23. The project underwent level-II restructuring twice. In August 2010, the

restructuring was for the reallocation of funds from the unallocated expenditure category

(US$20 million) and a reallocation from slower-performing components to faster-

performing components. The restructuring document stated that there would be no

extension of the project’s closing date (June 30, 2011). The table below summarizes the

allocations before and after restructuring, as well as after the project’s end-of-

disbursement date (August 2012).

Project

Component

At Approval

(US$)

After

Restructuring

(US$)

Actual

disbursement

(US$)

% of

utilization

Component A 40,000,000 40,000,000 44,024,443.48 110.06

Component B 38,500,000 59,225,000 49,643,892.77 84.00

Sub-component

B1

38,000,000 58,225,000 48,664,257.03 83.58

Sub-component

B2

500,000 1,000,000 979,635.74 97.96

Component C 500,000 150,000 0 0

Component D 10,725,000 10,350,000 10,774,644.42 107.75

Sub-component

D1

500,000 350,000 0 0.00

Sub-component

D2

10,225,000 10,000,000 10,774,644.42 107.75

Unallocated 20,000,000 0 0 0

Front-end Fee 275,000 275,000 275,000.00 100.00

Total 110,000,000 110,000,000 104,717,980.67 95.20

7

24. The second restructuring took place in May 2011 to extend the project’s closing

date from June 30, 2011 to March 31, 2012. This extension was necessary to complete

implementation and reimbursement of project components, particularly the health

financing component. With PhilHealth then enrolling all the NHTS-identified poor

households, the DOH needed time to complete documentation of enrollments and to

calculate the National Government’s subsidies that the project was to finance. At the time

of the restructuring, DOH expected that nine months would be sufficient to complete all

activities, process reimbursements, and liquidate all advances, especially those for

vaccine purchases. DOH also expected to use the full amount that had been allocated.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

25. The project design was finalized under a changing policy context that had to

balance the latest developments in both the Borrower’s and the Bank’s thinking about

how a health sector reform project should be designed for a middle-income country. The

Bank team sought to address the changing context and at the same time ensure that the

Borrower’s “ownership” of the project was fully secured. The project was originally

conceived of as a traditional investment loan that would support health system reform in

four provinces and would develop national-level policy and capacity in both the DOH

and PhilHealth. This was much more modest than the final design of the project. Taking

into account the lessons learned from the two Social Expenditure Management Projects

(SEMP),3 the Bank proposed implementing sector budget support through a National

Sector Support (NSS) approach. This was applied to the health and the education sectors.

As in the case of the SEMP projects, financing was underpinned by requirements to

improve the management of specific line items. The Country Assistance Strategy for

2006-2008 had proposed that future lending for national government agencies should be

programmatic and support reform through regular government programs and budgets. At

the same time, lending to LGUs should be offered separately and principally through a

multi-sector local lending platform.

26. On the Borrower’s side, the DOH had adopted the concept of the SDAH to

harmonize donor financing for the health sector. Thus, at the macro-level, the design of

the NSS approach for health was fully consistent with the Borrower’s thinking and there

was high ownership of the approach.

27. The DOH was also no longer interested in a narrow focus – as was the case under

the SEMP, which had mainly focused on procurement of public health goods and

commodities. In line with F1, it expected the NSS approach to be aligned with the broad

3 In the aftermath of the Asian financial crisis of 1997, the World Bank supported the GOP in protecting basic social

services (health education and social welfare) while at the same time leveraging overall improvements in levels of, and

allocation of public spending in these sectors, through two social expenditure management projects (SEMP 1 and 2).

These projects which operated under the broad stewardship of the DBM provided budget support for specific line items

of the sector budget.

8

health sector reform agenda of the GOP. The design team tried to marry the expectations

of both the Borrower and the Bank, and reflect these in the final project design, but the

team perhaps deeply under-estimated the capacity of the DOH to implement a budget

support approach on its own, with the Department of Budget and Management (DBM)

providing arm’s length oversight. The design team also perhaps over-estimated the speed

at which F1 reforms would be implemented.

28. In its identification of components, the project design was fully consistent with

the F1 reforms and included both PhilHealth reforms as well as LGU reforms. For

PhilHealth, a key issue was how poor households were to be identified. At the time of the

project, the LGUs had no consistent criteria for identifying poor households and thus the

project proposed that the LGUs use the Community-Based Monitoring System (CBMS).

The adoption and application of the CBMS was expected to align with the expansion of

providing PhilHealth health insurance for poor households.

29. The LGU component was absolutely essential to increase DOH stewardship of the

LGUs, and to ensure that the LGUs regularly provided health data to the DOH. A key

reform element was creating peer pressure among LGUs to perform better by

disseminating their annual scores on the LGU scorecard. In both health financing and

LGU components, the willingness and commitment of the LGUs to reform was perhaps

over-estimated. As implementation would show later, uptake of national reforms by the

LGUs was slow. This demonstrates that at the project design stage, more careful thinking

should have been given to the incentives provided for LGU engagement.

30. The procurement of key public health goods was a continuation of the SEMP 2,

and to enhance DOH stewardship of the LGUs, two small components on strengthening

regulatory capacity and governance of the DOH were added to support the F1 approach.

This was consistent with the intention that the project would support all four pillars of the

F1 reforms, while financing only a small part of the cost.

31. The project underwent a Quality Enhancement Review (QER) process in

February 2006. The QER panel was concerned with the capacity of the DOH to operate

under the new NSS approach, and recommended that more high-level stakeholders, such

as the DBM, Department of Finance (DOF), and National Economic Development

Authority (NEDA) be directly involved in the reform process. In line with the

recommendations of the QER panel, PDOs were revised to be more modest and specific,

most disbursement conditions were eliminated, the financial management risk rating of

the project was clarified, the active role of the DBM in the project was clearly identified

in the PAD, and financial management and actuarial assessments of PhilHealth were

initiated.

32. The negotiations took place in May 2006, and the World Bank Board approved

the project on June 29, 2006. Although the Loan Agreement was signed on October 3,

2006, it was not until March 27, 2007 that the project was declared effective. This

perhaps indicates that some issues about readiness for implementation were not

adequately addressed during the design stage. Visions differed between the DOH and the

9

DBM about whether to establish a “special account” and this delayed completion of the

project’s operational manual. This was finally resolved through the DOH and the DBM

agreeing to utilize the DBM’s reimbursement mechanisms if the DBM committed to

providing the DOH with adequate up-front releases of funds so that the DOH could

implement project reforms.

33. Even though the project was designed to operate within the framework of the

DOH, which used a programmatic and an SDAH approach (and within these financed

selected priority national elements that were ready for implementation), it should be

noted that the project’s design lacked flexibility. This resulted in relatively inflexible

sector budget support. The project was not sufficiently “sector wide” to allow for

financing to move frequently and flexibly from one budget line to another, without major

restructuring. Additionally, the design of M&E indicators and the institutional

arrangements for M&E were weak. These M&E design issues, which are described in

greater details below under the M&E section, plagued the project throughout

implementation.

2.2 Implementation

34. With the exception of Component B1, implementation of most project

components encountered substantial delays. Factors that likely led to slow disbursement

are described below. Component B1 disbursed funds the fastest throughout the whole

project. Perhaps this was because procuring vaccines through negotiated contracts with

UNICEF was relatively straightforward. Also the DOH had gained commodity

procurement experience under SEMP 2, so this was an area where DOH capacity in

implementation was already high.

35. Component A was the slowest to disburse. At the time of project negotiations, it

was agreed that the CBMS would be the primary means of identifying indigent

households. However, soon after the project became effective, the National Government

(NG) adopted the National Household Targeting System - Poverty Reduction (NHTS-PR)

under the Department of Social Welfare and Development (DSWD). The World Bank

had provided support for this major policy development through technical assistance.

This was the first time in the Philippines that a refined targeting mechanism, based on a

well-accepted proxy means test (PMT) methodology was available. Once this tool was

available, the GOP wanted to apply it to all NG-financed social assistance programs,

which included NG’s financing for poor households. The Bank supported the GOP’s

approach, although disbursements under the project were substantially delayed.

PhilHealth had to cross-match the list generated through the NHTS-PR with the existing

list of sponsored members. Other issues had to be resolved such as the NG-LGU cost

sharing arrangement under the NHIP. However, this was a significant policy success as it

led to enrollment of around 4.3 million households (approximately 20% of the

population) who had never had health insurance before. Use of the NHTS-PR also paved

the way for the GOP to scale up universal health care (UHC) which the Bank is expecting

to support through a new lending operation. Thus, while disbursements were significantly

delayed, the policy outcome was substantial.

10

36. Components B2 and D2 were initially delayed due to the delays in the completion

of operational manuals required for their disbursement. This indicates issues in readiness

to implement that should have been addressed at the preparation stage. After these issues

were addressed, Component D2 progressed positively. Component B2 progressed more

slowly, and only in the final months of the project was an agreement reached that the loan

money could be used to reimburse funds for the Maternal, Newborn, Child Health and

Nutrition (MNCHN) grants that the DOH had awarded to the LGUs in 2009 and 2010.

37. Components C and D1 were initially delayed due to prolonged discussions about

which specific BFAD- and HRH-related budget line items the NSSHRP was to finance.

The implementation of Component C was also affected by the 2008/2009 legislation that

ensured full income retention for the BFAD, strengthened its regulatory powers, and

renamed the BFAD as the Food and Drug Administration (FDA). The specific FDA

activity to be financed by the NSSHRP was finally proposed by the DOH in 2010. The

FDA implemented Quality Management System (QMS) accreditation, but due to the

delay, the activity could not be financed from the NSSHRP. The activities under

component D1 were identified by the DOH in 2009, and procurement started in that year.

However, due to lengthy procurement problems, these activities could also not be

financed from the NSSHRP.

38. Component D3, funded by the European Commission Trust Fund, was also

initially delayed, largely due to lack of familiarity with the new tools and lengthy reviews

of investment plans, annual plans, training plans, and project procurement and

management plans. Nevertheless, there was progress made in the development of the

Expenditure Tracking System (ETS) though this is still in its development stage. DOH

staff were trained in internal audit and finance. The Electronic National Government

Accounting System was rolled out to the regions by providing hardware, software, and

technical assistance.

39. It should be noted that though the project was designed to operate within the

framework of the DOH, which used a programmatic and SDAH approach, and within

these to finance selected priority national elements that were ready for implementation,

the project was not “programmatic” enough to allow for financing to move frequently

and flexibly from one budget line to another. With the exception of the US$20 million

unallocated portion, the specific amount of financing was allocated for each project

component, and restructuring was needed to reallocate the resources. Hence, the way that

the project was implemented appeared to more “traditional” in operation than

“programmatic”.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

40. The project suffered from weaknesses in M&E at all stages – design,

implementation, and utilization. Regarding M&E design, the results framework in the

project’s Loan Agreement included a mix of outcome and intermediate indicators, though

these were not adequate. Generally, the indicators were appropriate at the time of project

design, as these were based on broader national program indicators and were the same

indicators and targets as those used by the GOP. However, there were no indicators and

11

target values to track the progress of project components C and D1. Furthermore, six

indicators in the PAD did not have baseline data. These gaps were never addressed

during implementation.

41. Consistent with the SDAH, all development partners were expected to participate

in the Joint Assessment and Planning Initiative (JAPI) that was organized by the DOH

once or twice a year. The JAPI included field visits and a concluding workshop led by

DOH staff in which development partners provided their feedback, and follow-up action

was identified. While the JAPI helped harmonize development partners’ initiatives and

reduced transaction costs for the Borrower, under JAPI it was impossible for the Bank to

undertake as rigorous due diligence that is the norm in regular Bank supervision missions.

