Philippines - Health Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 18079 IMPLEMENTATION COMPLETION REPORT PHILIPPINES HEALTH DEVELOPMENT PROJECT (Loan 3099-PH) June 26, 1998 Health, Nutrition, Population Unit East Asia and Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (As of December 31, 1997) Currency Unit = Philippine Peso (P) US $1.00 = P38.00 P1.00 = 100 Centavos FISCAL YEAR OF BORROWER January I - December 31 ABBREVIATIONS CARI Control of Acute Respiratory Infection COA Commission on Audit DBM Department of Budget and Management DOH Department of Health GOP Government of the Philippines HIS Health Information System IEC Information, Education and Communication IMR Infant Mortality Rate MCH Maternal and Child Health MCP Malaria Control Program MIS Management Information System NGO Non-Governmental Organization PHC Primary Health Care POPCOM Population Commission RHU Rural Health Unit SCP Schistosomiasis Control Program TCP Tuberculosis Control Program UNICEF United Nations Children's Fund USAID United States Agency for International Development WHO World Health Organization Regional Vice President: Jean-Michel Severino, EAP Country Director : Vinay Bhargava, EACPF Sector Manager : Maureen Law, EASHN Task Manager : Jayshree Balachander, EACPF  FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT PHILIPPINES HEALTH DEVELOPMENT PROJECT (Loan 3099-PH) Table of Contents Preface.. Evaluation Summary ............................................................ ii Part I Implementation Assessment .............................................................1 A. Statement/Evaluation of Objectives ............................................................ 1I B. Achievement of Objectives ............................................................2 C. Major Factors Affecting the Project ..............................................................7 D. Project Sustainability .............................................................8 E. Bank Performance ..............................................................9 F. Borrower Performance ............................................................ 10 G. Assessment of Outcome ............................................................. 10 H. Key Lessons Leamed ............................................................. 11 Part II Statistical Annexes ............................................................ 12 Table 1: Summary of Assessment ............................................................ 12 Table 2: Related Bank Loans/Credits ............................................................ 13 Table 3: Project Timetable ............................................................ 15 Table 4: Credit Disbursements: Cumulative Estimated and Actual ................. 16 Table 5: Key Indicators for Project Implementation ......................................... 17 Table 6: Studies Included in Project ............................................................ 23 Table 7: Project Costs by Category of Expenditures ....................................... 28 Table 8: Project Financing ............................................................. 29 Table 9: Status o.l7 Legal Covenants ............................................................ 30 Table 10: Bank Resources - Missions ............................................................ 32 Appendices ............................................................ 33 A. ICR Mission Aide-Memoire ............................................................ 34 B. Borrower's Contribution to the ICR ............................................................ 41 C. Borrower's Comments to the ICR ............................................................ 60 IBRD Map No. 27553 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.   i IMPLEMENTATION COMPLETION REPORT PHILIPPINES HEALTH DEVELOPMENT PROJECT (Loan 3099-PH) Preface This is the Implementation Completion Report (ICR) for the Health Development Project (PHDP) in the Republic of the Philippines, for which Loan 3099-PH in the amount of US$70 million was approved on June 22, 1989 and made effective on January 10,1990. Loan 3099-PH was closed on December 31, 1997, compared with the original closing date of December 31, 1996. Final disbursement took place by April 30, 1998. No part of the loan was cancelled. The ICR was prepared by Jayshree Balachander, Sr. Human Resources Specialist, Maria Theresa G. Quinones, Participation Specialist, and Noel M. Sta. Ines, Procurement Specialist with the assistance of consultants, Drs. Alberto Romualdez and Patrick Lowry. Jonathan Flavier prepared the background paper for the community development component and Agnes Ferrer prepared the Tables. Cynthia F. Manalastas was the Task Assistant. The ICR was cleared by Maureen Law, Sector Manager, EASHN. Preparation of the ICR was begun during the ICR mission in November 1997. The ICR benefited enormously from the end-of-project evaluation prepared by the Upecon Foundation which included five studies on the various components, and based on a field survey. It also used material in the project file as well as information provided by the Borrower. The Borrower contributed to the preparation of the ICR by stating their views as reflected in the Aide-Memoire (Appendix A), by preparing their own evaluation of the Project's execution (Appendix B), and commenting on the draft ICR (Appendix C).  ii IMPLEMENTATION COMPLETION REPORT PHILIPPINES HEALTH DEVELOPMENT PROJECT (Loan 3099-PH) Evaluation Summary Introduction i. The Philippines Health Development Project (PHDP) was the Bank's first comprehensive effort to support the Department of Health (DOH) in the Philippines, covering the key areas of disease control, health services delivery at the field level and capacity building of the DOH. After two population projects that performned poorly, PHDP was designed with full government ownership and a clear mandate for the DOH. Project Objectives ii. The Staff Appraisal Report (SAR) lists six specific project objectives. The project sought to achieve improvements in (i) the control of major communicable diseases; (ii) maternal and child health; (iii) equity, by targeting services to underserved areas and high risk groups; (iv) partnerships among government, NGOs and communities for health outcomes; (v) institutional capacity of the DOH; and (vi) DOH capacity for health policy development. iii. In the context of a logframe, these six objectives would correspond to the following three outcomes related to the overall goal of improving the health of at-risk and underserved population groups in the Philippines: (i) education in the burden of infectious diseases (41% of project costs); (ii) improvements in the delivery of field health services in underserved communities (44% of project costs); (iii) strengthening DOH capacity to plan and manage health policies and programs (15% of project costs). These objectives are clear and realistic, and addressed important needs of the sector. However, the linkages between the objectives were weak, especially during implementation - for example, institutional strengthening did not directly contribute to better implementation of disease control programs. Moreover, the multiple components to achieve each objective contributed to some complexity and risk and this was greatly exacerbated by the devolution of health services to local governments. Implementation Experience and Results iv. The Disease Control Programs varied in the level of project inputs from substantial in the case of schistosomiasis (80% of the overall country program) to negligible for the control of acute respiratory infections (CARI) and nutrition. All components were adversely affected by lack of GOP counterpart funds for key complementary inputs, and by the devolution of the responsibility for health services delivery to local governments. However the problems affected some components more than others and were managed by the components with different degrees of success. Overall, the achievement of the disease control component was partial.  