Philippines - Vocational Training Project

Documantof The World Bank FOR OFFICLAL USE ONLY Repwt No. 13062 PERFORMANCE AUDIT REPORT PHILIPPINES VOCATIONAL TRAINING PROJECT (LOAN 2200-PH) MAY 17, 1994 Operations Evaluation Department 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 Currency Unit = Philippine Peso (P) Appraisal Year 1982 US$1.00 = P 8.30 Intervening Years 1983 US$1.00 = I 11.11 1984 US$1.00 = P 16.69 1985 US$1.00 = P 18.61 1986 USS1.00 = P20.39 1987 US$1.00 = P21.00 1988 US$1.00 = P 21.25 1989 US$1.00 = P22.28 Completion Year 1990 US$1.00 = P 28.00 ABBREVIATIONS CITC Construction Industry Training Center GITP Garment Industry Training Program NMYC National Manpower and Youth Council OED Operations Evaluation Department PAR Performance Audit Report PCR Project Completion Report PMTC Provincial Manpower Training Center RMTC Regional Manpower Training Center SAR Staff Appraisal Report FISCAL YEAR OF BORROWER January 1 - December 31  FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Office of Director-General Operations Evaluation May 17, 1994 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Performance Audit Report on Philippines Vocational Training Project (Loan 2200-PH) Attached is the Performance Audit Report on Philippines - Vocational Training Project (Loan 2200-PH) prepared by the Operations Evaluation Department. It is in broad agreement with the conclusions of the PCR for this project. The project sought to broaden and strengthen vocational training in the Philippines by support for the responsible agency, the National Manpower and Youth Council (NMYC). Despite profound economic and political changes, the project was implemented successfully, albeit with a three years' delay and some scaling down of project size. But since the NMYC system has attained the overall appraisal benchmark for in- house training, and surpassed the training target for contract training, the project outcome is satisfactory. With the exception of one covenant (preparation of annual training plans) for which compliance lapsed in the later years of implementation, the covenants were fully complied with. Institutional development has been considerable, and project sustainability appears likely, given the high priority Government attaches to vocational training. The Bank is supporting these efforts through a follow-on project (Credit 2392-PH). Apart from a further strengthening of the NMYC system and of industry-based training, continued efforts to streamline the multitude of training programs existing in the country would offer the prospect of significant gains in efficiency. Attachment This document has a restricted distribution and may be used by recipients only in the performance of their official duties. fts contents may not otherwise be disclosed without World Bank authorization.  I  FOR OFFICIAL USE ONLY PERFORMANCE AUDIT REPORT PHILIPPINES VOCATIONAL TRAINING PROJECT (LOAN 2200-PH) CONTENTS PREFACE BASIC DATA SHEET iii EVALUATION SUMMARY vii i. PROJECT BACKGROUND 1 II. PROJECT OBJECTIVES AND CONTENT 2 III. PROJECT IMPLEMENTATION 4 IV. PROJECT OUTCOMES 5 V. FINDINGS AND ISSUES 8 TABLES 3.1 Changes in Project Investments in NMYC Training Centers 4 4.1 RMTC Output by Center, 1980-1991 5 4.2 Per Trainee Cost Directly Allocated to NMYC-RMTCs, by Region, 1990 6 5.1 Number of Training Programs, by Responsible Government Agency, 1990 9 This report was prepared by Hans Heinrich Thias (Task Manager) who audited the project in December 1992. Therese Mackie was the Staff Assistant. This document has a restricted distribution and may be used by recipients only in the performiance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.   i PERFORMANCE AUDIT REPORT PHILIPPINES VOCATIONAL TRAINING PROJECT (LOAN 2200-PH) PREFACE This is a Performance Audit Report (PAR) on the Vocational Training Project in the Philippines. This project was supported by a Bank Loan of US$24 million l which was approved on September 21, 1982. An amount of US$8 million was cancelled at the request of the Government in October 1987. The Loan was closed on December 31, 1990, three years after the date planned at appraisal. The last disbursement took place on July 2, 1991, at which time an undisbursed balance of US$1.5 million was cancelled. The PAR is based on the Project Completion Report (PCR) (No. 11163) dated September 18, 1992, the Staff Appraisal Report (No. 3750b-PH) dated August 26, 1982, the Loan Agreement dated October 28, 1982, project files, and government documents including a Completion Report prepared by the implementing agency, the National Manpower and Youth Council (NMYC). Additional information