Moreover, since the JAPI did not use a formal M&E framework aligned to the project, it

was difficult to track and report on project indicators. This is perhaps one reason why the

tracking of project’s results framework indicators was not consistent over the whole

project.

42. Perhaps for the same reasons for aligning with the JAPI, no proper Mid-Term

Review (MTR) mission took place. The lack of a full MTR was a missed opportunity for

the GOP and Bank teams to re-align project indicators and targets, clean up the results

framework, and align to the situation on the ground. As mentioned before, there was a

significant shift in the policy environment that impacted implementation of Component A.

Despite these shifts, the lack of formal acknowledgement during the MTR and the lack of

restructuring the PDOs and associated indicators that normally follows an MTR meant

that at completion the performance of the project is judged as per the situation at

appraisal. At the same time, there were policy shifts as well as implementation

experience which could have been used to restructure the project.

43. Thus, no indicators were adjusted during project implementation, despite the fact

that some indicators were no longer applicable and should have been removed or adjusted

before or during project restructuring. For example, the indicator and target values for the

component “Increase in number of LGUs identifying the poor using acceptable means

test and enrolling them in NHIP indigent program” were no longer relevant by the time of

project restructuring in 2010 and 2011 since the Bank, DOH, and PhilHealth agreed to

use the NHTS-PR and enrolled the poor who were identified by the NHTS-PR in the

NHIP Indigent Program, instead of relying on LGUs to identify the poor using an

acceptable means test.

44. Based on available information, the ICR team concluded that during

implementation, the results framework for the project was not properly tracked by either

the Borrower or the Bank. In addition, the government did not submit annual project

Progress Reports to the Bank.4 Although according to the Loan Agreement, starting in

2007, the DOH was to submit an annual report to the Bank no later than March 31 of

4 The DOH produced annual reports on broader health collaboration, but there were no NSSHRP-specific indicators in

the report.

12

each year, this did not occur.5 Furthermore, efforts to identify the methods for tracking the

progress of certain objectives and targets were inadequate. For example, despite being

required in the PDO, at the time of project design no method was identified for tracking

the utilization of health services by the poor, and this problem was not addressed during

project implementation.

45. Despite the weaknesses in project M&E, specific M&E activities for Component

D2 “Sector Management and Coordination of Local Health Systems Reform” progressed

well. Although in the beginning, the DOH M&E framework initially proposed a long list

of indicators, without a clear strategy for data collection, the issues were later addressed.

The LGU scorecard later became one of the GOP’s flagship products, and was rolled out

from 16 convergence provinces to the rest of the country. While the DOH was unable to

obtain health data from the LGUs on a regular basis prior to implementation of the LGU

scorecard, the introduction of the scorecard, which was broadly supported under the

rubric of the project, has been successful in changing this pattern and provides a

framework for DOH-LGU relations that can be pursued through future reforms.

46. With regard to M&E utilization at the project level, M&E data were not used

sufficiently to inform decision-making and resource allocation. Decisions about where to

allocate and re-allocate project resources appear to have been based on where

disbursement was quickest, which was to support the purchase of public health

commodities (Component B). However, this did not take into consideration the

performance-based aspect of resource allocation, which was stated in the PAD.

Nevertheless, M&E data were appropriately utilized in Component D2. The DOH used

the Service Level Agreements (SLA) and the LGU scorecards to monitor performance in

all provinces, and scores based on the achievement of SLA performance targets were

released together with the corresponding variable tranches that the DOH provided to the

LGUs.

2.4 Safeguard and Fiduciary Compliance

47. Environment: The project did not trigger the environmental safeguard policy; it

was rated as environmental category “C”, which meant that no specific environmental

safeguards were required. The project did not invest in civil works or other activities in

health facilities that could have any significant impact on the environment.

48. Indigenous People: The project did not have any potential adverse impacts on

indigenous people. On the contrary, the project contributed positively to indigenous

people who benefited from the intensified public health efforts and expanded coverage

under the Indigent Program of PhilHealth. The Indigenous People Safeguard Policy

(OP/BP 4.10) was triggered by this positive impact. Related to this, the DOH

implemented an Indigenous People Planning Framework (IPPF), which outlined the

5 The annual report was expected to include (i) results of the monitoring and evaluation activities on the progress

achieved in carrying out the project during the 12-month period preceding the date of the report; (ii) setting out the

measures recommended to address problems and improve project efficiency.

13

measures that the DOH and PhilHealth had adopted to ensure that the health sector

reform program supported by the project adequately addressed the needs and cultural

preferences of indigenous people, and that the indigenous people participated in the

benefits of the reform program. The results of implementing the IPPF were mixed, with

some measures initiated but not completed. Some provinces also moved ahead on IP

issues faster than others (e.g. Oriental Mindoro, Ifugao, and Mountain Province).

49. Procurement: During the early years of project procurement, performance was

rated by the Bank team as moderately unsatisfactory. Progress occurred only in

Component 2, while the other components moved very slowly, because the project

encountered a number of systemic procurement challenges. First, procurement planning

was not systematic, leading to stock-outs in a number of cases. Second, there were delays

in the procurement of drugs and vaccines due to: (i) finalization of the Bank-required

memorandum of understanding (MoU) between the DOH and United Nations (UN)

agencies with regard to the procurement of drugs and vaccines from project resources;

and (ii) difficulties that the DOH had in complying with the rules of the Central Bank of

the Philippines regarding the purchase of dollars that were needed for advance payment

to UN agencies. The DOH also planned to procure TBC drugs through the World Health

Organization (WHO) using project resources, but the DOH and the WHO were not able

to reach agreement on certain issues and failed to sign the MoU, leading to a shortage of

TBC drugs in 2009.6 To address this shortage, the DOH shifted its procurement approach

to national competitive bidding (NCB), and was able to procure TBC drugs and other

drugs locally. The issue with the Central Bank was later resolved through the World

Bank making advance payments directly to UNICEF.

50. It should also be noted that the Bank’s position on procurement through

negotiated contracts with UN agencies changed over time. Prior to, and in the early years

of the NSSHRP, the Bank supported the procurement of vaccines and drugs through

negotiated contracts with UN agencies. However, the Bank advised the DOH in 2010 that

following that year, vaccines and drugs would have to be procured on a competitive basis.

Nevertheless, as explained later in this document, the DOH saw the benefits of procuring

vaccines through negotiated contracts with UNICEF and continued the practice with

DOH’s resources.

51. Financial Management: In the early years of the project, there were a number of

financial management challenges, primarily due to inadequate staffing at both the agency

and project level, leading to delayed recording and financial reporting and weaknesses in

internal control. The DOH committed to address the weaknesses, and the situation

improved gradually as more staff were hired to address financial management issues.

However, despite the improvement, delays in the submission of complete quarterly

financial reports, audit reports, and information from warehouses on the issuance of drugs

continued to some extent.

6 The main concern was about a clause related to governance and anti-corruption.

14

2.5 Post-completion Operation/Next Phase

52. The health financing reform, which includes the aim of increasing financial

protection for indigent households, started during the implementation of the NSSHRP, is

expected to be continued and enhanced by the proposed National Sector Support for

Kalusugan Pangkalahatan (Universal Health Care) project, which is expected to receive

support from the World Bank. The proposed UHC project will tackle issues that were not

fully addressed under the NSSHRP. This may comprise enrolling more NHTS-PR

households (the near-poor) into the NHIP, implementing the enhanced NHIP benefits

package, and supporting NHIP reform through improving health services delivery. The

proposed UHC project is expected to build upon the lessons learned from the NSSHRP

by strongly emphasizing monitoring and evaluation. In addition, the current CAS

(FY2010-2013) has adopted the National Program Support (NPS) model as a key

instrument for support to social sectors.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

Rating: Substantial

53. Overall, relevance was rated as substantial. The PDOs remain highly relevant for

the Philippines as it strives to achieve UHC by 2016. The health financing component of

the project (Component A) has been instrumental in pushing ahead the agenda of

enrollment of the poorest households in the Philippines into PhilHealth’s Indigent

Program, using a transparent targeting mechanism. Prior to this project, there was no one

defined, uniform instrument that could be used to target the poor. This resulted in

politicization of enrollment of the poor at the LGU level. Although the project took a

long time to disburse Component A due to this LGU constraint, through introduction of

the NHTS-PR, the project eventually delivered a better method of identifying the poor so

that they could be enrolled into the Indigent Program. The Indigent Program is now being

scaled up by the NG to also include the near-poor in the program.

54. The project design features that focused on financial protection for the poor,

public health service delivery, and performance-linked Local Health Systems Reform

were highly relevant, and fully aligned with both the World Bank’s current CAS

(FY2010-13) and the government’s current national development strategy (Philippines

Development Plan 2011-2016), which supports UHC in order to achieve better health

outcomes, fair health financing and responsive health systems that provide all Filipinos,

especially the disadvantaged groups, with equitable access to quality health care and

improved financial risk protection.

3.2 Achievement of Project Development Objectives

Rating: Moderately Unsatisfactory

55. The Bank’s final evaluation was based on the project’s results framework and

established targets, as well as available evidence and data. Outcomes by PDO are briefly

summarized below.

15

a. Improving priority public health outcomes and increasing the utilization of health


the project.

56. Based on available data, the project did not contribute to the improvement of

priority public health outcomes, as specified in the PAD and Loan Agreement. The

targets for all three indicators (FIC rate, TB case detection rate, and TB cure rate) were

not achieved by the final year of the project. The latest FIC and TB cure rates improved

slightly from the baseline, but fell behind the target, while the latest TB case detection

rate was the same as the baseline. However, the available data also show inconsistencies,

with exceptionally high performance in the years immediately following the baseline

(2005), and a decline in performance in the later years of the project.7 The data for these

indicators were obtained from the Field Health Service Information System (FHSIS), but

some data were inaccurate. Some numbers were simply erroneous and others were out of

date. To improve data quality, a data quality check (DQC) was initiated by the DOH, but

the results were not available when needed for validating project data. Moreover, the

immunization indicator was adversely affected by using the wrong denominator. 8

Indicators Baseline 2006 2007 2008 2009 2010 2011 Targets

Fully immunized

children rate

80% 92% 90% 91% 88% 84% 85%9 90%

TB case detection rate 72% 74% 75% 72% 71% 72% N/A 80%

TB cure rate 81%% 83% 82% 79% 80% 82% N/A 85% Source: DOH

57. Even though the targets for priority public health outcome indicators specified in

the Loan Agreement were not met, there were specific disease indicators outside the

project’s results framework that showed marked improvement in the past five years.

These included the sharp decline in morbidity rates for acute lower respiratory tract

infection, pneumonia, leptospirosis, malaria, neonatal tetanus and schistomiasis, and

continuing low morbidity rates for cholera, diphtheria, and filariasis. Nevertheless, some

disease-specific challenges continue. Morbidity rates for leprosy and rabies have risen

sharply since 2009. Also, the Philippines is one of the only nine countries in the world

with an increasing number of HIV cases.

58. The project did not indicate the methods on how to track the utilization of health

services by the poor, and this issue was not addressed during project implementation.

Thus, it was not feasible at the end of the project to generate evidence that there had been

an increase in the utilization of health services by the poor.

b. Increasing financial protection of indigents from health care costs.

7 The ICR Team explored possible reasons for the poor FIC rate, TB case detection rate, and TB cure rates with DOH

staff, and they indicated that these rates may not include comprehensive data from private health care providers. 8 The new census data are now officially available and indicators, such as the FIC indicator will need to be re-calibrated. 9 Data from the Family Health Survey 2011.