iii v. The project's contribution to the reduction is the incidence of malaria in the Philippines is small since the projected expansion of vector control was not well managed while the increase in case-finding accomplishment (from 99% to 111% of target) during the same period was not significant. The achievement of the schistosomiasis component was substantial. The program was able to decrease the prevalence rate from 7.5% to 3.9% in 1993. On the process side, the component was run largely as envisaged at the time of project preparation. The component exceeded its output targets. TheTB Control component adopted an active case-finding and treatment approach targeting the identification of 250,000 cases, providing 185,000 courses of short course chemotherapy, and achieving 100 % cure rates in the treated cases. To this end, the component supported 310 case finding packages (CFPs) each consisting of a medical technologist, sputum canvasser, binocular microscope and laboratory supplies. Many delays were encountered in the procurement of drugs and microscopes and in paying salaries of the case-finding teams. As a result, less than 50% of the case-finding target of was attained. Moreover, the lack of effectiveness of the active case finding approach has been internationally recognized. The strategy is now one of case-holding to ensure treatment completion. The major contribution of this component is the excellent national survey supported by the project which will be useful for TB control planning in the next five years. It is not possible to quantitatively assess PHDP's achievements with respect to the control of acute respiratory infections (CARI) and malnutrition. In relation to the rest of the government's program, which received substantial support from other sources, the project's contribution was small and the overall impact of these activities on the national situation was probably negligible. vi. Delivery of Field Health Services. The achievement of this component was substantial. Midwives were hired and placed in appropriate underserved rural and urban locations and were well utilized by the client population. Although not a recipient of special training as proposed in the SAR, the midwives performed comparably with non-project health workers. However, despite indications at the beginning of project implementation that devolution would occur, no contingency plan was prepared to ensure that the midwives would be absorbed by the Local Government Units (LGUs). Thus, while the achievement of this component during the project period was substantial, sustainability is uncertain. The Community Health Development (PCHD) component was intended to develop a partnership between the government, NGOs and communities to expand primary health care services in remote and underserved communities through a process approach. Successful experiences were documented in several communities. Remote and underserved communities were reached. Overhead costs were relatively low. The project succeeded in leveraging funds with 50% of sub-project costs being resourced from outside the project. However, total reach was probably too small to make an impact at the national level. Implementation problems included delays in the release of funds, onerous accounting requirements for NGOs from GOP auditors and lack of support from local governments. Sustaining the partnership beyond PHDP also proved to be more difficult than anticipated. vii. Institutional Capacity Building was negligible. The IEC and Infocom components succeeded in installing state of the art technology and in training and familiarizing DOH staff in its use. However, the sustainability of the facilities, most notably the multimedia center and institutionalization of the use of information technology for management purposes is uncertain. The achievement of the other sub- components, including training, planning, policy development and central laboratories was negligible. Given the economic situation of the region, the election of a new government, and the changing global health situation, the overall prospect for sustainability of the project's achievements is uncertain. viii. Key factors that affected the project implementation were: 1) the devolution of health services; 2) delays in the release of counterpart funds; and 3) weak institutional capacity. The passage of the Local Government Code in 1991 and its implementation in 1993 had by far the most serious and lasting effect  iv on the project. Although the possibility of devolution was present since project inception, the implementing agency chose to plan and implement the project as a centralized project rather than developing a decentralized approach. The project experienced severe cash flow problems in 1991 causing serious delays and discontinuities for the DOH in conducting activities planned and approved for financing by the project. The size, duration and scope of the project severely taxed the management capacity of the DOH. During the period of project implementation, there were six changes in top DOH management. The individual DOH Secretaries' priorities in turn influenced the department's focus and level of commitment to different project components. ix. Bank Performance was highly satisfactory during the preparation phase. Appraisal was satisfactory despite failure to identify some weaknesses in project design and to deal adequately with concerns raised about project complexity and poor implementation capacity of the DOH. Bank performance during supervision was deficient mainly because PHDP supervision missions were combined with preparation missions for, successively, the Urban Health and Nutrition Project, the Women's Health and Safe Motherhood Project and the Early Childhood Development Project, and two sector reports. Donor collaboration was poor. x. Borrower Performance and participation in project preparation was excellent. Project implementation, however, was less satisfactory. The implementing agency largely ignored contingency planning for devolution, even as it became more imminent. The Government failed to provide counterpart funds as needed resulting in serious inefficiencies - for example, the lack of drugs during case identification and insecticides during the appropriate period for vector control. The Project Coordination Unit (PCU) was unable to enforce performance