Documentof The WorldBank FOR OFFICIALUSEONLY ReportNo: 31456-PH PROJECTAPPRAISALDOCUMENT ONA PROPOSEDLOAN INTHEAMOUNT OFUS$16.0 MILLION TO THE REPUBLICOF THE PHILIPPINES FORA SECONDWOMEN'SHEALTH & SAFE MOTHERHOODPROJECT March23,2005 HumanDevelopmentSector Unit EastAsia andPacificRegion This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents mav not otherwise be disclosed without World Bank authorization. CURRENCYEQUIVALENTS (As of February 7,2005) Currency Unit = Peso ((PhP) 1Peso = US$0.02 US$ = PhP54.52 FISCAL YEAR January 1 - December31 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank AIDS Acquired Immune Deficiency Syndrome ARH Adolescent Reproductive Health AusAID Australian Agency for International Development AYH Adolescent and Youth Health BCC Behavior Change Communication B C I Behavior Change Intervention B C U Blood Collecting Unit BEmOC Basic Emergency Obstetric Care BHS Barangay Health Station BHW Barangay Health Worker BS Blood Station BSF Blood Service Facilities BTr Bureau of Treasury BTL Bilateral Tubal Ligation CAS Country Assistance Strategy C D LMIS Contraceptive Distribution, Logistics and Management Information System CDS Contract Distribution System CEmOC Comprehensive Emergency Obstetric Care CFAA Country Financial Accountability Assessment CHD Center for Health Development CPAR Country Procurement Assessment Report CPR Contraceptive Prevalence Rate COA Commission on Audit CSR Contraceptive Self-Reliance csw Commercial Sex Worker CYP Couple-Year Protection Vice President: Jemal-ud-din Kassum Country ManagerDirector: Joachim von Amsberg Sector Director: Emmanuel Y, Jimenez Sector Manager: Fadia M.Saadah Task Team Leader: Teresa H o FOROFFICIAL USEONLY DBM Department of BudgetandManagement DENR Department of Environment andNaturalResources DOH Departmentof Health DKT DharrnmendraKhumarTyagi EA EnvironmentalAssessment FHSIS FieldHealth ServiceInformation System FMR Financial Monitoring Report FP Family Planning FSW Free-lance Sex Worker GOP Government of the Philippines GTZ GermanTechnicalCooperation HIV HumanImmunodeficiencyVirus HOMIS Hospital OperationsManagementInformation System HNP Health,NutritionandPopulation m Human Resmrce Development HSRA Health Sector ReformAgenda HRMD HumanResource Management andDevelopment I A Implementing Agency ICB InternationalCompetitiveBidding ICR ImplementationCompletionReport IEC . Information, Educationand Communication IP IndigenousPeoples IPDP IndigenousPeoples DevelopmentPlan IPP Individually PayingProgram IT Information Technology I U D s Intra-Uterine Devices LCE Local Chief Executives LGU Local GovernmentUnit LMIS Logistics Management Information System LOGOFIND Local Government Finance andDevelopment MB Monetary Board MC Maternal Care MERD Monitoring, Evaluation,Research andDissemination MIS ManagementInformation System MOA Memorandumof Agreement MTPDP MediumTerm Philippine DevelopmentPlan NCA Notice of Cash Allocation NCDPC National Center for Disease Preventionand Control NCIP National Commissionon IndigenousPeoples NDHS National DemographicHealthSurvey NEDA National Economic and DevelopmentAuthority NG National Government NGAS New Government Accounting System NHIP National Health InsuranceProgram NSD Normal Spontaneous Delivery NSO National Statistics Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. I t s contents may not be otherwise disclosed without World Bank authorization. NSV Non-Scalpel Vasectomy OFWs Overseas Foreign Workers PAD Project Appraisal Document PhilHealth Philippine Health Insurance Corporation PHO Provincial Health Office PMO Project Monitoring Office PMT Project Monitoring Team RH Reproductive Health RHU Rural Health Unit SBD Standard Bidding Document SEMP2 Second Social Expenditure Management Project SHC Social Hygiene Clinic S I L Specific Investment Loan SOE Statement of Expenditure SP Sponsored Program SPLA Sub-project Loan Agreement STI Sexually Transmitted Infection TA Technical Assistance TBA Traditiona1BirthAttendants TORS Terms of Reference UHNP Urban Health and Nutrition Project UNFPA UnitedNations Population Fund UNICEF UnitedNations Children's Emergency Fund UPMD UnifiedProject ManagementDivision USAID UnitedStates Agency for InternationalDevelopment VAW Violence Against Women VCT Voluntary Counseling Test WHO World Health Organization WHSM Women's Health and Safe Motherhood WHSMP Women's Health and Safe Motherhood Project WHSM-SP Women's Health and Safe Motherhood - Service Package WHT Women's Health Team WRA Women of Reproductive Age FOR OFFICIAL USEONLY PHILIPPINES SECOND WOMEN'SHEALTH & SAFE MOTHERHOOD CONTENTS Page CURRENCY EQUIVALENTS ......................................................................................................................... ii A. STRATEGIC CONTEXT AND RATIONALE ...................................................................................... 1 1. Country and sector issues................................................................................................ 1 2. Rationale for Bank involvement ..................................................................................... 3 3. Higher level objectives to which the project contributes ................................................ 3 B. PROJECTDESCRIPTION ...................................................................................................................... 3 1. Lending instrument ......................................................................................................... 3 2. Program objective and phases......................................................................................... 4 3. Project development objective and key indicators.......................................................... 4 4. Project components ......................................................................................................... 4 5. Lessons learned and reflected in the project design........................................................ 6 6. Alternatives considered and reasons for rejection........................................................... 7 C . IMPLEMENTATION ............................................................................................................................... 7 1. Partnership arrangements ................................................................................................ 7 2. Institutional and implementation arrangements .............................................................. 7 3. Monitoring and evaluation of outcomes/results .............................................................. 8 4. Sustainability................................................................................................................... 8 5. Critical risks and possible controversial aspects............................................................. 9 6 . Loadcredit conditions and covenants ........................................................................... 10 D . APPRAISAL SUMMARY ...................................................................................................................... 10 1. Economic and financial analyses .................................................................................. 10 2. Technical ....................................................................................................................... 12 3. Fiduciary........................................................................................................................ 13 4. Social............................................................................................................................. 14 This document has a restricted distribution and may be used by recipients only inthe performance of their official duties. It s contents may not otherwise be disclosedwithout World Bank authorization . V 5. Environment .................................................................................................................. 14 6. Safeguardpolicies ......................................................................................................... 15 7. Policy Exceptions and Readiness.................................................................................. 15 Annex 1:Country and Sector ProgramBackground .................................................................................... 16 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ....................................... 24 Annex 3: Results FrameworkandMonitoring .............................................................................................. 26 Annex 4: DetailedProjectDescription ............................................................................................................ 40 Annex 5: Project Costs ..................................................................................................................................... 56 Annex 6: Institutional Analysis andProjectManagement ........................................................................... 58 Annex 7: FinancialManagement and Disbursement Arrangements ........................................................... 67 Annex 8: Procurement ..................................................................................................................................... 71 Annex 9: Economic andFinancialAnalysis ................................................................................................... 77 Annex 10: SafeguardPolicy Issues .................................................................................................................. 91 Annex 11:Project Preparationand Supervision ........................................................................................... 96 Annex 12: Documentsinthe ProjectFile ....................................................................................................... 98 Annex 13: Statementof Loans and Credits .................................................................................................... 99 Annex 14: Country at a Glance ..................................................................................................................... 101 vi PHILIPPINES SECOND WOMEN'S HEALTH& SAFEMOTHERHOOD PROJECT APPRAISAL DOCUMENT EAST ASIA AND PACIFIC EASHD Date: March23, 2005 TeamLeader: Teresa Ho Country Director: Joachim von Amsberg Sectors: Health (100%) Sector Managermirector: EmmanuelY. Themes: Population andreproductive health Jimenez (PI Project ID: PO79628 Environmental screening category: Partial Assessment Lending Instrument: Specific Investment Loan Safeguard screeningcategory: No impact [XI Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing (US$m.): 16.00 RECONSTRUCTIONAND DEVELOPMENT Total: 36.02 1.98 38.00 ResponsibleAgency: Department of Health San Lazaro Compound, St. Cruz Manila Philippines Tel: (63-2)711-6061 Fax: (63-2)711-6061 aapadilla@co.doh.gov.ph vii 7Y 6 7 8 9 10 11 12 0 0 lnnual 0.50 1.32 1.86 2.24 3.20 3.20 3.68 0.00 0.00 hmulative 0.50 1.82 3.68 5.92 9.12 12.32 16.00 16.00 16.00 Project implementationperiod: Start July 25, 2005 End:December 31, 2011 Expected effectiveness date: July 25, 2005 Expectedclosing date: June 30, 2012 Does the project depart from the CAS in content or other significant respects? Ref. PAD A.3 [ ]Yes [XINO Does the project require any exceptions from Bank policies? Ref. PAD D.7 [ ]Yes [XINO Have these been approved by Bank management? [ ]Yes [ IN0 1s approval for any policy exception sought from the Board? [ ]Yes [ IN0 Does the project include any critical risks rated "substantial" or "high"? Ref. PAD C.5 [XIYes [ ] N o Does the project meet the Regional criteria for readiness for implementation? Ref. PAD 0.7 [XIYes [ ] N o Project development objective Ref. PAD B.2, TechnicalAnnex 3 The project will contribute to the national goal of improving women's health by: 1) Demonstrating inselected sites a sustainable, cost-effective model of delivering health services that increases access of disadvantaged women to acceptable and highquality reproductive health services and enables them to safely attain their desired spacing and number of children. 2) Establishing the core knowledge base and support systems that can facilitate countrywide replication of the project experience as part of mainstream approaches to reproductive health care within the framework of the Health Sector ReformAgenda. Project description [one-sentence summary of each component] Ref. PAD B.3.a, Technical Annex 4 Component A. Local Delivery of the IntegratedWHSM Service Package. This component would support local governments insix project sites over aperiod of six years inmobilizing networks of public andprivate providers to undertake activities and deliver services included in the integratedWomen's Health and Safe Motherhood service package (WHSM-SP), with focus on maternal care, family planning and STUHIV control services. Component B: National Capacity to Sustain W H S M Services This component would develop capacity inthe DOHto create an operating environment conducive to LGUs managing and sustaining local delivery of the WHSM-SP and facilitate replication of the integrated W H S M service model through (i) development of operational and regulatory guidelines for the provision and use of W H S M services; (ii) support for a network of training providers for the integratedWHSMP-SP; (iii) monitoring, evaluation, research and dissemination; and (iv) establishment of project management capacity. V l l l ... Which safeguard policies are triggered, if any? Ref. PAD 0.6, TechnicalAnnex 10 1. Bank'sEnvironment Assessment Policy (OP/BP/GP 4.01) 2. Indigenous Peoples (OD 4.20) Significant, non-standard conditions, if any, for: Ref. PAD C.7 Board presentation: None Loadcredit effectiveness: 1.Issuance by PhilHealthBoard of apolicy statement supportingthe national WHSMprogram and authorizing piloting of various measures in the project sites to support the program 2. Initial deposit by all municipalities in Sorsogon and Surigao del Sur Provinces into Project Accounts of respective seed funds to cover three months' counterpart expenditures 3. PIP, Procurement ImplementationManual (PIM), and FMManual adopted 4. Signing of sub-project loan agreements under the LOGOFIND Project for project-related activities in Sorsogon and Surigao del Sur Provinces 5. Ratification of Environment and Waste Management Operating Guidelines, Environmental Assessment Report, I' Strategy, IPDP of Sorsogon and Surigao del Sur and Resettlement Policy Framework Covenants applicable to project implementation: 1.Government to maintainineffect andimplementthe PIP,PIM, FMManual, Environment and Waste Management Operating Guidelines,Environmental Assessment Report, IP Strategy, IPDP of Sorsogon and Surigao del Sur and Resettlement Policy Framework 2. D O H and MDFO will seek Bank concurrence on the selection and investment plans of Batch 2 sites and enter into agreements with them covering implementation and financing arrangements for the Project with terms and conditions acceptable to the Bank 3. Not later than July 1, 2006, Government to furnish to the Bank its FundingModalities Plan setting out the modalities for onlending of loan proceeds to LGUs; subsequently only make available to Project Sites subproject financing in accordance with such Plan 4. Project municipalities to maintain their respective Project Account balances consistent with the financing requirements of the Project 5. Staff for key positions in adequate numbers and with sufficient qualifications will be maintained in PMTs of provincial and city governments, and at D O H units involved inproject implementation 6. Furnishto the Bank on June 30 and December 31of each year semi-annual reports on results of monitoring and evaluation activities 7. B y December 31, 2008, prepare a midterm report and review such report with the Bank Disbursement conditions for Batch 2 sub-projects: 1.Government will adopt FundingModalities Plan acceptable to the Bank 2 2. Initial deposit by Batch 2 municipalities into respective Project Accounts (as with Batch 1) i x A. STRATEGIC CONTEXT AND RATIONALE 1. Country and sector issues Women`s Health Outcomes. With a maternal mortality rate of 180 per 100,000 live births (1995) and a total fertility rate of 3.5 children per woman (2003), the Philippines faces outstanding challenges in these important indicators of health status despite efforts of a succession of government administrations pursuingworthwhile programs in these areas. Large-scale efforts to improve prenatal care and train traditional birth attendants (TBAs) led to early significant declines in maternal mortality, but the gains leveled off at a still-high rate. A wide range of family planning