was obtained through discussions with Bank staff and government officials involved in the project, the latter having been contacted during a visit to the Philippines in November/December 1992 which also included visits to a number of vocational training centers and employers and their organizations. OED gratefully acknowledges the assistance of government officials, private sector representatives and Bank staff who freely gave of their time. The PAR, in broad agreement with the findings of the PCR, is supported by more recent data and field observations. Following standard OED procedures, copies of the draft PAR were sent to the Borrower on March 9, 1994. No comments have been received from the Borrower. 1 All refcrences to the Bank's loan amount in the text and tables of this report are in USS equivalent.   iii PERFORMANCE AUDIT REPORT PHILIPPINES VOCATIONAL TRAINING PROJECT (LOAN 2200-PH) BASIC DATA SHEET KEY PROJECT DATA Item Original Plan Actual Total project cost (US$ million) 41.7 23.1 (underrun) (in percent) - (45.6) Loan Amount (US$ million) Date physical components completed Proportion completed by above date 100 Proportion of time overrun (in percent) Institutional performance Good Good CUMULATIVE ESTIMATED AND ACTUAL DISBURSEMENTS (US$ million) FY83 FY84 FY85 FY86 FY87 FY88 FY89 FY90 FY91 FY92 Appraisal estimate 0.7 2.2 6.2 13.2 24.4 24.4 24.4 24.4 24.4 24.4 Actual 0.6 3.0 3.8 5.0 5.6 7.0 9.2 12.0 14.9 14.9 Actual as percent of appraisal estimate 86 136 61 38 23 29 38 49 61 61  iv MISSION DATA Month/ No. of No. of Specializations Performance Year Persons Staff Days Represented a Ratings b Reconnaissance 10/77 1 5 EP Identification 12/78 2 15 EP,TE Preparation 09,79 3 40 EP,TE,E 03/80 3 8 TE,E,EP 08/80 2 16 TE,E 02/81 1 4 E Pre-appraisal/ 4-5/81 2 52 TE,E Appraisal Post-appraisal 08/81 2 16 TE Supervision I 11/82 1 4 E 1 II 04/83 1 4 TE 2 III 08/83 1 1.5 TE 2 IV 03/84 2 14 TE,GE 2 V 07/84 3 9 TE,LO,E 2 VI 03/85 1 2 TE 2 VII 08/86 1 3 TE 2 VII 10/86 1 15 TE 2 IX 04/87 3 12 TE,AE 2 X 06/87 1 7 TE 2 Xi 03/88 1 3 TE 2 XII 10/88 2 20 TE,E 2 XIII 02/89 1 17 TE 2 XIV 10/89 2 20 TE,E 2 XV 03/90 3 13 TE,E,GE 2 a ED 5 Education Planner, TE = Technical Educator, E = Economist; GE = General Educator LO = Loan Officer, A = Architect. b 1 = problem-free or minor problems; 2 = moderate problems.  v STAFF INPUTS (Staffweeks) Fiscal Year Preappraisal Appraisal Negotiation Supervision Other Total 1982 6.3 28.8 5.4 11.2 51.7 1983 4.0 5.8 2.7 12.5 1984 9.6 9.6 1985 3.1 3.1 1986 1.3 1.3 1987 5.7 5.7 1988 8.1 .2 8.3 1989 4.6 4.6 1990 5.9 5.9 1991 4.8 4.8 1992 9.3 9.3 1993 2.3 2.3 Totals 6.3 28.8 9.4 60.5 14.1 119.1 ALLOCATION OF LOAN PROCEEDS (in US$ million) Appraisal Estimate Actual Final August 1982 July 1991 Civil works and professional services 3.0 1.8 Furniture, equipment and materials 9.6 6.1 Technical Assistance 2.9 2.0 Tuition, stipends and staff allowances 6.5 4.6 Front end fee 0.4 0.4 Unallocated/cancelled 2.0 9.5 Totals 24.4 24.4  Vl OTIIER PROJECT DATA Original Plan Actual First mention in files - 10/77 Appraisal 12/80 4-5/81 Negotiations 05/81 08/81 Board Presentation 11/81 09/82 Loan Agreement signing n/a 10/82 Loan Effectiveness 02/83 02/83 Closing Date 12/87 12/90 Borrower Republic of the Philippines Executing Agency National Manpower and Youth Council (NMYC) Follow-on Project: Name Second Vocational Training Project Credit Number Cr. 2392-PH Amount (US$ million) SDR 26.4 million (US$36 million) Date of Credit Approval July 6, 1992 Fiscal year of Borrower Jan. 1 - Dec. 31  vii PERFORMANCE AUDIT REPORT PHILIPPINES VOCATIONAL TRAINING PROJECT (LOAN 2200-PII) EVALUATION SUMMARY Introduction Project Objectives and Content 1. In the early 1970s, manufacturing 4. Apart from the Ministry of Education employment in the Philippines experienced and Culture whose secondary and post- moderate expansion. At 3.2 percent a year, it secondary technical schools formed technical accounted for barely one tenth of the growth workers in a rather slow process with strong in the labor force. Two thirds of manufac- theoretical leaning, the major institution to turing employment, but only 5 percent of train skilled industrial manpower was the output was contributed by the small-scale National Manpower and Youth Council "unorganized" sector. Two thirds of both (NMYC). It maintained, in 1980, a network of employment and output were concentrated in 10 Regional Manpower Training Centers the greater Manila area, causing great strain (RMTCs), which offered a variety of short- on the metropolitan infrastructure and large and medium-length courses (up to nine migration flows towards the country's center. months in duration). The Bank, having already assisted in the establishment of the ten 2. The Government's 1978-82 five-year RMTCs through a previous education project Development Plan aimed at more rapid manu- (supported by Cr. 349-PH), considered NMYC facturing development, particularly of small- as the obvious choice for carrying out a major and medium-scale enterprises, and at a more industrial training effort. However, the size of even geographic distribution of industrial the task was such that NMYC needed not only activities. Job creation was to double to about an expansion and improvement of its training 100,000 new work places a year. centers, but also institutional strengthening. 