Filipino Report Card on pro-poor services - Summary

27106 2001 The World Bank fl -i~~~~~~~~~~~~ IV~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Environment and Social Development Unit East Asia and Pacific Region 'J,1~~   Filipino Report Card on Pro-Poor Services SUMMARY Environment and Social Development Unit East Asia and Pacific Region The World Bank  The Filipino Report Card Team T | ahe Filipino Report Card on Pro-Poor Services was prepared by a team led by Bhuvan Bhatnagar, and comprising Musunuru Sam Rao, Dennis M. Arroyo, and Adarsh Kumar. It was prepared under the general direction ofVinay Bhargava, Zafer Ecevit, and Robert Vance Pulley. The client satisfaction survey, on which the Report Card is based, was designed and implemented by the Social Weather Stations, under the direction ofMahar Mangahas and Lindaluz B. Guerrero. The sector chapters were prepared by Jayshree Balachander, -- Joven Balbosa, Carol V. Figueroa-Geron, Vijay Jagannathan, Mariles Navarro, Ching Dela Pefia, and Mary Racelis, with inputs from the Report Card Team. Ganesan Balachander, Cyprian Fisiy, inrJ Marita Concepcion C. Guevara, Rana Hasan, Jesko Hentschel, ,- }= Angie Ibus, Manny Jimenez, Smita Lahiri, Juri Oka, Samuel Paul, M_ s Parmesh Shah, and Anna Wetterberg provided valuable suggestions 7-1 ~ * and inputs. The Report Card benefited from several hundred _ * reviewers both inside and outside the Bank. Luisa Sambeli Espafiola provided excellent production support. Brian James J. Lu designed this summary edition. Most photographs came from the collection ofTilak Hettige. A Note to the Reader T his booklet contains the summary of the Filipino Report Card. It also inicludes the table of contents forthe full-length report, which is available at the Public Information Center of the World Bank Office, Manila. For more information on the Filipino Report Card, please vtisit the websites at www.worldbank.org/participation or www.worldbank.org.ph. Thefindings, interpretations, and conclusions are those of the report team and should not be attributed to the WorldBank, its Board ofDirectors, or any ofits member countries.  SUMMARY I believe in listening to and leaming from those whom / serve. / will ensure that my organization creates and respects genuine mechanisms for regular feedback from our citizen-customers, and subsequently uses this feedback to render better service to them. President Gloria Macapagal-Arroyo INTRODUCTION Visayas, and Mindanao. In keeping with global best practice, client satisfaction with public ser- is the Report Card? vices in the Philippines was measured by com- paring it with satisfaction with services pro- he Report Card is a way for citizens to vided by the private sector.7 provide systematic feedback to public agencies about their performance. It Why Prepare a Report Card? elicits information about users' awareness of, There is a growing concern in the Phi- access to, use of, and satisfaction' with public lippines about the performance and account- services. It is an important follow-up to the ability of public agencies that deliver services, World Bank's Philippines 2000 Poverty As- e clly o t poor. Mos aoa bility 2 especially to the poor. Most accountability sessment. It complements the expert analyses mechanisms for ublic agencies focus on in- and findings in the Poverty Assessment with a g and findings in the Poverty Assessment with a puts (e.g., number of personnel, facilities, and "bottom-up" assessment of pro-poor services expenditures). They occasionally report on in five key sectors: health care, elementary edu- broad outcome indicators such as literacy and cation, water supply, housing, and subsidized 3 mortality rates. Beyond this arithmetic, little is rice distribution.3 known about the quality of services delivered The Report Card identifies the key con- by the State. It is thus difficult to identify spe- straints that Filipinos face in accessing public cific areas where these services could be im- services, their appraisals of the quality and ade- proved. quacy ofpublic services, and the treatment they Service providers and experts have under- receive from service providers, especially gov- taken a number of evaluations of pro-poor pro- emnment officials. It offers several recommen- datins n setorpoliies strteges, nd ro- grams in the Philippines that often identify pro- grams to address these constramits and improve gram-specific problems. The studies explore is- sues that do not, however, connect or cut across service delivery, especially to the underserved the various sectors. Moreover, very few of the and the poor. evaluations are done from the perspective of The Report Card is based on a national client the clients.8 The Report Card initiative was satisfaction survey undertaken by the World launched so that citizens could rate pro-poor Bank in collaboration with the Social Weather public services, based on their experience as re- Stations (SWS), a premier survey organization cipients. The Report Card also helps to pull to- in the Philippines that is independent, nonparti- gether the myriad individual problems facing san, and credible.4 The survey was carried out the various programs into common sectoral is- between March 26 and April 17, 2000. It cov- sues. It draws attention to the worst problems ered 1,200 households,5 distributed nationwide and to good practices in the five selected sec- in four broad regions:6 the National Capital Re- tors. By ranking and quantifying issues, it gion (NCR), Luzon excluding the NCR, the brings into the limelight the concerns that trou-  REPORT CARD ble Filipinos most.9 What is in the Report Card? To be effective, traditional public account- The Report Card presents people's perspec- ability systems need to be strengthened through tives on pro-poor services. These are not al- innovative approaches that involve public par- ways captured in traditional evaluations by ex- ticipation. Those at the receiving end -- Fili- perts and in the routine reports of agencies pro- pinos who use the services -- are well placed to viding the services.'3 The client assessments provide systematic feedback on government ac- bring forth valuable insights on pro-poor ser- tions intended to benefit them. Most recipients vices from different service providers (e.g., gov- cannot comment on complex technical matters. ermient, the private sector, and other sources). But they are eminently qualified experts on They probe into such critical dimensions as whether the public services meet their needs awareness, availability, and affordability. and expectations. They can say with authority These dimensions of service are presented from whether specific aspects are satisfactory or un- the perspectives ofdifferent population