Philippines - Urban Health and Nutrition Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 23262 IMPLEMENTATION COMPLETION REPORT (IDA-25060) ONA CREDIT IN THE AMOUNT OF US$70 MILLION TO THE PHILIPPINES FOR AN URBAN HEALTH & NUTRITION PROJECT December 28, 2001 Human Development Sector Unit East Asia and Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange Rate Effective As of November 2001) Currency Unit = Philippines Pesos (PHP) PHP 1 million = US$ 192 US$ 1.00 = 51.95 FISCAL YEAR July 1 June 30 ABBREVIATIONS AND ACRONYMS AusAID Australian Agency for Intemational Development DOF Department of Finance DOH Department of Health DOTS Directly Observed Treatment, Short Course Strategy for Tuberculosis GIS Geographic Information System GOP Government of the Philippines ICB International Competitive Bidding IDA International Development Association IEC Information, Education and Communication IMR Infant Mortality Rate LCB Local Competitive Bidding LGU Local Government Unit MIS Management Information System MOA Memorandum of Agreement MCH Maternal and Child Health MDF Municipal Development Fund MHO Municipal Health Office M&E Monitoring and Evaluation NGO Non-Govermmental Organization OR Operational Research PCU-UHNP Project Coordination Unit, Urban Health and Nutrition Project PEM Protein-energy malnutrition PHC Primary Health Care PHDP Philippines Health Development Project PMO Project Management Office TB Tuberculosis TOR Terms of Reference UHNP Urban Health and Nutrition Project UNICEF United Nations Children's Fund Vice President: Jemal-ud-din Kassum, EAPVP Country Manager/Director: Robert V. Pulley, EACPF Sector Manager/Director: Maureen Law, EASHD Task Team Leader/Task Manager: Jayshree Balachander, EASHD  FOR OFFICIAL USE ONLY PHILIPPINES PH-URBAN HEALTH & NUTRITION CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 4 5. Major Factors Affecting Implementation and Outcome 8 6. Sustainability 9 7. Bank and Borrower Performance 10 8. Lessons Learned 12 9. Partner Comments 12 10. Additional Information 13 Annex 1. Key Performance Indicators/Log Frame Matrix 14 Annex 2. Project Costs and Financing 15 Annex 3. Economic Costs and Benefits 17 Annex 4. Bank Inputs 18 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 21 Annex 6. Ratings of Bank and Borrower Performance 22 Annex 7. List of Supporting Documents 23 Annex 8. Borrower's Comments 24 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.   Acknowledgements The ICR was prepared during a visit to the Philippines in November 2001, and a draft was discussed at a seminar organized by the DOH. The team that prepared the ICR included Jayshree Balachander (task team leader, EASHD), Richard Heaver (principal author, consultant), Son Nguyen (public health specialist, EASHD), Noel Sta. Ines (procurement specialist, EACPF), Marilyn Lorezo (public health specialist, consultant), and Emmanuel Castillo (financial management specialist, consultant). Sabrina Terry (EASHD) and Cynthia Manalastas (EACPF) rendered excellent administrative support. Helpful comments were received from Stanley Scheyer (former task tearn leader) and Mr. Mario Taguiwalo (forner Undersecretary, Department of Health, Philippines). Thanks is due to Dr. Dongil Ahn and Dr. Pieter van Maarenp (WHO Regional Office, Manila) for excellent assistance in the last three years of the project. T hanks is also due to Cherrylyn Daus (Project Coordinator, UHNP) for the extensive arrangements to facilitate the work of the ICR team.   Project ID: P004568 Project Name: PH-URBAN HEALTH & NUTRITION Team Leader: Jayshree Balachander TL Unit. EASHD ICR Type: Core ICR Report Date: December 20, 2001 1. Project Data Name: PH-URBAN HEALTH & NUTRITION L/C/TF Number: IDA-25060 Country/Department. PHILIPPINES Region: East Asia and Pacific Region Sector/subsector: HC - Primary Health, Including Reproductive Health, Chi KEY DATES Original Revised/Actual PCD: 06/30/90 Effective: 03/22/94 04/07/94 Appraisal: 12/18/92 MTR: 12/31/97 01/15/98 Approval: 06/08/93 Closing: 12/31/2000 06/30/2001 Borrower/Implementing Agency: GOP/DOH Other Partners: AusAid STAFF Current At Appraisal Vice President: Jemal-ud-din Kassum Gautam S. Kaji Country Manager: Robert V. Pulley Callisto E. Madavo Sector Manager: Maureen Law Jayasankar Shivakumar Team Leader at ICR: Jayshree Balachander Stanley Scheyer ICR Primary Author: Richard Heaver 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: U Sustainabilitv: UN Institutional Development Impact: N Bank Performance: U Borrower Performance: U QAG (if available) ICR Quality at Entry: U Project at Risk at Any Time. Yes  3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The project's development objectives were to: (i) improve the health and nutrition status of slurn-dwellers in the project cities; (ii) build the capacity of city and municipal governments to plan, finance and implement cost-effective slum health and nutrition programs, in partnership with communities, NGOs and the Department of Health (DOH); (iii) help slum communities identify their own health, nutrition and environmental problems and participate in planning, implementing and monitoring appropriate interventions; and (iv) help DOH develop policies and strategies to improve the reach and cost-effectiveness of health and nutrition delivery systems. These objectives were appropriate given that: (i) health and nutrition indicators in the Philippines were considerably worse than would be expected for a country of its level of per capita income; (ii) some health and nutrition indicators in urban slums were worse than in rural areas; and (iii) there had been under-investment in health infrastructure in the slums compared even to rural areas. The objectives were consistent with the Bank's CAS objective of poverty alleviation, and with the Government's five year plan objectives of improving basic social services and focusing them on the poor. The project's capacity development objectives for communities and local governments were also in line with Bank and Government strategies. The capacity-building objective for local governments was particularly important, since during project preparation the Government passed legislation devolving health services from central to local government units (LGUs). 