or reporting compliance from the program units. Summary Of Findings And Key Lessons Learned xi. Assessment of Outcome. Overall outcome of the project may be rated as satisfactory since most of the objectives were reached at least to some degree. The project had a positive benefit-cost ratio, even under the most stringent assumptions, primarily as a result of the field health and schistosomiasis components. Where objectives were not fully attained, the groundwork, in most cases, has been laid for future planning and management. For example, with respect to TB control, as a result of project experiences and with the new information provided by the national survey, the DOH is well prepared to mount a major control effort that could have substantial impact. xii. Equity was improved, as project investments were targeted to public health services and to underserved areas and communities. The inability of the DOH, as an implementing agency, to plan for and cope with devolution reflects the need for strengthening of institutional capacity that was identified in the SAR. It can be assumed that much was learned from this lesson, especially with regard to the planning and management needs of the agency. xiii. Key Lessons Learned. The major lesson to be learned from this project is the need to be more aware of the political milieu, including monitoring of possible legislative actions and other developing scenarios, while planning and implementing projects. Clearly, devolution could have been anticipated and contingency plans developed that would have eased its impact on both DOH and project activities. xiv. There should be strong linkages between the various components of projects. For project management purposes, while it is not necessary (and sometimes counterproductive) to have a dedicated project implementation staff, coordination should be at a management level and through a mechanism capable of monitoring the performance of the different components and taking corrective action.  v xv. Institutional development components should include a good analysis of existing constraints, well specified plans to achieve objectives and clear monitoring indicators. In most cases, the goals should be focused and modest. Typical examples are management and health information systems, which are complex and difficult to implement and where gains are often slow to be realized. These should at the start, be simplified and succinct, more complexity can be added as the basics are understood. xvi. Streamlining of drugs and equipment procurement and distribution, including possible decentralization of procurement, particularly of drugs and medical supplies, must be assured before any major public health commitment is made. The need for vehicles should be closely scrutinized during the project designed phase. Vehicles are often not essential to project success and their purchase should be minimized in future projects, except where the need can be specifically documented. xvii. The Bank should budget adequate resources for supervision. While multiple task missions may be cost-effective, particular care should be taken to ensure that all tasks, in particular, project supervision tasks, receive due attention. Consistent performance monitoring against indicators, and follow-up and resolution of earlier mission findings are important. xviii. Several donors concurrently support governments for activities to achieve certain outcomes. For example, curricula for midwives and other rural health workers have been developed repeatedly by donor projects over the past 15 years, but seldom coordinated or even fully utilized. Such efforts in the future should bring together major stakeholders in the planning and design stage to agree on collaborative implementation.   I IMPLEMENTATION COMPLETION REPORT PHILIPPINES HEALTH DEVELOPMENT PROJECT (Loan 3099-PH) PART I: IMPLEMENTATION ASSESSMENT A. EVALUATION OF PROJECT OBJECTIVES 1. The Philippines Health Development Project (PHDP) was the Bank's first comprehensive effort to support the Department of Health (DOH) in the Philippines, covering the key areas of disease control, health services delivery at the field level and capacity building of the DOH. After two population projects that performed poorly as a result of weak commitment on the part of government and in-fighting between agencies dealing with population, PHDP was designed with full government ownership and a clear mandate for the DOH. 2. The Staff Appraisal Report (SAR) lists six specific project objectives. The project sought to achieve improvements in i) the control of major communicable diseases; ii) maternal and child health; iii) equity, by targeting services to underserved areas and high risk groups; iv) partnerships among government, NGOs and communities for health outcomes; v) institutional capacity of the DOH; and vi) DOH capacity for health policy development. 3. In the context of a logframe, these six objectives would correspond to the following three outcomes related to the overall goal of improving the health of at-risk and underserved population groups in the Philippines: (i) reduction in the burden of infectious diseases through disease control programs; (ii) increased access to health services by expanding delivery of field health services in underserved communities; and (ii) institutional strengthening by improving DOH capacity to plan and manage health policies and programs. 4. These objectives are clear and realistic, and addressed important needs of the sector. There are strong linkages between the objectives. The effective delivery of disease control and MCH programs requires strong partnership among the various actors and access to services for vulnerable populations. This in turn is predicated on strong management and planning structures within a well-designed health policy framework at the level of the national agency. However, some of these linkages were lost sight of during implementation - for example, capacity development in the DOH was not directed at improving the management of the disease control programs, nor was the partnership component linked to the delivery of the core services. Moreover, the multiple components to achieve the objectives contributed to some complexity and risk and these was greatly exacerbated by the devolution of health services to local governments.  2 B. ACHIEVEMENT OF PROJECT OBJECTIVES Disease Control Objective (41% of project expenditure) 5. Summary Assessment. The disease control programs varied in the level of project inputs from substantial in the case of schistosomiasis (80% of the overall country program) to negligible, for CARI and nutrition (less than 10%). All components were adversely affected by lack of GOP counterpart funds for key complementary inputs, and by devolution. However, the problems affected the components differently and were managed with differing degrees of success. Achievement of the schistosomiasis control program was substantial; CARI and malaria partial; and TB and nutrition, negligible. Overall, the achievement of the disease control component was partial. 