groups. satisfactory, and whether the concerned agen- cies are responsive, reliable, or accountable. They are differentiated by geographic re- gion, rural and urban residence, level of house- The Report Card is a timely initiative: it hold expenditure, and by gender. These should should help demonstrate the renewed commit- be key inputs in the design and improvement of ment of Filipinos to a democratic, transparent, effective service delivery programs. They and accountable State responsive to the needs should be seen as complementing the findings of the people, especially the poor. This commit- of expert evaluations and agency reports. The in- ment was reiterated by President Gloria Maca- sights derived from the Report Card can shed pagal-Arroyo, who required her Cabinet mem- light on the degree to which pro-poor services bers to sign a pledge to be accountable to eleven are reaching the target groups, the extent ofleak- service standards. The pledge includes respon- ages, and the factors that contribute to such mis- siveness to client feedback." direction of resources and services. They help This shift to thinking about Filipinos as cli- identify issues that constrain the poor from ac- ents rather than beneficiaries requires that their cessing and using the services, like physical "voices" count in the design, delivery, and as- availability, quality, and cost. Theyuncoverpos- sessment of public services. Private firms oper- sible ways to rectify the situation. The latter in- ating in a competitive environment make use of clude suggestions by citizens about the types of this approach. They utilize the data from client programs that might provide better service de- surveys to redesign theirproducts to better meet livery,.'4 Further, the Report Card results help customer needs and enhance customer loyalty, test from the clients' standpoint some ofthe pol- User feedback is especially important for agen- icy conclusions reached in other analytical stud- cies providing government services as they of- ies. 5 Thus, it presents a "bottom-up" perspec- ten operate as monopolies, i.e., with no compe- tive on the analytical work of the World Bank tition. In this situation, people, especially poor andothers. people, may have few viable and affordable al- ternatives.12 Citizen feedback is a much- How Did the Report Card needed corrective in this setting. It can be used Identify the Poor? by reform-minded champions in the Govern- ment as a trigger for public pressure to improve The primary measure of poverty in the Re- performance. port Card is based on household expenditures.'6 2  SUMMARY Households with expenditures in the bottom Government. 30% are classified as poor. Those with expendi- Initiatives and actions are already underway tures in the middle 30% are considered middle- to address some of the constraints identified by income. Those with expenditures in the top 20 Report Card 40% are regarded as the rich. 17The incidence teRpr adrsodns 40% are regarded as the rich.1 Theincidence. . recommendations are already incorporated in of expenditure poverty in the Philippines is the new Medium Term Development Plan2 and about 30% according to official estimates, so revised poverty strategy of the Goverment. households with expenditures falling in the bot- Many of them were mentioned in the Presi- tom 30% should cover virtually all, if not all, d 2 22 households that are below the official poverty dings are o be u bthe World Ban line. findmgs are also bemg used by the World Bank as key inputs into the design of a new country 23 ~~~~~~~~~~~~24 strategy23 and future lending operations. is the Report Card? The draft Report Card was finalized based on feedback from different stakeholders. The The Report Card began with consultations next step is to stimulate informed dialogue and with key stakeholder groups in government, the follow-up actions by development partners. private sector, civil society, and academe. Dissemination efforts will focus on three target Their inputs were actively solicited and incor- audiences: the service providers, the Congress, porated in the design of the survey question- and the general public. Different versions ofthe naire. After the fieldwork was completed, pre- Report Card will be produced and disseminated liminary data tables were prepared. The initial to cater to the needs of various target audi- findings drawing upon the tables were pre- ences.25 The follow-up dissemination actions in- sented to stakeholder representatives in re- clude: gional workshops in June 2000.18 The partici- pants helped validate the preliminary results * Individual consultations with concerned and suggested areas for additional tabulations public agencies on the Report Card results; and further analysis. They identified a number of nuances that were helpful in explaining the 0 Consultations between public agencies on perceived discrepancies between the Report common citizen concerns that cut across sec- Card results and sector level data. '9 tors; Detailed tabulations, analyses, and interpre- * Consultations between citizens and service tation ofthe survey responses took place during providers (public, private, and civil society the succeeding six months. World Bank sector organizations); specialists and national experts prepared the write-ups on the five sectors, utilizing the final * Targeted dissemination to the legislative data tables. They married Report Card findings branch ofthe Government; with other sector-level data to present a com- prehensive picture of the situation in the sec- * Dissemination of the main findings of the tors. The detailed data tables and draft sector Report Card through the media2 and re- write-ups were shared with the Government gional stakeholder workshops; and through the National Economic and Develop- ment Authority. This encouraged independent * Distribution of the Report Card data and scrutiny and validation of the analysis by the findings on user-friendly compact discs. 