3.2 Revised Objective: Because of poor disbursements, the project was restructured after a mid-term review. It was not resubmitted to the Board, because neither the development objectives nor the component structure was changed. 3.3 Original Components: The project had four components: (i) Service Delivery (US$51 .6m), aiming to improve the access and quality of key primary health care services for the poor living in slums; (ii) Institutional Development (US$14.5m), supporting improvements in the capacity of the 21 city and municipal health departments to plan, manage, finance and implement their public health programs, and improvements in the capacity of the central, regional and district levels of the DOH to provide technical assistance, training, communications and logistical support to these units; (iii) Community Partnerships for Health (US$4.9m), supporting community mobilization and community-based activities aimed at improving the health and nutrition of the urban poor; and (iv) Policy Research and Evaluation (US $4m), supporting research and evaluation studies. The main focus of the operational research (OR) was on testing altemative service delivery models to see which were most appropriate in the urban slum environment. The choice and design of these components was clearly linked to the development objectives. The project's narrow focus, on the health sector and in 21 local governments (out of more than 1,500 in the country) in 3 major metropolitan areas, was prudent, given past implementation difficulties with multisectoral urban development projects and because this was the first Bank-financed project to be - 2 -  implemented afler the devolution of health services to LGUs. The service delivery interventions in component I included prenatal and postpartum care, safe birth, family planning, immunization, management of diarrhea and acute respiratory infection, TB and sexually transmitted diseases, as well as micro-nutrient supplementation and prevention of PEM. These were all high priority primary health care activities, with which the implementing agency was experienced. Component 3 of the project was institutionally complex, in that it involved developing three-way partnerships between local governments, NGOs and community organizations; but there had been successful experience with this under the Bank-fmanced Philippines Ilealth Development Project. It was therefore reasonable to assume that components I and 3 of the project were within DOH's implementation capacity. The scope and complexity of the activities in Components 2 and 4, while each justified in itself, was too great for the government's implementation capacity in the difficult environment after devolution. With regard to component 2, the challenge of increasing local governments' health management capacity, and reorienting DOH to build the capacity of local governments rather than deliver health services itself, was enormous; however, this effort, though complex, was an unavoidable one after devolution. It was over-ambitious for the project, however, to have expected simultaneously to reorient health sector training, as component 2 planned. Component 4 proposed more than 15 OR studies, in addition to baseline and endline studies, and this too was unrealistic. 3.4 Revised (CotpotneeH: The four original components were retained but within each, priorities were redefined, components simplified and standardized protocols adopted. USS20m was cut from the project, since slow past disbursements coupled with exchange rate savings meant that it was impossible to spend the original credit amount. In retrospect, the cut should have been larger, but this would have been politically difficult, since this was the last IDA-financed project in the Philippines. Within the components, the following changes were made: Component 1. Procedures ior targeting the urban poor were revised and clearly specified, and the number of monitoring indicators was reduced from 27 to a more manageable 6. Interventions were prioritized in three areas: (i) T B control through the implementation of DOTS, in response to the finding of a project-financed prevalence survey that TB rates in the slums were some of the highest in the world; (ii) a renewed focus on integrated provision of MCH care; and (iii) some discretionary funding for local governments to spend on local health priorities. Component 2. The idea of systematic across-the-board management systems improvement for local governments was dropped for lack of time to implement it. A more lirnited program of management training for local governmnDts, coupled with a demand-driven, piecemeal approach to systems improvement was proposed. The proposed reform of health sector training strategies was dropped, because it was not feasible to develop and implement a plan for this in the time available. Component 3. An 'apex NGO' was hired to help implement the local government-NGO-community partnership scheme, with the aim of increasing the number of sub-projects, and improving the consistency and quality of work done by partrner NGOs. Component 4. The number of OR studies was reduced to 4. These changes were sensible responses to limited implementation capacity at both central and local govenmment levels. II would have been more realistic to further limit Component 4 to one OR study. - 3 -  3.5 Quality at Entry: The quality of the project design was satisfactory in that: (i) the development objectives were consistent with the Government's policy framework and the CAS; (ii) the components reflected the objectives; and (iii) the main service delivery interventions were consistent with best practices at the time. Project strategies were conmnendable in that they included a heavy emphasis on institutional development, which was appropriate following health service devolution; and an innovative strategy for targeting the urban poor, which had not been attempted before on a systematic basis. Project complexity overall was not so great as to prevent achievement of the project objectives. A positive feature of project preparation was the high degree of participation from the local governments who would be implementing the project. With regard to project implementation readiness, a project implementation plan was prepared. The project's quality at entry is nevertheless rated as unsatisfactory, by the Bank's current standards, in the following respects: (i) the Project Management Office (PMO) was not fully staffed until well into the first year of project implementation; and there is no record of arrangements agreed for procurement and financial management. (ii) The following had not been completed by effectiveness: guidelines for implementing the strategy for reproductive cycle targeting of core project MCH services; and objectives and indicators for project institutional development activities in the local governments, or TORs for key consultancy for local government management systems improvement. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: The main source of outcome data is the endline evaluation survey financed under the project. Though completed, this was not released to DOH or the ICR mission, since the consultants had not been paid for it-an illustration that UHNP's severe management problems continued right to the end. It was therefore not possible to make a professional evaluation of achievement of outcome against original or revised objectives. The project's performance improved substantially in its last two years, after the project was restructured and a new manager was appointed (see below). Despite this, the project's overall achievement must be rated as unsatisfactory, since each of the project's four original development objectives were only partially met, as follows: (i) Improve the health and nutrition status of slum-dwellers in the project cities. Certain health indicators in the slums improved during the project period, though for methodological reasons it is not possible to quantify the project's contribution to this. Some project service delivery related activities were well implemented, such as civil works and the TB control program. But serious shortfalls in the quantity and timeliness of drugs and equipment procured under the project, recruitment of only half the planned number of additional health staff, delays in producing integrated MCH protocols and failure to complete two thirds of the integrated MCH training mean that output cannot be rated as satisfactory. (ii) Build the capacity of city and municipal governments to plan, finance and implement cost-effective slum health and nutrition programs, in partnership with communities, NGOs and the DOH. Though some planning and management training was provided to local governments in the last two years of the project, and capacity development of the local governments in the area of health education was successful, the key activity of improving local government health management systems was begun too late, and could therefore not be systematically implemented. - 4 -  (iii) Help slum communities identify their own health, nutrition and environmental problems and participate in planning, implementing and monitoring appropriate interventions. All local governments succeeded in developing partnerships with NGOs and communities, but this happened too late to achieve the core objective of giving urban slum conmmunities more control over their health and nutrition status. Only about 100 sub-projects for partnership activities were implemented, as against the 800 planned at appraisal. (iv) Help DOH develop policies and strategies which would improve the outreach and cost-effectiveness of health and nutrition delivery systems. Though a new system for targeting health services to the urban poor was introduced under the project, other key strategy development activities, especially in the key areas of protein-energy malnutrition control and environmental health, were not implemented. 4.2 Outputs by components: Component 1. With regard to the TB services, systematic M&E was conducted after the restructuring. The two objectives of the revised project were to detect at least 70% of the estimated smear-positive TB cases and cure at least 85% of them. At project completion, all facilities were implementing DOTS. In terms of case detection, most areas were close to the target of 70%. Cure rates were going up, but there was quite some variation between LGUs. With an average success rate (combining cured and treatment completed) of 80% in 2000, the project had come very close to the target of 85%. Except for the TB component, the project did not succeed in establishing a practical, reliable and technically appropriate M&E system to routinely track performance indicators for service delivery. The original 25 project indicators had problems of technical appropriateness and measurability. The revised project proposed 6 core indicators and 18 process indicators. However, devolution and weak M&E capacity at both DOH and LGU levels meant that no systematic reporting of the indicators took place. During the last supervision mission, a set of indicators were agreed for use in the final evaluation, which did not materialize. However, routine service delivery data points to certain improvement in access to MCH services by the poor. As shown in the table below, for 5 out of 9 outcome indicators of MCH services, data for the urban poor in thefirst six months of 2001 are either equivalent or better than those among city-wide population for all 1997. 1995 1997 2001 (city-wide) (city-wide) (ftrst six months urban poor) Pregnant women with at least 3 prenatal visits 32% 48% 56% Pregnant women receiving at least 2 doses 47% 46% 46% of Tetanus Toxoid Post partum women with at least I PP visit 60% 69% 69% Post partum women who initiated breastfeeding 56% 66% 56% Fully immunized children (FIC) 92% 91% 61% Lactating women with vitamin A supplement 45% 56% 56% Infants with Vitamin A supplement NA 81% 109% Pregnant women with iron supplement. 