6. Malaria (6%). The Philippine Malaria Control Program aimed at reversing the perceived resurgence of the disease that occurred when the old vertical malaria program was integrated into the decentralized DOH public health structure in the 1980s. The strategy was to restore a semi-vertical program, hiring of canvassers for case-finding (about 33% of the component costs) and insecticidal spray teams for vector control (funded by GOP counterpart funds). The procurement of insecticides was also supported by the project (44% of component costs), as well as the production of IEC materials. 7. Project implementation was hindered by a number of factors. The banning of DDT in the Philippines was an unforeseen circumstance that delayed procurement and increased costs because of the need for more expensive alternatives. The lack of counterpart funds to hire spray teams resulted in delays in the spraying schedules, which are crucial for effective vector control. Procurements were delayed (e.g. insecticides ordered in 1991, arrived a year later) and when split between local and international procurement, (e.g. the engines and hulls of pump boats), were poorly synchronized. 8. During the project period, the incidence of malaria dropped from 14.2 per thousand in 1989 to 5.7 in 1993. However, the project's contribution to this reduction is small since, as stated above, the projected expansion of vector control was not well managed while the increase in case-finding accomplishment (from 99% to 111% of target) during the same period was not significant. IEC materials produced were of good technical quality, but their impact was not directly evaluated. While the restoration of a semi-vertical malaria program structure was accomplished, the component failed to achieve its intended impact. 9. Schistosomiasis (11%). The Schistosomiasis program was intended to decrease the prevalence rate from 7.5 % in 1989 to 1% in 1993. The project expected to conduct 4.81 million stool examinations and provide treatment with parziquantel for 180,000 patients. To achieve these outputs, additional itinerant teams consisting of microscopists, public health nurses, canvassers and drivers were to be hired, vehicles and microscopes purchased, health education materials distributed and 9 tons of snail molluscicides applied. 10. The achievement of the schistosomiasis component was substantial. The program was able to decrease the prevalence rate from 7.5% to 3.9% in 1993. The reduction of 58% in 3 years is a significant achievement even if it falls short of the SAR target. The component achieved its output targets - 5.29M stools examined against a target of 4.81 M and 263,562 cases of schistosomiasis treated against a target of 180,000.  3 11. On the process side, the component was run largely as envisaged at the time of project preparation. Apart from a failure in the procurement of taxicabs and delays in the availability of IEC materials, there were no implementation problems. The component managers also limited their losses by discontinuing the purchase of the motorcabs and retraining the drivers as stool collectors. 12. Tuberculosis (9%). The National TB Control Program adopted an active case-finding and treatment approach targeting the identification of 250,000 cases, providing 185,000 courses of short course chemotherapy, and achieving 100 % cure rates in the treated cases. The bulk (90%) of PHDP funds were used to support 310 case finding packages (CFPs) consisting of a medical technologist, sputum canvasser, binocular microscope and laboratory supplies. 13. There were many difficulties encountered during implementation. Sixty cities and 35 provinces were eventually supplied with CFPs. However, there were mismatches in timing between hiring and training of microscopists and the procurement of microscopes, a high turnover rate of these personnel, adverse effects of devolution on supervision, and delays in drug procurement. As a result, less than 50% of the case-finding target of 250,000 smear positive cases was attained and, of those treated, 87% were cured (according to service statistics). 14. The 1997 National TB Survey, supported by PHDP, showed some small improvements in the TB situation in comparison to a similar survey conducted in 1988. Even these very modest gains cannot be attributed to the project. In fact the active case finding approach adopted by the project has now been replaced by an emphasis on case-holding to ensure treatment completion. It should be noted that this new strategy, known as the WHO directly observed treatment strategy (DOTS), was adopted globally in 1996 or towards the end of PHDP as a result of difficulties experienced globally with the active case finding approach. 15. In sum, the overall contribution of PHDP toward the improvement of the national TB situation is negligible. Its major contribution will probably be in the development of future TB control programs. In particular, the national survey supported by the project is an excellent basis for TB control planning in the next five years. 16. Maternal and Child Health (5%). Under this component, PHDP supported activities in the DOH acute respiratory infection control (CARI) and nutrition programs. CARI aimed at reducing mortality and morbidity due to pneumonia among children through provision of training and appropriate antibiotics down to level of barangay health midwives. The nutrition programme's objectives included the reduction of protein-energy and micronutrient malnutrition among children at high-risk. 17. It is not possible to quantitatively assess PHDP's achievements with respect to the control of acute respiratory infections. In relation to the rest of the national program which received substantial support from other sources, the project's contribution was small. The procurement of drugs (83% of PHDP funding for ARI) may be assumed to share in the positive effect of the program on ARI mortality. About 6% of PHDP funding for the component went toward the procurement of 80 oxygen concentration for use at peripheral health facilities to treat serious cases of pneumonia. At the time of the PHDP evaluation survey, only 30% of these were judged to be operational at the level intended. 18. The PHDP Nutrition component supported the salaries of 16 nutritionists, some training and IEC, and the purchase of micronutrients for the national micronutrient control program (ASAP). The 116 mothercraft classes conducted in 35 municipalities is well short of targets implied in the SAR. The overall impact of these activities on the national nutrition situation was probably negligible.  4 SERVICES DELIVERY OBJECTIVE (44% of project expenditure) 19. Summary Assessment. The objective of improving the delivery of field health services in underserved areas was substantially achieved through the provision of midwives in remote areas and partially achieved by partnerships with communities and NGOs. Overall, the achievement of this component was substantial. 20. Midwives. To achieve project objectives, the project planned to hire midwives, initially using project funds, and assign them to underserved rural and urban sites. The DOH would later absorb these health workers after their effectiveness had been demonstrated and they were well established in their work sites. The project would develop innovative and relevant programs for training of midwives and other rural health providers. Finally, these workers were to be taught how to better collect and use data for planning and budgeting purposes and how to motivate their clients through use of information, education and communication (IEC) techniques and materials. 