16

59. There were two indicators defined for measuring financial protection: (i) an

increased number of indigent families enrolled into the NHIP, and (ii) insured indigent

households have lower OOP spending on health, compared to uninsured households and

compared to prior periods.

60. The first indicator has been achieved, and the outcome has exceeded the target by

far. The project led to the enrollment of an additional 4.3 million indigent households into

PhilHealth’s Indigent Program.10 These are the poorest households in the Philippines and

were never enrolled into the NHIP through the LGU targeted program. This has increased

health coverage for the total population from 55% to 75%. Nevertheless, one constraint is

that these enrollment data have not been verified yet (by checking whether new enrollees

know that they had been enrolled into the NHIP).

61. The second indicator has not been achieved. This was expected since this group

was only enrolled under the NHIP in April 2011. Also, the PhilHealth benefits package

did not expand significantly during the period covered by the project. Increased financial

protection, as measured by reduced out-of-pocket spending on health, can only be

expected if the benefits package addresses gaps in coverage. These reforms are only just

beginning in PhilHealth.

62. Based on the lack of verifiable data for the PDO indicators and the project’s

inability to meet the targets set for priority health outcomes, but taking into account the

large increase in the number of indigent families enrolled into the NHIP, and marked

improvement in several disease-specific indicators outside of the project’s results

framework, development outcomes for the project have been rated as moderately

unsatisfactory. A summary of intermediate outcome results’ indicators by project

components is described below, while a more detailed discussion is provided in Annex 2.

Component A: Health Financing (US$44.024 million actual; US$40 million in the

Loan Agreement)

63. Overall, the rating for this component was judged to be satisfactory. The initial

efforts to encourage the LGUs to identify the poor using acceptable, defined methods of

means testing, e.g. CBMS, were plagued by deep-seated local political and governance

issues. When the DSWD successfully identified the poor by using the NHTS-PR,

PhilHealth exerted its efforts to convince LGU officials to enroll into the Indigent

Program all NHTS-identified households. However, no LGUs accepted this method.

Given the constraints on the LGU part, the project turned to the NG to support the

enrollment of the poor into the NHIP Indigent Program, using NHTS-PR. This is clearly

a significant policy progress that goes far beyond the project’s own objectives. With the

support of the NG, the project is able to identify the poor using NHTS-PR, which is an

acceptable, defined method of means testing and enrolled about 5.2 million poor

10 NHTS identified 5.2 million indigent households. Out of these, around 900,000 households were already on

PhilHealth’s Indigent Program list (identified by LGUs).

17

households into the NHIP Indigent Program in the final year of the project. In addition,

the original method of having the LGUs identifying the poor using CBMS was expected

to bring only 1.51 million poor households into NHIP Indigent Program by the end of the

project.11 Thus, the project has actually brought more than three times poor households

into the Indigent Program. Moreover, when PhilHealth cross-matched the NHTS-PR’s

list of poor households with the list of poor households identified by the LGUs, this

showed evidence of political influence and governance problems. Out of the 5.2 million

households that have been identified as poor using the NHTS-PR, only 912,696

households on the NHTS-PR list matched the list of over 6 million households originally

identified by LGUs as poor. This raises the suspicion that many of the households on the

LGU list were not actually poor.12

64. Some shortcomings remain. There was limited progress in the development of a

partially subsidized scheme for the near-poor. In addition, PhilHealth made slow progress

in increasing financial protection for existing members through preferred provider

agreements to limit extra billing and incremental enhancement of benefits package.

Furthermore, as explained above, many LGUs had disagreed with the NHTS-PR, and

refused to pay the premiums of the poor households that were identified by using NHTS-

PR. As a remedy measure, the premiums of the poor identified by using NHTS-PR are

paid by the NG, backed by the Joint Implementation Guideline adopted by DBM, DOH

and PhilHealth, while the premiums of the “poor” identified by LGU undefined methods

were paid by the LGUs.13 Challenges to be resolved in future are how to get the LGUs to

agree to co-pay the premiums for poor households identified under the NHTS-PR to

make the funding arrangement more sustainable, and how to address the problem of the

LGUs enrolling “poor” households that are not actually poor into the Indigent Program

and paying for their insurance premiums.

Component B1 and B2: Health Service Delivery: Public Health (US$49.643 million

actual; US$38.5 million in the Loan Agreement)

65. Overall performance for this component B1/B2 was judged to be moderately

unsatisfactory. Operationally, component B (driven by sub-component B1) was the

quickest-moving project component, with a high disbursement rate. Nearly half of the

loan was used for the purchase of vaccines and other public health commodities, largely

through UNICEF. However, the outcomes of the component appeared to be poor. Targets

for the five indicators in the Loan Agreement, used for tracking the progress of this

component, were not met. The first three indicators were similar to those used to track the

PDO – FIC rate, TB case detection rate, and TB cure rate. The latest FIC and TB cure

11 This target is stated in the PAD, but was later dropped by the government and does not appear in the Loan

Agreement. The national government dropped this indicator because it is beyond NG control. 12 The number of “poor” households identified by LGUs is around 6-7 million households. 13 As a remedy measure, the LGUs continue to pay the premiums for the LGU-identified poor, despite the fact that

these poor households were not identified by an acceptable, defined means test. Out of 5.2 million households that were

identified as poor using the NHTS-PR, only 912,696 families were identified by LGUs as poor. This indicates a serious

shortcoming in the method that the LGUs used for identifying the poor, and raises concerns that many of the

households identified by LGUs as ‘poor’ were not actually poor.

18

rates improved slightly from the baseline, but fell behind the target, while the latest TB

case detection rate was the same as the baseline. The target for the fourth indicator was

not met, as no method for validation was finalized nor did monitoring take place. 14

According to the DOH, the reason for not achieving this target was difficulty in coming

up with evidence of a statistically significant improvement. Also the DOH was not able

to identify a third party to validate an alternative method, as planned. The target for the

fifth indicator was also not met (quarterly reporting on inventory and method of

forecasting quantities required of public health commodities satisfactory to the Bank as

well as baseline data on stock levels/losses/targets agreed for each year).15 The teams of

the DOH and the Bank have explained that no data were available. The DOH could have

tracked data down to DOH’s Center for Health Development (CHD) at the regional level;

however, it was difficult to get data from the LGUs, as this was not part of the LGU

reporting mechanism. This highlights that, despite the availability of SLA, governance

issues occurred in central-local relations in the health system.

66. Another important reform that the project component failed to implement was

allocating commodities to different LGUs on the basis of appropriate and transparent

criteria combining considerations of both performance and need, despite the fact that the

project should have allocated at least US$5 million on the basis of performance. DOH

staff have explained that implementing the reform would have negatively affected the

residents of poor-performing LGUs, rather than the LGU administrators themselves.

However, the DOH did not raise this concern, as it should have, during project design and

appraisal.

67. Despite the failure to meet all results targets, the project significantly helped the

country’s immunization program and it financed the procurement of all necessary

Hepatitis B vaccines, and the first ever procurement of Hemophilus influenza B (HiB)

and Measles, Mumps and Rubella (MMR) vaccines. In addition, the project partially

contributed to increasing the share of the public health program out of total government

health spending. Prior to the project, the public health program’s share of total

government health spending (excluding staff salaries) was 25%, while 65% went into

hospital operations. By 2012, the public health program, which is considered pro-poor,

received 50-55% of total government health spending. Moreover, procurement of

essential vaccines and other commodities through UNICEF offered significant benefits to

the Philippines. Not only did it ensure the quality of vaccines,16 UNICEF also provided

technical advice to the government on improving its capacity to forecast and budget for

public health commodities, as well as to improve cold chain management. In addition, the

2008 logistics review showed important improvements in the country's cold chain

facilities, which were intact at the very least up to the level of municipalities.

14 The fourth indicator was “evidence of a statistically significant improvement or validation by an alternative method

of improvement, in prevention, diagnosis or treatment rates in participating LGUs for diseases or conditions subject to

performance agreements and grants (from 0 LGU to 15 LGUs)”. 15 The fifth indicator was “significant quantified reductions in date-expiry, stock-outs and losses of public health

commodity stocks at defined levels in supply chain”. 16 Previously the government experienced quality problems when procuring vaccines through nationally competitive

bidding.

19

Component C: Regulation of Pharmaceuticals (US$0 actual; US$0.5 million in the

Loan Agreement)

68. Overall performance for this component was judged to be unsatisfactory,

reflecting chronic and systemic lack of progress. This component encountered severe

shortcomings. First, there was no indicator for this component in the Loan Agreement,

which made M&E difficult. Second, the BFAD/FDA did not appear to be enthusiastic

about implementing activities using the loan. This is partly due to the fact that the loan

was for budget support and did not provide a new source of money for the BFAD/FDA.

On the other hand, the use of the Bank’s loan can be viewed as adding burdens to

BFAD/FDA staff, as the staff needed to learn and follow new procedures. Third, the

BFAD/FDA suffered from chronic shortage of competent managers, which severely

delayed BFAD/FDA’s key reform agendas. Finally, there appeared to be a lack of

coordination between the FDA and the BIHC regarding the project’s closing date, so the

FDA was unable to use the loan money to finance quality assurance activities.

Component D1: Health Human Resources (US$0 actual; US$0.5 million in the Loan

Agreement)

69. Overall performance for this component was judged to be unsatisfactory,

reflecting systemic lack of progress. Operationally, this component encountered severe

shortcomings. First, there was no indicator for this component in the Loan Agreement,

which made it difficult to carry out M&E. Second, those managing the DOH HRH unit

did not appear enthusiastic about implementing activities using the loan. This is partly

due to the fact that the loan was for budget support and did not provide a new source of

money for the HRH unit. On the other hand, the use of the Bank’s loan can be viewed as

adding burdens to HRH unit staff, as they had to learn and follow new procedures in

using the loan. Also, there was a lack of coordination between the BIHC and the HRH

unit in facilitating the HRH unit to use the loan money. Although the project’s HRH

component did not progress, it should be noted that there were positive development on

HRH activities financed by DOH own resources. This included the implementation of

programs to deploy health professionals to rural and under-served areas, particularly

Doctors to the Barrios (medical doctors), RNHeals (nurses) and midwives deployment

programs.

Component D2: Sector Management and Coordination of Local Health Systems

Reform (US$10.774 million actual; US$10.225 million in the Loan Agreement)

70. Overall performance for this component was judged to be satisfactory, reflecting

the rapid progress in implementing SLA and LGU scorecards, as well as the use of M&E

data from LGU scorecards that is linked with variable tranches from the DOH to the

LGUs. This achievement has gone beyond the target of LGU scorecards being

implemented in 16 F1 provinces, as the implementation of LGU scorecard has been

rolled out nationwide. Since the SLA for all 16 F1 provinces was finalized by July 2007,

it has been used, revised, and improved over the years. The implementation was

20

successful, and DOH in 2010 decided to roll out the use of LGU scorecard in monitoring

the performance of all provinces, in addition to 16 F1 provinces. There is, of course,

room for improvement in future, as the data is self-reported by the LGUs, and the DOH

should put in place a system for the validation of these reports.