53% 48% 32% Children with Vitamin A supplement NA 96% 62% If these data reflect the true situation, they are encouraging. However, it is impossible to make a confident statement that the project was responsible. - 5 -  It is clear, however, that the project had significant outputs uwhich might ha\ e contributed to an improvement in urban poor indicators, even though the inputs were much smaller tItan what was planned at appraisal. On the positive side: (i) 114 health facilities were built or upgraded and equipped under the project representing an increase of about a quarter over the pre-existing infrastructurc. (ii) 617 additional health staff were financed and trained under the project; mostly midwives and nurses assigned to health centers and outreach work. (iii) In the last two years of the project, USS2m of TB drugs v. ere procured (as against the original budget of US$700,000 for the whole p]-oject). With these drugs universally available, and all local governments trained in the new 'DOTS' approach to I B control. by miid 2000 case detection rates rose close to the post-restructuring target of 70( 1. and the cobnbn,ed completed-treatment-and-cure rate was 8000, almost meeting the targe. of 85% On the negative side: (i) The additional midwives and nurses represented only about half the numnber planned and budgeted at appraisal, based on the local governments' own assessments of their needs. Local governments were prevented from hiring more by legislation which liminted the proportion ol their budget spent on salaries as opposed to other operating costs. (ii) Implementation of the planned integration of MCH I services ;waIs delayed until the last two years of the project. (iii) Because of the lack of procurement planning and the poor implementation of procurement, no TB drugs and only a limited quantity of MCH drugs were prcn red prior to the last two years of the project. Deliveries were not only too small to meet local government.' needs. but also sporadic, and sometimes included types of drugs which were not a prionty at the local level. Some of the medical equipment procured was defecti- e. Component 2. Management Systems Improvement,; CapacitLy I?ei'clo; n. in Planning and Evaluation. As noted above, these activities began only after project reslructuring, and therefore could not achieve originally planned outcomes. Information, Education and Communication (iEl. This key activity was financcd through an Australian grant for the first three years of the project, and with Australian technical assistance. Since the grant did not flow through government channels, this activity did not sutffer from the tinancing delays experienced by nearly all others. An evaluation by an Australian tech-ical. expert indicates that IEC strategies, messages and materials were developed, many IEC campaigns wNere contducted by the local governments, and there was evidence of resulting behavioral change. The capacity of both local governments and local communities to plan and organize IEC activities was strentTthened. Administrative and Training Infrastructure. Ten healtlh offices and ori, regional training center were constructed as planned. As with the project-financed health centers, the ciil works und(ler this component were implemented well, because of strong demand from the local gonemmvnts, the presence of a proactive individual in charge of this activity in the PMO, and tech:-.Ical assistance from Bank supervision missions. -6 -  Project Management and Coordination. Project management was very weak until the last two years of the project. Although two management consultants were hired at different times to help the PMO, their output did not prove to be acceptable to their clients, and made no difference. Component 3. This component was slow to get off the ground, with only 46 community partnership sub-projects approved in the four years prior to restructuring. After restructuring, an apex NGO was procured to help other NGOs develop sub-projects, and this system proved successful, in that 59 sub-projects were then developed in a year and a half. Component 4. Baseline, midterm and endline surveys. Owing to problems in organizing the design of the survey and in procurement, the baseline survey was only completed three years into the project, and the midterm survey was therefore cancelled. The endline survey took place as planned, although it was not released. A high quality TB survey was financed under the project, and its finding that TB prevalence was twice as high in urban slums as in rural areas was a major factor in influencing DOH to make TB control a policy priority and a priority of the restructured project. Workload and Work Routines Study. This was not carried out. OR on women 's health, nutrition and environmental health. No OR was begun before the project was restructured, and only one of the four OR studies in the restructured project was attempted. Process documentation indicates that the study results are not valid, because procurement problems meant that food supplements were not purchased for some study areas, while nutrition activities were carried out by some local governments in areas meant to be controls. 4.3 Net Present Value/Economic rate of return: These were not calculated. But the health interventions included in the project (such as immunization, diarrhea, tuberculosis and acute respiratory infection control, matemal health care and family planning, micro-nutrient and protein-energy malnutrition control) are all ones which the Bank's global sector work has indicated to have high cost-benefit ratios. The project planned to increase the cost-effectiveness of MCH interventions by moving from a vertical to an integrated approach; there was only limited success in doing this, and the benefits if any are not quantifiable. During the project, new and more cost-effective approaches to TB control was developed and promoted by WHO. These were introduced in the last two years of the project, with considerable success in improving case detection and cure rates. 4.4 Financial rate of return: Not applicable for public health projects. 