methods have been made available to most women of reproductive age, raising contraceptive prevalence from 36% in 1988 to 49% in 2003. Women, however, are still having on average one more child than they intended, with an estimated 20% of all women of reproductive age with unmet demand. Although abortion i s illegal, data from various studies indicate that there are around 16 abortions for every 1000 pregnancies. An unusually high population growth rate of 2.36% per year (1995-2000) i s yet another consequence of low contraceptive prevalence. STZ and HIV/AIDS. Early recognition of the country's increased risk to an HIV/AIDS epidemic facilitated a relatively early and vigorous response. Although current levels of HIV prevalence remain relatively low (around 6,000 people estimated to be living with HIV/AIDS as of 2002), risks remain due to a large population involved with commercial sex 'and practicing risky sexual behavior. The increasing rate of HIV infection among returning overseas Filipino workers (OFWs) i s also a concern, as i s the large and growing rate of STIs in the general population, which poses the threat of sudden expansion of HIV prevalence beyond the high-risk groups. The high prevalence of gonococcal resistance to penicillin, tetracycline and ciprofloxacin i s of particular concern. Access to Services for Disadvantaged Women. For WHSM services, as with other services, lack of financial and physical access are major obstacles to care. Although initially meant to be provided completely free, Government services have gradually become "less free", with users generally expected to pay for drugs and diagnostic tests. In addition, health facilities are often located in areas that are not easily accessible to the poorest families, who tend to live in more remote areas. Even when public facilities are present, staff in these facilities tend to be poorly qualified and the facilities poorly stocked. Lack of access to facilities that can offer safer deliveries and appropriate care in the event of an obstetrical emergency i s hence a major problem. Also, many women choose to deliver at home for non-financial as well as cost reasons. The continued existence of unmet demand for Family Planning (FP) i s related to the poor quality and limited reach of services, much deteriorated since their high point in the 1970s. The slow uptake of modern permanent methods among lower income groups, where unmet demand i s greatest, i s of particular concern. Although FP commodities largely have been offered free or at highly subsidized prices, this situation i s changing rapidly with the ongoing pullout of donated contraceptives from the country (see below). Devolution of health care to Local Government Unites (LGUs) in the early 1990s was expected to improve the targeting of services to the most needy, but LGUs have been slow to take up their new responsibilities towards the poor. The introduction of national health insurance in the mid- 1 1990s was meant to ensure universal access. In particular, the Sponsored Program (SP) of the National Health Insurance Program (NHIP), offered fully subsidized membership premiums for indigents. However, the SP did not take off until 2001, and even then utilization of benefits by indigent members has been low because of the co-pay required b y providers, malung care still unaffordable to the poor. Because of their poorer standards, many public hospitals were unable to gain accreditation from the Philippine Health Insurance Corporation (PhilHealth). Contraceptive Supplies. In the last twelve years, contraceptive donations by U SAID accounted for 80% of the country's total supplies. These donated contraceptives (pills, I U D s , injectables and condoms) flowed almost exclusively through the public sector and were provided free to clients. In 2004, USAID started phasing out its contraceptive donations (except IUDs), with the last supplies expected in 2009. In the face of opposition from the Catholic Church, the previous administration, now re-elected in national elections in May 2004, took the position that no National Government funds would be used for purchasing contraceptives, thus creating an imminent threat of serious shortages incontraceptive supplies in the country in the coming years. Government Policies on Women`s Health and Safe Motherhood (WHSM). The government`s basic policies are generally favorable to promotion of WHSM. Public support i s strong for extending high quality maternal care to all in both public and private sectors. The policy on contraceptive purchase notwithstanding, the government' s stated policy of making a wide range of legally allowable family planning methods available to all on the basis of respect for the free and informed choices of women and couples i s acceptable. The Philippine AIDS Prevention and Control Act of 1998 provides a robust legal framework for the national response to HIV/AIDS, which i s consistent with international best practice. The real challenge i s in making these policies bear down on the actual technical content, quality, cost, effectiveness and accessibility of services delivered to women, particularly those segments whose current reproductive health status are well below the national average. Government Strategies for improving Women's Reproductive Health. Government would like to introduce new strategies to address both demand- and supply-side obstacles to access for disadvantaged women. I t intends to do this by introducing: strategic changes in the design of WHSM services including (i)shift in emphasis from the a "risk approach" that identifies high-risk pregnancies during the prenatal period to an approach that prepares all pregnant women for the risk of complications at childbirth; (ii) improved quality of FP counseling and expanded service availability, including itinerant teams providing permanent methods; (iii) integration of STI services into Maternal Care (MC) and FP protocols, wherever appropriate; and (iv) developing outreach programs for young adults, freelance sex workers, and returning OFWs. changes in the service delivery strategy involving a shift from delivery of separate national programs (FP, MC, STUHIV, Adolescent Reproductive Health (ARH) operating at separate, independently-governed levels of the health system to delivery of an integrated Women's Health and Safe Motherhood Service Package (WHSM-SP), focused on maximizing synergies among these key services and on ensuring a continuum of care across levels of the referral system. reliable and sustainable support systems for W H S M service delivery, including systems for: (i)drugandcontraceptive security, through a strategy for contraceptiveself-reliance; (ii) safe blood supply; (iii)behavior change, through a combination of performance-based 2 grants, advocacy and communication; (iv) sustainable financing, through diversification of funding sources, market segmentation (public subsidies for the poor, user fees for the non- poor) and external donor support for the initial capital investments. (d) Stronger stewardship and guidancefrom the Department of Health (DOH)in the form of (i) evidence-based guidelines and protocols on WHSM services; (ii) system for accrediting a providers of integrated WHSM-SP training programs; and (iii) monitoring, evaluation and research on the new WHSM strategies. 2. Rationale for Bank involvement The Bank was one of the first donors to express readiness to support the DOH'S population policy, enunciated during the first months of the previous, now re-elected, administration. That policy statement, though issued under the cloud of the President's ban on NG contraceptive purchase, nevertheless contained all the elements of a comprehensive and well-balanced program. The Bank's early intervention revived interest among other donors (e.g., ADB and the EU) and provided a vehicle for pursuing new alternatives for achieving contraceptive independence as USAID phased out its donations. The Bank also brings badly-needed financial and strategic support for the national MC, FP, STI/HIV and ARH programs. Although other donors, notably UNFPA and USAID, have ongoing projects to support these services, the size of assistance has fallen short of the needs. The Bank was also one of the first donors to support the Health Sector Reform Agenda (HSRA), and the first to back DOH'Sstrategy to link reforms in a key national program (WHSM) to the HSRA framework. The Bank brings technical assistance to help the DOH and LGUs take a step back from the traditional ways of doing business to develop a more cost-effective package of services, and to ensure that financing issues in particular, and systemic reforms in general, figure as prominently as the more usual technical issues in these new approaches and models. 3. Higher level objectives to which the project contributes The project will support the overall CAS goal of assisting the Government of the Philippines (GOP) to re-establish rapid and sustained poverty reduction through two critical paths: achieve poverty-reducing growth and ensure that the poor participate and benefit fully from development. The project i s advanced in the CAS as one of the Bank's instruments for empowerment of the poor by improving investments in human development and ensuring access by the poor with particular focus on increasing the utilization of and satisfaction with the quality of health care services especially among low income households. B y contributing to the population management program as articulated in the government's Medium Term Philippine Development Plan (MTPDP), Project support for FP services will have impact beyond the CAS'S human development objective, on its broader objective of accelerating general socio-economic growth. B. PROJECTDESCRIPTION 1. Lending instrument A Specific investment loan (SIL) was selected because the new approaches to be introduced in the Project, aiming to accelerate the decline in maternal mortality, are still unproven on a large scale in the Philippine context. Furthermore, working in a highly-devolved health sector that i s currently undergoing broad sectoral reform will require focused attention and coordinated action 3 at different levels of government. An SIL i s the most appropriate instrument for this demonstration approach, and for the institution-building that these circumstances require. 2. Programobjective and phases Not applicable 3. Project development objective and key indicators The project will contribute to the national goal of improving women's health by: 0 Demonstrating in selected sites a sustainable, cost-effective model of delivering health services that increases access of disadvantaged women to acceptable and high quality reproductive health services and enables them to safely attain their desired spacing and numberof children. 0 Establishing the core knowledge base and support systems that can facilitate countrywide replication of the project experience as part of mainstream approaches to reproductive health care within the framework of the Health Sector Reform Agenda. Key indicators will include': 0 80% births delivered by skilled attendant (health professional), either in a facility or at home 0 75% of births delivered in a health facility 0 75% of deliveries by the poor in BEMOCs and CEMOCs financed through PhilHealth SP 0 25% of deliveries by the poor in BEMOCs and CEMOCs financed through DOH-LGU Performance grant 0 Increase Contraceptive Prevalence Rate by 10 percentage points 0 100% of RHUShave not experienced stock-outs of pills, injectables and I U D s for the past 6 months 4. Project components ComponentA. Local Delivery of the Integrated WHSM Service Package (total cost USD 32.4 million of which USD 13.4million loan). This component would support local governments in mobilizing networks of public and private providers to deliver the integrated Women's Health and Safe Motherhood service package (WHSM-SP), with focus on maternal care, family planning and STI/HIV control services. The Project will give priority attention to protecting the needs of disadvantaged women. The component would be implemented in six project sites over a period of six years, starting in the first year of the Project with a first batch of three sites (Sorsogon Province, Surigao del Sur Province and Iloilo City) to be followed in the third year of the Project by a second batch of three sites (still to be identified). Ineach project site, the Project would undertake an interrelatedset of interventions, including: 0 Critical Capacities to Provide Quality WHSM Services. The Project will help LGUs in the project sites establish the capacity to deliver the integrated WHSM-SP through the establishment and operation of a network of W H S M teams consisting o f a Women's Health Team (WHT) in every barangay and an appropriate number of Basic and Comprehensive These targets are for Batch 1project sites. Corresponding targets will be set, but at lower levels, for Batch 2 project sites which are expected to start implementation inYear 3 of the Project. 4 Emergency Obstetric Care (BEmOC, CEmOC) and Itinerant NSV/BTL teams, appropriately dispersed throughout the project site. The full maternal care, family planning and STI/HIV service packages will be provided to the general population in all project sites. In addition, ' on a pilot scale, the D O H will test new approaches to reaching groups at high risk of STI/HIV as well as poor reproductive health outcomes overall, including registered and freelance commercial sex workers (CSWs), OFWs, and young adults. Reliable and Sustainable Support Systemsfor WHSM Service Delivery. The Project would facilitate establishment and operation of systems for: (a) drug and contraceptive security, by (i) applying market segmentation in the financing and distribution of contraceptives; (ii) establishing efficient province/city-wide procurement, logistics and management systems; (iii)supporting the expansion of existing social marketing initiatives for providing contraceptives; (b) safe blood supplv, by re-enforcing the network of Blood Service Facilities (BSF) at different levels of the system to meet anticipated needs for safe blood for obstetric (and other) emergencies; (c) behavior change interventions, including a combination o f (i)pilot testing of performance-based grants for stakeholders; and (ii)advocacy and communication to influence stakeholder behavior and increase information among stakeholders; and (d) sustainable financing of local WHSM services and commodities, by applying principles of (i)diversification of funding sources, with focus on PhilHealth and LGUs as growing sources, and (ii)market segmentation, for application of user charges to non-poor clients. Component B: National Capacity to Sustain WHSM Services (total cost USD 5.7 million of which USD2.5 million loan) This component would develop capacity in the D O H to create an operating environment conducive to LGUs managing and sustaining local delivery of the WHSM-SP and facilitate replication of the integrated W H S M service model throughout the country. It consists of three sub-components: Sub-componentB.1. Operational and Regulatory Guidelinesfor the Provision and Use of WHSM Services. This subcomponent will support the research-based formulation, transparent official adoption, thorough field dissemination, and enforcement of technical guidelines that will be critical to the provision and use of W H S M services. Sub-component B.2. Network of Training Providers for the Integrated WHSMP-SP. This subcomponent will support the development of a network of training providers accredited to provide efficiently designed courses on (i) the appropriate delivery of the integrated WHSMP-SP for each category of W H S M worker and (ii) work and collaboration for each type of team WHSM team. Sub-componentB.3 Monitoring, Evaluation, Research and Dissemination. This subcomponent will provide the following types of information for project management and impact evaluation: (a) regular assessment of inputs and processes related to the Project Development Objective and sub-components; (b) annual reporting of service delivery performance; (c) changes in key result indicators at mid-term and end of project as measured against baseline status and comparison groups (later for selected sites only); (d) operations research and special studies that evaluate the 5 effectiveness of innovative activities for use in replication and scaling-up; and (e) dissemination of results to support evidence based decision-making processes. Sub-component B.4 Project Management. This subcomponent will establish and maintain project management capacity at central and local levels. 