3. However, this industrial development policy was constrained by a lack of skilled 5. In response to those needs, the manpower, exacerbated by the export of Vocational Training Project of 1982, supported Philippine skilled manpower which had started by Loan 2200-PH in the amount of US$24.4 around the middle of the decade and which by million, sought to broaden and strengthen 1980 had risen to a total of 350,000. While industrial training, by further development of this exodus gave the country much needed NMYC (including an expansion of its network foreign currency through workers' remittances, of training centers), by introducing a system of it also left noticeable gaps in the ranks of the out-contracting sector-specific training in seven country's skilled labor force. This called for a industries, and by expanding skill testing and concerted effort to train new manpower. certification.  viii 6. It was expected that upon project later, a total of 126,000 workers had been completion, the expanded network of training trained. These activities are indicative of centers would be able to instruct about 20,000 future trends in Philippine vocational training, trainees per year. which aim at assigning an increasing role both in the organization and financing of vocational Implementation training to the private sector. 7. From its start in February 1983, project 11. Institutional development, however, implementation was faced with difficulties, the was not limited to an expansion and most serious being inadequate and delayed strengthening of the RMTC network and the counterpart funds. In late 1987, disbursements fostering of industry-based training schemes: stood at only 23 percent of appraisal NMYC administration was strengthened, with estimations. enhanced capacities in program planning and development (including an improved informa- 8. By that time, a democratic Government tion system) and an expansion of skill had taken office and was facing a host of standards development and skill testing well economic and budgetary problems. In res- beyond initial expectations. ponse to these problems, the Government and the Bank agreed on a restructuring of the Sustainability project portfolio. For the Vocational Training Project, this meant a reduction in the physical 12. Vocational training continues to be a scope of the project, leading to the cancel- government priority. Together with the lation of US$8 million of Loan funds (to be gradual shift of a greater share of respon- followed by a further cancellation of US$1.5 sibilities to the private sector, this makes million at the closing of Loan accounts in sustainability of the project's achievements 1991). In addition, a series of three one-year likely. Through the Second Vocational extensions of the Closing Date put the project Training Project the Bank continues to lend its into a more realistic time frame, as a severe support to the subsector. typhoon and an earthquake added compli- cations to physical implementation. With the Findings exception of one covenant, which was not met for several years (submission of annual training 13. The project's outcome has been satis- plans), all covenants were fully complied with. factory, and institution building efforts have been yielding substantial results. As vocational Outcomes training in the Philippines is moving increas- ingly towards industry-sponsored and industry- 9. Despite the delays and the scaling run models, NMYC's network of training cen- down of the project, NMYC's system of ters is likely to undergo a shift in emphasis, Regional Manpower Training Centers is now towards training support for industries which training close to 20,000 young people a year, are too weak and fragmented to undertake the benchmark established at appraisal. In their own training, and to administering addition, since 1987, a network of smaller and "facilitating training" for young unemployed more modestly equipped Provincial Manpower school leavers, particularly in regions with Training Centers accommodates another 5,000 strong outmigration. To play this role, the trainees. training centers continue to need equipment which is both adequate and appropriate. The 10. This in-center training effort is being Second Vocational Training Project, besides complemented by sizeable contract training. continuing the development of industry-based The original target of about 76,000 trainees vocational training, is addressing the had been surpassed by 1988, and two years investment needs of NMYC's training centers.  