4.5 Institutional developnment impact: Overall, this was weak. Local govemrnent management systems were not improved on a systematic basis as planned. Though there was some training of local governments in health planning and management, this came late in the project. On the positive side, the IEC sub-component left local govermments with a significantly increased capacity to plan and manage IEC programs, and DOH regions and districts with a strengthened capacity to support them. And the partnership-building activities under component 3 left all local govemments with an increased capacity to mobilize and work with NGOs and communities. -7 -  5. Major Factors Affecting Implementation and Outcome 5. 1 Factors outside the control of government or implementing agency: National and local elections held in the first year of implementation meant that many newly elected local government executives were unaware of or uncommitted to the project, and the PMO had to spend much time rebuilding commitment. Support from the Bank was weak during the first four years of the project. 5.2 Factors generally subject to government control: Serious weaknesses in DOH procurement capacity and procedures, and reluctance to accept Bank procurement procedures, contributed to very serious procurement delays. Serious weaknesses in financial management capacity and procedures at both central and local government levels contributed to slow disbursements. There were eight DOH Secretaries during the life of the project (preparation through completion). Besides lack of consistent direction and support from the top, it also led to frequent changes of other DOH officials at middle and lower levels. Lack of support and monitoring from oversight agencies. 5.3 Factors generally subject to implementing agency control: Lack of project readiness at effectiveness. Although devolution was legislated in 1992, DOH took several years to develop procedures for management and financing under devolution. The PMO was staffed late and with individuals inexperienced in managing large donor-funded projects. There were five project coordinators during the life of the project, only the last of whom was full time. There was insufficient intervention by DOH management to bring the project back on track. 5.4 Costs and financing. Disbursements under the project were only US$14.5m (21% of the credit) at the time of the project midterm review, which took place after almost four years of implementation, due primarily to delays in procurement and weak financial management (see Borrower performance section for details). This prompted the project restructuring, and the cut of US$20m from the credit. By the end of the project, which was extended by six months through June, 2001, US$35m had been disbursed, half the original credit. Part of the undisbursed balance was due to foreign exchange savings owing to a progressive decline in the peso from 26 to the dollar at appraisal to 52 at closing. In peso terms, the project spent 72% of the budget at appraisal. Furthermore, 11% of the original peso budget for the project was in respect of the 215 field staff that local governments opted not to hire. It is noteworthy that no less than 43% of the peso spending was recorded in the last year and a half of the project, following the takeover of a new Project Coordinator after project restructuring. -8 -  Planned and actual expenditures by cost category were as follows (in million pesos): Category Planned Actual Actual as % of Plan Civil Works 238 273 114 Goods-Drugs, Chemicals, Contraceptives 238 359 108 Goods-Equipment, Furniture 238 125 52 Goods-Food Supplements, Micro-Nutrients 238 0 0 Consultant Services 172 79 46 Incremental Operating Costs 159 184 115 Grants for Community Health Partnerships 172 32 19 Travel, Maintenance and Other Operating Costs 212 289 136 Unallocated 185 0 0 Total 1855 1343 72 Failure to implement PEM control activities and to hire the consultants for management systems improvement, together with the poor performance of the community partnerships component, explains the under-spending in the relevant categories in the above table. The over-spending on drugs was due to the very large purchases of TB and MCH drugs made in the final years of the project. This hides significant under-spending on drugs earlier in the project. The overspending in the operating cost categories shows that the administrative overhead proved to be much higher than expected. 6. Sustainability 6.1 Rationale for sustainability rating: Except for the service delivery component, the sustainability of activities for institutional development, community partnership and operations research is unlikely. Specifically: * The health facilities built under the project will continue to be operated. Considerable training in the implementation of DOTS has taken place and is very likely to be useful for the national TB control program. There will probably be adequate supplies of TB drugs, since these are to be provided by the central Government as a national health priority. MCH and other drugs and supplies, which are a local government responsibility, will continue but may be under-funded. * Nearly two thirds of the more than 600 additional contractual health workers funded under the project are being absorbed onto the permanent staff of the local governments-but more than a third will be lost, even though all participating governments signed an agreement to retain all project staff after the project. * Local governments will continue some IEC activities, but less than half the project local governments plan to fund the purchase of IEC materials. How much IEC will be done will depend on what resources they can access from donors such as UNICEF. DOH has no systematic strategy for continuing efforts to strengthen the health management capacity of local governments, nor has it budgeted the funds for this. Local government-NGO-community partnership activities are likely to continue, but local governments are unlikely to commit funds to them. If DOH cannot provide matching grant finance, and the only source of funding is the NGO movement, then this effective way of -9-  mobilizing communities and increasing outreach will remain under-exploited. 