5. Lessons learned and reflected inthe project design The principal lesson learned from recent projects in the Bank's health portfolio in the Philippines i s the critical role of implementation capacity and management oversight, particularly in a devolved setting. In particular, the ICRs of the recently closed Bank loans for the Urban Health and Nutrition Project and the First WHSMP - both rated unsatisfactory b y the OED - emphasize the following lessons: recognize that, under devolution, the LGU plays the major role in health care delivery and D O H can act only in conjunction with the LGUs; as a corollary, involve LGUs as active partners inproject preparation, implementation and monitoring; 0 establish a professional project management office in the D O H while involving technical services in all aspects of project implementation; 0 resolve fundamental cross-cutting management problems upfront (e.g., weak financial management, procurement and human resource management). The D O Hhas been taking action to address these issues over the last few years, through: 0 adoption of the HSRA, which defines the respective roles of the D O H and LGUs in health sector development consistent with the realities of devolution - viz., technical assistance and regulation as the main responsibilities of the D O H and its regional offices and implementation and financing as the main responsibilities of the LGUs; 0 establishment of a Unified Project Management Division (UPMD) with TORS that require the unit to work with technical services in DOHon technical aspects of projects; 0 capacity building efforts being implemented under the Second Social Expenditure Management Project (SEMP2) for the FM,procurement and IT units within the D O H central and regional offices. In addition to broad management and governance issues, experience under WHSMP brought specific lessons with respect to project design: 0 be selective, where possible, and adhere to the project readiness filter to avoid implementation delays; 0 introduce project inputs for a given project area in "convergence", to ensure quality production of the project deliverables. In particular, ensure that "soft" inputs like training and advocacy do not take a back seat to civil works and equipment; have a detailed plan for monitoring and evaluation ready at appraisal and use it in management and supervision; 0 plan and implement financing arrangements at the outset. These lessons have been incorporated into project design and preparation. 6 6. Alternativesconsideredand reasonsfor rejection No Project or no FP component. With the D O H shifting sector strategy to systemic approaches under the HSRA, i t was not clear that program-specific interventions were still appropriate. In addition, the national administration's prohibition on use of NG funds to purchase contraceptives seemed an insurmountable obstacle to intervention in FP. On the other hand, maternal health indicators were falling seriously behind the MDG goals for 2015 and there seemed to be no substantive drivers in place for significant improvement. In addition, the ban on NG contraceptive purchase, combined with withdrawal of U SAID donations, threatened a collapse of the national FP program unless alternatives were sought. While other donors, such as USAID and UNFPA, are active in the field, it was not likely that the government and these donors would together be able to meet the needs. For these reasons, the no-project alternative was rejected. Wider geographic coverage. While the first WHSMP covered the entire country, this project covers only 6 sites with an estimated population of around 3 million or around 4% of the population. Though wider coverage was considered, lessons from the first project taught the need for (i)emphasis on quality and convergence of project interventions; (ii)intensive coordination with LGUs; and (iii)exploring more effective approaches to W H S M service delivery. These called for significantly smaller coverage and greater depth in project intervention. Wider Range of Services in the WHSM-SP. Activities under the first WHSMP to manage cervical cancer and violence against women (VAW) had been relatively successful and the D O H wanted to continue these activities under the second project. On the other hand that project had almost no intervention in FP and, while much was done for STI control, more was needed to reach the highest risk groups. While recognizing the opportunity cost of excluding other related services, the Bank insteadadvised to intervenein greater depth inFP and STI. C. IMPLEMENTATION 1. Partnershiparrangements Not applicable 2. Institutionalandimplementationarrangements The project will be implemented b y the Department of Health, with substantive participation by provincial and city governments of project sites. This arrangement i s consistent with prevailing general institutional arrangements of the country's public health system. Participating provincial and city governments, through their respective project management teams (PMTs), will directly implement activities under Component A using local government counterpart funds and funds on-lent from this project by the National Government (for civil works and equipment). For Batch 1 sites, some project-related activities, including civil works and equipment provision for LGU-owned health facilities, will be funded and implemented through the ongoing Bank-funded LOGOFIND Project. Participating LGUs (provincial, city or municipal, as appropriate) will also receive, manage and utilize goods, services, training, technical assistance and grants financed b y the project and implemented by the DOH. Provincial governments shall enlist the necessary cooperation and appropriate contribution of municipal governments requiredfor the implementation of Component A. 7 The D O H shall implement Component B. In addition, it will procure goods and services required to support LGUs in Component A. Within the DOH, the UnifiedProject Management Division (UPMD) of the Bureau of International Health Cooperation i s responsible for overall project management; the National Center for Disease Prevention and Control (NCDPC) i s responsible for the project's technical direction; and the Centers for Health Development covering participating LGUs are responsible for approving LGU withdrawals of on-lent project funds. These financing and implementation arrangements among DOH, provinces and cities, and municipalities will be governed by a set of Memorandum of Agreements (MOAS) to be signed before project negotiations. Staff for key positions in adequate numbers and with sufficient qualifications will be in place at PMTs of provincial and city governments, and at D O H units involved in project implementation by negotiations. A Project Implementation Plan (PIP) will be drafted before negotiations. 3. Monitoringand evaluation of outcomes/results As described above for sub-component B.3 of the Project, the monitoring and evaluation component will collect data that routinely monitors progress made with processes and outputs, and periodically measures project impact on key results indicators. Multiple data sources will be used for these purposes, including routinely collected statistics and survey research methods. Capacity building activities will be conducted to develop existing information systems of the D O H so that data quality i s ensured. A controlled, interrupted time series study design will be used to investigate the impact on key outcome indicators in 2 of the first 3 sites; the third site will not have a comparison group but will evaluate changes in outcome indicators. D O H will regularly convene meetings of technical and managerial staff from several levels of the health care system, to engender a culture of using data for decision malung. Monitoring and evaluation staff will be placed in each provincial office, and in the national office, supplemented by technical consultants. 4. Sustainability Political. The political volatility of the FP program presents the greatest risk to project sustainability. Although selection of project sites i s conditioned on the LGU's readiness to implement the complete W H S M package, including FP, there i s little guarantee that a favorable environment at the start of the project will remain favorable during the life of the project. The best strategy in this situation i s to assume the permanence of uncertainty at the top, and to build a constituency at the grassroots that will demand FP services even when local or national interest groups oppose it. National survey data has shown, in fact, that 76% of respondents support politicians favoring FP, and a growing number of stakeholder groups such as women's NGOs, business and labor leaders, journalists and some national lawmakers are becoming more vocal in their calls for a strong national FP program. The project's advocacy activities, particularly at the local level, will seek out this constituency. Institutional. At the national level, the project would help DOH develop the policy framework and mechanisms for knowledge transfer to the LGUs. It would also help PhilHealth achieve universal coverage for its SP program, a benefit that will be difficult politically to withdraw once enjoyed. At the local level, LGUs will acquire the systems and slulls to manage, finance, 8 provide and sustain local delivery of the WHSM-SP, through the WHSM teams, and will learn to organize themselves into efficient-sized operational units that cross administrative boundaries. At the community level, community groups that establish effective support systems for WHSM services will be supported through the project's advocacy activities. Financial. The Project's approach to financial sustainability i sthree-fold: through diversification of funding sources, market segmentation and external assistance. These three strategies are described further below and in Annex 9. 5. Critical risksand possible controversialaspects Risks RiskMitigation Measures RiskRating with Mitigation Toproject development objective Complex governance structure of Keep DOHPhilHealth leadership, LCEs Substantial health sector, involving D O H fully involved in implementation (central & regional), PhilHealth Participatory preparationprocess and LGUs (provincial & municipal Create large constituency for project or city) requires coordinatsd effort among non-political stakeholders through that may weaken at any time. communications activities Strategies selected for WHSM-SP Phased start-up of Batch 2 sites to allow Moderate delivery and financing - some new time for learning lessons from and untested - may prove to be implementation in Batch 1sites; technically inappropriate or Project monitoring & evaluation ineffective. To comuonent results Insufficient project management - UPMD staff will be reinforced S and technical capacity inD O H and - Establish PMT at provincial/city level LGUs to leadDroiect activities Need to coordinate with - D O Hto coordinate closely with M LOGOFIND Project complicates LOGOFIND Project management on project management arrangements implementation of project-related for Batch 1sites LOGOFIND sub-nroiects Untimely release of cash by NG or - Project budget will be included in annual S LGUs for project implementation D O W L G Ubudget plans - project municipalities will establish seed funds to cover countemart exnenditures I I ___ Possible collapse in contraceptive - market segmentation; public subsidies S supplies if LGUfinancing falters reserved for the poor -drugs-for-commodities swap to ease the transition Difficulties placing and retaining - apply flexible staffing arrangements, M skilled staff for WHSM teams contracting of private midwives/doctors - TA for HR planning and management Overall Risk Rating I S - I 9 6. Loadcredit conditions and covenants Conditions of effectiveness: Issuance by PhilHealth Board of a policy statement supporting the national WHSM program and authorizing piloting of various measuresinthe project sites to support the program 0 Initial deposit by all municipalities in Sorsogon and Surigao del Sur Provinces into Project Accounts of respective seed funds to cover three months' counterpart expenditures 0 PIP, Procurement ImplementationManual (PIM) andFMManual adopted 0 Signing of sub-project loan agreements under the LOGOFIND Project for project-related activities in Sorsogon and Surigao del Sur Provinces 0 Ratification of Environment and Waste Management Operating Guidelines, Environmental Assessment Report, IP Strategy, IPDP of Sorsogon and Surigao del Sur and Resettlement Policy Framework Covenants: Government to maintain in effect and implement the PIP, PIM, FM Manual, Environment and Waste Management Operating Guidelines, Environmental Assessment Report, IP Strategy, IPDP of Sorsogon and Surigao del Sur and Resettlement Policy Framework D O H and DOF will seek Bank concurrence on the selection and investment plans of Batch 2 sites and enter into agreements with them covering implementation and financing arrangements for the Project with terms and conditions acceptable to the Bank Not later than July 1, 2006, Government to furnish to the Bank its FundingModalities Plan setting out the modalities for on-lending of loan proceeds to LGUs; subsequently only make available to Project Sites subproject financing in accordance with such Plan Project municipalities to maintain their respective Project Account balances consistent with the financing requirements of the Project Staff for key positions in adequate numbers and with sufficient qualifications will be maintained in PMTs of provincial and city governments, and at DOHunits involved in project implementation Furnishto the Bank on June 30 andDecember 31 of each year semi-annualreports on results of monitoring and evaluation activities By December 31, 2008, prepare a midtermreport and review such report with the Bank Disbursement Condition (for Batch 2 sub-projects): 0 Government will adopt a FundingModalities Plan acceptable to the Bank 0 Initial deposit by Batch 2 municipalities into Project Accounts (as with Batch 1) D. APPRAISAL SUMMARY 1. Economic andfinancial analyses Economic Analvsis Efficiency. As with other health services, WHSM services are subject to market failure in a number of ways, of which the most significant are: (a) Externalities. A couple practicing FP may not consider the effects of birth spacing and limiting on overall population growth, or a husband may not consider the impact of frequent pregnancies on the woman's health. figh-risk individuals may not consider the benefits of 10 practicing safe sex to the rest of the population. In general, maintaining the mother's health and increasing her chances of surviving childbirth affects not only her health and her child's health, factors she would likely ccnsider, but also her ability to care for her other children and her long- run productivity. Project interventions aim to correct these cases of undervaluing of social benefits by reducing financial and social costs to the woman of utilizing the services. (b) Incomplete information or information asymmetry. The risks related to unskilled attendance at delivery are often not known to women. Likewise, misinformation on the relative effectiveness or the side-effects of different FPmethods may leadto distortions in demand. Lack of information on PhilHealth benefits leads to reduced demand for membership and for benefit utilization. Information asymmetry results, for example, in providers taking advantage of their greater access to information (compared with their clients) on increases in PhilHealth benefit levels by increasing their prices with each benefit increase, without reducing members' co-pays. The Project's IEC activities will help clients make more informed choices. (c) Subsidies causing distortion. When normal deliveries are offered at subsidized cost in tertiary facilities, this results in inefficient use of these facilities. Also, the free provision of pills and injectables in public facilities has led to distortions in relative prices for the consumer and hence in an inefficient overall method mix. Analysis shows that the cost per couple year of protection (CYP) of modem methods of contraception would decline if clients shiftedfrom pills and injectables to I U D s , or to permanent methods (see Annex 9). The design of the WHSMP2 service package includes mechanisms and approaches to reduce inappropriate use of tertiary facilities and to facilitate the transition to a more cost-effective method mix. (d) Monopoly. The Project will help counter high prices in the markets for drugs and contraceptives resulting from the quasi-monopolistic structure of the market by strengthening public sector channels for drug and contraceptive provision andby supporting social marketing. Equity. Differences in access to health care between poor and non-poor families are well- documented. TBAs attend to 63% of deliveries by poor women versus only 23% for the non- poor. In addition, the majority of the poor (57.1%) do not use any contraceptives, and those who do tend to use modern methods less frequently. And yet, a market segmentation study showed that about 60% of public sector clients receiving free care and contraceptives in 1998 came from middle- to high-income groups. Data also show that the use of traditional methods increases with age among the poor. In contrast, among the non-poor, use of permanent methods increases with age. These method preferences of poor versus non-poor women have resulted in an average cost per CYP for the poor that i s 12% higher than for the non-poor (see Annex 9). To address the distributional objective and alleviate poverty, WHSMP2 targets poor disadvantaged women and other vulnerable groups through a variety of interventions on both supply and demand sides. Financial Analysis Government's strategies for improving W H S M outcomes will require substantial additional resources to: (a) upgrade the delivery system; (b) sustain the incremental operating costs for expanded services; and (c) replace the donated contraceptives that will be phased out of the marketbetween 2004-2009. Three strategic measures will be applied to meet these challenges: 0 Diversify the mix offunding sources, financing of W H S M services will no longer be the sole responsibility of the NG but of a mix of funding sources - LGUs, PhilHealth, NG and out-of- pocket. Financial access for the poor will be addressed mainly b y expanding membership in ' PhilHealth's SP and by increasing allocations by LGUs to W H S M services. 