PERFORMANCE AUDIT REPORT PHILIPPINES VOCATIONAL TRAINING PROJECT (LOAN 2200-PH) I. PROJECT BACKGROUND 1.1 In the 1970s the Philippines manufacturing sector was characterized by two dichotomies; the first was employment/output related: the "unorganized" sector (defined as comprising establishments having fewer than ten employees) accounted for about 65 percent of sectoral employment but for only 5 percent of its output. 1.2 The second distinction was geographic: about two thirds each of national manufacturing output and employment were concentrated in the Greater Manila area. Only a few heavily resource-based industries such as food processing and wood products showed a wider geographic dispersion. This in turn meant a strong demographic pull by the capital on the rest of the country, with its attendant problems of a strained infrastructure in the former and a heavy exodus of productive people in the latter. 1.3 On the whole, manufacturing employment had increased only moderately in the second half of the 1970s, by about 50,000 jobs or 3.1 percent per year--which did not even amount to one tenth of the simultaneous rise in the labor force. 1.4 The Government's Five-Year Development Plan for the period 1978-82 sought to give an impetus to industrial development, with emphasis on small- and medium-scale enterprises. Complementary aims of the Government's industrial development policy were to sustain the rapid growth of manufacturing exports, increased processing (instead of straightforward export) of domestic raw materials, and a less lop-sided regional distribution of industrial activities. The Government hoped to boost employment creation in the manufacturing sector to roughly twice its previous level (i.e., 100,000 new jobs per year). 1.5 However, when the Government started to implement this decentralized industrial development policy, it found itself confronted with a general lack (as well as an uneven regional distribution) of skilled manpower, in addition to remoteness from markets, inadequate infra- structure, and a host of other difficulties. The response was to plan for a series of industrial estates to serve as regional growth poles and, in the field of manpower development, to step up vocational training. 1.6 An expansion of vocational training also recommended itself for another reason: since about 1975 the Philippines had become increasingly an exporter of skilled manpower, partic- ularly to the Middle East. By 1980, the number of Philippine workers abroad exceeded 350,000, of whom three quarters were professional and technical specialists, craftsmen, and production process workers. Expanding vocational training would thus not only contribute directly to this  2 skill export, but also help replace workers that had left jobs in the Philippines for employment abroad (given that prospective foreign employers preferred to recruit people with previous work experience). The contribution of these temporary emigrants to the national economy, especially in terms of foreign exchange earnings, was considerable: in 1980, almost US$700 million in remittances flowed back to the Philippines. 1.7 While it was difficult to predict this skill export, the Government expected the exodus of manpower to stabilize at just under 150,000 per year by the middle of the 1980s. A skill drain of this size could not be expected to be made good by a slow and haphazard process of on-the-job training. A concerted effort to train skilled manpower was called for. 1.8 While vocational training in the widest sense was carried out by a large number of public and private entities, industrial skill training was essentially undertaken by two agencies: one was the Ministry of Education and Culture, through its formal technical education at second- ary and post-secondary levels, which was time-consuming and had a strong theoretical leaning. 