3  REPORT CARD SUMMARY FINDINGS FIGURE 1 Private Facilities are Rated Befter than Public Facilities T n he Filipino Report Card captures citi- zen assessments of public service pro- Non-medical facilities 7 vision in five key sectors: health care, el- Availability of medicines _ 73 ementary education, water supply, housing, 23 subsidized rice distribution, and the Lingap Waiting time 73 para sa Mahihirap (or Caring for the Poor) Pro- Medical facilities 73 gram. The assessments and key implications 15T72 for sector findings are summarized below. Treatment received 33 Quality of medicines 70 Health Care Competence of personnel 22 70 The health facilities assessed in the Report Availability of personnel 25 68 Card included barangay (village) health sta- Number of personnel tions, rural health units/urban health centers, 28 government hospitals, private clinics/hos- Attitude of personnel 24 pitals, nonprofit clinics/hospitals, and tradi- Convenience of schedule 63 tional healers. Understanding health needs 22 The nonpoor use health facilities more 52 than the poor. More than three fourths ofthe re- r 18 0 spondents have utilized a health facility in the Convenience of location 56 12 months preceding the survey. Urban re- Flexibility of payment 60 sidents visit the facilities more than rural resi- 30 dents. A larger proportion of the better-off visit Cost of medicines 67 29 health facilities, compared to the poor, although Cost of treatment 76 poor Filipinos are more likely to suffer from ill 20 40 60 80 10 health. Those who did not go to health facilities Percent of respondents gave absence of illness, self-medication, and the high cost of medical care as reasons. Base: Households most often using (private/public) facility and with access to altemative (public/private) facility Public facilities are low in cost but in- ferior in quality. Publicly provided health ser- vices are used mainly by those who cannot af- a PRIVATE facilities are better than public facilities in (ASPECT) ford the widely preferred private services. si PUBLIC facilties are better than private facilities in (ASPECT) Compared to government facilities, clients rank private facilities superior in all quality as- pects (care, facilities, personnel, medicines, units/urban health centers) appropriately pro- and convenience). The only advantages of go- vide preventive health services and treatment vemment facilities over private facilities are for minor illnesses/accidents. However, a siz- their low cost (oftreatment, medicines, and sup- able number of Filipinos bypass them, even plies), and flexibility ofpayment (Figure 1). when they are highly accessible, in favor of gov- Primary facilities are frequently by- emient hospitals and private clinics/hospitals passed. Government primary health facilities (Figure 2). Thus, government hospitals end up (barangay health stations and rural health providing the same services as primary facili- 4  SUMMARY FIGURE 2 Public Primary Health Facilities are Often Bypassed facilities do so because they are dissatisfied Public_Primary_Health_Facilities_are_Often_Bypassed with their quality. In fact, satisfaction is lowest for frontline barangay health stations and grassroots rural health centers. Diagnosis is Barangay poor, necessitating repeat visits. Medicines and health 68 supplies are inferior and often unavailable. station Staffmembers are often absent, especially in ru- ral areas, and are perceived to lack medical and Rural/Urban people skills. Waiting time is long, schedules health 74log cealter ! !are very inconvenient, and facilities are run- cenr / / down. 65 70 75 Primary facilities are used mostly by the Percent of respondents poor. Private clinics/hospitals are more likely that bypass facility to be visited in Metro Manila and in other urban Base: Households within a 15 minute walk areas, and by the nonpoor. On the other hand, residents of Mindanao and rural areas, and the poor, are more likely to visit government pri- ties. Only a third of their business consists of mary facilities andtraditional healers. specialty services like care for major illnesses Improving primary facilities is pro-poor. (Figure 3). Since public primary facilities are mostly fre- Primary facilities arenotedfortheirquented by the poor, improving their quality, Primry aciitie ar noed fr teirlow and stressing services needed by the poor, quality. Those who bypass the primary health wud make te re poor. would make them more pro-poor. This would FIGURE 3 also reduce the inefficient use of public hospi- Public Hospitals Mostly Do the Work of Primary Facilities tals. The Sentrong Sigla program of the Depart- ment of Health, which issues a seal of approval to facilities that meet quality standards, should be strengthened. Targeted assistance to upgrade Specialty care the quality of primary facilities should focus on poorer, isolated communities. M ri Government hospitals require quality up- Minor curative i care 30 grading, too. While clients rate government hospitals higher than public primary facilities, Preventive 35 there remains a significant quality deficit in gov- health care 63 ernment hospitals compared to private facili- ties, especially in the NCR. This is particularly 0 20 40 60 80 disconcerting, since a large share ofthe national Percent of households government budget for health is spent on gov- ernment hospitals in Metro Manila. The prior- Base: Respondents that sought their services ity is to improve service quality in government hospitals through financial autonomy and mar- | O Primary facility U Hospital ket pressure. The poor pay more, but get less. Median 5  REPORT CARD annual household expenditure on health is FIGURE 5 PhP1,180 (about $25), and, in absolute Medicines are Expensive amounts, the rich spend ten times more on health care on average than the poor. This is largely due to patronage by the poor of cheaper, Others lower-quality government services. However, Laboratory the modest health care spending of the poor ab- Consultation, treatment sorbs a larger share of their income than does Hospital stay l the health care spending of the rich (Figure 4). Medicines l __ _ ___ The poor especially need insurance cover- 0 10 20 30 40 50 age. Insurancecoverage couldlightenthemed- Percentage share in total ical burden of all Filipinos, especially the poor. health expenditures While one third of the population is protected Base: All households by health insurance, less than 1% ofthe poor are covered. Thus, payments for health care by the some drugs by half. poor are almost entirely out of pocket, effec- tively limiting their use of care for catastrophic Implement the Health Sector Reform illnesses or for quality (private) care. Agenda. The Health Sector Reform Agenda (HSRA) proposes to make the health care sys- High prices of medicines are a burden. tem in the Philippines more pro-poor by (i) ex- Medicines and supplies account for the largest panding health insurance coverage for the poor; share of household medical expenses, at 49% (ii) improving the quality and accessibility of (Figure 5). This is even larger than the 33% health care for the poor in public primary facili- share that goes for hospital stay and the 10% ties; (iii) reducing the cost ofmedicines and hos- share for consultation and treatment. It is urgent pital stays; and (iv) improving quality in gov- to cut the prices of medicines, which are signifi- emient hospitals by giving them financial au- cantly higher in the Philippines than in the rest tonomy. If successfully