21. The implementation of this component was both efficient and effective. Essentially, midwives were hired and placed in appropriate underserved rural and urban locations and were well utilized by the client population. The midwives and other health workers, although not recipients of special training as proposed in the SAR, performed comparably with non-project health workers. However, despite indications at the beginning of project implementation that devolution would occur, no contingency plan was prepared to ensure that the midwives would be absorbed by the Local Government Units. At close of project, some 25% had been absorbed and another 20% had resigned, while the future of those remaining is in doubt. Thus, while the achievement of this component during the project period was substantial, sustainability is uncertain. 22. Community Health Development (PCHD). PCHD was intended to develop a partnership between the government, NGOs and communities to expand primary health care services in remote and underserved communities by "raising community health awareness, and sensitizing the health delivery system to be more responsive and creative to the delivery of basic health services." (SAR). This objective was to be achieved through a process approach which involved planning by communities, facilitated by NGOs, who were themselves oriented by the Department of Health (DOH). 23. The component was launched in 4 provinces in 1990. Successful experiences were documented in several communities. In 1992, DOH management decided to extend the component nationwide. Meanwhile, devolution cut-off direct control of the provincial health offices by central DOH. Responsibility for PCHD was transferred to the regional offices which lacked capacity to manage what was essentially a community based effort. 24. By the end of the project, the component had been implemented in 453 communities involving 304 NGO partners but the total coverage was probably too small to make an impact at the national level. About 70% of the expenditures went directly as project grants and 78% of grants were spent on sub- projects benefitting communities. In other words, beneficiaries at the community level received about 55 cents for each dollar spent by the component. The project succeeded in leveraging funds with 50% of sub-project costs being resourced from outside the project. The component was in fact implemented in remote barangays. Recipient communities were satisfied with the performance of the component.  5 25. The main implementation problems encountered had to do with delays in the release of funds, onerous accounting requirements for NGOs from GOP auditors and lack of support from local governments. Sustaining the partnership beyond PHDP also proved to be more difficult than anticipated. The achievement of objectives under the component was partial. INSTITUTIONAL DEVELOPMENT OBJECTIVE (15% of project expenditure) 26. Summary Assessment. Achievement of the institutional strengthening objective was negligible. The IEC and Infocom components have succeeded in installing state of the art technology and in training and familiarizing DOH staff in its use. However, the sustainability of the facilities, notably the sophisticated multimedia center, and capacity to use information technology for management purposes is still uncertain. The achievement of the other components including training, planning, policy development and upgrading of central laboratories was negligible. 27. Infocom. Infocom had two main elements: first, to improve communication within the DOH through acquisition and installation of appropriate communications hardware, including computers, radios and telephone systems; and second, to use this enhanced communication system to improve information gathering, analysis, planning and decision making. The heart of this second element was to establish a computerized health information system (the Field Health Services Information System or FHSIS) that would permit rapid communication of data between various levels of the DOH throughout the country, and encourage realistic and timely planning and management. It was also expected that the computerization would extend to DOH administrative operations such as logistics management, personnel, procurement and document management. 28. The component has laid the foundation for an electronic infrastructure for DOH, but the purchase of the equipment is too recent to institutionalize the use of information for management purposes. Implementation was delayed as a result of administrative bottlenecks, shifting management priorities and resistance to information technology. Most important, use of FHSIS that was to underpin this component did not materialize. The FHSIS program promoted by project was complicated. Its real purpose seemed to be to improve input to central DOH for their planning purposes. After devolution, FHSIS was assessed by the rural health workers as not particularly useful for their new planning and information needs. The rather negative effect of devolution on this component could have been prevented by early contingency planning and strategy modification, indeed, this component could have been successful if both the information and the planning (see below) elements were made more appropriate and useful to the rural health user. Thus this achievement of this component is, at best, partial. 29. Health Planning. This component was designed before devolution to enhance planning capabilities at regional, provincial and district levels of the DOH system. To this end, planning tools and training activities were conducted or planned for all provinces. Almost all participants in these activities submitted provincial level plans that were deemed satisfactory according to the criteria set at the workshops. However, only a very small number (less than ten percent) were actually usable. 30. Devolution interrupted the process of planning capacity development. Provincial level training was discontinued and planning was limited to the regional level staff. To institutionalize the planning process, it is in fact necessary to focus on planning capacity at the grass roots and on improving the quality of health information. The fact that these did not occur has severely limited the impact of PHDP in improving health planning in the country. Achievement in this component is rated as negligible.  6 31. Training. The training programs for midwives and other rural health workers were developed, in some cases field tested, but largely not implemented, as was the case with curricula developed in earlier World Bank projects (Population I and II). The curricula developed by the PHDP remains largely unused even today within the Philippines even though by most opinions they are excellent. Much of the in- service training for field staff was derived from vertical programs, and as such not the holistic training which was the project's intention. 