1.9 The other institution was the National Manpower and Youth Council (NMYC), a government agency then operating within the President's Office. It had an overall mandate for manpower planning and development and more specifically, to establish and operate vocational training institutions and to oversee the development of manpower and out-of-school youth. To carry out these functions, it maintained, in 1980, 14 Regional Manpower Development Offices and 10 Regional Manpower Training Centers (RMTCs) which offered courses varying in length from several weeks to nine months and which had reached an annual output of roughly 110,000 trainees, one third of whom specialized in industrial skills. 1.10 While NMYC had so far performed creditably in providing vocational training, the increasing demands to be put on it threatened to give rise to serious bottlenecks. Among its perceived institutional weaknesses were understaffing, insufficient data handling capacity, and lack of experience in manpower planning and development. Vocational training itself was hampered by the insufficient size and uneven coverage of the network of Vocational Training Centers, the lack of modern equipment and both quantitative and qualitative shortcomings in the instructors corps. 1.11 The Bank, which had assisted in the creation of the 10 above-mentioned (para. 1.09) RMTCs through a previous education project (Cr. 349-PH), considered vocational system as a suitable field for investment, the more so since this would be a logical complement of its first Structural Adjustment Loan of 1980, Ln. 1903-PH), which supported the Government's industrial and trade policies. II. PROJECT OBJECTIVES AND CONTENT 2.1 The resulting project, the Vocational Training Project of 1982, pursued a hierarchy of objectives. In the broadest sense, it was seen as "an integral component in support of the Government's industrial development program ... and would address the major policy and manage- ment issues affecting industrial training" (SAR, para. 3.01). In doing so, "(i)ts main thrust would be to broaden and strengthen the infrastructure of national industrial training" (ibid.). This meant  3 more specifically, to "(a) strengthen the NMYC management system, enabling it to improve both manpower planning and the organization of administration of training ...... at the national level; (b) establish a system of contracting for sector-specific training to serve the needs of employed workers in seven priority subsectors;' and (c) expand the skill testing and certification system" (ibid.). 2.2 The project contained the following components (SAR, para. 3.02): Management of Industrial Training (a) Reorganization/Strengthening of NMYC Secretariat; (b) Improvement of NMYC manpower planning and evaluation capabilities; (c) Creation of a Management Information System and an Equipment Maintenance Service. Strengthening Industrial Training (a) A sector-specific industrial training scheme for a total of 76,000 workers; (b) Expansion of training facilities.2 Trade Testing and Certification (a) Further development of training standards and of a related data bank; (b) Establishment of trade testing facilities. 2.3 It was expected that the expanded training system would have slightly under 3,000 training places and be able to instruct in double shift operation about 20,000 trainees per year (SAR, para. 3.21). 2.4 Total project cost was estimated at US$40.3 million, with the Loan of US$24.4 million covering 60 percent of total cost including the entire foreign exchange component. The project was expected to be completed over a period of 4 years and 3 months, with Loan closing scheduled for December 1987. Metals and engineering; shoes and leather goods; wood products; construction; automotive trades; garments; and hotel and restaurant trades (SAR, para. 3.05). 2 This component was not mentioned at all in the list of objectives (see para. 2.1 items (a), (b), (c) above) and was treated rather lightly (2 pages out 11 in the project description), although in terms of foreign exchange requirements and, hence, of Loan funds, it accounted for over half of the total (and probably motivated the Government more than the various administrative and management components to seek the Loan). This asymmetrical treatment of project components and activities can be observed in a number of education projects undertaken in the Region during this period (e.g., Ln 1904-IND or La. 2030-PH). It appears to have been a presentational device to impress upon readers the innovative nature of the lending operations.  