implemented, the of the Association of Southeast Asian Nations HSRA could respond to the aspirations and con- (ASEAN). Hence, the Government has initi- cems of Filipinos. ated parallel importation of cheaper drugs from countries such as India. Competitive bidding Elementary Education procedures have also helped cut the prices of Elementary education in the Philippines is FIGURE 4 provided by public and private (including sec- Health Care is More Costly for the Poor tarian) schools. Elementary school enrollment is almost Rich universal, and mostly in public schools. . _ l More than nine out of ten school-age children Poor are enrolled in elementary schools, and 88% of (-- )---------r-- -6 ---8----~ them go to public schools. Access to public 0 2 4 6 8 schools has improved overtime. Mean health expenditure as a percentage of total household expenditure Dropouts are mostly from poor families. Base: Rich and poor households About three fourths of the dropouts belong to poor households. They are most often located 6  SUMMARY in rural areas. Two out of five Filipino children FIGURE 7 not in school are Mindanao residents (Figure Private Schools are Rated Better than Public Schools 6). Boys tend to drop out more often than girls. Of those children who drop out of elementary school, 60% do so in grades 4 and 5. Teachers' mastery 7 _ FIGURE 6 Textbooks 91 1 Most Children Not in School are from Mindanao Class size 11_84 Facilities in the _ 1 78 Metro Manila classroom Visayas l Teachers' attitude 78 Balance of Luzon Other facilities 76 Mindanao 6 b - . 6 z < ~~~~~~~~~~~~~Administrators' ability _ 2i1 0 20 40 60 73I Teachers' attendance _ 7 Regional distribution of childreniI not in school, in percent Convenience of 7 3 schedule 3 Base: All children not in school Classmates of child 7 647 Location I Children drop out for health and eco- Transport costs 40 nomic reasons. Poor health (or disability) is Uniform costs 0 7 the main reason for dropping out, followed by Tuition 8: 6 economic reasons, like the high cost of educa- --t tion, or the need for the child to work. A small 0 20 40 60 80 100 proportion drop out due to poor grades. Percent of respondents Filipinos recommend the following pro- Base: Households with children in (private/public) schools and with access to alternative (public/private) schools grams for helping poor families keep children_________ in school: in-school health care; full exemption C Child's PRIVATE school is better than alternative public from miscellaneous fees; and more qualified, school in (ASPECT) and better trained, teachers. Scholarships for rl Child's PUBLIC school is better than alternative private school in (ASPECT) poor families, specifically targeted at children in rural areas, are also recommended. Public schools are low in cost, but inferior in quality. A significant majority of private and public school patrons agree that private schools patronized by rich, urban households, and resi- are better in quality than public schools (Figure dents of Metro Manila. Unsurprisingly, these 7). On the other hand, public schools are rated schools are more often located where the better- higher by clients on their low cost and conve- off live. nience of location. Those who can afford to pay On the other hand, public elementary edu- send their children to private schools. cation is far from free. Public education is sup- Tuition fees of private schools are ten posed to be free. In fact,Jfamilies spend about times those of public schools. Because they 2% of their total household expenditures on are out of the reach of poor and most middle- each child enrolled in a public elementary income households, private schools are mainly school. 7  REPORT CARD FIGURE 8 Public Elementary Schools: Lowest Ratings for Class Size, Facilities, and Textbooks Class size 1.02 Facilities in the classroom 1.05 Other facilities 1.07 Textbooks 1.09 Tuition 1.24 Convenience of schedule 1.24 Classmates of child 1.24 Teachers' attendance 1.33 Transport costs 1.37 Teachers' attitude 1.37 Teachers' mastery 1.39 Ability of administrators 1.41 Convenience of location 1.64 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 Very Satisfied 2, Satisfied 1, Neutral 0, Dissatisfied -1, Very Dissatisfied - 2 Base: Households with children in public elementary schools One fifth of this amount goes to miscella- lower rating for teachers' performance should neous fees and donations for the school's up- be of particular concern to private schools, as keep. These fees are particularly high in the this has been their main comparative advantage Visayas. Transportation accounts for about half over public schools. Unless private schools are of education expenses, and uniforms for about a able to arrest this decline, they are likely to lose quarter. more students. This is bad news for public Class size, textbooks, and facilities are schools, too, as it puts additional pressure on al- rated poorly in public schools. Public school ready strained resources. patrons are most satisfied with location, per- Parent-Teacher Associations are wide- haps because of the successful implementation spread. Parent Teacher Associations (PTAs) of the long-standing "one baran gay, one are found in 98% of public schools, and two school" policy of the Government. However, thirds ofthe parents are PTA members. Partici- they are least satisfied with class size, availabil- pation ofthe poor is higher than the national av- ity of textbooks, and school facilities (Figure erage -- three fourths of poor households are 8). Average class size in the Philippines (45) is PTA members (Figure 9) -- and has improved much higher than the average teacher-to- over time. Four out of five private schools have student ratio (35), largely due to poor deploy- PTAs, and their numbers too have risen over ment of teachers. Five students, sometimes time more, share a single textbook. And the condi- tionofmostpublic schoolbuildings is poor. PTAs are a potent force for reform. Al- There has been a drop in client satisfac- most all of the poor say they are well repre- tion with private schools. The fall is related to sented in PTAs. Public school PTAs are equally tuition fee increases, slipping teachers' perfor- concerned with education and fundraising, and mance, and deteriorating school facilities. The members feel they have considerable influence 8  SUMMARY FIGURE 9 while 3% get water from vendors. This means Parent-Teacher Associations are Widespread 3 7% of the consumers devise their own ways to get water. Self-provisioning is the last resort of 100 - poor households. They are forced to collect wa- 80 ter from contaminated sources. They store it in 60 containers (such as clay pots, plastic cans, or 20 - tins) that are not regularly cleaned, and