Component D3: Strengthening DOH internal management systems (financed by the

EC Trust Fund for the amount of US$1.2 million)

71. This component supported the strengthening of DOH public financial

management systems, integrated its management information systems, and trained DOH

staff in financial management, procurement, and internal audit. Overall implementation

for this component was judged to be satisfactory. This reflects: continued full compliance

with the Bank’s procurement procedures and standards; monitoring using agency

procurement benchmark indicators; training of and over 80% of internal audit (IA) staff

to meet international IA standards; and implementing the annual IA plan for scheduled

audits. The DOH was also able to roll out the Electronic National Government

Accounting System (eNGAS). By the end of the project, the eNGAS was in full use in 5

CHDs, 7 CHDs were in a transition phase, and the eNGAS was being rolled out in

another 4 CHDs. In all the CHDs, quarterly reports were submitted to managers on

performance against plan and budget under the GAA program structure. Even though

roll-out of the eNGAS was slower than the project targets, the DOH should be given

credit for its persistence in expanding use of the eNGAS. The DOH persevered in using

the eNGAS, despite the fact that in 2008 the Commission on Audit (COA) decided to

suspend the national roll-out of the eNGAS and stop supporting the DOH in

implementing the eNGAS, while waiting for a new comprehensive system (which was

still not available at the time of ICR). After COA’s decision to suspend the roll-out of the

eNGAS, this project indicator and its target values should have been adjusted, but since

no MTR was conducted, this did not occur.

3.3 Efficiency

Rating: Modest

72. Net present value, economic and financial rate of return, and cost-effectiveness

were not calculated a priori for the project.17 Overall national health spending shows

mixed results. Out-of-pocket spending continued to be the largest source of health

spending (54%). Nevertheless, ever since the current government came on board in May

2010, there was a strong commitment to health spending, and the DOH budget has

increased significantly – from PhP31 billion in 2011, to PhP42 billion in 2012, and

PhP53.8 billion in 2013. An increasingly larger share of the DOH budget now goes to

financing premiums for indigents – from PhP3 billion in 2011 to PhP12.6 billion in 2012.

As indicated above, there was also an increase in the public health program’s share of

17 The efficiency section of the PAD does not provide economic and financial analysis, but more of a national budget

execution review.

21

total government health spending, rising from 25% prior to the project to 50-55% by

2012.18

73. The efficiency of project execution, as measured by the speed of disbursement,

was very poor. Actual disbursement significantly lagged behind the plan, and over half of

the project’s resources were disbursed only in the last year before the project closed.

There were also inactive component and sub-component, which were never disbursed.

There were inadequate efforts by the government and the Bank team to re-allocate

resources from these inactive sub-components to active ones. Essentially, slow

disbursement imposes opportunity costs by tying up resources that could have been made

available to other projects or activities.

74. Despite the inefficiency of project execution, the project achieved a limited level

of efficiency through expenditures on vaccinations, which are considered a cost-effective

intervention. Moreover, the project also contributed to better targeting of resources at the

poor, which is theoretically an efficient way to improve health outcomes since scarce

resources are concentrated on those who are likely to have greater health deficits.

However, the enrollment of the poor into PhilHealth’s Indigent Program, using an

acceptable means test, only took place in late 2011 and 2012, and no data are available to

show that the poor made greater use of health services or had improved health outcomes.

Based on the above-mentioned assessment, the project’s overall efficiency was rated as

modest.

3.4 Justification of Overall Outcome Rating


75. The overall outcome rating was moderately unsatisfactory based on substantial

relevance, modest efficacy, and modest efficiency. While the project has contributed to

an increase in the number of indigents covered by national health insurance, and

supported the implementation of LGU performance grants and the LGU scorecards, no

data were available to show higher utilization of health services by the poor. Nor were

data available which show that OOP payments had reduced. This was understandable,

however, since the poor households were only enrolled in April 2011, and PhilHealth

only recently enhanced its benefits packages which would ensure better financial

protection. In addition, though the project made public health products, and especially

vaccines, more available in rural areas, none of the three priority public health targets

were met.

18 Prior to the project, the share of public health program out of the government health spending (excluding staff

salaries) was 25%, while 65% went into hospital operations.

22

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

76. No data were available that show direct impact on poverty. Nevertheless, there

were indirect impacts on poverty. Through the enrollment of 5.2 million indigent

households into PhilHealth’s Indigent Program, the project increased financial protection

of the poor from catastrophic health care costs. The project also increased the availability

of public health products, particularly vaccines, in rural areas, and these vaccines were

disproportionally provided to the poor.

(b) Institutional Change/Strengthening

77. The project made significant contributions through promoting key policy reforms,

including the identification of the poor using an acceptable, defined method of means

testing, and enrolling them en masse into PhilHealth’s Indigent Program. The project also

successfully supported the reform of providing performance-based grants to local health

systems, including the creation and use of the SLA and of the LGU scorecards. This has

strengthened coordination between the DOH and the LGUs.

(c) Other Unintended Outcomes and Impacts (positive or negative)

78. The main unintended outcome is the introduction of a new method to identify the

poor and enrolling them into PhilHealth’s Indigent Program. The new method of

identification is based on a nationally standardized proxy means test under the NHTS-PR,

conducted by DSWD. The number of beneficiaries would have been significantly fewer

if the project had followed the original plan of having the LGUs identified the poor using

acceptable, defined methods.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

N/A

4. Assessment of Risk to Development Outcomes Rating: Moderate

79. The risk to development outcomes has been rated as moderate. A risk to

development outcomes is sustaining the reform to increase financial protection of

indigent households so that they do not suffer from catastrophic health care costs.

According to the law, half of the financing of the government’s payments to PhilHealth

for health insurance premiums of each indigent family under the Indigent Program is

contributed by the NG, while the other half is contributed by respective LGU. However,

LGUs do not agree to pay their share of premiums for the indigents identified by PMT

method of NHTS-PR. An interim arrangement has been agreed that the NG would be

responsible for paying premiums of the indigents identified under NHTS-PR, reducing

the LGU contribution to zero. On the other hand, the LGUs would be responsible for

paying premiums of the LGU-identified “indigents” that are not included in the NHTS-

PR list, and the contribution from the NG for this group would be reduced to zero. Even

23

though this change has not been incorporated into the law, the NG is committed in the

long term to identifying more sustainable ways to finance the premiums for NHTS-

identified poor households, e.g. through the DOH’s increased budget and the introduction

of “sin” taxes.19 For example, the DOH budget rose by 44% from 2011 to 2012 to cover

the enhanced premium of PhP2400 (US$54) for all poor households identified by NHTS-

PR. The 2013 budget includes PhP13.8 billion (approximately US$305 million) to cover

the remaining 5.6 million households identified under the NHTS-PR, many of which are

in quintile 2 (the near-poor).

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry


80. Although the project took four years to prepare, the project design was adapted by

the team to align with the thinking of the GOP and the Bank about sector direction and

instruments. The previous design – which was developed from 2002 to 2004 – was no

longer relevant for the project. In this regard, the Bank’s team showed prudence in

revising the design to align with emerging country and Bank priorities. The Bank’s team

should also be given credit for designing a highly relevant project to leverage a number

of important health sector reforms, including increased financial protection for the poor

from catastrophic health care costs, performance-based resource allocation for public

health commodities and grants as well as local health system reform through the

provision of grants based on service level agreements and LGU scorecards. The project

helped push the frontier in terms of Bank projects and is a precursor to the program-for-

results (P4R) operation.

81. However, there were gaps in project preparation and design, namely in fully

underpinning the operation on a realistic assessment of DOH’s and PhilHealth’s capacity

to implement the new budget support approach as well as associated reforms. Although

the project was designed to operate within the framework of the DOH, which used a

programmatic approach, and within this to finance selected priority national elements that

were ready for implementation, the project design lacked flexibility. This made the

project a relatively inflexible sector budget support operation, as it did not allow for

financing to move frequently and flexibly, without restructuring. Hence, the project

design appears to have been more traditional than “programmatic”.

82. Furthermore, the results and M&E framework was weak and not comprehensive,

leaving some components without indicators. Unfortunately, all the components without

indicators underperformed. A number of indicators in the PAD also had no target values,

and this was not corrected or revised at a later stage, rendering these indicators useless.

19 “Sin tax” is a state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco

and gambling. This type of taxes is levied by governments to discourage individuals from partaking in such activities

without making the use of the products illegal. These taxes also provide a source of government revenue.

24

In addition, a key element of the design was not conducive to success, e.g. the project

design provided no incentives for the LGUs to identify the poor using the acceptable

method.

83. Additionally, the Bank team may not have had sufficient information to carefully

assess local politics and governance, which led the project to put too much emphasis on

CBMS, conducted at the LGU level. The project attempted this method in the first few

years. However, due to local political and governance issues and vested interests, very

few of the LGUs adopted this method to identify the poor and enroll them in the Indigent

Program. Had the project not switched to the NHTS-PR in the later years of the project,

the number of indigents enrolled in PhilHealth’s Indigent Program by the end of the

project would have been much smaller.

84. The Bank team also underestimated implementation capacity, and pushed forward

the reform to introduce performance-based allocation of public health commodities.

While the concept was good in theory, linking performance with the allocation of public

health commodities was quite unrealistic in the context of the Philippines. When the

DOH officials met the ICR team, the DOH staff objected to this approach, as they said it

would punish the poor, not poorly-performing LGUs. Furthermore, the Bank’s design

team underestimated the supervision capacity of the Bank team, particularly that the

Bank needs a multi-sectoral team to supervise this large and complicated project

effectively. Based on the above-mentioned analysis, Bank performance during project

preparation was judged as moderately unsatisfactory.

(b) Quality of Supervision


85. The Bank’s team should be credited with closely following-up on the

implementation of the SLAs and the LGU scorecards, and for making sure that they were

on track. The team was also prudent in adjusting the health financing component of the

project design, in accordance with changing conditions, i.e. moving away from using

CBMS that relied on the LGUs to instead promoting use of the NHTS-PR, with the

national government fully financing the premiums of indigent households identified by

the NHTS-PR. This occurred after it became clear that few of the LGUs were interested

in adopting the CBMS to identify the poor in their localities, and that the LGUs would

not adopt the NHTS-PR either. Use of the NHTS-PR has contributed to the enrollment of

over five million indigent households into PhilHealth’s Indigent Program, which is three

times more than the project’s original target. The Bank’s fiduciary team also provided

timely advice and other forms of support to enhance the project’s procurement and

financial management activities.

86. Nevertheless, there were shortcomings in the quality of supervision by the Bank’s

team. The team was under constant pressure to achieve quicker disbursement, which

distracted the team’s focus from results and making sure that proper M&E was carried

out. There were inadequate efforts as well to identify methods for measuring the progress

of certain objectives and targets, and certain project indicators were not properly tracked.

Moreover, in accordance with the SDAH, the DOH’s JAPI process made it difficult for

25

the Bank to organize its own twice-yearly supervision missions, as is standard in most

countries. The SDAH process was still evolving and the DOH was also just beginning to

use the JAPI. When the Bank saw that JAPI did not work well for tracking project’s

progress, the Bank could have undertaken its own follow-up missions; however, this did

not occur. As a result, supervision of the project was judged sub-par. Moreover, given

that the policy environment was quite dynamic and there were lessons learned early in

project implementation, the supervision team should have conducted a mid-term review.

An MTR would have provided an opportunity to revise the results framework and

indicators as well as better align to existing conditions on the ground. At project closure,

this would have given a more balanced view of the project, including better development

outcomes. For example, although the indicator on the LGUs adopting the CBMS for

targeting the poorest households was not relevant by the middle period of the project, this

was never formally acknowledged in a restructured project document. Eventually there

was no proper MTR, and a number of important mid-term evaluation of indicators

specified in the PAD did not take place.