4 III. PROJECT IMPLEMENTATION 3.1 The Loan became effective in February 1983. From the very beginning, inad- equate and delayed counterpart funds proved to be the most serious obstacle to project imple- mentation. This eventuality had not been listed among the risks discussed in the SAR, whose concerns focussed in employers' reluctance to perceive the benefits (and hence, assist in the financing) of vocational training; the unfamiliarity (and thus, uncertain acceptance by industry) of the contractual training scheme; the scarcity of competent implementation staff; and the lack of NMYC experience in the innovative aspects of the project. 3.2 Disbursements, after an initial surge above appraisal expectations in 1984, fell increasingly behind schedule until by the second half of 1987 they reached a low of 23 percent of expected levels. 3.3 By that time, the 1986 Revolution had brought in a democratic Government; it was faced with a severe economic and budgetary situation. As part of a general realignment of its project portfolio, the Government agreed with the Bank on a restructuring of this project. This involved a cancellation of Loan funds in the amount of US$8 million (to be followed at Loan accounts closing in July 1991 by another cancellation of US$1.5 million), a one-year extension of the Closing Date (with two more to come in late 1988 and 1989) and changes in the scope and composition of the project. 3.4 The most important changes in physical project composition are summarized in Table 3.1: Table 3.1: Changes in Project Investments in NMYC Training Centers Original Revised RMTCs RMTCs PMTCs' New Expanded New Rehabilitated New Cagayan de Oro Batangas Cag. de Oro Batangas (D) b Abra Tacloban Cebu Tacloban Cebu (D) Kalinga-Apayao Tuguegarao Davao Tuguegarao Davao (D) Ifugao Zamboanga Guiguinto Zamboanga Guiguinto Mt. Province Manila (CITC) Iligan Iligan Laguna Mariveles Mariveles Zabales Pili Pili (D) Cavite San Fernando Talisay Talisay Cotobarto (D) Iloilo (D) La Union (D) a Construction Industry Training Center. b (D) = including new dormitories. C Provincial Manpower Training Centers (somewhat smaller training centers one level below the Regions.  5 3.5 The project faced further adversity through a severe typhoon and an earthquake which struck parts of Northern Luzon and which led to the cancellation of the RMTC at Baguio (which had been planned under the project restructuring arrangements of 1987), and which was replaced by the construction of a Regional Office. In the final stage of project implementation, price increases in the wake of the Gulf War caused further delays in carrying out the last physical investments (PCR, para. 5.7). 3.6 Total project cost came to US$23.1 million, 45 percent lower than the appraised figure. The $14.9 million disbursed from Ln. 2200-PH covered 64.5 percent of total cost, slightly above the 60 percent share envisaged at appraisal. 3.7 With the exception of one covenant, which was not met for several years (submis- sion of annual training plans), all covenants were fully complied with. IV. PROJECT OUTCOMES 4.1 The project, after its scaling back in 1987 and with several years delay, has reached its most important training and institutional development targets. 4.2 Regional Manpower Training Centers. The 10 original RMTCs (of which one was converted into a national center) and the four new centers established under the project are at present training close to 20,000 young people a year (see Table 4.1). Together with a network of 10 Provincial Manpower Training Centers (PMTCs) which have come on stream since 1987, they produced in 1991 close to 23,000 skilled workers. Table 4.1: RMTC Output by Center, 1980-1991 RMTC 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 199l Total 8,396 25,960 29,812 18,355 16,203 14,063 9,383 8,283 14,201 14,469 17,389 18,095 La Union 1,246 2,193 4,102 1,883 1,453 1,394 1,103 880 1,071 1,162 1,526 1,258 Tuguerarao 475 1,307 1,203 1,394 1,327 Guiguinto 3,294 2,906 2,348 1,965 1,963 1,111 1,409 3,062' 2,877 1,602 3,305 Mariveles 330 2,120 2,550 1,284 1,343 979 769 700 1,888 Batangas 992 3,122 3,023 1,748 1,142 843 717 641 1,181 995 1,262 1,260 Pili 868 1,050 2,878 2,143 1,650 1,105 669 772 1,666 1,069 1,369 1,369 Talisay 762 2,480 4,536 2,430 2,023 1,805 1,176 698 b 1,625 b 1,859 b 1,026 1,205 Iloilo 857 995 1,204 Cebu 2,474 3,001 2,951 2,450 2,140 1,658 1,103 1,503 1,356 1,260 1,566 1,502 Tacloban 570 1,152 1,099 Zamboanga 328 263 966 Cagayan de Oro 601 1,017 758 1,187 Davao 567 1,589 2,378 1,779 1,249 1,323 875 725 1,024 1,135 1,266 1,345 Iligan 1,157 7,111 5,075 2,290 3,238 2,993 1,003 480 1,038 994 1,322 1,068 ' Includes output of RMTC-Mariveles. b Includes output of RMTC-Iloilo. Source: NMYC, 1991 Manpower Fact Book, Manila 1992, Table G 17.  