32. The criteria for achievement of this element were not quantified in the SAR. The curricula development effort had no effect on the project. Again, if devolution was a factor in the implementation of this element, this could have been mitigated by early contingency planning and appropriate strategy modification. The impact of this component is considered negligible. 33. IEC. The IEC component of the project was to serve both as a resource to the disease control components and as a means of improving institutional capacity for health promotion. The existing IEC unit of the DOH provides most of the IEC materials for disease control. The intention of the project was to upgrade this unit to a multi-media center, capable of a providing more diversified and better quality IEC through a much broader range of media. 34.The IEC materials developed through this component were assessed as both effective and helpful to field health services, although sometimes delayed and often not finely tuned to the particular needs of the province or LGU. Reportedly, there was little input from the periphery into development of such materials. Motivational and promotional skills seemed however to be successfully taught and utilized by the field health services staff and the disease control programs were satisfied with the materials produced. The multi-media center was not effectively functional until the last year of the project, but appeared poised to provide significant future assistance to DOH programs subject to DOH initiatives to sustaining it. The impact of this component was partial. 35. Central Laboratory. This component was part of overall plan to strengthen the DOH science and technology infrastructure in support of its health service programs. A detailed component plan is not available, but it appears that a number of DOH facilities were envisioned to have been upgraded including the central laboratory, the Biologicals Production Service (BPS), the Research Institute for Tropical Medicine, as well as the four specialized tertiary medical centers (for lung, heart, kidney, and children's diseases). The main activities were the acquisition of equipment (71% of component costs) and overseas training in highly sophisticated laboratory methods (e.g., polymerase chain reaction). Acquisition of the equipment was supposed to coincide with the return of the trained staff, who would then implement a technology transfer plan. 36. The equipment procured vary in their degree of appropriateness and almost all are underutilized. In some cases, they could not be installed owing to lack of appropriate work rooms. There has been significant attrition of trained staff and there is no evidence of programs or activities to transfer skills within the DOH system. Overall, the contribution of this project component to upgrading of DOH laboratory capabilities is probably negligible. 37. Health Policy. A total of 23 policy studies were carried out under the project. Of these, almost half were in the area of health care financing. This area was also funded under a much larger grant from USAID. All studies were carried out by non-DOH contractors and were of good quality.  7 38. In the case of health care financing, the studies led to the enactment of landmark legislation creating the Philippine Health Insurance Corporation which is now tasked with expanding health insurance coverage provided under the old Medicare Law. A Health Policy Council supported under contract by PHDP deliberated extensively on the study results during the activities leading to the law's enactment. Unfortunately, the Council ceased to function afterward. 39. Except for the above, the component did not have any impact on capacity building for health policy. There is no policy formulation structure at DOH capable of commissioning, receiving, analyzing, and using materials for designing policy options useful to the DOH management. It may in fact be reasonable to conjecture that had such capacity been created, the impact of devolution on the role of the DOH may have been anticipated and addressed. Recently, a new policy development staff was put in place at DOH. Their effectiveness will depend on the importance the in-coming DOH administration attaches to policy making. In view of the above, the achievements under this component may be considered partial. The Project's Economic Rate of Return 40. An end-of-project evaluation calculated the benefit-cost for specific project activities and for the project as a whole. The approach was to use estimates of healthy life years saved for various treatment and prevention scenarios from earlier studies, and thus to estimate the healthy life years saved generated by project activities. Money values were imputed for healthy life years saved using GNP per capita for a high case scenario and income at the poverty line for the low case scenario. Data on treatment provided for malaria, schistosomiasis, TB, and midwife services were used to calculate the healthy life years saved as a result of project activities. In each case, benefits were calculated for a range of effectiveness, money value of the benefits and accrual period of the benefits. 41. Under the most conservative set of assumptions, the benefit-cost ratio for the project is 2.75, at a 12% discount rate for the total cost of the activities estimated, and 1.08 for total project costs (assuming a zero rate of return for the remaining activities). From the individual calculations, it appears that the gains from spending on midwives alone could more than offset the lack of benefits from all other activities. C. MAJOR FACTORS AFFECTING PROJECT IMPLEMENTATION 42. A number of factors had significant overall effects on the project. The most significant were the following: 43. The Devolution of Health Services. The passage of the Local Government Code in 1991 and its implementation in 1993 had by far the most serious and lasting effect on the project. Devolution of health services meant that the responsibility for the delivery of primary health care was transferred from DOH to the local governments (LGUs). This resulted in breaking the direct chain of command, from DOH to the rural health units, and changed the allocation and flow of funds for health care. Although the possibility of devolution was present since project inception, the implementing agency chose to plan and implement the project as a centralized project rather than developing a decentralized approach. In fact, nothing in the project SAR or objectives would have prevented implementation of the project in such a manner as to encourage strong but efficient and effective decentralized health services, with the DOH capacity building oriented to its post devolution advisory and technical assistance role.  8 44. Delays in Budget Releases and Complex Procurement Procedures. All project components suffered from delays in the release of funds and the procurement of equipment, supplies and services. The project experienced severe cash flow problems in 1991 as a result of the government's obligations to the IMF and rigidities with respect to operating special accounts. This caused serious delays and discontinuities for the DOH in conducting activities planned and approved for financing by the project. There were delays in procurement and/or delivery of drugs (particularly for TB treatment), pesticides/insecticides (particularly for malaria spraying), equipment (especially for Central Laboratory and Infocom), training manuals and guides (for the training component) and IEC materials (for disease control programs). Significant negative effects were observed on project activities heavily dependent on sustained expenditures on a continuous basis, including salaries and travel allowance of casual employees on case-finding and insecticide spraying teams. 