drink it o -- l without treatment. Poor Middle Rich The poor are excluded from Level III wa- ter service. Only one quarter ofthe poor get wa- Base: Household with children in elementary school ter piped to their homes (Figure 10). The access ofthe poor to home-piped water is less than half * Member in PTAs that of the rich. The poor are three times more CL PTAs represent their views closely likely than the rich to access water from wells, springs, and communal faucets. Of the poor with no house connections, more than two on the teaching programs. thirds want such access. Figure 1 1 shows the dis- tribution ofwater sources for the poor. Private school PTAs are mostly concerned with education activities, and members feel Rural communities and Mindanao are they have considerable influence on the teach- underserved. Urban households are four times ing programs, too. Thus, PTAs represent valu- more likely to be served by Level III systems able social capital that could help enhance re- than rural households. More than four out of sponsiveness, accountability, and results orien- five households in the NCR enjoy access to tation in elementary schools. FIGURE 10 Only Two out of Five Filipinos Have Piped Water Water Supply The Government provides water through three formal levels. Level I is a point source Philippines I (without any piped distribution), like a spring Mindanao or protected well. It serves around 15 house- Visayas holds within 250 meters. Level II is a piped sys- Balance of Luzon tem with community faucets, serving four to six Metro Manila households within 25 meters. Level III is a full Rural waterworks system with individual house con- Urban nections. When water is not piped, responsibil- Rich ity for improving quality is transferred to the Middle consumer. Level I and II water has to be stored poor for a longer time, at greater risk of contamina- P 26_ 0 20 40 60 80 100 tion. Percent of respondents with access Two out of five Filipinos do not get water to home-piped (Level oll) water connections from formal sources. Only 64% of Filipinos get water from the Level I, Level II, or Level III Base: All households systems. One third rely on self-provisioning, 9  REPORT CARD FIGURE 11 FIGURE 12 A Third of the Poor Collect Their Own Water Those with Home Pipes Consume the Most Water Vended Philippines Communal Vended faucets Wells, springs Home pipes - - Communal faucets Self-provisioning Self- provision Home Pipes _ f._ _ : _ Wells, 0 20 40 60 80 100 springs _ __ E 1 Median water consumed, in liters per capita per day 0 10 20 30 40 Main source of water supply, percent of households Base: All households Base: Poor families Level III services. Level III service is least ceptably low. Half of all poor and rural house- available in Mindanao. A majority there get wa- holds consume less than 41.6 liters per capita ter from communal faucets (Level II) and point per day. This is a meager amount, given that 30 sources (Level I), and one third rely on self- liters barely meets human water requirements. provisioning. Among the poor who buy water from vendors, Level III service is unable to meet con- median consumption is just 20.8 liters. The poor and rural households are more vulnerable sumer demand. Hence, consumers are forced . .. to get water from other sources. Among those to diseases like malaria, gastroenteritis, dengue without access to home-piped water, two thirds fever and typhoid induced by scarce, contami- want to get it, but 95% have not applied for such nated water. service. The main reason cited is absence of the Water supplied by all sources is consid- service in their area. Water services should be ered unsafe for drinking. Almost all house- provided based on what the clients want and are holds incur additional expenditures on water willing to pay for. treatment and bottled water, and such expendi- Level III service con- tures are often substantially higher than those Househmold w iterthan others. Median water paid to the water utility. The quality ofwater pro- sum moewtr thnohr.Mda.ae vided in the rural areas appears worse than that consumption for Level III households is more in areas,aaseseenoin the r trat than the combined consumption for those with Level I and Level II access (Figure 12). Higher costs in the countryside. consumption levels and convenience are indi- Low water quality especially hurts the cators of greater welfare, and the survey con- poor. Rural residents spend more than twice as firms that Level III systems are preferred. Even much on treating water as they do on their util- the poor consume more water from Level III sys- ity bills. Urban households spend an almost tems, compared to any other source. equal amount on bottled water, a source in need Water consumption by the poor is unac- of improved regulation. The poor scrimp on wa- 10  SUMMARY ter treatment because they cannot afford it and largest State investments and subsidies (in capi- because oftheir lack ofhygiene education. tal and operational costs), serve mainly the ur- The poor pay more, but get less. Outlays ban nonpoor. Therefore, these groups benefit on water vary from 2% to 9% of total household more from goverment subsidies. expenditure. Self-provisioning and vended wa- ter show the highest shares. On average, poor Housing households allocate proportionally more of The Report Card sought citizen assessments their monthly expenditure to water than do the of their current housing as well as the housing rich. The poor can afford only limited amounts assistance services they received from both pub- of (low-quality) water, and have very little lic and private sources. Information on current money to treat it. They should receive priority housing provides a context for better interpret- in new service provision. ing the experiences ofFilipinos with housing as- sistance programs. The poor spend the most on low-quality vended water. Clients give the lowest quality The poor are extremely dissatisfied with and service ratings to vended water. Almost one their housing. Half of the respondents rate tenth ofMetro Manila residents, many ofwhom their housing as inadequate (Figure 14). An- are poor, get their water from vendors. The Fili- other third consider their housing as borderline- pino poor who rely on vended water as their inadequate. In Mindanao and Visayas, where main source devote 9% of their household ex- poverty is more widespread than Luzon, nearly penditure to buying water (Figure 13). This is two out of three households regard their hous- the highest share among all categories and ing as inadequate. Dissatisfaction with housing sources. They should receive top priority fortar- is higher in rural communities, where more geted interventions. poor Filipinos live, than in urban areas. How- ever, the urban poor are extremely dissatisfied The rich are subsidized more than the FIGURE 14 poor. Level III systems, which often get the Half the People Rate their Housing as Poor FIGURE 13 Expenditure on Vended Water is a Burden on the Poor Philippines I U Metro Manila 101'- I_ 8- / l Balance Luzon I .._ . 