6 4.3 The centers offer two main types of courses, a long (600 hours) basic course and short (120 hours) upgrading and instructors' courses. The balance between the two categories of training changes from one Region to another; the nationwide ratio between long and short courses was about 1:1.6 (6,500 vs. 10,800). 4.4 Cost per trainee, adjusted for length of course, varied from about 12 700 to F2 2,900 averaging 1R 2,066 (or $82), the considerable regional differences being probably due to variations in trainee composition by trade, class sizes, and local cost variations. The average cost per trainee/hour of about 12 3.5 is low (Table 4.2). Table 4.2: Per Trainee Cost Directly Allocated to NMYC-RMTCs, by Region, 1990 Budget Unweighted Weighted Course Cost Region Allocation a Output Output b Per Trainee (12 1,000) (A) (B) (A) (B) I 1,851.8 1,526 775 1,214 2,389 II 1,063.3 1,394 535 763 1,987 III 1,235.7 3,490 1,730 354 714 IV 2,097.6 1,262 867 1,662 2,419 V 1,829.6 1,369 718 1,336 1,548 VI 3,363.5 2,021 1,168 1,664 2,880 VII 1,721.6 1,566 777 1,099 2,216 VIII 1,218.4 1,152 632 1,058 1,928 IX 739.0 263 66 281 1,120 X 1,265.2 758 554 1,669 2,284 xi 1,012.4 1,266 746 800 1,357 XII 1,797.3 1,322 721 1,360 2,493 Totals 19,195.4 17,389 9,289 1,104 2,066 Net of grants to trainers used for outreach training. b The duration of basic courses is 600 hours and that for upgrading and trainers' programs 120 hours. The latter is given the equivalent basic course time of 25 percent. Source: NMYC 4.5 NMYC also undertook monitoring of the trainees after course completion. In the second semester of 1990, 45 percent of that year's RMTC trainees had found a job, 47 percent of those not employed prior to training had found work, and of those who had found employment, 87 percent had found work related to their training. For PMTC trainees the relevant proportions  7 were somewhat lower (27, 23 and 83 percent, respectively), possible because of the location of the PMTCs in somewhat smaller and more remote cities.3 4.6 Training Contract Scheme (sector specific training scheme). After a slow start, these training courses expanded to an annual level of about 20,000 trainees. By 1988, the original target of about 76,000 trainees (SAR, Table 3.1) had been exceeded and by 1990, over 126,000 workers had been trained. 4.7 These courses were important in that they pioneered a new approach in Philippines manpower training, in which NMYC played a facilitating role, contracting a training agent and agreeing to cover 70 percent of the cost of training, the rest being contributed by the private sector (usually small or medium sized firms). The original list of seven industries (para. 2.1, FNI) was later augmented by six more (utilities, land transport, coal mining, printing, communications, and agro-industries). 4.8 Training courses comprised basic training (a total of 23,600 trainees in the period 1982-90); upgrading (nearly 47,000); supervisors' training (30,750); instructors' training (22,100); and special technical courses (2,600). 4.9 The Garment Industry Training Program (GITP) was perhaps the most successful of these contracted programs. Between 1988 and 1991, almost 12,000 unskilled young people took part in so-called zero-skill courses which gave them through a 120-hour course sewing machine skills sufficient for subsequent employment in garment factories. 4.10 Trade skill standards and skill testing. Among the other programs undertaken, the development of trade skill standards and skill testing merit special mention. The SAR had anticipated that the number of National Trade Skill Standards would be increased from 13 to 55. Similarly, trade testing was to be expanded from 14,700 workers in 1982 to 30,000 in 1985 (SAR, para. 3.25). 4.11 These targets were surpassed by large margins: the list of 42 additional skill standards was increased to 200, and subsequently to 266. At the end of the decade, 200 standards were already developed, nearly all of them in the four years 1986-89. 4.12 Trade testing was given to 27,000 workers in 1985, or 90 percent of the target. After suffering a brief setback in 1986, it grew at a very fast pace since, reaching almost 60,000 in 1991. The certification rate grew from 42 percent in 1992 to 49 percent in 1991.4 3 Private sector employers outside Manila interviewed during the field visits appreciated the skills and knowledge of trainees but emphasized the small size of local labor markets. 4 NMYC, 1991 Manpower Fact Book, Manila 1992, Table G 20.  