6.2 Tranisition arrangement to regular operations: Local governments are already operating project-financed infrastructure and continuing project-financed activities. These will continue, albeit with even lower levels of drugs and supplies than under the project. Overall, the resource transfer to local governments under the project was not achieved on the planned scale. As a result of devolution, the DOH now has only a very small budget for matching grant finance to local governments. The ongoing health sector reform contains no special provision for improving the health and nutrition of disadvantaged slum populations. Yet significant health problems remain in the slumns, especially in the areas of protein-energy malnutrition and environmental health. 7. Bank and Borrower Performance Bank 7.1 Lending: The project as identified was appropriate. Bank assistance in preparation was adequate on the technical front, but the Bank missions were inadequately staffed with regard to institutional development, procurement and financial management. Bank support was most unsatisfactory during the first four years of implementation. The Task Manager (TM) changed immediately after appraisal, but there was no hand-over mission with both old and new TM. 7.2 Supernision: Supervision was weak immediately after the project became effective, just when a weak PMO most needed help. The incoming TM proved unable to develop a cooperative working relationship with the PMO. The Bank did not act quickly to recognize and resolve this problem. Nor, as the project's performance deteriorated, did Bank management begin a high level dialogue with the Govemment to find ways to improve it. 7.3 Overall Bank performance: The Bank's performance improved from 1998, when supervision was handed over to the resident mission, and a new TM developed a more productive working relationship, and assisted with the project restructuring. By this time also, the resident mission had developed a capacity to assist the DOH with training and technical assistance in the areas of procurement and financial management. This local presence meant a quick tum-round time on procurement clearances, and continuing help in resolving bottlenecks. But despite these improvements later in project implementation, overall Bank perfornance can only be rated as unsatisfactory. Borrower 7.4 Preparation: The Borrower's comnuitment to the project during preparation was very satisfactory, in that there was adequate attention from top DOH management, involvement of the relevant programs and services in DOH, and participation of local governments. 7.5 Government implementation performance: There was little or no support or effort from GOP oversight agencies to assist DOH in problem solving despite its unsatisfhctory performance rating by the Bank. The lack of clear financial guidelines in the MNunicipal De-vlloyment Fund (MDF), slowed SOE processing in Manila; MDF sometimes exercised an audit rather than a review function with respect to SOEs. - 10-  7.6 Implementing Agency: As noted above, Implementing Agency performance improved substantially during the last two years of implementation. However, in the earlier years of the project, a combination of the following problems led to Bank supervision missions giving the project an unsatisfactory rating for three successive years from 1996: * There was no continuity between the staff who helped prepare the project and those recruited into the PMO for project implementation. * PMO staffing was slow and piecemeal, and late recruitment meant inadequate time for team-building and training. The PMO was not staffed with individuals who had experience in managing large scale donor-funded projects. * The PMO tried too much to go it alone, rather than cooperating with the DOH program and service departments, and seeking assistance from the PHDP PMO, which had much experience in project procurement and financial management. DOH was slow in redefining its new role after devolution, and in developing related operational procedures under devolution, and this led to continuing uncertainty for both the PMO and participating local governments. There were very serious procurement delays, due to a procurement specialist not being hired into the PMO until the fourth year of the project; lack of procurement planning and implementation; difficulties in DOH preparing specifications and bid documents; long delays in bid evaluation; lack of systematic procurement monitoring; lack of understanding of Bank procurement procedures. * There were serious disbursement delays, due to lack of competent financial management staff in the PMO (for the first two years of the project, its finances were managed by a generalist project officer and a clerk); slow processing of statements of expenditure (SOEs) by local governments whose financial management systems were weak, and whose accountants often gave UHNP implementation low priority; lack of internal control and record systems in the PMO, resulting in lack of clarity about what physical assets were available, or what costs were incurred. * The project never developed effective financial management, procurement or progress monitoring systems, and even basic office management and filing systems were inadequate right from the early years of the project. * The frequent changes in Secretary led to inadequate supervision and support from DOH management, and inadequate intervention when the project's performance deteriorated. 7.7 Overall Borrower performance: Borrower performance is rated unsatisfactory overall. Nevertheless, it did far better in its last two years than in its first four. Three factors were mainly responsible for this: A competent, full time project manager was appointed during this period. * The project restructuring process helped the PMO to get some of the basic planning done which should have been completed before project effectiveness. Some progress was made in strengthening capacity and clarifying procedures in the across-the-board problem areas of procurement, financial management, and reorientation of DOH to its new post-devolution role. The local governments involved do not consider UHNP to be a failure, but are frustrated that the central government got the project moving only in its last two years, and that it ended before many of the - 11 -  agreed inputs had reached them. About a third of the LGUs performed very well despite the failure of DOH to deliver inputs in a timely manner. 