45. Weak Institutional Capacity. The size, duration and scope of the project severely taxed the management capacity of the DOH. The limited monitoring and review of specific activities and poor resolution of problems is evidence of this. During the period of project implementation, there were six changes in top DOH management. The individual DOH Secretaries' priorities in turn influenced the department's focus and level of commitment to different project components. For example, coordinated development of the Central Laboratory was abandoned when the emphasis changed from high level science and technology strengthening to a more grassroots orientation in 1992. The absence of a full- fledged policy development staff capable of designing policy options based on alternative scenarios is another example of institutional weakness. D. PROJECT SUSTAINABILITY 46. Given the economic situation of the region, the election of a new government, and the changing global health situation, the overall prospect for sustainability of the project's achievements are uncertain. There is however considerable variation among components. The new government's stated pro-poor bias will likely mean focused attention on problems that are perceived as strongly related to poverty. 47. The National Tuberculosis Program is likely to receive continuing support. However, it remains to be seen, in the light of the government's financial situation, whether the magnitude of such support will enable the program to achieve the ambitious target of substantially controlling the problem by the start of the 21 st century. 48. The significant gains of the Schistosomiasis Program can be sustained if continued support for its vertical structure is maintained. Further gains will require more attention to environmental approaches. In this connection, the program should consider coordinating with the agricultural sector in treating the infection in domestic animals which contribute to the survival of the parasite in the environment. 49. Malaria control activities may benefit from the planned global effort to roll back malaria announced by WHO in May 1998. The effect on malaria morbidity of shifting from environmental methods such as residual spraying to individual protection such as permethrin treated bed nets needs to be closely monitored. 50. The MCH programs, not having received significant support from the project, are likely to be unaffected. Nevertheless, gains achieved in immunization may be threatened by unavailability of vaccines secondary to funding difficulties.  9 51. It has been clearly shown in the Philippines context that midwives and other rural health workers can be effective in providing rural health services, and that they are acceptable to those living in underserved areas. In the long run, as LGUs consolidate their experiences and access their constituencies needs, it is likely that they will increasingly fall back on the use of such health workers. The exposure of so many health and other govemment workers to training in information systems and planning will likely be the foundation for future gains in this area. However, near-term prospects are uncertain as more than 50% of midwives supported by the project had not been absorbed by local governments when the project closed in December 1997. 52. IEC use is likely to continue to rise. The multimedia center is now very well equipped and staffed. The center has prepared a business plan that anticipates it will initially focus exclusively on the needs of DOH, while exploring opportunities in other government departments or the private sector. However, the center may not be able to sustain itself if it is subject to the same resource constraints and bureaucratic procedures as other units of the DOH. Several options were suggested for DOH consideration to ensure the sustainability of the center, including autonomous operation or leasing out of the facility to the private sector including guaranteed production for the DOH. E. BANK PERFORMANCE 53. The project was managed by a single task team from preparation till most project activities had been fully implemented. A new project team took over in November 1994 and continued till the end of the project. The Implementation Completion Mission and ICR were handled by a new task manager based in the Resident Mission after decentralization of EAP. 54. The preparation phase was characterized by close collaboration between the Bank mission and the DOH and considerable client ownership. Bank performance was highly satisfactory during this phase. Appraisal was satisfactory despite failure to identify some weaknesses in project design such as weak links between the various components and to deal adequately with issues of project complexity and poor implementation capacity (identified as major risks by the FEPS review). 55. Even before the approval of the PHDP, the task team began focusing on building a pipeline of health projects. Given the long period betveen the approval of the Second Population Project and PHDP (10 years) during which in the Bank had no further involvement in the health sector, this was understandable. However, this had the unintended result of minimizing supervision inputs for PHDP. PHDP supervision missions were combined with preparation and then supervision mission for successively, UHNP, WHSMP and ECD. Missions also participated in the preparation of two sector reports - one on Family Planning and another on Devolution of Health Services. The additional tasks were not offset to any significant degree by increasing the duration or frequency of missions. 56. Bank performance during supervision was deficient. Supervision reports tended to not discuss all the project components, or review design and implementation issues in any detail. Missions failed to follow-up recommendations from one mission to the next so that a number of issues identified fell between the cracks. Missions provided very little support, in particular, for the institutional development component where the Borrower needed the most support. Missions also failed to collaborate effectively with donors. USAID funded a Child Survival Project (which was managed by the PHDP PMO) and a parallel health policy development initiative which are barely mentioned in the supervision reports. The Italians co-financed a TB component which likewise gets no mention during supervision.  10 F. BORROWER PERFORMANCE 57. Borrower performance with respect to project preparation is rated as highly satisfactory. The project addressed some of the most relevant health problems of the country and identified appropriate structures that had to be strengthened in order to resolve them. Borrower ownership and participation in the process was excellent. 