11 0 Apply a policy of market segmentation, with non-poor clients taking an increasingly larger share of the burden for financing services, including previously free contraceptives, and with public funding reserved for the poor. Seek external funding for initial capital expenditures, including from the World Bank. 2. Technical Shifting to facility-based delivery to improve maternal mortality outcomes. There i s ample evidence to show that skilled attendance at childbirth, by a properly trained health professional, decreases the chances of maternal deaths. However, there i s less clarity about the advantages of such births taking place at a fixed facility rather than at home, especially at a lower level facility where emergency interventions such as cesarean sections or blood transfusions cannot be done. The issue i s particularly difficult when a majority of women show a preference for delivering at home, either for reasons of cost or for non-financial reasons related to convenience, etc. Nevertheless, DOHhas chosen to take a policy position to promote facility-based deliveries over home deliveries with skilled attendance for the following reasons: (a) the midwife will be able to assist at more than one delivery if necessary; (b) the midwife i s more likely to attend, as she will likely live close to the facility; (c) it i s more likely that there will be other colleagues (other midwives, doctor) present in the facility who can be consulted in case of difficulties; (d) the BEmOC i s more likely to be closer to the CEmOC than the mother's home and with better access to emergency transport and communication in case of need; (e) the BEmOC has capacity to do laboratory exams and the midwife can perform basic emergency obstetric interventions, if needed, with greater ease at the BEmOC; (f) in a country where TBA attendance i s closely identified with home births, this policy emphasizes the need to have a health professional attend the birth; and (g) PhilHealth finances facility but not home deliveries. Recognizing that this option may not be preferred nor feasible in some cases, the D O H will take a flexible approach in promoting facility deliveries, and will focus on upgrading slulls of all midwives. In addition, the Project incorporates interventions to encourage women to come to such facilities: (a) preparation of a birth plan early in pregnancy that will include danger sign awareness, where to go, planning for costs and transport; (b) incentives for communities to organize and implement schemes to facilitate facility deliveries by women such as layaway savings plans, transport support, support for care of other children while the mother i s away; (c) no charges for the delivery; PhilHealth (for members) or the LGU (for non-members) will cover WHT fees, with an allowance for transport and other expenses (currently women pay around PhP 500-1000, Le., US$lO-20); (d) upgrading of facilities located closer to the community to serve as birthinghomes or BEmOCs; and (e) a family-friendly environment at the BEmOC (with cooking facility, space for companion, etc.). Potential opposition from TBAs i s addressed through fee- sharing arrangements and by defining a new role for TBAs as a formal member of the WHT ("assistant midwife"). Contraceptive self reliance (CSR) through diversification of funding sources and market segmentation. Ideally, Governments at all levels would contribute to the FP effort in general, and to the funding of contraceptives for the poor in particular. Although the NG i s not doing this, the DOH'S CSR strategy of seelung a broader range of funding sources, including user charges for the non-poor, LGU contributions and PhilHealth coverage would mitigate the problem. The D O H offer of a drugs-for-commodities swap would also help, though this i s not a sustainable solution for the long-term. Other components of the CSR strategy, including 12 operationalizing market segmentation through a client classification scheme, expanding social marketing schemes to meet the new needs of non-poor users who used to benefit from the donor subsidies, and promoting a shift in method mix to reflect the changing relative prices of the different methods are also risky andor would take time to achievp,. Overall, the risk of a collapse in contraceptive supplies remains substantial and constitutes a critical risk of the project. 3. Fiduciary Procurement. The conclusion of the assessment i s that the project i s in the high risk category. While D O H may no longer be considered a high risk category agency, and while there have been recent improvements in the D O H procurement environment (CPAR update, December 2003), the reform measures have yet to be translated to efficiency in the turnaround of transactions at various levels of procurement and payment processes at DOH. At the LGUs, most of the issues/risks concerning procurement have been identified, major of which are resistance from interest groups to changes in LGU procurement arrangements/procedures and potential negative political interference in procurement decisions. Another critical risk that i s likely to impede implementation of the project's procurement activities i s the ability of the LGUs to commit funds in view of the limitations/restrictions of the LGU-NG cost sharing arrangements and the country's current fiscal situation. The action plan outlined in Annex 8 aims to address the above high risk category rating by organizing the project unit at the UPMD in D O H the soonest, building capacity at the LGUs, advancing project procurement readiness by preparing critical bidding documents at the earliest possible time, and helping insulate the process from political interference. To illustrate project advance procurement, in accordance with Paragraph 1.9 of the Guidelines, the D O H has proceeded with the initial steps of procurement of some works and goods, and developed a Procurement Plan for project implementationfor the first 18 months for the first Batch LGUs. Financial Management (FM) and Disbursement. An assessment of the FM system for the proposed project indicates that DOH'S organic accounting system i s adequate to generate the financial reports required by the Bank. These financial reports will be prepared in accordance with the accounting principles under the New Government Accounting System prescribed by the Commission on Audit (COA). A computerized version of NGAS has been installed and i s now on parallel run. The financial reporting system will be complemented by physical accomplishment and procurement reports that will be generated b y the Project's monitoring and evaluation and procurement management systems. The FM system will be expanded to cover all organizational units that will participate in project implementation. The financial report, the physical accomplishment report and procurement report will constitute the required Financial Monitoring Report. The Finance Service of DOHhas a complete core staff, which will be augmented with additional contractual staff with the appropriate qualifications if and when the Project's volume of transaction so require. The COA will do the external audit while the Agency's Internal Audit will also periodically evaluate and test the internal control system for the Project. The risk of delay in funds flow will be addressed by the maintenance of project accounts in the implementing organizational units that will be opened with seed money from GOP funds of the participating LGUs and D O H to defray initial expenditures, including those that are eligible for Bank financing, and will be replenished by loan proceeds and LGU counterpart funds. 13 4. Social The project provides various opportunities for reaching and improving access of identified vulnerable/high risk groups (adolescents, sex workers, overseas workers, indigenous peoples and poor women) to improved health services and education through a more targeted and integrated approach. Complementing this i s the upgrading of health facilities and improvement of skills of health providers. The preparation of the service delivery package and its support system engaged different stakeholders of the project -- WRA, TBAs, public health providers and local chief executives through consultative meetings. A team of social scientists was commissioned to do a social assessment conducted as part of the preparatory activities. The assessment included discussions and interviews with LGUs, adolescents, health workers, indigenous peoples, NGOs, church groups, commercial sex workers where their views about the project were sought. The assessment highlighted the diverse views and even misperceptions of various groups to fertility management and maternal care. Mechanisms for continuous engagement/dialogue with these stakeholders would therefore be necessary throughout the project. During project implementation, Women's Health Teams composed of community health providers and supported by professional health providers, shall be organized to serve as the primary community service providers. NGOs will be tapped to take the lead in the IEC/advocacy among the high-risk groups e.g., sex workers. Youth teams, supported by NGOs, shall likewise be organized in order to more effectively reach the adolescent groups. In communities with indigenous peoples, IP volunteers and traditional birth attendants among the IPS would be included in the health teams. Provincial and Municipal LGUs would have a central role in the planning, coordination, implementation and long-term financing of various project activities. No major adverse social impact i s anticipated from the various project interventions. However, a central challenge to the project i s how effectively it can reach and benefit the vulnerable and high risk groups it has targeted, including indigenous peoples groups. Related to this challenge i s the sustainability of LGU-financing of improved health services given the still generally weak fiscal performance of LGUs and the fast-turnover of health staff due to the exodus of health workers to countries that provide better opportunities for these skills. 5. Environment Environmental Category: B A participatory environmental assessment (EA) study was commissioned by the DOH as part of the project preparation to evaluate the environmental effects of Batch 1facilities to be supported by the project and to develop the environmental guidelines for future facilities. The EA covers nine (9) sites and a wide array of health facilities ranging from rural health unit to provincial hospital. The assessment identified two environmental issues that need to be addressed b y the project. These are the short-term impacts (e.g.,noise and dust generation) from civil works and the long-term issue of waste generation, treatment and disposal. The EA report formulates an Environmental Management Plan (EMP) per type of facility to address the impacts from civil works and the operation of the completed facility. For construction impacts, all contracts will include clauses for proper construction site management and strict adherence to appropriate noise and dust standards, disposal of solid wastes, installation of sanitary facilities for workers and the observance of occupational health and safety standards. For waste issues, impacts will be addressed through the implementation of proper waste management program. The EA provides 14 practical but safe options for handling, segregation, storage, treatment and disposal of general and infectious/hazardous wastes, which are consistent with the D O H health care waste guidelines, the WHO guidelines and local laws such as the Toxic and Hazardous Waste Management Act (Republic Act 6969), the Ecological Solid Waste Management Act (RA 9003) and the Clean Air Act (RA 8749). The EA also provides environmental and waste management guidelines for health facilities to be implemented from year 2 and onwards. The EA report was disclosed locally through a series of consultation-workshops with central and regional officials and staff of the DOH, the Department of Environment and Natural Resources (DENR), participating LGUs, service providers and civil society. Environmental compliance monitoring of facilities will be done by the D O H in close coordination with the Department of Environment and Natural Resources (DENR), the primary environmental agency in the country. 6. Safeguard policies Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP/GP 4.01) [XI [ I Natural Habitats (OP/BP 4.04) [ I [XI Pest Management (OP 4.09) [I [XI Cultural Property (OPN 11.03, being revised as OP4.11) [ I [XI Involuntary Resettlement (OP/BP 4.12) [XI [XI Indigenous Peoples (OD 4.20, beingrevised as OP 4.10) [XI [ I Forests (OP/BP 4.36) [I [XI Safety of Dams (OP/BP 4.37) [ I [XI Projects in DisputedAreas (OP/BP/GP 7.60)* [I [XI Projects on International Waterways (OP/BP/GP 7.50) [I [XI 7. Policy Exceptionsand Readiness The project would not require any exceptions from Bank policies. With respect to readiness for implementation, the following actions were taken prior to negotiations: (i) PMOSat national and Batch 1 LGU levels established with core/critical staff; (ii)procurement plan finalized and bidding documents for lSt of implementation completed; (iii) drafts of PIP, PIM 18 months final and FM manuals completed; (iv) Project M O A S signed and sub-projects for funding by LOGOFIND appraised in Sorsogon and Surigao del Sur Provinces; (v) safeguard disclosure requirements complied with. * By supporting theproposedproject, the Bank does not intend to prejudice thefinal determination of theparties' claims on the disputed areas 15 Annex 1: Country andSector ProgramBackground PHILIPPINES: SECONDWOMEN'SHEALTH & SAFE MOTHERHOOD Background Women's Health Outcomes. Reviews of health status of Filipinos consistently point to relatively high levels of total fertility, maternal mortality and infant mortality for a country at its income level (US$1,080 in 2003). With a total fertility rate of 3.5 children per woman (NDHS estimate, 2003), infant mortality rate of 29 infant deaths per 1,000 live births (NDHSestimate, 2003) and a maternal mortality rate of 180 maternal deaths per 100,000 live births (1995), the Philippines faces outstanding challenges in securing improvement in these important indicators of health status. The introduction of the HIV virus into the country in the 1980's and the slow but definite spread of the infection around the archipelago has created an added source of concern about the state of overall reproductive health. Over the last twenty years, a succession of government administrations have pursued several worthwhile directions in the field of maternal care, family planning and prevention of HIV/AIDS. In maternal care, a combination of (a) delivering improved services to mothers through the extensive network of public and private providers and; (b) deliberate reduction of the most harmful practices in birth attendance among still widespread traditional home-based deliveries, has brought down maternal deaths to comprise less than one percent of total deaths, although these deaths still comprise 14% of all deaths among women aged 15 to 49. A wide range of family planning methods have been made available to most women of reproductive age, raising contraceptive prevalence from 36% in 1988 to 49% in 2003. Women, however, are still having on average one more child than they intended. Unmet needs for family planning remain sizeable as reflected in an estimate for 1998 that places 20% of all women of reproductive age not able to practice family planning despite their stated desire to either limit or space their pregnancies. Although abortion i s illegal, data from various studies indicate that there are around 16 abortions for every 1000 pregnancies. Finally, an unusually high population growth rate of 2.36% per year (1995-2000) i s yet another consequence of low contraceptive prevalence. STZ and HZV/AZDS. Early recognition of the country's increased risk to an HIV/AIDS epidemic facilitated a relatively early and vigorous response, including passage and initial implementation of an enlightened national law on AIDS prevention. Although current levels of HIV prevalence remain relatively low or around 6,000 people estimated to be living with HIV/AIDS as of end- 2001), risks remain due to a large population involved with commercial sex and practicing risky sexual behavior. Their current exposure to sexually transmitted infections i s driving the prevalence of these diseases, which might be a major factor in a still possible deterioration of the current rate of HIV/AIDS infection. The increasing rate of HIV infection among returning overseas Filipino workers (OFWs) i s also a concern, as i s the large and growing rate of STIs in the general population, which poses the threat of sudden expansion of HIV prevalence beyond the high-risk groups. The highprevalence of gonococcalresistance to penicillin, tetracycline and ciprofloxacin i s of particular concern. 