6- //| 5 - Visayas IEEEEEE 4- ~~~~~~~Mindanao E EE I 2- ~~~~~~~~~~~~~~Urban Poor Rich Rural IE*E* E: Share of vended water as 0 10 0 30 40 50 60 70 percent of total household expenditure Percent of respondents who rate their housing as poor Base: Households that rely on vended water as main source of water Base: All households  REPORT CARD comparedto theirwealthierurban counterparts. The poor are capable of building their Location is linked to satisfaction. Urban own shelter. The Report Card finds that al- though residential land ownership iS lowest residents, especially the poor, are more satis- fied than rural Filipinos with tamong the poor, house ownership is highest, thedr house relalive i o wit the ocaton of compared to middle-income and rich house- ltchirihouse at h p lace of wok ub- holds. This reflects the capacity of the poor to lic aciitis, nd ublc srvies.Becusetheur- build their own shelter. To improve housing for ban poor value access, distant, out-of-city relo- ,thep r the GoverneTs prort hould be cation is ill-advised. There is also a need to e otenure and the provsiton of es- bringjobs, public facilities, and public services sentiao srie leand the ir closer to rural communities, that give low ownhouses, grades on access. Community upgrading and provision of basic services, like water and Access to housing programs is very lim- sanitation, will improve their quality of life. ited. Out of the five basic services included in Land tenure is vital to housing satisfac- the survey, housing assistance offers the lowest tion. In the Philippines, house ownership (at access. Only one tenth of the respondents have 78%) is more common than residential land ever applied for housing assistance. Of this ownership, at 58%. Among the expenditure number, one third had to do so because of gov- groups, the poor have the lowest proportion of emient relocation drives. The three main rea- households owning residential land (Figure sons for not applying for housing assistance are 15). They are also the least satisfied with their lack of awareness about housing programs and housing. As such, programs that focus on se- ways to access them (50%); lack ofneed (20%); curity of land tenure, like the Community Mort- and high transaction costs, at 7% (Figure 16). gage Prgrm,arnigdmadansou As a first step, service providers should inform gage Ptrongram,red in high demand and should the public, particularly non-NCR, rural, and be strengthened. poor households, about the programs. They FIGURE 15 should streamline application procedures, set Residential Land Ownership is Lower among the Poor reasonable waiting times, and establish respon- sive complaint mechanisms. 80 - / The private sector hardly participates. 70- Three fourths of those who get housing assis- 60- / 1!|!1 - --- m tance obtain it from the Government. A maj- 50 |- "] ~ - ority of the rest get it from informal sources like 40 / | - * _ relatives, moneylenders, religious institutions, 30 cooperatives, and non-government organiza- 10 l player in housing assistance. An option that _ l _ _ could raise the flow of private funds into hous- Philippines Poor Middle- Rich ing is to develop a secondary market for mort- Income gage-backed securities. This would require le- Percent of respondents gal, regulatory, supervisory, and tax reforms. who own residential lots Government housing assistance benefits Base: All households mostly those who need it least. About 95% of the beneficiaries of government housing as- 12  SUMMARY FIGURE 16 The poor are excluded from housing asso- Information on Public Housing Assistance is Lacking ciations. The SSS, GSIS, and PAG-IBIG pro- grams require that participants contribute for at ______-- least two years before they qualify for assis- Not eligible tance. Such requirements discriminate against the poor and those employed in the rural and in- High expenses formal sectors. Since only 3% of poor house- holds are members, most applications come Not required from the nonpoor. Even the poor who are mem- Don't know how b bers are often unable to access assistance, be- cause of unrealistic payment requirements and Not aware I _ _ -_ corruption among lending officials. A separate 0 10 20 30 and transparent housing assistance window tar- Top reasons for not applying geted at the poor, with more favorable terms, is for govemment housing recommended. assistance, in percent Client rejection of housing assistance is Base: Households that did not apply for assistance Appliantsject o r than alfithe as high. Applicants reject more than half the as- sistance offered to them by housing agencies. sistance have been urban households (the ma- The assistance appears to come too late, as re- jority in the NCR). Most of the assistance has spondents complain of long waiting times. Ru- been captured by rich and middle-income ral Filipinos display a higher rejection rate than households, with only 21% of the beneficiaries urban Filipinos. This may be due to the addi- coming from the poor (Figure 17). Ironically, a tional transaction costs of traveling long dis- larger proportion of the NCR, urban, and tances to urban centers to make monthly pay- nonpoor households confirmed that they did ments. Reforms would require the decentral- not require assistance. The Government should ization of housing services and capacity build- give more attention to rural and poor house- ing for local governments. holds. FIGURE 17 Housing Assistance Approvals are Biased Against Poor and Rural Filipinos Poor Middle-income I _ Rich I -- Rural Urban I - 0 10 20 30 40 50 60 70 80 90 100 Approved applications, in percent Base: All who accepted govemment housing assistance 13  REPORT CARD Low-cost rental housing can benefit the chase as muchNFA rice as stocks allow. poor. The Philippine Constitution calls for ade- NFA rice is low in cost, but inferior in qual- quate shelter for all, not home ownership for all (FAgre is low aing decirior bal- Affordability is a major issue, so alternatives to it (Figure 18). Purchasing decisions are based ownership are necessary. Rental housing can largely on priceandquality. Given the poor qual- improve housing quality and security oftenure, ity of NFA rice, those who can afford to pay a wimprhoutsconfeing qualitywandsecrity Te tenu, Chigher price buy better quality non-NFA rice; without conferring ownership. The Rent Con- while the poor, who do not have adequate in- trol Law should