58. Project implementation, however, was less satisfactory. The implementing agency largely ignored contingency planning for devolution, even as it became more imminent. For example, there was no plan for devolution as to the future role of project midwives. It was uncertain who was to assume support of them and after the fact agreement was hard to reach. Subsequently, training of the midwives was discontinued and the funds used simply to provide salaries while a solution was sought. Likewise, while FHSIS and the area-based planning effort could have been implemented in a manner to build up and strengthen decentralized health service capability, they were really implemented as an adjunct to centralized DOH planning and information needs. The Government also failed to provide counterpart funds as needed resulting in serious inefficiencies - for example, the lack of drugs during case identification and insecticides during the appropriate period for vector control. 59. The DOH consciously chose to leave the management of the components to existing service units, rather than direct implementation by a dedicated project staff. The Project Coordination Unit (PCU) was intended to act as a service unit to meet the Bank's procurement, financial and monitoring requirements. However, the PCU was unable to enforce performance or reporting compliance from the program units. This was probably a result of inadequate support to the PCU from the top DOH management. In the end, the arrangements were not enough to ensure sound project management. 60. All legal covenants were complied with by government. However, sonie of the agreements reached as per the SAR were inadequately pursued. One of the most significant of these is establishment of the National Council for Health Policy Development. The Council was short-lived and focused mainly on the issue of national health insurance. Had this Council been given a wider mandate and its operational secretariat fully integrated within the DOH, major issues such as devolution may have been at least deliberated upon and policy guidance more firmly given to DOH management. G. ASSESSMENT OF OUTCOME 61. Overall outcome of the project may be rated as satisfactory since most of the objectives were reached at least to some degree. The project had a positive benefit-cost ratio, even under the most stringent assumptions, primarily as a result of the field health and schistosomiasis components. Where objectives were not fully attained, the groundwork in most cases has been laid for future planning and management. For example, with respect to TB control, as a result of project experiences and with the new information provided by the national survey, the DOH is well prepared to mount a major control effort that could have substantial impact. 62. Equity was improved, as project investments were targeted to public health services and to underserved areas and communities. The inability of the DOH, as an implementing agency, to plan for and cope with devolution reflects the need for strengthening of institutional capacity that was identified in the SAR. It can be assumed that much was leamed from this lesson, especially with regard to the planning and management needs of the agency.  11 H. LESSONS LEARNED 63. The major lesson to be learned from this project is the need to be aware of the political milieu, including monitoring of possible legislative actions and other developing scenarios, while planning and implementing projects. Clearly, devolution could have been anticipated and contingency plans developed that would have eased its impact on both DOH and project activities. The sector work prepared by the Bank on the subject came relatively late in the project life and was not used by the DOH for devolution planning. 64. There should be strong linkages between the various components of projects. In particular, institutional capacity building and community involvement are likely to be more successful if they are directly linked to service delivery. For project management purposes, while it is not necessary (and sometimes counterproductive) to have a dedicated project implementation staff, coordination should be at a management level and through a mechanism capable of monitoring the performance of the different components and taking corrective action. 65. Institutional development components should include a good analysis of existing constraints, well specified plans to achieve objectives and clear monitoring indicators. In most cases, the goals should be focused and modest. Typical examples of such constraints are management and health information systems, which are complex and difficult to implement and where gains are often slow to be realized. Improvements in information collection and planning will be achieved by developing a simple product that is immediately useful to the user, mostly health workers at the rural health units. More complexity can be added as the basics are understood. 66. Successful NGO and community participation requires a change in the standard bureaucratic processes and approaches of government. 67. Streamlining of drugs and equipment procurement and distribution, including possible decentralization of procurement, particularly of drugs and medical supplies, must be assured before any major public health commitment is made. The need for vehicles should be closely scrutinized during the project designed phase. Vehicles are often not essential to project success and their purchase should be minimized in future projects, except where the need can be specifically documented. 68. The Bank should budget adequate resources for supervision. While task missions which supervise more than one project may be cost-effective, particular care should be taken to ensure that all tasks, in particular, project supervision tasks, receive due attention. Consistent performance monitoring against indicators and follow-up and resolution of earlier mission findings are important. 69. Several donors concurrently support governments for activities to achieve certain outcomes. For example, curricula for midwives and other rural health workers have been developed repeatedly by donor projects over the past 15 years, but seldom coordinated or even fully utilized. Such efforts in the future should bring together major stakeholders in the planning and design stage to agree on collaborative implementation.  12 IMPLEMENTATION COMPLETION REPORT PHILIPPINES HEALTH DEVELOPMENT (PHD) PROJECT (Ln. 3099-PH) PART II: STATISTICAL ANNEXES Table 1: Summary of Assessment A. Achievement of Obiectives Substantial Partial Negligible Disease Contrrol (4 1%) 0 18l O Malaria Control (6%) [ 3 I0 Tuberculosis Control (27%) 3 MI Schistosomiasis Control (22%) 8 o O Mlatemal and Child Health CARI (7%/.) O 0 O Nutrition (5%) O 0 Ec1 Field Srrvices Defivery (44%) 181 0 0 Field Health Services (84%) cm 0 0 Community Health Deveiopment (16%) 0 1i1 0 hIstismunioal Streng1hening (15.2%) 0 0 ER Information System (30%/6) 0 0 0 Information Education and Communication (30%) 0 I1 0 Planning (13%) 0 0 I1 Central Laboratory (13%) 0