16 Access to Sewices for Disadvantaged Women. For WHSM services as with other services, lack of financial and physical access are major obstacles to care. This i s particularly true with respect to the lack of access to hospitals that can offer safer deliveries and the poor transport conditions inthe event of an obstetrical emergency when deliveries take place outside hospitals. For family planning, although FP commodities have largely been offered free or at highly subsidized prices, this situation i s changing rapidly with the ongoing pullout of donated contraceptives from the country (see below). Although initially meant to be provided completely free, Government services have gradually become "less free" in that users are oftentimes expected to pay for drugs and diagnostic tests andor purchase their own drugs and provide their own hospital food and bed linens. Increased prices in public facilities has likely led to reduced use of health services by the very poorest or to serious economic consequences for poor families that do use these facilities, particularly in catastrophic emergencies. Physical accessibility of providers i s also a problem. Health facilities are often located in areas that are not easily accessible to the poorest families, who tend to live in more remote, less accessible areas. Even when public facilities are present, staff in these remote facilities tend to be more poorly qualified and the facilities more poorly stocked with supplies and more poorly maintained. Deteriorating quality has also led to bypassing of lower level public facilities by clients who go directly to higher level public facilities where quality i s perceived to be relatively better or to private facilities, again with economic consequences for the poor (World Bank, Filipino Report Card on Pro-Poor Services, 2001). Access to W H S M services for the poor i s limited by a lack of appropriately slulled personnel able to provide emergency obstetrical care during delivery, offer advice or services for the full menu of options for FP, treat STIs using the lower-cost syndromic approach (applicable where lab testing i s unavailable), or offer counseling and testing for HIV infection. For adolescents specifically, there are few channels for offering advice on sexuality and high-risk behavior. And for FP specifically, socio-cultural obstacles play an important role, inparticular (i) opposition by the Catholic Church to artificial methods of FP; (ii) observed differences between men and women in desired family size; and (iii) the stigma attached to women working incommercial sex or being infected with STI or HIV. The continued existence of unmet demand for FP i s particularly related to the slow uptake of modern permanent methods among lower income groups, where unmet demand i s greatest. This i s likely the result of (a) the relatively higher cost of permanent methods, given that temporary methods have been available at no cost to date and that there i s a limited number of service points available to low income clients; (b) more traditional attitudes towards permanent methods among rural populations, especially among the older generations. Government's response to the above obstacles has mainly focused on continuing investment in public providers of W H S M services. Over time, this has proven insufficient because of the high cost of maintaining the physical and human capital infrastructure and because of limitations on public budgets. Devolution of health care to LGUs in the early 1990s was expected to improve the targeting of publicly-provided services to the most needy, although this has not really 17 happened because of the lack of understanding at the local level of basic principles of efficient health financing and provision and because of the worsening budget situation. The introduction of national health insurance in the mid-1990s was meant to ensure universal access by bridging the financing gap, with benefits accessible through accredited providers, whether public or private. In particular, the Sponsored Program (SP) of the National Health Insurance Program (NHIP), which provides for public financing of membership premiums for indigents, would allow the poorest families to participate in the program. However, the SP did not take off until 2001, and even then indigent members have been largely unable to use benefits because of the co-pay required by providers, making care still unaffordable to the poor. Because of their poorer standards, many public hospitals were unable to gain accreditation from the Philippine Health Insurance Corporation (PhilHealth). Specific to Women's Health services, the NHIP benefit package includes all maternal care, FP and STI cases in an inpatient setting, including normal spontaneous deliveries (NSD) for the first two children2, IUD insertion, bilateral tubal ligation (BTL) and vasectomy. These four procedures are also covered when carried out in accredited non-hospital birthing facilities (for NSD) or as day surgeries (for IUD,BTLand vasectomy). Family planning commodities - pills, injectables, and condoms - are not covered by PhilHealth. PhilHealth-accredited rural health units (RHUS)may, however, use their PhilHealth capitation fund for purchase of particular pills and injectables included in the Philippine National Drug Formulary. Because coverage of outpatient services i s a recent development, many members and even providers are unaware of them. Contraceptive Supplies. Most current users of FP depend on public sector providers (73% of pill users; 81% of IUDusers; 94% of injectable users; 50% of condom users obtain their supply from public sources). In the last twelve years, contraceptive donations provided by USAID have accounted for 80% of the country's total supplies. These donated contraceptives (pills, I U D s , injectables and condoms) flow almost exclusively through the public sector and are provided free to clients. In 2004, USAID started phasing out its contraceptive donations, to wean the country of its heavy dependence on donated contraceptives. Condom deliveries were stopped in 2004, pills will phase out by 2008 and injectables by 2009. In anticipation of this pullout, D O H prepared to launch a contraceptive independence initiative in 2001. However, the administration that assumed office that year (and was since reelected in May 2004) took the position that no D O H funds would be usedfor purchasing contraceptives. As a result, there i s an imminent threat of serious shortages incontraceptive supplies inthe country inthe coming years. Government Policies on Women's Health and Safe Motherhood (WHSM) With the exception of the policy on contraceptive purchase, the government's basic policies are generally favorable to promotion of WHSM. Public support i s strong for extending high quality maternal care to all in both public and private sectors. The government has a stated policy of makmg a wide range of legally allowable family planning methods available to all on the basis of respect for the free and informed choices of women and couples. The Philippine AIDS An amendment to the National Health InsuranceLaw adopted in2003 provides for inclusion of the third and fourth NSDinthe package, but PhilHealth has yet to implement this amendment. 18 Prevention and Control Act of 1998 provides a robust legal framework for the national response to HIV/AIDS, which i s consistent with internationalbest practice. The real challenge i s in making these policies bear down on the actual technical content, quality, cost, effectiveness and accessibility of services delivered to women, particularly those segments whose current reproductive health status are well below the national average. These challenges must, in addition, be met in a context in which (i) public provisions of health services i s now the financing and management responsibility of local governments; and (ii)government i s concurrently undertaking a wide-ranging and ambitious program of integrated reforms under its Health Sector Reform Agenda (HSRA) including hospital autonomy, financing of public health programs, local health systems development, health regulation and expanded coverage of the NHIP. Government Strategiesfor improving Women's Reproductive Health The central issue of concern for the government i s the poor access to W H S M services by disadvantaged women, leading to poor WHSM outcomes. Government would like to introduce new strategies to address both demand- and supply-side obstacles to access, including the lack of financial and physical access to maternal care and family planning services, the impending lack of access to subsidized FP commodities, the lack of appropriately skilled and sufficiently motivatedpersonnel, and the lack of effective channels for offering advice on sexuality and high- risk behavior. It would also like to develop cost-effective, replicable approaches for reaching high-risk groups that tend to remain out of reach of the formal health system, including young adults, "unregistered" or "freelance" sex workers (FSWs) and OFWs. Key elements of the Government's strategy for change are described below. All elements of the strategy are designed to fit into the broader framework of the HSRA, ensuring complementarity and coherence, rather than conflict, between system-wide reforms and "programmatic" reforms. Changes in the design of WHSM Services. Government will introduce changes in key design features of the W H S M service package to improve the effectiveness of WHSM services, including: 0 Maternal Care. Shift the emphasis of national policy for' preventing maternal deaths from the currently-practiced risk approach that identifies nigh-risk pregnancies for referral during the prenatal period to an approach that considers all pregnant women to be at risk of complications at childbirth.'This implies that: o at the individual level, every mother will have access to skilled attendance at delivery by a midwife, nurse, or doctor, preferably at a duly-accredited health facility, and to emergency treatment for all complications during pregnancy, delivery and after birth; o at the service level, transition to more appropriate distribution of deliveries along the continuum of care, including more normal deliveries in basic facilities, more emergency referrals to intermediate level facilities, and fewer deliveries at home and at higher levels. 19 Family Planning. Increase the quality and access of FP services, with particular effort going to promoting permanent modern methods for low income clients. Four strategies will be applied: o improve the availability and quality of FP counselingespecially inperipheral areas; o make modern permanent methods more widely available via itinerant teams; o expand provider supply in both public and private sector through training and contracting of private midwives, especially in rural areas; and o assure continued wide access of contraceptives through a contraceptive self-reliance strategy. STUHZV. Intensify efforts to control STIprevalence through the following strategies: o For the general population, take a "no missed opportunity" approach by integrating STI screening and treatment for M C and FPclients whenever appropriate; and o For populations at risk, (i) the effectiveness of integrating Social Hygiene Clinic test services with mainstream WHSM facilities; and (ii)develop cost-effective and sustainable approaches to reach two difficult risk groups, unregistered CSWs and OFWs,based on principles of outreach and peer support. Adolescent Reproductive Health. Develop cost-effective and sustainable approaches to reach young adults based on principles of outreach and peer support. Changes in the Service Delivery Strutem. Shift the program strategy from delivery of separate national programs (family planning, maternal care, STUHIV, ARH) operating at separate, independently-governedlevels of the health system to delivery of an integratedWomen's Health and Safe Motherhood Service Package (WHSM-SP), focused on maximizing synergies among these key services b y delivering them at the same time to the same client whenever appropriate (horizontal integration) and on ensuring a continuum of care across levels of the referral system (vertical integration). This requires organizing program inputs and investments around a network of coordinated service delivery teams as follows: The Women's Health Team (WHT), led by a rural health midwife and including TBAs operating in the community and the barangay health worker (BHW), to provide prenatal care, assist pregnant women to prepare birth plans that include preparations for facility- based delivery and contingencies for obstetric emergencies, provide basic FP and STI services and referrals, and dispense FP and STI drugs and supplies. The Basic Emergency Obstetric Care (BEmOC) Team, under the supervision of the RHU or district hospital doctor and including the attending WHT with skills and resources to conduct safe normal spontaneous deliveries in a facility setting, diagnose, manage andor refer complications and handle basic obstetric emergencies, as well as other facility-based services in MC, FP (including IUDinsertion), and STI/HIV control. The Comprehensive Emergency Obstetric Care (CEmOC) Team, including an ObiGyn specialist or a general practitioner trained in Ob emergency or management of obstetric complications, an anesthesiologist or trained GP, operating room nurses or surgical midwives, and a medical technologist, equipped to handle comprehensive obstetric 20 emergencies such as Caesarian section and blood transfusion. The CEmOC Team will also provide bilateral tubal ligations. 0 The Itinerant Team for Non-Scalpel Vasectomy (NSV) and Bilateral Tubal Ligation (BTL), consisting of one surgeon or appropriately trained General Practitioner and assistant(s), to perform NSV or BTL services, including outreach services. The WHT shall be tasked to identify prospective clients and schedule outreach team visits to the community. 0 The STI Team, organized in high-risk municipalities, to address the health needs of high- risk groups and to protect the general population. 