87. Furthermore, the team did not appropriately follow up on issues required by the

Loan Agreement. For example, the DOH, per the Loan Agreement, was required to

submit an annual report with analysis on project progress and how to address

shortcomings. But the DOH did not submit such reports to the Bank, and the Bank team

did not follow up to get them. This, in turn, partly contributed to DOH’s weakness on

M&E of the project. It also appeared that the team did not follow up sufficiently with the

DOH for other key activities specified in the PAD, e.g. performance-based resource

allocation for public health, or conducting baseline surveys, and follow-up surveys to

monitor progress during implementation.

88. In February 2006, the QER process highlighted that the DOH appeared to have

little capacity to implement reforms, and that it was critical that more high-level

stakeholders, such as the DBM, DOF and NEDA be explicitly involved in the reform

process. Moreover, the DBM’s active role in the project was clearly identified in the PAD.

However, it appeared that the team did not make sufficient effort to engage these more

high-level stakeholders in unsuccessful project reform activities, e.g. performance-based

allocation of public health commodities and the BFAD/FDA reforms. Based on this

analysis, Bank performance during project supervision was moderately unsatisfactory.

(c) Justification of Rating for Overall Bank Performance


89. On the basis of moderately unsatisfactory performance during preparation and

supervision, overall Bank performance was rated as moderately unsatisfactory.

5.2 Borrower Performance

(a) Government Performance Rating: Moderately Satisfactory

90. The NG should be credited with having a strong commitment to achieving, by the

end of the project, the PDO of increasing financial protection for over five million

26

indigent households from catastrophic health care costs, by paying for their health

insurance premiums. The NG also contributed to the achievement of performance-linked

local health system reform grants, with the development and use of the SLAs and LGU

scorecards in 16 convergence provinces and later successfully rolling these out nationally.

91. The adoption of the NHTS-PR as a mechanism to identify the poor was a

remarkable government policy achievement. This not only led to the enrollment, during

the project, of an additional 4.3 million poor households, that had never had access to

health insurance before, but it also paved the way for the identification of the near-poor

(quintile 2), and for their enrollment into PhilHealth’s Indigent Program in the near future.

The government should be commended as well for institutionalizing this mechanism of

proxy means test through the President of the Philippines signing Executive Order 867.

This order directed all NG agencies to adopt the NHTS-PR as a mechanism to identify

poor households. It would be beneficial for the Philippines if the NG is able to continue

promoting this method of identification of the poor among LGUs.

92. While taking note of these achievements, the NG could have done more to

address the shortcomings in data tracking and M&E process, which affected the

availability and accuracy of data. These data were needed for the project, particularly in

the context of a decentralized health system. This system-wide weakness goes beyond the

DOH, and hence it is appropriate for the NG to take the lead in strengthening the

country’s data tracking and M&E mechanisms. As a notable example, the NG could have

done more to address the results of the logistics reviews of 2005 and 2008 that

highlighted the grave situation with regard to date-expiry, stock-outs and losses of public

health commodity commodities. Very importantly, a significant volume of drugs and

vaccines were expiring without being used. These losses were common at the level below

the CHDs and local governments. With appropriate NG intervention, “significant,

quantified reductions in date-expiry, stock-outs and losses of public health commodity

stocks at defined levels in [the] supply chain” could be achieved in future. In addition, it

would be very beneficial for the NG to build and strengthen the DOH’s stewardship of

the Philippines’ health sector to improve links between the central and local governments

and between the public and private sectors.

93. Despite shortcomings on M&E and data tracking, the NG should be credited with

a number of achievements. As a result, the government’s performance was rated as

moderately satisfactory.

(b) Implementing Agency or Agencies Performance Rating: Moderately Unsatisfactory

94. The main implementing agency was the Department of Health. The DOH should

be credited with spearheading a number of successful reforms, including the

strengthening of performance-linked local health systems reform grants. This was made

possible through the development and use of the flagship products – the SLAs and the

LGU scorecards – that were first used in the 16 convergence provinces. Thanks to the

27

DOH’s initiative, the SLAs and the LGU scorecards have been rolled out and used

nationwide, and now form the backbone of central-local relations of the health system.

95. Despite facing initial resistance from local politicians, the DOH’s decision to use

negotiated procurement with UNICEF for the purchase of vaccines has generated a

number of benefits for the health system. The quality of vaccines and the timeliness of

deliveries have been ensured. Moreover, through technical assistance from UNICEF,

DOH had the opportunity to strengthen its capacity in forecasting and budgeting for

vaccines as well as improving cold chain management.

96. In addition, since the early years of the project, the DOH successfully met the

targets for two performance indicators: (1) increasing the proportion of the DOH budget

allocated on the basis of need and performance; and (2) increasing the number of

development projects using the HSEF to plan and program their health sector support,

and thus ensuring a sector development approach for health.

97. Nevertheless, there were significant shortcomings during project implementation,

which have affected project outcomes. First and foremost, monitoring and evaluation

activities by the DOH were consistently weak. Per the Loan Agreement, annual reports

should have been prepared and submitted to the Bank by March 31 in each calendar year,

beginning March 31, 2007. 20 The report was supposed to provide the results of

monitoring and evaluation activities for the previous 12-month period and set out

measures to address shortcomings and ensure efficient implementation of the project.

However, no such reports were provided to the Bank. It would be valuable for the

implementing agency and the Bank’s team to discuss how to develop an innovative

means of tracking and reporting progress and achievements of project indicators for the

lowest transaction cost on the government’s side.

98. The DOH could have paid more attention to the results framework in the PAD

and the Loan Agreement, and exerted more efforts to fulfill the key reforms in the

project: (1) to generate evidence of a statistically significant improvement or validate by

an alternative method of improvement, in prevention, diagnosis or treatment rates in

participating LGUs for diseases or conditions subject to performance agreements and

grants, and (2) to ensure that there is significant quantified reductions in date-expiry,

stock-outs and losses of public health commodity stocks at defined levels in supply chain.

99. It also appeared that the DOH overestimated the implementing capacity of

agencies that were in charge of certain project components, including performance-based

allocation for public health commodities, regulation of pharmaceuticals and developing

human resources in health. Judging from the results of these components, the DOH

should have provided more intensive supervision and coordination to ensure effective

implementation of these components.

20 In addition, according to the Loan Agreement, the DOH needed to submit by June 30, 2008, a mid-term report with

the results of monitoring and evaluation activities, the progress achieved, as well as measures to ensure the efficient

implementation of the project and the achievement of the objectives. No such report was submitted.

28

100. Although the DOH should be credited with a number of achievements, there were

significant shortcomings. On this basis, DOH’s performance was rated as moderately

unsatisfactory.

(c) Justification of Rating for Overall Borrower Performance Rating: Moderately Unsatisfactory

101. On the basis of an overall moderately satisfactory rating for the performance of

the government and a moderately unsatisfactory rating for the performance of

implementing agencies, overall borrower performance was rated as moderately

unsatisfactory.

6. Lessons Learned

102. Implications for “National Program Support” and the need to move closer to

country systems: the NSSHRP utilized the “budget support” model to finance priority line

items/programs in the DOH budget. This yielded both advantages and constraints.

Regarding the advantages, budget support assured the availability of cash for priority

expenditures as well as providing the DBM with more authority and an entry point for

improving national fiduciary systems. Moreover, it provided an opportunity for the DOH,

in partnership with the Bank, for strong implementation of the identified programs. If

initiatives were carefully selected, as was the case in this project, benefits for the

country’s health system would be considerable. However, in the absence of complete

alignment with country systems, including fiduciary and M&E systems, such budget

support operations could be burdensome for the client. This was one of the major reasons

why Component C never disbursed. In addition, there was no operational M&E

framework for F1 when the project was designed. Perhaps this was the reason why there

was no link between the project’s indicators and the DOH’s own M&E framework and

also perhaps why the DOH did not take ownership of the M&E framework and track it. A

Bank project’s M&E framework, unless aligned to the country’s own, can increase

transaction costs for the client and is somewhat against the principles of the NSS and

SDAH.

103. Design of “programmatic” operations should be flexible: Even though the project

was designed to operate within the framework of the DOH, which used a programmatic

approach and SDAH, and within these financed a selection of priority national elements

which were ready for implementation, it should be noted that the project design lacked

flexibility, which made it a relatively inflexible sector budget support operation. The

project design was not flexible enough to allow for financing to move frequently and

flexibly. With the exception of an unallocated US$20 million, specific amounts of

financing were allocated for each project component, and restructuring of the project was

necessary when resources needed to be reallocated. Hence, the way that the project was

implemented appeared to lean more toward a traditional operation than a “programmatic”

sector-support operation. The design of the project should have been adjusted to make it

easier to reallocate resources across any component that supported F1. For instance, a

29

single disbursement category, without dividing it by components, could have been used.

This would have helped move funds more easily from an inactive component to a faster-

moving one.

104. Strengthening results and policy focus of National Sector Support: Budget

support operations provide a unique opportunity to link policy dialogue with enhanced

lending. However, in the case of Development Policy Lending (DPL) and results-based

operations, disbursements are linked to the achievement of specific targets. This approach

is not entirely problem-free but provides a framework for the NG and Bank teams to stay

focused on results. In this project, there were some strong policy components such as

Component A where disbursement was linked to a policy result. While this component

took a long time to disburse, it was also one of the most successful components of the

projects. In the other components, policy changes were implicit and required tracking the

indicators, but disbursements were not linked to results. This demonstrates the benefits of

a results-based approach. However, it would have been advisable to link to a range of

policy and program results rather than to a single indicator, thereby managing risks better

throughout the project cycle.

105. Strengthening the focus on M&E: The project suffered from weaknesses in M&E

at all stages – design, implementation, and utilization. Efforts to identify methods for how

to track the progress of certain objectives and targets were inadequate. For example,

during project design, methods for tracking the utilization of health services by the poor

were not identified. Unfortunately during implementation, tracking this important project

development objective was not addressed. The project’s results framework was not

properly tracked either during implementation. In addition, no indicators were adjusted

during project restructuring, despite the fact that some indicators were no longer

applicable. This also highlights an important lesson as both the Borrower and the Bank

could have used M&E data to identify needs to address in restructuring and, in turn, used

the restructuring to bring to date the project, through changes in directions, increased

flexibility, and improved measures of implementation, including adjustment of the results

framework.

106. The need for strong and dynamic approach to implementation support. While

Bank projects are implemented solely by the Borrower, the Bank team can leverage good

results through high-quality, strong, and dynamic technical support provided to the

Borrower. This Bank support during implementation provides an opportunity for a joint,

frank assessment of the policy context and how the project can contribute to the stated

development outcomes. An MTR, which provides a chance for the Bank’s core

implementation team to bring in outside expertise for a full review, also provides a

chance for adapting the project to maximize development outcomes. While the Bank

teams focused on policy dialogue during implementation and many issues were identified,

these were never formalized through regular missions, an MTR, or restructuring of the

project. As a result, at project closure, the project had to be evaluated based on original

project design, although major changes had occurred, such as the adoption of a national

targeting mechanism.

30

107. Strengthening central-local relations, particularly through promoting among

LGUs the introduction of defined method of identification of the poor: While the NG

adopted the NHTS-PR as the method to identify the poor and enrolled poor households

into PhilHealth’s Indigent Program, the LGUs still retain undefined methods of

identifying the poor, and pay for their insurance premiums out of public funds. This was

an unsatisfactory compromise between the LGUs and the NG, as two parallel systems

exist to cover two sets of populations. The premium of the poor identified by the NHTS-

PR is paid for by the national government, while the premium of the “poor” identified by

LGUs’ undefined method is paid for by the LGUs. Building on the achievements of the

SLAs and LGU scorecards, the NG should continue to work together with the LGUs to

promote the NHTS-PR. Public resources would be used even more efficiently if the

LGUs would adopt the NHTS-PR as the method of identifying the poor, and co-pay their

insurance premiums with the national government. Alternatively, a new arrangement

could make the LGUs no longer responsible for paying insurance premiums at all, and

instead assign the NG to be solely responsible for paying the insurance premiums of poor

households.