8 V. FINDINGS AND ISSUES 5.1 Overall results. The PAR is in broad agreement with the findings of the PCR; more recent statistics confirm the trends becoming visible at project completion. Given the difficult circumstances under which the project had to be implemented, the outcome has been satisfactory. The development of a broad array of training programs catering to specific needs, the expansion of occupational standards and of skill testing, to name only a few examples, point to a significant amount of institution building.5 More important, the project initiated a move of vocational training towards the place of work, i.e., as close to the enterprises as possible, which is advocated by most vocational training experts as the most efficient and responsive arrangement. 5.2 This change in emphasis, together with the Government's continuing commitment to vocational training, bodes well for the sustainability of the project's achievements. Putting the country's vocational training efforts on a broader physical and financial basis will also facilitate future expansion and diversification. The Bank's Second Vocational Training Project of 1991 aims at supporting this process. 5.3 Issues. While an increasing portion of vocational training will become the responsibility of the enterprises, the RMTC/PMTC network will retain at least two important functions (apart from serving as location for future ad hoc courses in response to new types of needs). One is to provide a basis for vocational training in a given geographic area for industries which are weak and fragmented and thus not in a position to organize their own training. The second is to provide young people in regions with strong out-migration with marketable skills that make them in principle more employable, prior to their departure from their homes. 5.4 With this continuing role for the RMTCs and PMTCs in mind, the appropriate equipping of the centers deserves continued attention. In some of the centers visited, the OED staff noticed very old and outmoded equipment (e.g., ancient manual typewriters or lathes that were approaching the end of their useful life). A question to this effect drew the answer that such a mixing in of old equipment would serve a useful purpose by simulating rather closely the workplace condition in the small or medium-sized Philippine factory. While this argument may have some merit, it becomes increasingly tenuous as older equipment breaks down more often and the necessary spare parts become harder to find. The replacement and upgrading of equipment in the RMTCs and PMTCs planned under the Second Vocational Training Project is no doubt a desirable and necessary investment. 5.5 A more serious concern evolves from the very large number of vocational training programs undertaken in the Philippines. A recent list comprises 261 different programs under- taken by nine different government agencies. In the light of these achievements, the criticism of the SAR for the Second Vocational Training Project directed toward the NMYC (SAR, para. 22.3) appears somewhat harsh.  9 Table 5.1: Number of Training Programs, by Responsible Government Agency, 1990 Department/Agency Number of Programs Labor and Employment 23 Education, Culture and Sport 8 Environment and National Resources 20 Interior and Local Government 10 Trade and Industry 40 Social Welfare and Development 22 National Manpower and Youth Council 24 Science and Technology 11 Agriculture 61 Agrarian Reform 9 Health 7 Civil Service Commission 18 National Economic Development Agency 2 5.6 With the exception of the programs of the two last mentioned agencies, these programs are nearly all directed at specific outside clienteles, with a good deal of program overlap.6 In a number of trade groups, training was offered by three or more government agen- cies, with widely varying unit cost.' This points to the existence of wide differences in quality or cost-efficiency which would make a streamlining effort worthwhile. A continuation of the stock- taking and analysis undertaken so far (see FN 6), and a tighter coordination of vocational training efforts would promise substantial gains in efficiency. 5.7 However, when all is said and done, it must be realized (as the NMYC manage- ment does) that no matter the degree of fine-tuning and responsiveness, no vocational training system can create employment per se (with the obvious exception of its own staff), and that the absorption of the labor force in general and out-of-school youth in particular into gainful employment will ultimately depend on overall economic and fiscal policies, with education and training as indispensable but ultimately subordinate instruments. 6 Source: NMYC, Monitoring Report of the Council on Manpower Training Programs, 1991, Manila 1992, Annex A: list of Major Training Programs by Agency. 7 NMYC, Monitoring Report of the Council on Manpower Training Prorams 1991, Manila 1992, Ch. IV/II.