0 The Adolescent and Youth Team, organized at two levels: the provincial level team shall be interagency and interdisciplinary in nature and shall consist of representatives from the different government agencies concerned with the youth, while the municipal level team shall be formed in areas where youth problems are prevalent and shall implement interventions that hew to the provincial strategy. Appendix 1.1illustrates the structure and hierarchy of the various WHSM teams, their links to existing health facilities at various levels, and the referral flow of clients among various teams. Reliable and sustainable support systems for WHSM service delivery to ensure efficient operations of the various WHSM teams. Key among these are: 0 Drug and contraceptive security. Promote national contraceptive self-reliance within the limits of the current policy on NG financing of contraceptives. Strategies include to: (a) diversify sources of financing for contraceptives and target publicly-financed contraceptives to only the poorest users (market segmentation); (b) expand the social marketing program for contraceptives to make reasonably-priced contraceptives widely available to the non-poor; and (c) improve the commodity procurement and distribution system in public facilities to reduce costs. Safe blood supply. Decrease maternal deaths from post-partum hemorrhage. Establish an effective network of Blood Service Facilities (BSF) to meet anticipated needs for safe blood of CEmOC facilities. 0 Behavior change through incentives, advocacy and communication. Encourage specific behavioral changes among key stakeholders - the disadvantaged woman of reproductive age, the health care provider, the LGU and the community - as necessary for success of the new strategies. The behavior change strategy will employ a combination of interventions including: (a) performance-based grants for stakeholders; (b) a coherent strategy for advocacy and communication to influence stakeholder behavior and increase information among stakeholders; and (c) improvements in services to respond to non- financial barriers that affect behavior, particularly of clients (e.g., client-friendly FP counseling, greater privacy, etc.). 21 Sustainable financing of local WHSM services. To meet the above Program objectives, substantial additional resources will be needed to upgrade the delivery system, sustain the incremental operating costs for expanded services, and replace the donated contraceptives that will be phased out of the market between 2004-2009. Three key strategies will be applied to meet these challenges: (a) diversify the mix offunding sources, shiftingfrom a financing strategy largely based on the NG to one involving a mix of sources - LGUs, PhilHealth, NG and out-of-pocket; (b) apply a policy of market segmentation, with non- poor clients (or PhilHealth on behalf of non-poor members) taking an increasingly larger share of the burden for financing services (including previously free contraceptives) and with public funding reserved for the poor; and (c) seeking external funding for initial capital expenditures. The proposed strategy for sustainable financing i s discussed further inTechnical Annex 9. Stronger stewardship and guidance from the DOH in the form of: Development and implementation of evidence-based guidelines and protocols on WHSM services; Development of a system for accreditation of integrated WHSM-SP training providers and support for these providers through contracting of training services for public-sector WHSM workers: and Monitoring, evaluation and research on the new WHSM strategies, and dissemination of results countrywide. 22 Appendix 1.1 Organizational Structureof WHSM Teams COMMUNITY -rals Maternal emergency referraIs 23 Annex 2: Major RelatedProjectsFinancedby the Bank and/or other Agencies PHILIPPINES: SECOND WOMEN'SHEALTH& SAFE MOTHERHOOD Latest Supervision Sector Issue Project Ratings Bank-Financed IP DO Project underpreparation Five components of health sector Health Sector ReformProject reform in the context of transition to a (FY06) devolved health system -- (i) hospital reform; (ii)public health programs; (iii) healthsystems;(iv)health local regulation, especially drugs; and (v) social healthinsurance Ongoingprojects Budget support for TB drugs and Second Social Expenditure S S vaccines; reforms in procurement, FM Management Project and regulation Multi-sectoral project promoting early Early Childhood S S childhood development and including Development Project support for child health programs - EPI, IMCI, nutrition Provides sub-loans to LGUs for LOGOFIND S S priority development projects Provides support for empowerment o f KALAHI-CIDDS Project S S communities and local governance and grants for community investment Dromams Recently completedprojects Improve the delivery o f women's Women's Health and Safe OED rating - Unsatisfactory health services (Jointly with ADB, Motherhood Project AusAID and other donors). Improve the delivery of basic health and nutrition services in urban centers 24 IOther development agencies 25 Annex 3: ResultsFrameworkandMonitoring PHILIPPINES: SECONDWOMEN'S HEALTH & SAFE MOTHERHOOD Results Framework PDO1 Outcome Indicator Cse of Results Information 1. Increase access Key Indicator:80% birthsdelivered by Provincial PMO: o f disadvantage skilled attendant (health professional), either WRA in project inafacility or at home Yr 1-2 to identify compliance sites to acceptable, (Baseline: 59.8%delivered by a health level of LGUs with regard to highquality and professional; 2003 NDHS) delivery protocols cost effective RH services and enable Key Indicator:75% of births delivered ina Yr 2-3 to identify effectiveness of them to safely healthfacility advocacy and financial incentives attain their desired (Baseline: 37.9%delivered in healthfacility; spacing and 2003 NDHS) Yr 5 - sustainability number o f children. Key Indicator:75% of deliveries by the poor inBEMOCs and CEMOCs financed through PHILHEALTHSP Key Indicator: 25% of deliveries by the poor inBEMOCs and CEMOCs financed through DOH-LGU Performance grant Key Indicator:Increase contraceptive Yr 1-2: identify gaps with regard prevalence rate by 10percentage points to quality and use o f FP service (Baseline: CPR at 46.5 9b and modern delivery contraceptive at 26%; 1998NDHS) Yr 3-5: identify level of effectiveness o f advocacy work and market segmentation INTERMEDLATE RESULTS INDICATORS FOR EACH USE OF OUTCOME RESULTS for COMPONENT MONITORING PDO1 Component A.1 100% of the BEMOCs have PHILHEALTH Yr 1-5: identify facilities with (Critical accreditation for maternity package potential revenue source from Capacities) PHILHEALTH 50% reduction inthe number o f normal Yr 1-2: identify effectiveness of spontaneous deliveries in CEMOC (referral advocacy work and referral facility for complicated cases) systems Yr 3-5: identify level of quality of services provided by bothWHT and BEMOC Note: All targets are for Batch 1project sites. Corresponding targets dbe set, but at lower levels, for Batch 2 project sites which are expected to start implementation inYear 3 of the Project. All baseline statistics are drawn from national level estimates and may be substantially dlfferent from the project sites. Baseline values for Batch 1project sites will become available on completion of the baseline survey, and Batch 1 targets may b e adjusted at this time. 80% of women who delivered inthe past 6 Yr 1-2: level of implementation of months had birthplans staff training re preparation of birthplan Yr3: Effectiveness of advocacy work (including matching grant mechanism- but there i s no matching grant targeting this particular behavior, namely preparingbirthplan!) Yr 4-5: Sustainability of project interventions 100% of FPusers and ante-natal clients Yr 2-5 assess level of screened for STI according to prescribed implementation of STI integration protocol' with FP and MC; includes training, supervision, monitoring 70% of women who know the 3 ways tools (abstain, be faithful, consistent, correct condom use) of preventing the sexual transmission o f HIV Increase to 16% from baseline the total Yr 1-2: mobilization of newly proportion of women or their partners using formed WHT as FP advocates for permanent methods permanent methods and of (Baseline: 10.5%for BTL; 0.1% for NSV; itinerant N S V B T L teams 2003 NDHS) Yr 3: identify the need to expand staff complement based on projected Component A.2 Key Indicator: 100% of RHUShave not Yr 1-2: assess level of (Sustainable experjenced stock-outs o f pills, injectables effectiveness o f CDLMIS Support Systems) and I U D s for the past 6 months including gaps in the distribution (Note: Stock-outs defined as absence o f supply) Yr 3-5: assess increasing support o f LGUs 70% of non-poor FPclients paying for Yrl-2: level o f implementationof contraceptives (may be paying through private market segmentation sector providers or suppliers or through user charges in public facilities) Yr 3-5: effectiveness of advocacy work 'STI guidelines are based on the following three elements and conform to DOHpolicy: (i) FPclientsusinghormonal,barriermethodsarescreenedduringhistorytaking (ii) STI screening for IUDusers includes history and clinical examination, and if needed, laboratory exam (iii) STI screening for ANC clients includes history and clinical exam, with laboratory test if indicated, and universal syphilis test using either W R or VDRL anytime during pregnancy up to and including delivery 27 Increase LGUenrollment for the Yr 2: determine project PHILHEALTH Sponsored Programcoverage implementation level at the and sustain to at least 75% of the target poor municipal/LGU level (minimum household at the municipal and city level ;ondition: trained providers and upgraded facilities are inplace) 1 Yr 3-5: as above; sustainability 100%of BEMOCs share M C revenues with Yr 1-2: level o f implementation of WHT according to guidelines commitment made as condition of project effectiveness (at the municipal level) Yr 3-5: sustainability Outcomes Indicators 2. To assist in the Inclusion of W H S M standards inthe Sentrong Yr 3-5: Identify level of utilization development and Sigla accreditation criteria of research-generated evidences implementation o f for policy development sustainable and replicable systems within the framework o f the Health Sector ReformAgenda for financing and delivery of RH RESULTS INDICATORSFOREACH COMPONENT Component B.1 Firstedition of WHSM services guidelines for (Operational and LGUs and localWHSM teams disseminated preparedness at the municipal Regulatory and used by LGUmanagers and W H S M level LGU with regardto fully Guidelines for the teams implementing the service delivery Provision and Use model. o f W H S M services) Component B.2 80% of WHT, BEMOCand CEMOC teams Yr.1:trainingprovider hired and (Network o f have completed training on the integrated pilot-testedintegrated training Training Providers WHSM-SP package for the Integrated Yr.2: track development and WHSMP-SP) implementation of accreditation process Yr.3-4 : identify training provider mapping for batch 2 project sites Component B.3 0 100%of LGUs inproject sites use routinely (Monitoring, collected WHSMP M & Edata (including Evaluation, maternal death reviews) intheir annual Research and plans Dissemination) 0 Selected innovative elements of project documented and impact measured with results used for scaling up 28 . I) r: n h r: 8 '? zav i U P ? . P P 3 n 3 x I, 3 3 .3 z Y 0 I, 8 p: 2 m E 3 e .3 8 .y s3 8 m n x x 9 # # 13 0 2 -2 3 > m m Y a2 P i L9 $ 3 %2 m 0 0 z W Q >1 L x ; e, cd W 0 VY xz s d M M G 2 d G 3 2 8 m $ 0 2 8 n W 6) Bd rr 0 Arrangementsfor Results Monitoring Monitoring, Evaluation, Research and Dissemination (MERD) Component The monitoring, evaluation, research and dissemination component (MERD) will provide results for monitoring the project's progress and impact using the following types of information: (i) Regular assessment of inputs and processes related to the Project Development Objective and sub-components (ii) Semi-annual reporting of service delivery Performance (iii) Changes in key result indicators at mid-term and end of project as measured against baseline status and comparison groups (later for selected sites only) (iv) Operations research studies that evaluate the effectiveness of innovative activities for use inreplication and scaling-up (v) Dissemination of results to support evidence-based management In two of the project's sites causality will be examined by comparing the outcome measures before, at mid-term and after the project with changes in identical indicators taken at the same time intwo non-project sites. Data collection of key performance and outcome indicators will be measured using standardized instruments in all three sites of the project's first batch. Inputs, processes and outputs/performance will be monitored using routinely collected information from the FHSIS in every site (first and second batch). Capacity building to enhance provincial management's use of evidence for decision making will be supported through periodic seminars, briefing of results and targeted training courses. Impact Evaluation Studv Design A controlled, interrupted time series study design will be used to investigate the impact on key outcome indicators in 2 of the first 3 sites; the third site will not have a comparison group but will evaluate changes in outcome indicators. Three different data collection activities will be used to measure change in the general population (women of reproductive age), providers and clients at health center facilities, and health center performance with providing W H S M services. The frequency of the data collection activities will depend upon the data source, as follows: Population Based Sample Survey: Baseline, Mid-line, Endof Project Facility Based Surveys: Baseline, Mid-line, Endof Project Abstracts of Service Statistics: Semi-Annually Because of the time required for implementation to have an effect on health and behavioral outcomes, the staggering of the sites during the start-up phase precludes the possibility of conducting an impact evaluation of the sites in the second batch. The impact evaluation will be contracted out to a local research agency. The monitoring of performance (using FHSIS generated statistics) and local capacity building for evidence-based decision malung will be conducted in the sites of both first and second batch. 35 The WHSM project will provide inputs to support the collection and use of routinely collected statistics, as described below (Monitoring section). The accompanying Results Framework provides a listing of the project's key performance and outcome indicators that will be measured through these different data collection activities. In general the following types of information will be collected from each data source: 0 Population based sample survey will measure changes in the knowledge, practices and health outcomes of reproductive age women. 0 Facility based surveys will measure changes in the quality of care inWHSM sites. 0 Abstracts of facility statistics (using FHSIS and other sources of routinely collected data) will measure changes in health center performance (e.g., case load by type of service). Sampling and Data Collection Procedures for Impact Evaluation. The sample size calculations for the population based survey are based upon detecting the anticipated change in key outcome indicators cited in the WHSM Results Framework, with some inflation for non- response rate and sub-group analyses, (e.g., poor and non-poor, rural and ~ r b a n ) ~The sample . size will be sufficient to provide.results for each province (i.e., the provinces will not be pooled together in the analysis but analyzed separately). While the study design i s not a longitudinal, cohort design, the random sampling techniques will permit comparison's to be made across the cross-sectional surveys. The facility-based survey will utilize multiple research methods that include inventories of materials and equipment, interviews with all health care providers and a random sample patient exit interviews. A complete range of facilities will be selected, including all provincial, district hospitals, RHU, SHC, and a random sample of BHS. Data Collection Procedures in the Comparison Sites. The population based survey, facility surveys will be conducted in the comparison sites at baseline, mid-term and post-test (Le., at the same time as the project sites). In addition to the surveys, the project will monitor inputs and activities conducted in the comparison sites to ensure the accurate interpretation of results (i.e., no contamination of effects due to the introduction of W H S M - related interventions in the comparison sites). Monitoring the WHSMP2: Strengthening the FHSIS in Project Sites The implementation of the monitoring activities will strengthen the collection and reporting of FHSIS routinely collected data within each project site (province or municipality). A needs analysis of the existing procedures for the collection and analysis of provincial FHSIS data will be rapidly conducted during the start-up phase of the W H S M to identify specific areas where the project can enhance capacity, and integrate M&E support into existing management. A Request for Proposals I Terms of Reference was developed for awarding a contract to a local agency for the conduct of the baseline, using PHRD project-preparationfunds. This TOR contains more detailed description of the sampling plan and data collection procedures for the population and facility based surveys. 