108. Effectively utilize the Bank’s international experience and “good practices”

within the sector or cross-sectorally in project implementation: The Bank has

demonstrated the value of international “good practices” by bringing a successful

experience from the social protection sector in Latin America to apply to the Philippines’

health sector. In the Philippines, implementation of the project’s health financing

component had clearly reached an impasse by the project’s mid-term – no LGUs had

identified the poor using acceptable methods of means testing and enrolled them into

PhilHealth’s Indigent Program. The breakthrough came with the Bank’s introducing the

PMT approach from Latin America, and the DSWD adopting it under the National

Household Targeting System (NHTS). This PMT method under NHTS was later

successfully used by PhilHealth to identify poor households and enroll them into its

Indigent Program.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/implementing agencies

(b) Cofinanciers

(c) Other partners and stakeholders

31

Annex 1. Project Costs and Financing

(a) Project Cost by Component (in US$)

Components

Appraisal

Estimate

(US$)

Actual /Latest Estimate

(US$)

Percentage of

Appraisal

1. Component A 40,000,000 44,024,443.48 110.06

2. Component B 38,500,000 49,643,892.77 84

3. Component C 500,000 0 0.00

4. Component D 10,725,000 10,774,644.42 107.75

Total Baseline Cost 89,725,000 104,442,980.67 116.40

Physical Contingencies 20,000,000

Price Contingencies 0

Total Project Costs 109,725,000 104,442,980.67 95.19

Project Preparation

Facility (PPF) 0 0

0

Front-end fee (IBRD

only) 275,000 275,000

100.00

Total Financing

Required 110,000,000 104,717,980.67

95.20

(b) Financing

Source of Funds Type of Financing

Appraisal

Estimate

(US$)

Actual/Latest

Estimate

(US$)

Percentage

of

Appraisal

[Government]

[IBRD/IDA or

GEF]

110,000,000 104,717,980.67 95.20

[Donor A] [WB-administered

TF]

0 0 0

[Donor B] [Parallel financing] 0 0 0

32

Annex 2. Outputs and Outcomes by Component

A detailed analysis of output and outcome indicators by project component is

summarized below.

Component A: Health Financing (US$44.024 million actual; US$40 million in the

Loan Agreement)

The overall rating for this component was judged as satisfactory. Initial efforts to

encourage the LGUs to identify the poor using acceptable, defined methods of means

testing, e.g. the CBMS, were plagued by deep-seated local political and governance

issues. There were only a handful of LGUs which fully implemented the CBMS as the

primary source of poverty data (e.g. Capiz, Biliran, Eastern Samar, and Agusan del Sur).

Yet, PhilHealth’s assessment of these LGUs that implemented the CBMS revealed that

none of them, except Capiz, used the CBMS as the source data for identifying indigents.

When the DSWD successfully identified the poor with the NHTS-PR, PhilHealth exerted

its efforts to convince LGU officials to enroll all PMT-identified households into the

Indigent Program. However, none of the LGUs agreed to this.

Given the constraints on the LGU part, the project turned to the NG to support the

enrollment of the poor into the NHIP Indigent Program, based on NHTS-PR. This is

clearly significant progress in policy that goes far beyond the project’s own objectives.

With the support of the NG, the project was able to identify the poor using the NHTS-PR,

which is an acceptable, defined method of means testing. Through this, in the final year

of the project, the NG quickly enrolled about 5.2 million poor households into the NHIP

Indigent Program. This was faster than using the CBMS method. Furthermore, the

original method of having the LGUs identify the poor using the CBMS was expected to

bring only 1.51 million poor households into the NHIP Indigent Program by the end of

the project. Thus, the project enrolled more than three times the target for poor

households that have their premiums paid by the Indigent Program.

Despite subsequent technical difficulties in the application of the NHTS-PR, in the long

term its adoption aligned the project with the national strategy. In 2011, the General

Appropriations Act (GAA) formally adopted the NHTS-PR as the basis for determining

who would be eligible for government subsidized enrollment into PhilHealth. Moreover,

through the adoption of the NHTS-PR, PhilHealth cross-matched the NHTS-PR’s list of

the poor with the list of enrollees identified by the LGUs, and this showed that the LGU

list of poor households was questionable. Out of 5.2 million households that were

identified as poor using the NHTS-PR, only 912,696 households were on the list of over

6 million households that the LGUs had identified as “poor”.

Some shortcomings remain. There was limited progress in the development of a partially

subsidized scheme for the near-poor. In addition, there was slow progress in PhilHealth

increasing financial protection for existing members through preferred provider

agreements that limited extra billing, and through incremental enhancement of the

benefits package. Furthermore, LGUs did not agree with NHTS-PR, and would not pay

33

the premiums for poor households identified by the NHTS-PR. As a remedial measure,

the premiums of the poor identified by the NHTS-PR were paid by the NG, backed by the

Joint Implementation Guideline adopted by the DBM, DOH and PhilHealth. A challenge

in the longer term is how to get the LGUs to support use of the NHTS-PR, who to make

the existing funding arrangements sustainable, and how to address the issue of

households enrolled into the Indigent Program by the LGUs that are not actually “poor”.

In summary, while taking note of the long delay in the implementation of this component

and the fact that the project did not achieve its original intention to get the LGUs to use

acceptable means test to identify indigents, the outcome of this component exceeded the

original targets in terms of increasing financial protection for the poor from catastrophic

health care costs.

Component B1 and B2: Health Service Delivery: Public Health (US$49.643 million

actual; US$38.5 million in the Loan Agreement)

Overall performance for B1/B2 was judged to be moderately unsatisfactory. The sub-

component B1 was intended to leverage health service delivery reforms that would help:

(i) improve accuracy in projecting the quantities of public health commodities required;

(ii) revise the criteria for allocating commodities to different LGUs and service providers

on the basis of appropriate and transparent criteria combining considerations of need,

performance, and public-private utilization patterns; (iii) implement measures to improve

warehousing, inventory management, inventory reports, and the distribution of public

health commodities to end users.

Operationally, component B (driven by sub-component B1) was the quickest-moving

project component, with a high disbursement rate. Nearly half of the loan was used for

the purchase of vaccines and other public health commodities, largely through UNICEF.

However, the outcomes of the component appear to be poor. Targets for five Loan

Agreement indicators used for tracking the progress of this component were not met. The

first three indicators were similar to the indicators used to track the PDO – FIC rate, TB

case detection rate, and TB cure rate. The latest FIC and TB cure rates improved slightly

from the baseline, but fell short of the target, while the latest TB case detection rate was

the same as the baseline. (Please refer to the relevant table in the section on the

achievement of PDOs on page 15).

The fourth indicator was “evidence of a statistically significant improvement, or


treatment rates in participating LGUs for diseases or conditions subject to performance

agreements and grants (from 0 LGU to 15 LGUs)”. The target for this indicator was not

met, as no method was finalized and no validation took place. According to DOH

management, it was difficult to come up with an evidence of a statistically significant

improvement, and that it was not been able to find a third party, as planned, who could

provide an alternative method of validation. Nevertheless, the DOH has been able to

conduct a small-scale self-assessment by using data from the LGU scorecards.

34

The fifth indicator was “significant quantified reductions in date-expiry, stock-outs and

losses of public health commodity stocks at defined levels in supply chain”. The target

for this indicator (i.e. quarterly reporting on inventory and method of forecasting

quantities required of public health commodities, satisfactory to the Bank, as well as data

on the stock levels/losses/targets agreed for each year) is also not met. The DOH and

Bank teams explained that no data were available. Potentially, the DOH could track data

down to the DOH’s Center for Health Development (CHD) at the regional level; however,

it was difficult to get data from the LGUs, as this was not part of the LGU reporting

mechanism. This highlights the governance challenge of the central-local relations in the

health system that occurred, despite the use of the SLAs.

Despite the government’s weakness in tracking date-expiry, stock-outs and losses of

public health commodity stocks, the Bank supported a logistics review in 2008, as a

follow-up to the 2005 logistics review. The first review revealed that among key players

there was not a functional coordination system for procurement and logistics. The 2005

review also showed non-compliance with the normal quarterly delivery cycle of vaccines,

and the breakdown in distribution, inventory, and reporting at the LGU level, and in some

CHDs.

Findings of the 2008 review revealed that there were still a number of weaknesses,

including the expiry of a significant volume of drugs and vaccines before they were used,

and a low level of immunization (65-70%), despite full funding for vaccines. The review

also found that the delivery of “near date-expiry” drugs and vaccines to health facilities

persisted. The DOH continued to only use the “push” allocation system, instead of

utilizing other triggers such as inventory and consumption reports on distributing

vaccines and public health drugs. It appeared that the DOH logistics system was unable

to report on stock levels of vaccines and drugs at the LGU level. With the exception of

Cebu province, there was no inventory management below the CHD level. In most cases,

there were no housekeeping rules for pest control or for the disposal of expired stocks. At

the LGU level, there was minimal use of inventory cards and if inventory and utilization

reports by the CHDs and the LGUs were available, the information was inconsistent or

lacking.

Although the logistics review provided useful information, it did not provide a roadmap

to address issues and track progress, and this weakened the effectiveness of the DOH

M&E system. No logistics review took place in the final year of the project to track

progress before project completion. Based on the 2008 findings, it appears that failure to

achieve the target of FIC rate, TB cure rate, and TB case detection rate, could be

attributed, in part, to drug/vaccine expiry, stock-outs and unnecessary losses of public

health commodities.

Another important activity that the project component failed to implement was the reform

to allocate commodities to different LGUs on the basis of appropriate and transparent

criteria that combined considerations of performance and need. This problem occurred,

despite the fact that the project should have allocated at least US$ 5 million on the basis

of performance. The DOH’s explanation for not pursuing this reform was that this

35

method was not appropriate, because it would have negatively affected the residents of

poor-performing LGUs, rather than the LGU administrations. Nevertheless, this response

raised a question about why the DOH did not raise this concern at the project design and

appraisal stage.

Despite the failure to meet all results targets, the project significantly helped the

country’s immunization program. It also financed the procurement of all necessary

Hepatitis B vaccines, and the first ever procurement of Hemophilus influenza B (HiB)

and Measles, Mumps and Rubella (MMR) vaccines. In addition, the project partially

contributed to the increase in public health program financing. Prior to the project, the

share of public health program financing out of the government health spending

(excluding staff salaries) was 25%, while 65% went into hospital operations. Currently,

the public health program’s share, which is considered pro-poor, stands at 50-55%.

Moreover, procurement through UNICEF for essential vaccination and commodities

offered significant benefits to the Philippines. Not only did UNICEF procurement ensure

the quality of vaccines, UNICEF also provided technical advice to the government on

improving the capacity to forecast and budget for public health commodities as well as

improving cold chain management. Prior to contracting with UNICEF, the government

found quality problems when procuring vaccines through nationally competitive bidding.

In addition, the 2008 logistics review showed that there was improvement in the country's

cold chain facilities, which are functioning properly, at the very least, down to the level

of municipalities.

The implementation of sub-component B2 was slow, and agreement was only reached in

the final year of the project that US$1 million would be disbursed to reimburse the

government for MNCHN grants allocated in 2009 and 2010. However, the Bank team did

not discuss the benefits and outcomes of these grants in the ISR reports.