8. Lessons Learned (i) Resolve Cross-Cutting and Fundamental Management Problems First. Persistent, cross-cutting management problems, in areas such as those listed below, cannot be solved by traditional lending operations on a project-by-project basis, and need separate reform efforts or projects focusing solely on dealing with them such as weak financial management, procurement, and civil service. (ii) Identify and Respond to Major Changes Likely to Affecting the Implementing Agency. Bank lending should respond adequately to major institutional changes affecting the implementing agency (such as the advent of health sector devolution) at the design stage, and make a careful judgement whether a traditional, service delivery-oriented project: Should be postponed until conditions have stabilized and new systems have been developed; or Could be developed in parallel, with appropriate capacity building and reduced complexity. (iii) Encourage Borrower to Develop and Maintain a Professional Project Management Office. Professional staff, expert in various aspects of project management should be developed in implementing agencies so that they gain adequate experience in project management, and can successfully handle a wide variety of projects. The concept of a Unified Project Management Office currently being developed in the DOH is certainly a step in the right direction. The appropriate incentives for such staff and employment status are dealt with at present in such an ad hoc manner across Bank and other donor projects and within and across government agencies as to warrant a full-fledged study and follow-up action. (iv) Create True Project Ownership. True project ownership should be observed in terms of a strong demand to secure efficient and effective project implementation and an unwillingness to tolerate delays of the magnitude that characterized the first four years of UHNP. Country specific and institution-specific mechanisms must be identified and developed that will demand project implementation performance. Examples include effective monitoring by Govemment oversight agencies; joint and in-depth monitoring by donors and oversight agencies; civil society monitoring. (v) Bank Support Change of task managers soon after project preparation, and that too, abruptly and without immediate replacement and follow up should be avoided at all costs. * The Bank should provide an adequate amount of supervision in the crucial first project year. The Bank should intervene early on to replace ineffective Task Managers. 9. Partner Comments (a) Borrower/implementing agency. Please see Annex 8 for Borrower's input to ICR. (b) Cofinanciers: (cJ Other partners (NGOs/private sector): The ICR accurately reflects the shared WHO-Bank assessment of the TB component. It is worth - 12 -  noting that the collaboration between WHO and the Bank resulted in positive outcomes in the last 2 years of the project. Also worth-noting is that the budget for TB drugs increased to US$2 Million as against the original estimate of US$ 0.7 million. The provision of TB drugs is crucial for the DOTS program in the country, and the project team should be congratulated for augmenting the allocation during restructuring and supporting the procurement of the drugs. (WHO Regional Office, Manila) 10. Additional Information - 13 -  Annex 1. Key Performance Indicators/Log Frame Matrix Outcome / Impact Indicators: Indicator/Matrix Projected in last PSRI Actual/Latest Estimate 1. Reduction of anemia among registered pregnant women by 25%. 2. Reduction of bw birth weight (LBW) among babies of registered mothers by 25%. 3. Reduction of the prevalence of underweight and stunning among registered 14 months old children by 25%. 4. 100% elimination of deficient and low serum retinol levels among registered women and registered 0-24 months old children. 5. Reduction of anemia among registered 0-24 months old children by 25%. 6. Reduction in the incidence of pneumonia in 0-24 months old children by 25%. 7. Reduction by half of the number of deliveries within 2 years of the preceeding one. 8. Increase in contraceptive prevalence rate among project target women between 15-45 from 20% to 45%. Output Indicators: Indicator/Matrix Projected in last PSR Actual/Latest Estimate 1. Registration of 80% of pregnant women 80% for counseling/services by end of first trimester of pregnancy. 2. Distribution of iron tablets against anemia 100% to 100% of registered pregnant women throughout at least the last 4 months of pregnancy. 3. Availability of full range of family planning 100% services at project health facilities. 4. Growth monitoring of 90% of children in at 90% least 9 out of their 12 first months of life, with related nutrition counselling for mothers. 5. Short course chemotherapy 80% complianoe/completon rate at 80% for sputum positive TB cases. End of project - 14 -  Annex 2. Project Costs and Financing Project Cost by Component (in US$ million equivalent) Appraisal ActuallLatest Percentage of Estimate Estimate Appraisal Project Cost By Component US$ million US$ million A. Service Delivery 51.60 33.40 65 B. Institutional Development 14.50 7.70 53 C. Community Partnership for Health 4.90 0.70 14 D. Research and Evaluation 4.00 1.80 45 Total Baseline Cost 75.00 43.60 Physical Contingencies 1.90 Price Contingencies 5.40 Total Project Costs 82.30 43.60 Total Financing Required 82.30 43.60 Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) Procurement Method Expenditure Category ICB NCB Other2 N.B.F. Total Cost 1. Works 0.00 9.50 0.00 0.00 9.50 (0.00) (9.50) (0.00) (0.00) (9.50) 2. Goods 13.80 10.00 6.80 2.00 32.60 (13.80) (10.00) (6.80) (0.00) (30.60) 3. Services 0.00 0.00 7.20 0.70 7.90 (0.00) (0.00) (7.20) (0.00) (7.20) 4. Grants 0.00 0.00 7.20 0.00 7.20 (0.00) (0.00) (7.20) (0.00) (7.20) 5. Contract and staff 0.00 0.00 15.60 0.00 15.60 salaries (0.00) (0.00) (6.50) (0.00) (6.50) 6. Travel, maintenance and 0.00 0.00 9.00 0.40 9.40 other operating costs (0.00) (0.00) (9.00) (0.00) (9.00) Total 13.80 19.50 45.80 3.10 82.20 (13.80) (19.50) (36.70) (0.00) (70.00) -15-  Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equivalent) Procurement Method Expenditure Category ICB NCB Other 2 N.B.F. Total Cost 1. Works 0.00 7.03 0.00 0.00 7.03 (0.00) (7.03) (0.00) (0.00) (7.03) 2. Goods 8.59 2.59 1.32 2.00 14.50 (8.59) (2.59) (1.32) (0.00) (12.50) 3. Services 0.00 0.00 2.12 0.70 2.82 (0.00) (0.00) (2.12) (0.00) (2.12) 4. Grants 0.00 0.00 0.74 0.00 0.74 (0.00) (0.00) (0.74) (0.00) (0.74) 5. Contract and staff 0.00 0.00 14.14 0.00 14.14 salaries (0.00) (0.00) (5.89) (0.00) (5.89) 6. Travel, maintenance and 0.00 0.00 7.17 0.40 7.57 other operating costs (0.00) (0.00) (7.17) (0.00) (7.17) Total 8.59 9.62 25.49 3.10 46.80 (8.59) (9.62) (17.24) (0.00) (35.45) "'Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. 