36 The guidelines produced by the national consolidated FHSIS worhng group in the D O H will be followed in reinforcing the provincial information system. A work plan will be established based on the outcome of this needs assessment. Training programs and revised institutional management plans will be implementedas part of this work plan. In addition to the use of FHSIS generated data there will be multiple other sources of data that report on progress made with the creation of reliable and sustainable support systems for WHSM services, including the following: Drug and contraceptive security, (e.g., CDLMIS) Safe blood supply and laboratory information system Human resource development performance reports Hospital management information systems (HOMIS) PhilHealth records and information system The MERD consultant will also need to review results of the community based monitoring information system (CBMIS) that identifies women of reproductive age and the feasibility of integrating the system in routine statistical information collected by the H M S I S of the DOH. As this system was not maintained by the DOH, the MERD consultant will need to pay close attention to the sustainability of such a system. The MERD staff and consultants will work closely with the responsible WHSM technical offices to ensure that the routine collection and reporting of inputs, process and performance data are embedded within each intervention and that sufficient resources are devoted to ensure the timely availability of information for overall project monitoring. The responsibility for the implementation of the monitoring activities for each of these components will be with the relevant technical office, and the MERD staff will have a supporting role, and ensure the use of the data for reporting on project results. Research -- Special Studies There are two types of special studies in the MERD component: 0 Special studies will be conducted to document and examine the effectiveness of innovative elements of the W H S M SP that are not adequately captured in the impact evaluation or monitoring activities. 0 Operations Research techniques will be used to assist program managers to develop and test new forms of service delivery for hard-to-reach groups. Special Studies of Innovative Interventions. Special studies will be required to provide information the effectiveness of interventions that are not adequately captured in either the population or facility-based surveys. The methodologies used in the special studies will vary-, ranging from case studies, qualitative key-informant interviews, household surveys that are conductedby individual consultants, or research agencies. 37 The selection procedures to be followed during the project for conducting the studies will be finalized during Year 1 of implementation. A preliminary listing of potential topics for these special studies follows. a Private providers knowledge of STI treatment guidelines a Market segmentation study to track changes in service use b y poor and non-poor patients at project mid-term 8 Case studies: Preparation and use of birth plans, formation and maintenance of Women's Health Teams, including private sector providers a Effectiveness of the client classification scheme and zero co-pay policy 8 Evaluation of province/city-wide drug and contraceptive procurement 8 Evaluation of the grant scheme for supporting enrollment in PhilHealth and other measures to diversify funding sources for WHSM services Male involvement on WHSM services Indigenous People's access to services Operations Research Studies. Both the STI/HIV and the Adolescent Reproductive Health Components are designed to implement a pilot test of services using operations research methodologies. The MERD component will assist in the design of these pilots so that operations research techniques are used to evaluate the pilot activity's effectiveness. The STI/HIV pilot emphasizes the need to provide outreach services to Overseas Foreign Workers and Free Lance Sex Workers. To date neither of these groups has been effectively reached by the D O H facilities or the Social Hygiene Centers, and specially tailored interventions are required, by collaborating with NGOs that have a successful history of working with these 2 different groups. MERD staff and consultants will assist the STI/HIV Component managers to develop Terms of Reference for contracting with a local NGO to pilot test the provision of STI/HIV control and prevention services to each group. The TOR will include measurement of the intervention's effectiveness and costs. The Adolescent Reproductive Health pilot i s designed in a similar manner, and relies upon the use of a contract with local NGOs to develop and test an innovative service delivery package for adolescents through the use of operations research methods. The MERD staff will work closely with the ARH Component managers to develop the TOR for the contract, and assist in the implementation of the OR study. Evaluation of the grant scheme for supporting enrollment in PhilHealth and other measures to diversify funding sources for W H S M services. Dissemination The dissemination of results will ensure that the M&E component complements management by regularly providing information for evidence-based decision making. The following activities will also substantially strengthen capacity for the reporting of information: 8 Impact evaluation results (baseline, mid-term and end of project) presented in seminars both in the project site and Manila - Complete report produced 38 - Policy Brief highlighting key findings and recommendations - Targeted briefings for senior and mid-level management on key topics, with appropriate grade-level recommendations made 0 Semi-Annual meetings to present a report for management in provinces and national offices that weaves together results from the FHSIS and other routinely collected information systems - Standard reporting format developed to facilitate the creation of time series analysis, showing trends in output and lower level outcome indicators - Targeted briefings for senior and mid-level management on key topics with appropriate grade-level recommendations made to reinforce the use of evidence for policy and program decision-malung 0 Quarterly meetings with ILHZ officials to review results generated by the FHSIS, identify areas for improving data collection processes and implications for program management. These meetings will develop a organizational culture of using data for management. 39 Annex 4: Detailed Project Description PHILIPPINES: SECOND W O M E N ' S HEALTH & SAFE MOTHERHOOD The Second Women's Health and Safe Motherhood Project (WHSMPZ) will contribute to the national goal of improving women's health by: Demonstrating in selected sites a sustainable, cost-effective model of delivering health services that increases access of disadvantaged women to acceptable and high quality reproductive health services and enables them to safely attain their desired spacing and number of children. Establishing the core knowledge base and support systems that can facilitate countrywide replication of the project experience as part of mainstream approaches to reproductive health care within the framework of the Health Sector Reform Agenda. The above objectives shall be pursued through an integrated set of interventions backed by the necessary support systems and policy actions to ensure effective implementation of the Government's strategies for improving women's reproductive health, as described in Technical Annex 1of this report. Project interventions will take place at two levels: At the local level, the project will support delivery of the integrated WHSM Service Package in six project sites; At the national level, the project will develop capacity inthe DOHto create an operating environment conducive to sustainable LGU management and financing of the WHSM service package and facilitate replication of the integrated WHSM service model throughout the country. Ensuring replicability of lessons learned is a key feature of the project and i s reflected in the focus on institutional and financial sustainability of project interventions, a strong monitoring, evaluation research and dissemination component, the development of tools for use by non- project LGUs interested in replication, and institutionalizing capacity in DOH to guide other LGUs with replication. Component A. Local Delivery of the Integrated W H S M Service Package (estimated cost including contingencies USD 32.4 million of which USD 13.4 million loan) This component would support local governments in mobilizing networks of public and private providers as well as other community groups in the locality to undertake activities and deliver services included in the integrated Women's Health and Safe Motherhood service package (WHSM-SP), with focus on maternal care, family planning and STI/HIV control services. While local networks are intended to serve everyone in respective communities, the Project activities and inputs would give priority attention to assuring that disadvantaged women obtain their fair share in access to and use of the WHSM-SP. 40 The component would be implemented in six project sites over a period of six years, starting in the first year of the Project with a first batch of three sites (Sorsogon Province, Surigao del Sur Province and Iloilo City) to be followed inthe third year of the Project by a second batch of three sites (still to be firmly identified). Project sites were/will be selected using three sets of criteria: (a) need, as measured by maternal mortality, infant mortality and contraceptive prevalence rates; (b) population size, limited to provinces or cities with populations between 200,000 and 800,000, deemed to represent the appropriate scale for implementation of a full and integratedWHSM-SP; and (c) interest and willingness of LGU leadership to participate in the project. This last criterion has proven to be the most critical, operationally. In each proiect site, the Project would undertake an interrelated set of interventions to (a) establish critical capacities to provide quality services through a network of WHSM service teams; and (b) establish reliable and sustainable support systems for WHSM service delivery. Critical Cavacities to Provide Quality WHSM Services. The Project will help selected LGUs establish capacity to deliver the integrated WHSM-SP through the establishment and operation of the network of W H S M teams consisting of a Women's Health Team (WHT) in every barangay and an appropriate number of BEmOC, CEmOC and NCV/BTL teams, appropriately dispersed throughout the project site4. The full maternal care, family planning and STI/HIV service packages will be provided to the general population in all project sites. Recognizing that the number of health workers in some areas may be insufficient to meet the staff-to-population ratio requirementsfor the WHSM teams, arrangements for flexible staffing of service teams - including contracting of private midwives and doctors to join WHSM teams, allowing contracted midwives and doctors to have access to public facilities to carry out WHSM services for their private clients, in exchange for a fee or a share of any PhilHealth revenues, and to participate inDOH-sponsoredtraining activities under the Project. On a pilot scale and in selected sites only, the D O H will (i) test a model for delivery of STI services to CSWs in an integrated fashion with mainstream W H S M services5; and (ii) the engage services of NGOs with relevant experience to help LGUs develop and implement cost-effective and sustainable approaches for reaching three groups at especially high risk - freelance sex workers, OFWs, and young adults. To implement the service delivery model in a cost-effective manner, facilities and municipalities were identified and selected in each project site in Batch 1to serve as the loci for delivery of the integrated WHSM services. Selection was carried out through situational analysis, focusing on: (1) target population and facility mapping; and (2) needs assessment of selected facilities. The mapping exercise was used to determine the number of CEmOCs and BEmOCs to be organized for the province/city, guided by the UNICEF/WHO/UNFPA standard of 1CEmOC for every 500,000 population, and 1 BEmOC for every 125,000 population. However, additional As described in Technical Annex 1. The PIP will include a detailed description of the WHSM teams. Inthe municipality of Matnog, Sorsogon Province, a Social Hygiene Clinic (SHC) and the STIteam working inthe SHC will be integrated into the Matnog District Hospital, which will also serve as a BEmOC facility. Inthe municipality of Tangub, Surigao del Sur, the SHC/STI team will be integrated into the RHU. 41 CEmOCs and BEmOCs were found to be needed in all three project sites in Batch 1 when a parameter of "access" was added, defined as follows: a BEmOC should be reachable within 30 minutes from each LGUin its catchment area and should not be more than one hour away from a higher-level referral facility, Le., a CEmOC. A similar process of facilities mapping and needs assessment followed by investment planning will be applied in the second batch of project sites in Year 2 of the Project, in preparation for start-up of investments in Year 3. The Project will provide civil works, equipment, skdls upgrading and consumable supplies necessary to facilitate establishment of WHSM teams in the six project sites, including the SHC inthe Municipality of Matnog inSorsogon Province. Skills upgrading will start with training for (i)developing leadership and champions among project directors and others, (ii) interactive orientation of all staff and key stakeholders to the development objectives and the paradigm changes foreshadowed in the project, (iii) more intensive team development in one CEmOC and its catchment BEmOCs and barangays in each project site, including skill development for Midwives, BHWs and TBAs, and (iv) individual s h l l development for other staff for which training modes are well established, e.g. CEmOC and BEmOC doctors. This will be a transitional arrangement for training during the first 12 to 18 months of the Project, as the D O H builds up a network of accredited training providers who will deliver more streamlined and updated training programs on WHSM as described under Component B.2 below. Subsequent training for both batches will be contracted out to the accredited training providers. The Project will also finance the services of NGOs to assist in development and implementation of pilot interventions to reach FSWs, returning OFWs, and young adults in a limited number of municipalities where these groups are concentrated. Given the importance of PhilHealth benefit payments as a source of financing for the WHSM- SP, all infrastructure and staff upgrading activities to be carried out under the Project will be expected to meet the relevant accreditation standards of PhilHealth. Furthermore, the completion of preventive maintenance plans for Project-financed works and equipment will be a prerequisite for civil works and equipment purchases for the facility under this component.` Finally, given the importance of having fully-staffed and qualified WHSM teams in place for delivery of the WHSM service package, the presence of the full staffing complement in the respective facility and all participating barangays in its catchment area will also be a prerequisite for civil works and equipment purchases as will start-up of training on the integrated WHSM-SP for staff of WHSM teams in accordance with agreed training plans. Reliable and Sustainable Support Systems for WHSM Service Delivery. The Project would facilitate establishment and operation of systems for (a) drug and contraceptive security, (b) safe blood supply, (c) behavior change interventions; and (d) local financing of WHSM services and commodities. The World Bank's No-objection for proceeding with contract signing will be withheld until certification i s obtained from the authorized official inthe DOH'Sregional office (Center for Health Development). 