This rating reflects the project’s inability to meet specified targets for all five indicators,

despite quick disbursement and the sheer resources that went into the purchase of

vaccines and other public health commodities. Nevertheless, the level of dissatisfaction

was judged to be moderate, taking into account the project’s positive contribution to the

expansion of the country’s immunization program, increases in public health program

resources, improvement in cold chain management and assurance of vaccine quality.

Component C: Regulation of Pharmaceuticals (US$0 actual; US$0.5 million in the

Loan Agreement)

Overall performance for this component was judged to be unsatisfactory, reflecting

chronic and systemic lack of progress. Despite being one of the key pillars of F1, the

implementation of this component experienced multiple delays. Given the 2009

legislation strengthening the BFAD, which ensured full income retention for the BFAD

and strengthened its regulatory powers, the DOH could not decide what the NSSHRP

should finance in improving the regulatory capacity of the BFAD (renamed the FDA by

RA 9711). There was a suggestion that the loan should be used to support the full

36

implementation of the delayed BFAD Integrated Information System by 2010, but the

“budget support” nature of the loan (that this is not new money for the FDA) did not

appeal to FDA, and led to further delays.

In 2010, the DOH formally requested a reduction in the allocation to only US$60,000 in

order to fund studies that would analyze the impact of BFAD reform. Later, the DOH

indicated that it planned to use project funds to reimburse the quality assurance

accreditation activities of the FDA, but the FDA was only able to start processing its

request for DOH reimbursement in June 2012, after the project’s closing date. By then

the money had been reallocated elsewhere, so financing this activity from project funds

was not possible.

This component encountered severe shortcomings. First, there was no indicator for this

component in the Loan Agreement, which made M&E difficult. Second, the BFAD/FDA

did not appear to be enthusiastic about implementing activities using the loan. This is

partly due to the fact that the loan was for budget support and did not provide a new

source of money for the BFAD/FDA. On the other hand, use of the Bank’s loan was

viewed as adding burdens to BFAD/FDA staff, as there are specified criteria and

procedures that BFAD/FDA staff needed to learn and follow. Third, the BFAD/FDA

suffered from chronic shortage of competent managers, which severely delayed the key

reform agenda of the BFAD/FDA. Finally, there was lack of coordination and

communication between the FDA and the BIHC regarding the project’s closing date, and

this made it impossible for the FDA to finance quality assurance activities with the loan

money.

Component D1: Health Human Resources (US$0 actual; US$0.5 million in the Loan

Agreement)

Overall performance for this component was judged to be unsatisfactory, reflecting

chronic lack of progress. This component was expected to support the development of

selected strategic national initiatives in the DOH’s HRH master plan to address health

sector personnel issues, especially the deployment of health professionals to rural areas. It

was agreed that the project would support HRH information system development, but the

project faced substantial delays in procurement for this. In 2010, while the HRH

information system product was being procured, there was discussion about using project

finance to deploy health personnel to poor and remote LGUs. However, in the end no

decision was made about this. In addition, procurement of the HRH information system

product took too long, and could not be financed by the loan.

Operationally, this component encountered severe shortcomings. First, there was no

indicator for this component in the Loan Agreement, which made M&E difficult. Second,

DOH’s HRH unit management did not appear enthusiastic to implement activities using

the loan. This is partly due to the fact that the loan was for budget support and did not

provide a new source of money for the HRH unit. On the other hand, the use of the

Bank’s loan was viewed as adding burdens to HRH unit staff, as there were specified

criteria and procedures that the HRH unit needed to learn and follow. Also, there was a

37

lack of coordination between the BIHC and the HRH unit in facilitating the HRH unit’s

use of the loan money.

Although the project’s HRH component did not progress, it should be noted that there

were positive developments in HRH activities financed through DOH’s own resources.

This included the implementation of programs to deploy health professionals to rural and

under-served areas, particularly Doctors to the Barrios (medical doctors), RNHeals

(nurses) and midwives deployment programs.

Component D2: Sector Management and Coordination of Local Health Systems

Reform (US$10.774 million actual; US$10.225 million in the Loan Agreement)

Overall performance for this component was judged to be satisfactory, reflecting rapid

progress in implementing the SLA and LGU scorecards, as well as the utilization of

M&E data from the LGU scorecards that was linked with variable tranches from the

DOH to the LGUs. Since the SLA for all 16 F1 provinces was finalized in July 2007,

over the years it has been used, revised, and improved. This achievement went beyond

the target of the LGU scorecards being implemented in 16 provinces, as the LGU

scorecards were rolled out nationwide.

It should be noted that most of the LGUs initially thought of the SLA as a document that

must be signed prior to the release of their fixed tranche funds. The intended purpose of

SLA became clearer when scores based on the achievement of SLA performance targets

were released together with their corresponding variable tranche funds. In 2008, the

DOH allowed the LGUs to select some of the SLA indicators. Several Provincial Health

Offices (PHOs) admitted that they selected indicators that they thought would be the

easiest to carry out in order to increase their chances of getting a bigger percentage of the

variable tranches. Starting 2009, indicators, now based on LGU scorecard, became

uniform in all provinces. There is, of course, room for improvement in future, as the data

is self-reported by the LGUs, and the DOH should put in place a system for the validation

of these reports.

Component D3: Strengthening DOH internal management systems (financed by EC

TF)

This component supported the strengthening of DOH’s public financial management

systems, integrated management information systems, and trained DOH staff in financial

management, procurement, and internal audit. Overall implementation for this component

was judged to be satisfactory. This reflected continued full compliance with the Bank’s

procurement procedures and standards, which were monitored using agency procurement

benchmark indicators. Also, over 80% of internal audit (IA) staff were trained to

international IA standards, and the annual IA plan of scheduled audits was implemented.

The DOH was also able to roll out the Electronic National Government Accounting

System (eNGAS). By the end of the project, the eNGAS was fully used in 5 CHDs, while

7 CHDs were in a transition phase, and the eNGAS was being rolled out in another 4

38

CHDs. In all the CHDs, quarterly reports were submitted to managers on performance

against the plan and budget under the GAA program structure. Even though the roll-out

of the eNGAS was slower than the targets, the DOH should be given credit for

persistence in expanding use of the eNGAS, despite being affected by the 2008 decision

of the Commission on Audit (COA) to suspend the national roll-out of the eNGAS and

stop supporting the DOH in implementing the eNGAS. The COA intended to introduce a

new comprehensive system (this was still not in place at the time of the ICR). This

project indicator and related target values should have been adjusted during MTR after

the COA decided to suspend the roll-out of the eNGAS, but since no MTR took place,

this did not happen.

Outputs by Component

Outputs by Components Amount (US$)

A. Health Financing

Premium for part of indigent enrollees into NHIP 44,024,443.48

B. Health Service Delivery: Public Health

B1. Public Health Commodities

Drug and Medicines

Praziquantel 600mg (500 tabs/btl) 206,337.03

Rabies Vaccine PCEV (RABIFUR) 187,984.12

Equine Rabies Immunuglobulin (FAVIRAB) 65,760.56

Freight charges 33,797.69

Albendazole 400mg 192,872.56

Diethycarbamazine 50mg 304,396.84

Immersion Oil 42,679.98

Sputum cup 81,091.96

Glass slides 25,309.23

TB Laboratory Supplies 62,814.69

TB Laboratory Supplies 387,166.71

Sub-total for drug and medicines 1,590,211.37

Vitamin

Vitamin A Capsules 358,243.68

EPI Vaccines

BCG 2,217,125.83

DPT 5,581,785.00

OPV 6,959,139.03

MV 4,278,500.57

HepB 5,541,600.00

TT 2,174,940.00

MMR 5,234,960.00

DPT-HepB-Hib 8,259,640.00

AD syringe 2,519,634.96

Safety Box 240,110.52

39

Freight charges 3,708,420.07

Sub-total for EPI vaccines 46,715,855.98

Grand Total for B1 48,664,311.03

B2. Performance-based Public Health Award

Performance-based grants using the CY 2009 MNCHN grant

allocation released to Abra, Apayao, Benguet, Ifugao, Kalinga,

Mt. Province, Baguio city

979,635.74

C. Regulation of Pharmaceuticals 0

D. Health System Governance

D1. Human Resources in Health 0

D2. Sector Management and Coordination

Local Health System Grants to 16 F1 convergence provinces

from CY 2007 to CY 2010 as national government counterpart

funds from the EC grant managed by the World Bank

10,774,644.42

40

Annex 3. Economic and Financial Analysis (including assumptions in the analysis)

The PAD did not provide an economic and financial analysis of the project, but instead

undertook a budget execution review. No net present value, economic and financial rate

of return, or cost-effectiveness was calculated a priori for the project.

41

Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/

Specialty

Lending

Cesar Palma Banzon Team Assistant EACPF Administrative

Jan Both Consultant EASHD

Melinda Good Senior Counsel LEGES

Loraine Hawkins Lead Health Specialist EASHD Task Team Leader

Teresa Ho Lead Health Specialist EASHD Task Team Leader

Janet I. Hohnen Consultant EASHD

Timothy A. Johnston Senior Health Specialist EASHH

Marites B. Lagarto Human Development Specialist EASHD

Cynthia F. Manalastas Program Assistant EACPF Administrative

Rekha Menon Senior Economist ECSH1

May Cabilas Olalia Operations Officer LCSPS

Maria Loreto Padua Senior Social Development

Specialist EASPS Social Safeguards

E. Gail Richardson Consultant EASHD

Noel Sta. Ines, Senior Procurement Specialist EAPPR Procurement

Florence Tienzo Health Specialist EASHD

Josefo Tuyor Senior Operations Officer EASPS Environmental

Safeguards

Supervision/ICR

Agnes Albert-Loth Senior Financial Management

Specialist EAPFM

Financial

Management

Dominic Reyes Aumentado Senior Procurement Specialist EAPPR Procurement

Eduardo P. Banzon Senior Health Specialist EASHH Task Team Leader

Cesar Palma Banzon Program Assistant GSDCR Administrative

Natasha Beschorner Senior ICT Policy Specialist TWICT ICT

Timothy A. Johnston Senior Health Specialist EASHH Task Team Leader

Alvin Valeriano de Borja

Marcelo Consultant EASHH

Maria Loreto Padua Senior Social Development

Specialist EASPS Social Safeguards

Gerardo F. Parco Operations Officer EASPS Environmental

Safeguards

Joseph G. Reyes Financial Management Specialist EAPCO Financial

Management

Roberto Antonio F. Rosadia Health Specialist EASHH Task Team Leader

Noel Sta. Ines Senior Procurement Specialist EAPPR Procurement

Tomas JR. Sta.Maria Financial Management Specialist EAPFM Financial

42

Management

Dennis Streveler Consultant LCSHH

Florence Tienzo Health Specialist EASHD

John Q. Wong Consultant EASHH

Kristine May San Juan Ante Program Assistant EACPF

Sutayut Osornprasop Human Development Specialist EASHH ICR TTL and

Primary Author

(b) Staff Time and Cost

Stage of Project Cycle

Staff Time and Cost (Bank Budget Only)

No. of staff weeks US$ Thousands (including

travel and consultant costs)

Lending

FY02 10.44 62.94

FY03 16.11 57.62

FY04 17.49 108.71

FY05 27.08 103.69

FY06 46.84 176.22

FY07 3.41 9.41

FY08 - 0.00

Total: 121.37 518.59

Supervision/ICR

FY02 - 0.00

FY03 - 0.00

FY04 - 0.00

FY05 - 0.00

FY06 - 0.00

FY07 23.90 75.86

FY08 30.68 85.02

FY09 27.39 86.79

FY10 7.7 63.95

FY11 14.73 51.22

FY12 27.81 57.29

FY13 1.32 1.27 1

Total: 133.53 421.4

43

Annex 5. Beneficiary Survey Results (if any)

N/A

44

Annex 6. Stakeholder Workshop Report and Results (if any)

There was no stakeholder workshop.