be overhauled to make the come resort to lo Not have te rental housing market work for the poor. The come, resort to lower-priced NFA rice. The desttut hoeles ma reuir speialhosels nonpoor appear to buy NFA rice mostly for do- destitute homeless may require special hostels mestic helpers and pets. offering beds and toilet facilities. The nonpoor benefit more from the rice Distribution of Subsidized Rice subsidy. While proportionately more poor peo- ple buy NFA rice, the absolute number of the Rice is important for the welfare of the nonpoor who buy NFA rice is not very different poor. The Report Card reconfirmed the lm- from the absolute number of the poor who do portance of rice as a staple food, particularly in so. Because the middle-income and rich house- rural and poor communities. It also showed that holds purchase more NFA rice than the poor, 84% of Filipinos bought rice in the market, the nonpoor enjoy a bigger subsidy (Figure 19). while only 13% produced the rice they con- This appears to be a misallocation of scarce re- sumed. Even in the rural areas, approximately sources for a Government concerned with im- 71% ofthe respondents bought rice. To this end, proving basic services for the poor. To this end, if the Government is serious about addressing the Government should consider targeting rice the needs of the poor, it should ensure that af- support to the poor, rather than providing a gen- fordable rice is available and accessible to the eral rice subsidy for all. poor. FIGURE 18 Availability of National Food Authority NFA Rice is Rated Cheap But Low in Quality rice is limited. The Government, through the National Food Authority (NFA), has been sub- sidizing rice, not necessarily to tackle food pov- erty, but to ensure stable prices and supplies. Poor in color The survey found that the majority of respon- P i tat dents are aware that the NFA sells subsidized Poor in taste rice. Yet only 15% of the respondents buy NFA Low in rice, which is consistent with the level of NFA quality participation in the market. Low in price The poor self-target NFA rice. Despite the Poor in smell NFA's limited participation in the market, it ap- 0 10 20 30 40 pears to have disproportionately reached the Percent of respondents poor, with 27% of the poor buying NFA rice, Base: Households that purchased type of rice compared with 16% among the middle-income i *NFA Rice o Non-NFA Rice group and 6% among the rich. However, this does not appear to result from any deliberate government targeting, since anyone can pur- 14  SUMMARY FIGURE 19 The nonpoor patronize Enhanced Retail More NFA Rice Subsidies Go to the Nonpoor Access for the Poor stores more. Client feed- back on the Enhanced Retail Access for the Poor (ERAP) stores, which are supposed to be 2,108 1 / = ^ <located in areas where the poor live, is not en- 2,106 couraging. The survey found that middle- 2,104 income and rich households are more aware 2,100 than the poor of the ERAP stores, which are in- 2,098 tended to provide the poor with access to basic oor onpoor commodities at subsidized prices. Moreover, Million pesos/year the survey showed that more middle-income Base: Consumers of NFA rice and rich households patronize the ERAP stores, than do poor households (Figure 2 1). Mindanao is excluded. Among all the re- Filipinos recommend geographical tar- gions, Mindanao has the highest proportion of geting to the poor. Targeting rice subsidies to households for whom no NFA rice is available. the poor, which has been on the government It also has the fewest ERAP stores in the coun- agenda for the past few years, is validated by the try. As a first step, more stores should be located survey results. A majority of respondents rec- in disadvantaged areas, especially Mindanao, ommend geographic targeting, by locating spe- to enable the poor to avail themselves of low- cial stores selling NFA rice in poor areas, as the pricedbasic commodities, includingNFA rice. most effective targeting mechanism (Figure 20). There is less support for the provision of The Government is testing geographical identification (ID) cards and food stamps due to targeting plus ID passbooks. Government is concerns relating to potential corruption, high proposing a Targeted Low-Priced Rice Distri- costs ofradministration,tand impliedtlimits. bution Pilot Program to make available low- priced, good-quality NFA rice to poor families. This is expected to pave the way for discontinu- FIGURE 20 ing the general rice subsidy. The pilot program People Prefer Geographic Targeting uses geographic targeting but further limits ben- eficiaries and the purchase of rice through the use ofpassbooks, a form of ID system. Combin- Give poor people food ing geographic targeting and IDs may reduce stamps _ leakage more significantly than the application Give poor people ID of either one alone. cards I___ ____ Review the subsidy level. The NFA pilot Locate stores In poor _ , program offers rice at the same price as the gen- barangays ,/erally available NFA rice. However, a key sur- 0 20 40 60 vey finding is that the amount of NFA rice sub- Preferences for targeting sidy is modest and makes only a marginal dif- percent of respondents ference for the poor. Therefore, NFA may wish to consider adjusting upwards the price for gen- Base: All households erally accessible stocks. The savings obtained from adjusting the price of generally accessible 15  REPORT CARD FIGURE 21 LingapparasaMahihirap Program Low Use of ERAP Stores by the Poor The Lingappara sa Mahihirap (Caring for the Poor) Program, which aimed to benefit the 11 1 100 poorest families, was launched as the flag- Public market _ ship poverty reduction program of the Estrada stalls Administration. It aimed to reduce the number of poor Filipinos from 24 million in 1997 to 17 Rolling stores million by 2004. Initially, 16,100 poor families Rolling stores were identified to receive assistance; these were selected as the 100 poorest families in Neighborhood I each of the 78 provinces and 83 cities. Support stores to poor families was channeled in the form of a package of assistance with (i) food, nutrition, 10 20 30 40 50 and medical assistance; (ii) price supports for Patronage of ERAP stores rice and cor; (iii) protective services for chil- in percent Base: All households dren and youth; (iv) rural waterworks; (v) so- cialized housing; and (vi) livelihood develop- | Poor oi Middle income Rich ment. The poor and rural residents were not very aware of the Lin gap Program. About stocks could then be redirected to increase the veya reothLigpPgamAbu coverage and the berdi to increase the two thirds of the respondents had heard of the crovragemand.the subsidy to the poor in thepilot Lingap Program. This is impressive, given its