2'Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. Project Financing by Component (in US$ million equivalent) Percentage of AXppraisal| Component j ppraisal Esidmate Acual/Latesi Estimate l Bank Go'I. CoF. Bank Co,r. CoF. Bank Gout. CoF. A. Service Delivery 47.90 8.70 0.00 28.30 5.10 0.00 59.1 58.6 0.0 B. Institutional 12.80 0.00 3.10 4.60 0.00 3.10 35.9 0.0 100.0 Development C. Community Partnership 5.00 0.40 0.00 0.74 0.00 0.00 14.8 0.0 0.0 for Health D. Research and 4.40 0.00 0.00 1.80 0.00 0.00 40.9 0.0 0.0 Evaluation - 16 -  Annex 3. Economic Costs and Benefits An economic rate of return was not estimated for the project at the time of appraisal, nor at closure. - 17 -  Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2 Economists, I FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective Identification/Preparation October 1989 3 2 public health specialists, 1 communication specialist February 1990 3 2 public health specialists, 1 communication specialist July 1990 4 1 public health specialist, I population specialist, I economist, 1 consultant November/ 6 1 public health specialist, I December 1990 population specialist, 4 consultants March 1991 4 1 public health specialist, I population specialist, 2 consultants June 1991 2 1 public health specialist, I population specialist November/ 6 1 public health specialist, I December 1991 population specialist, I operations analyst, I sociologist, 1 nutrition specialist, I consultant March 1992 l 9 2 public health specialist, I population specialist, 1 operation officer, 1 FMS, 1 procurement specialist, I environment specialist, 2 consultants July 1992 7 2 public health specialist, I management and nutrition specialist, 2 population specialists, I reproductive health specialist, I FMS October 1992 6 2 public health specialists, 1 management and nutrition specialist, 1 population specialist, I nutrition specialist, I architect Appraisal/Negotiation January 1993 8 1 public health specialist, I management and nutrition specialist, 2 population specialists, 1 lawyer, 1 operation officer, 2 consultants (specialty not specified in record) - 18-  April 1993 3 1 public health specialist, 1 procurement specialist, 1 consultant October 1993 2 1 public health specialist, 1 consultant Supervision January 1994 5 1 task manager, 1 S S management specialist, 1 procurement specialist, I public health specialist, 1 architect November/ 3 1 population specialist, 1 S S December 1994 architect, 1 specialist in nutrition and management June 1995 3 1 population specialist, 1 S S architect, 1 specialist in nutrition and management February 1996 5 1 population specialist, 1 S S specialist in management and nutrition, 1 architect, 1 training consultant specialist, 1 IEC consultant specialist July 1996 6 1 population specialist, 1 U U specialist in management and nutrition, 1 architect, 1 training consultant specialist, 1 IEC consultant specialist, I procurement and financial management specialist November/ 9 1 population specialist, 1 S S December 1996 management and community participation specialist, 1 procurement analyst, I architect, 1 consultant in nutrition and management, 1 consultant in nutrition, I consultant in IEC, 1 consultant in training, 1 consultant in public health July 1997 5 1 population specialist, 1 U U consultant in nutrition and management, I training consultant, 1 architect consultant, 1 IEC consultant January 1998 7 1 human development specialist, U U (Mid-term review) I community participation specialist, I procurement specialist, 2 public health specialists, I management specialist, 1 IEC specialist February 1999 13 2 human development specialists, S S I procurement specialist, I FMS, I community participation - 19-  specialist, I economist, 4 public health specialists, 2 IEC specialists, 1 institutional development specialist September 1999 10 2 human development specialists, S S I procurement specialists, 2 FMS, 1 community participation specialist, 3 public health specialists, I institutional development specialist February 2000 8 2 human development specialists, S S I procurement specialists, I FMS, I community participation specialist, 2 public health specialists, I institutional development specialist October/ 8 2 human development specialists, S S November 2000 1 procurement specialist, 2 FMS, 1 community participation specialist, 2 public health specialists June 2001 9 2 human development S S specialists, 1 procurement specialists, 2 FMS, 1 evaluation specialist, 3 public health specialists ICR November 2001 5 1 human resource specialist, U U 1 management and nutrition specialist, I FMS, 2 public health specialists (b) Staff. Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ ('000) Identification/Preparation 100 472.9 Appraisal/Negotiation 26 122.9 Supervision 242 711.9 ICR 10 29.4 Total 378 1,337.1 - 20 -  Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H-High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating El Macro policies O H OSUOM O N * NA O Sector Policies O H OSUOM * N O NA a Physical O H * SU O M O N O NA L Financial O H OSU*M O N O NA El Institutional Development O H 0 SU 0 M S N 0 NA El Environmental OH OSUOM O N * NA Social FZ Poverty Reduction O H OSUOM O N O NA F Gender O H OSUOM O N O NA El Other (Please specify) O H OSUOM O N O NA Oi Private sector development 0 H O SU O M 0 N 0 NA El Public sector management 0 H 0 SU * M 0 N 03 NA LiOther (Please specify) O H OSUOM O N O NA - 21 -  Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bank performance Rating