45

Annex 7. Summary of the Borrower's ICR and/or Comments on the Draft ICR

The DOH reviewed the Draft ICR and provided comments related to the trends on TB

during implementation of NSSHRP project. The DOH advised that the private sector

reporting was not included in the FHSIS report, which was the source of data that the

DOH shared with the Bank’s ICR team. The National TB Program has its own data that

captures the private sector, per the table below.

Trends of Case Detection Rate (CDR), Cure Rate and Treatment Success Rate from 2005 - 2010

Indicator 2005 2006 2007 2008 2009 2010

CDR (NSP)* 70 74 75 72 74 72

CDR (NSP)** 70 74 76 78 77 78

Cure Rate (NSP) 83 82 79 77 82 83

Tx Success Rate (NSP)*** 90 90 89 85 89 90

*Est. Incidence = constant at 131/100,000

**Est. Incidence = declining per year

***Success Rate = Cure Rate + Completion Rate

Nevertheless, DOH concluded that even though the private sector data was already

included in the data above, the outcomes still did not reach the 80% target of case

detection rate and 85% target of cure rate. The National TB program also mentioned that

they also use the treatment success rate as their parameter where they monitor the TB

cases which finished the 6 months treatment.

The DOH also shared a note prepared by the Health Human Resource Development

Bureau, dated January 18, 2013. The Bureau responded to Component D1: Health

Human Resources, on page 36 under Annex 2, and clarified on the non-utilization of

funds allocated to HRH.

The Bureau expressed regrets that it was unable to access the loan as budget support to

Human Resources for Health (HRH), and explained that this was not due to “lack of

enthusiasm”. The Bureau recognizes the value of the loan in implementing priority

human resources for health (HRH) programs/activities/projects (P/A/Ps) as outlined in

the HRH Master Plan 2005-2030. However accessing the fund is a tedious process that

the Bureau, even in coordination with the Bureau of International Cooperation (BIHC),

could not bring into fruition the potential of using the loan as budget support. The Bureau

was able to implement the planned P/A/Ps by tapping other sources of fund.

46

Annex 8. Comments of Co-financiers and Other Partners/Stakeholders

N/A

47

Annex 9. List of Supporting Documents

Project documentation:

NSSHRP Aide Memoires, Back-to-Office Reports, Quality Enhancement Review

Reports, Project Implementation, Status, and Results Reports, Project Monitoring Reports,

2002-2011

NSSHRP Loan Agreement, 2006

NSSHRP Project Appraisal Document, 35405-PH, 2006

PH-EC TF for Health Sector Reform Implementation, Status, and Results Report, 2012

SEMP 2 Implementation Completion and Results Report, 2008

Reports, studies, and references:

Department of Health (DOH), Field Health Services Information System (FHSIS) Annual

Reports, National Epidemiology Center, various years

DOH, LGU Scorecards data, 2006-2011

DOH, National Health Accounts, various years

DOH, National Tuberculosis Program Manual of Procedures, 2005

DOH, National Tuberculosis Program (NTP) Report, various years

DOH, Philippine Plan of Action to Control Tuberculosis (PhilPACT), Health Sector

Reform Agenda Monograph No. 11, 2010

DOH, Registered Nurses for Health Enhancement and Local Service Brief, not dated

European Union, Philippine Health Sector Support Programme, ASIE/2005/017-638,

July 2012

National Statistical Coordination Board, National Health Account data, various years

Utilization of the Community-based Monitoring System (CBMS) as a Tool for Localizing

the Millennium Development Goals (MDGs), on-line report, not dated

The World Bank and Government Procurement Policy Board, Agency Procurement

Compliance & Performance Indicator Assessment for Selected Government Agencies,

May 2010

IliganIligan

PasigPasigQuezon Quezon

GeneralGeneralSantosSantos

LucenaLucena

ViracViracBatangasBatangas

BoacBoacMamburaoMamburao

RomblonRomblon

Santa CruzSanta Cruz

AntipoloAntipolo

BalerBalerPalayan Palayan

TarlacTarlacIbaIba

MalolosMalolosBalangaBalanga

Trece MartiresTrece Martires

Laoag CityLaoag City

ViganViganBanguedBangued

TabukTabuk

IlaganIlagan

CabarroguisCabarroguis

BontocBontocLagaweLagawe

BayombongBayombongLa TrinidadLa Trinidad

LingayenLingayen

KabugaoKabugao

BascoBasco

Puerto PrincesaPuerto Princesa

PiliPili

SorsogonSorsogon

DaetDaet

MasbateMasbateCatarmanCatarman

BoronganBoronganCatbaloganCatbalogan

NavalNaval

MaasinMaasin

BacolodBacolod

DumagueteDumaguete SiquijorSiquijor

TagbilaranTagbilaran

MambajaoMambajao

SurigaoSurigao

San JoseSan Jose

TandagTandag

Tubod Tubod

ProsperidadProsperidad

TagumTagumNabunturanNabunturan

MatiMatiKidapawanKidapawan

DigosDigosIsulanIsulan

Marawi Marawi

MalaybalayMalaybalay

OroquietaOroquietaDipologDipolog

IpilIpil

IsabelaIsabelaCityCity

JoloJolo

KaliboKaliboRoxas CityRoxas City

San Jose deSan Jose deBuenavistaBuenavista

JordanJordan

AlabelAlabel

PanglimaPanglimaSugalaSugala

ZamboangaZamboanga Shariff AguakShariff Aguak(Maganoy)(Maganoy)

San FernandoSan Fernando

TuguegaraoTuguegarao

BaguioBaguioSan FernandoSan Fernando

LegaspiLegaspi

TaclobanTacloban

CebuCebu

ButuanButuan

DavaoDavaoCotabatoCotabato

CagayanCagayande Oro de Oro

IloiloIloilo

PagadianPagadian

KoronadalKoronadal

CalapanCalapan

CalambaCalamba

MANILAMANILA

MALAYSIAMALAYSIA

Iligan

PasigQuezon

GeneralSantos

Lucena

ViracBatangas

BoacMamburao

Romblon

Santa Cruz

Antipolo

BalerPalayan

TarlacIba

MalolosBalanga

Trece Martires

Laoag City

ViganBangued

Tabuk

Ilagan

Cabarroguis

BontocLagawe

BayombongLa Trinidad

Lingayen

Kabugao

Basco

Puerto Princesa

Pili

Sorsogon

Daet

MasbateCatarman

BoronganCatbalogan

Naval

Maasin

Bacolod

Dumaguete Siquijor

Tagbilaran

Mambajao

Surigao

San Jose

Tandag

Tubod

Prosperidad

TagumNabunturan

MatiKidapawan

DigosIsulan

Marawi

Malaybalay

OroquietaDipolog

Ipil

IsabelaCity

Jolo

KaliboRoxas City

San Jose deBuenavista

Jordan

Alabel

PanglimaSugala

Zamboanga Shariff Aguak(Maganoy)

San Fernando

Tuguegarao

BaguioSan Fernando

Legaspi

Tacloban

Cebu

Butuan

DavaoCotabato

Cagayande Oro

Iloilo

Pagadian

Koronadal

Calapan

Calamba

MANILA

1

2

4

6

7

11

14

17

18

19

20

2122

16

23

2425

27

31

39

42 46

47

49

54

75

59

62

65

66

71

73

74

76

80

79

77

78

63

3

5 9

10

8

12

13

15

28

29

30

26

32

33

34

35 36

37

38

40

41

43

44 45

48

50

51

52

53

55

56

58

61

64

68

69

70

60

67

72

57

ZAMBOANGA CITY

ICAR II

III

IV-A

V

IV-B VI VII

VIII

IX X

XIII

XI

XII

ARMM

NCR

MALAYSIA

Celebes Sea

Moro

Sulu Sea

Leyte Gulf

Visayan

Sea

Mindoro Strait

SibuyanSea

Phi l ippine

Sea

Babuyan Channel

Luzon Strai t

Gulf

DavaoGulf

MindanaoSea

BatanIslands

BabuyanIslands

PolilloIslands

LubangIslands

Catanduanes

TicaoSibuyanTablas

Busuanga

SemiraraIslands

CuyoIslands

Culion

Linapacah

Dumaran

Bugsuk

Balabac

Cagayan Sulu

Tawi-Tawi

Sulu

Basilan

Mindanao

CamiguinSiquijor

Negros

Panay

Bohol

Cebu Leyte

SamarMasbate

Marinduque

BuriasMindoro

Palawan

Luzon

Dinagat

Siargao

Sarangani

20ºN

10ºN

5ºN125ºE

120ºE

125ºE

IlocosIlocos NorteIlocos SurLa UnionPangasinan

Cordillera Admin. Reg.AbraApayaoBenguetIfugaoKalingaMountain Province

Cagayan ValleyBatanesCagayanIsabelaNueva VizcayaQuirino

Central LuzonAuroraBataanBulacanNueva EcijaPampangaTarlacZambales

National Capital Reg.

CALABARZONBatangasCaviteLagunaQuezonRizal

MIMAROPAMarinduqueMindoro OccidentalMindoro OrientalPalawan*Romblon

BicolAlbayCamarines NorteCamarines SurCatanduanesMasbateSorsogon

Western VisayasAklanAntiqueCapizGuimarasIloiloNegros Occidental

Central VisayasBoholCebuNegros OrientalSiquijor

Eastern VisayasBiliranEastern SamarLeyteNorthern SamarSamarSouthern Leyte

Zamboanga PeninsulaZamboanga del NorteZamboanga del SurZamboanga SibugayZamboanga City

I1234

CAR56789

10

II1112131415

III16171819202122

NCR

IV-A2324252627

IV-B2829303132

V333435363738

VI394041424344

VII45464748

VIII495051525354

IX555657---

Northern MindanaoBukidnonCamiguinLanao del NorteMisamis OccidentalMisamis Oriental

Davao Reg.Compostela ValleyDavao del NorteDavao del SurDavao Oriental

SOCCSKSARGENNorth CotabatoSaranganiSouth CotabatoSultan Kudarat

CaragaAgusan del NorteAgusan del SurDinagat IslandsSurigao del NorteSurigao del Sur

Autonomous Reg. inMuslim MindanaoBasilanLanao del SurMaguindanao**SuluTawi-Tawi

X5859606162

XI63646566

XII67686970

XIII7172737475

ARMM

7677787980

**Shariff Aguak (Maganoy) andSultan Kudarat serve as co-capitalsof the province.

*Executive Order 429, May 23, 2005,provides for the transfer of Palawanprovince (#31) from Region IV toRegion VI; Administrative Order 129holds EO429 in abeyance until animplementation plan is approvedby the President.

PHILIPPINES

0 50 100

0 50 100 Miles

150 Kilometers

IBRD 33466R4

NOVEMBER 2012

PHIL IPPINESSELECTED CITIES

PROVINCE CAPITALS

REGION CAPITALS

NATIONAL CAPITAL

RIVERS

MAIN ROADS

RAILROADS

PROVINCE BOUNDARIES

REGION BOUNDARIES

INTERNATIONAL BOUNDARIES

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, o r any endo r s emen t o r a c c e p t a n c e o f s u c h boundaries.