program. short history. However, rural residents were Differentiate price and quality. Ac- much less informed about the program than cording to the survey, respondents were dissat- their urban counterparts. Awareness was low- isfied with the quality, smell, taste, and color of est among the poor, at 57%, compared with NFA rice. In the targeted program, NFA should 63% for the middle-income group, and 69% for take steps to assign different prices to different the rich. qualities of rice sold, improving consistency of stocks, and eliminating the need to mix stocks Purse strings were controlled by legisla- of various qualities. tors. About two thirds of the Lingap funds were Reconsider the entitlement level. The to be disbursed with the approval ofmembers of lot program limits the entitlement ofrice alloca- the Senate and House of Representatives. Fur- tion per person. However, respondents are least ther, the legislators were represented in the pro- supportive of food stamps to buy subsidized gram advisory boards in each ofthe implement- rice, due to the implied quantity limits on buy- ing agencies. This subjected the Program to the ing rice. To this end, NFA may wish to review pressures of political patronage. That is why the the entitlement level, following the pilot phase. Report Card looked into poverty targeting. 16  SUMMARY The nonpoor barangays benefited more. FIGURE 23 The proportion of households responding that The Poor Have Less Access to Members of Congress their barangay was listed for coverage under the Lingap Program was almost the same for the poor, middle-income, and rich groups. In fact, the number of poor households that indicated _- - i that their barangay was included for coverage Rich was less than halfofthat ofthe nonpoor. Md Middle- The nonpoor households benefited more. income While 16% ofthe poor counted themselves as el- igible to receive benefits from the Lingap Pro- Poor gram, so did 16% of the middle-income group / _ _ _/ and 11% ofthe rich. This reveals ineffective tar- 15 20 25 30 geting. Worse, the nonpoor listed as eligible to Percent in each expenditure receive benefits outnumbered the poor by ara- 1group who know a member receive benefits outnumbered the poor by a ra- of the House or Senate tio ofalmost two to one (Figure 22). Base: All households The poor are less connected to legislators. One quarter of the respondents said that they knew a Congressman or a Senator who would recommend their household to be included in The Lingap Program should be over- the Lingap Program. The proportion of poor hauled or terminated. At its inception, a ma- households having such connections is lowest jority of Filipinos believed that the Lingap Pro- (19%), compared with the middle-income gram would have no impact on poverty reduc- group (23%) and the rich (27%). This put the tion. After the first year of implementation, the poor at a disadvantage (Figure 23). bulk ofthe benefits ofthe Lingap Program were going to the nonpoor. The mechanisms for bene- FIGURE 22 ficiary selection seem to facilitate this leakage. Lingap Program Benefited the Nonpoor More To this end, the program requires a major over- haul, or termination.27 300,000, 200,000- 150,000, 0 Poor Nonpoor Number of households covered by the Lingap Program Base: All Households 17  REPORT CARD INSTITUTIONALIZATION ety organization, often a policy research and ad- OF THE REPORTCA" vocacy institute. A primary example of this is OF THE REPORT CARD the Public Affairs Centre in Bangalore, Karna- taka State, India.29 The advantage of this mo- Why Institutionalize del is that it is independent of government, so it the Report Card? enjoys greater credibility. On the other hand, its he RportCardprovdes lien assss- links with service providers and public coordi- he Report Card provides client assess- batse on lctiens' experienst svicese nating agencies are tenuous. Service providers based on citizens' experiences It is ex- may resist the results and/or even undermine pected that the service providers will consider the findings. Moreover, the report card may not the Report Card findings in adjusting their pro- be sustainable in the medium and long term: reg- 28 However, many past assessments did ular funding for it is uncertain, and the rigorous gra.ms.. ,. technical requirements may be burdensome for not have a lasting impact on service delivery, be- tecical reqiets mayi ebresmso cause they were one-shot exercises with no ef- fective follow-through. It is necessary to run Under the second model, the initiative for the Report Card periodically to gauge improve- the report card comes from a government ser- ments in service delivery from a "bottom-up" vice provider. The agency contracts out the ac- perspective. Service providers may be moti- tual survey and the preparation of the draft re- vated to respond with concrete improvements if port to a private sector group or civil society or- they know they will be tracked again. Hence, ganization. The draft report is vetted by the the Report Card mechanism should be institu- agency, finalized, and sometimes disseminated tionalized: it should be repeated periodically, to the public. The focus of the report card may say, at 12-to 18-month intervals. be confined to a single program or service, or a facet relevant to a program. Examples of coun- Global Experience tries using this model include Canada and the with Report Cards United Kingdom.30 A major strength of this While citize report cards are newtomost model is the ownership of the exercise by the Whilemmes itizen arepnor cardsnareu to mste public service provider, while preparation of governments, they are now being used to rate terpr adb notiefr rnssm the erfonane ofpubic aencis i Canda, the report card by an outside firmn brings some thenperformance ofIpubic, agenciesraine, Cana degree of independence to the exercise. The pre- Denmark,Ghana, Idia, Swden, Ukrine, th liminary results are available to the agency and United Kingdom, and the United States. It is in- itiesuand ltsv1ws ndfeedback are included in the final structive to review their institutional arrange- report. ments while exploring options to institutional- report. ize the Report Card in the Philippines. The same factors may become weaknesses in the model when viewed from a different per- The institutional arrangements may be cate- gorized under three main types or models. Re- spective. The service provider being assessed *cs y p r iy p sponsors the preparation of the report card and port cards may be prepared (i) by an independ-ppp ent civil society organization; (ii) by a gover- oversees its implementation. This arrangement ment service providergency;adiiiyago may lead the public at large, as well as legisla- ernment servceprovide agency; by