42 D r u g and Contraceptive Security. The Project would help the LGUs ensure an accessible and affordable supply of commodities necessary to deliver the WHSM-SP by: (i) applying price discrimination in the financing and distribution of contraceptives, in keeping with the market segmentation strategy of the Contraceptive Self-Reliance program7; (ii)establishing efficient province/city-wide procurement, logistics and management systems for the provision of mission- essential drugs and contraceptives for participating health facilities; (iii)supporting the expansion of existing commercial and non-governmental initiatives providing affordable contraceptives to public and private outlets and other re-supply points at the community level. The client classification scheme to be carried out under the "sustainable financing" activities described below will apply in the case of contraceptives. Clients in participating public facilities not identified as poor will be required to pay for contraceptives. All clients identified as poor will receive free contraceptives, funded by the LGU. In turn, LGUs will receive free drugs from D O H in a drugs-for-contraceptives swap arrangement for the duration of the project, as part of the "behavioral change" activities described below. To help LGUs maximize economies of scale, pooled procurement, to be undertaken at the provincial level, will be applied in the purchase of Project-related drugs and contraceptives for distribution in publicly-owned facilities. Participation in the pooled procurement scheme will be offered as an option to the MLGUs. The plan i s to encourage the MLGUs to "pool" their requirements at PLGU level, and if the system proves itself efficient, to consider moving to province-wide procurement, to cover all LGUs willing to participate. The existing provincial- level Contraceptive Distribution Logistics and Management Information System (CDLMIS) which has been used for distribution and reordering of contraceptives under the USAID- sponsored program, will continue to serve as the logistics system for contraceptives.' This system will be expanded to accommodate logistical needs for the distribution and reordering of WHSM drugs used at the provincial level, using management tools and processes from the Contract Distribution System (CDS) developed under the First WHSMP, adjusted for use at the provincial level. Detailed operational instructions including technical specifications will be included inthe Procurement Implementation Manual (PIM). An alternative system for contraceptives will also be available through existing social marketing programs of NGOs such as DKT and the Family Planning Organization of the Philippines (FPOP), which would sell contraceptives at reasonable prices to those who can afford to pay9. Depending on the margins involved, LGUs could use a portion of the revenues from these social marketing programs to finance contraceptives for the poor. In the case where LGUs choose to sell contraceptives to the non-poor through their public facilities, they could purchase a service provided by DKT under its Commodity Revolving Program Franchise Activity which provides support for contraceptive product procurement, promotion, distribution, and sales management by equipping LGU personnel with the necessary knowledge and slulls to operate, develop and As described inAppendix 4.2 Because contraceptives were donated under the USAID program, no procurement took place at the provincial, or even the national, level. The new procurement system will therefore have to be added to the existing CDLMIS system. Preliminary explorations by D O H indicate that FPOP may not have the capacity to carry out social marketing programs on the scale requiredfor the Project. 43 eventually sustain their own capacities to manage contraceptives. If this option i s adopted, the social marketing provider would also be required to expand its activities with private commercial outlets in the project sites to accelerate the shift of non-poor clients from the public to the private market. The Project will finance technical assistance on procurement systems at the provincial/city and municipality levels, and possibly in the form of the franchise fee to participate in DKT's Franchise initiative" in addition to the purchase of drugs and commodities under the drugs-for- commodities swap discussed below. The nature and level of collaboration among local governments for purposes of drugs and commodities procurement and distribution, including arrangements for the flow of funds from municipal LGUs to the province, will be covered under the Project MOAs to be signed between provincial and municipal LGUs. Similarly, MOAs to be signed between the D O H and provincial or city governments will cover arrangements for procurement and distribution of drugs under the proposed drugs-for-commodities swap discussed below. These agreements were drafted during appraisal and were finalized and signed for Surigao del Sur and Sorsogon Provinces prior to negotiations. Safe Blood Supply. A network of Blood Service Facilities (BSF) will be established to meet anticipated needs for safe blood for obstetric (and other) emergencies in CEmOC facilities following Government's safe blood supply strategy". To enhance the provision of safe blood in project sites, the following blood supply management configuration shall be implemented: 0 A centrally-located CEmOC will be designated the central Blood Bank for the project site. For the Batch 1 project sites, blood centers will be located in the Bicol Regional Hospital in Legazpi City for Sorsogon Province, in the Western Visayas Medical Center in Iloilo City, in the Davao Medical Center in Davao City and the Caraga Regional Hospital inProsperidad City for Surigao del Sur Province. 0 All CEmOCs - where all transfusions will take place - shall be designated Blood Stations. 0 All BEmOCs shall be designated Blood Collecting Units (RCUs) except for remote BEmOCs which shall be designated Blood Stations (BS). 0 All Blood Station staff shall be trained in basic blood banking and quality systems, covering the vein-to-vein approach. Tc support establishment of this blood supply system, the Project will finance civil works and equipment for storing and transfusing blood, as needed, in BEmOCs and CEmOCs, civil works and equipment, as needed, for the three regional blood centers, equipment and software for a centralized donor registry linked with a unique identifier system for blood bags and donor samples. Appropriate Behavior Change among Stakeholders. To encourage specific behavioral changes among key stakeholders - the disadvantaged woman of reproductive age, the health care lo Someprojectmunicipalitiesmay participatein the KfW-funded SocialMarketingProjectimplementedby DKT. l1 As describedinthe PIP. 44 provider, the local chief executive and the community - as necessary for success of the Project's objectives, a combination of interventions will be applied, including performance-based grants and communication and advocacy, following the Government's WHSM behavioral change strategy12. Performance-based grants will include payments to the WHT attending facility-based deliveries by poor women, a matching grant to LGUs that meet their targets for enrollment in PhilHealth's Sponsored Program, and grants for LGUs that undertake contraceptive procurement. Grants will be incash, except for the LGUgrant for undertalung contraceptive procurement, which will be in the form of a drugs-for-commodities swap whereby the D O H gives a grant to the LGU in the form of WHSM-related drugs. These performance-related grants are described further in Appendix 4.3. Operating rules for the grant scheme will be included in the PIP. The D O H will also support the development and implementation of a communication and advocacy program in every project site to further encourage and facilitate behavior change. To this end, the D O H will engage the services of a full-service, professional communications firm, experienced in socially-oriented communications projects, that would develop a project-wide communications strategy, assist each project site in developing a site-specific version of the strategy and corresponding implementation plans, and in carrying out these plans. Given the potential large size of this contract, and the recent difficulties experienced with similar-type contracts in other related projects, the D O H will ensure that clear performance milestones are set at key stages of the contract, and that continuation of the contract beyond an initial phase (say after Year 2) will be contingent on the consultant meeting these milestones. Details of the behavioral change and communication strategy of the project will be given inthe PIP. Sustainable Systemsfor Financing of Local WHSM Services and Commodities. To establish a sustainable and equitable financing system for local W H S M services, the Project will apply the two principles of diversification of funding sources and market segmentation described in Technical Annex 9. The added resource needs generated by the Project will therefore be financed as follows: From the N G D O H , (a) direct subsidies for some commodities, training, and other goods and services used for locally provided services; and (b) performance-related grants to stakeholders. Much of the funding to be provided by the NG under the Project will continue only during the project period. NG-financed recurrent expenditures will therefore have to be replaced by other sources after 2009. 0 From the LGU, (a) direct funding for the operations of publicly-owned and operated facilities/WHSM teams, portions of which will be recovered through user fees for the non-poor, PhilHealth reimbursements or revenue sharing across LGUs, facilities, and health care providers, for services rendered to clients residing beyond the administrative boundaries of municipalities where the facilities are located; and (b) during the post- project period, continuation of payments made by N G D O H . From PhilHealth, for PhilHealth members only, reimbursements for services covered under its benefit package. l2As described inTechnical Annex 1and in the PIP. 45 From non-poor clients, user fees for services and commodities received. In accordance with the National Health Insurance Law, social insurance premiums for the poor will be financedjointly by the NG and LGU. To facilitate implementation of the expanded financing system, the Project will undertake the following activities: Implement a client classification scheme to identify poor and non-poor residents. An enumeration method for collection of household data will be used to identify and rank poor households within each project site. In addition to providing the means test required for implementing market segmentation under the CSR, BCC, and financing aspects of the project, the client classification scheme would also help PhilHealth test this method as a tool to facilitate listing by LGUs of poor families to be covered under its LGU-funded Sponsored Program (SP). Expand enrolment of poor families under PhilHealth's Sponsored Program (SP); expand enrolment of non-poor families under PhilHealth's Individually Paying Program (IPP). Under the Project, Batch one LGUs will commit to expand coverage under the SP program to at least 75% of the target poor households by Year 3 and sustain that level through the remainder of the project. Batch two LGUs will commit to reach this target by the end of the third year following start-up. Accelerate PhilHealth accreditation of facilities and providers. This will require action on the part of LGUs to ensure that facilities and staff meet accreditation requirements (to be done under this component, as described above) and on the part of PhilHealth to facilitate the accreditation process. At least in the project sites if not nationwide, implement modifications to the PhilHealth W H S M benefit packages to enhance PhilHealth support for the Program, as described inTechnical Annex 9. Implement the zero co-pay policy for indigents in LGU hospitals similar to the practice in the DOH-retainedhospitals. Authorize reveme retention and management for LGU facilities that engage in cost recovery. Retained revenues can be put into a revolving h i d to support WHSM commodities and services. Revenue retention will ensure sustainability of the package and result infaster turnaround of funds. Partnerships with the private sector, including contracting private midwives to participate on WHTs and BEmOC teams and expanding private commercial outlets for social marketing of contraceptives. Financing commitments to be made by the various funding sources .will be embedded in the Project MOAs to be signed between the D O H and the Provincial or City LGUs and between the PLGUs and MLGUs, as well as in the PhilHealth policy statement supporting the project as described in Technical Annex 9. Signing of the Project MOAs took place prior to project negotiations and adoption of the PhilHealth policy statement prior to effectiveness. In support of the client classification scheme, the project will finance householdenumeration surveys in five of the six project sites (a first one will be financed under the preparation grant). 46 Component 3: National Capacity to Sustain WHSM Services (estimated cost including contingencies USD 5.7 million of which USD 2.5 million loan) This component would develop capacity in the D O H to exercise its stewardship and guidance responsibilities for the WHSM Program, create an operating environment conducive to LGUs managing and sustaining local delivery of the WHSM-SP and facilitate replication of the integrated W H S M service model throughout the country. The component would support three key channels through which the national government can influence the cost, quality, coverage, and equity of locally devolved service delivery. These channels are: a) promulgation of technical guidelines and regulatory standards on W H S M services; b) accreditation of providers of training programs on the integrated WHSM-SP under a streamlined WHSM training system; and c) dissemination of experience and the results of monitoring, evaluation, or research for consideration of local policy makers, managers, and providers. Sub-component B.1. Operational and Renulatory Guidelines for the Provision and Use of WHSM Services This subcomponent will support the research-based formulation, transparent official adoption, thorough field dissemination, and enforcement of technical guidelines that will be critical to the provision and use of WHSM services. There will be two types, namely, best-practice advisory operational guidelines which providers need to consider for improved services, and mandatory regulatory standards which providers are obliged to meet. The guidelines themselves may be in the form of service delivery standards, clinical practice guidelines, referral protocols, communication and counseling guidelines, technical specifications of goods and equipment, or checklists and procedural manuals, etc. Formulation will build on the abundant reservoir of documents, prototypes, technical materials, and actual experience already available from earlier and ongoing W H S M projects and RH programs as well as studies prepared during the preparatory phase of this project. Among the most important sources are the D O H Sentrong Sigla movement, PhilHealth provider accreditation program, the successor of the U SAID- assisted matching grants program for LGUs, D O H regulatory functions under the Bureau of FoodandDrugs and other licensing units. The guidelines will be compiled in a publication (or publications) that will be made available to concerned stakeholders (e.g., national agencies, LGU administration and health officials, research institutions, NGOs, etc.), and that will be updated periodically. Publication of the first edition of the WHSM Guidelines will take place by the end of Year 2 of the Project. Review and concurrence of the Bank of this first edition will be a condition for disbursements for Batch 2 project sites. The National Center for Disease Prevention and Control (NCDPC) of the D O H will oversee development, updating and dissemination of the guidelines and be responsible for assuring the quality of material therein. The NCDPC will also ensure compliance with the guidelines through clear delineation of responsibilities and accountabilities, monitoring of providers, reporting requirements, etc. In carrying out these tasks, the NCDPC will apply the 47 methodologies for development and adoption of clinical practice guidelines currently being developed as part of the preparation of the proposed Health Sector ReformProject. To facilitate development, quality assurance and dissemination of the guidelines, the Project will finance technical assistance for preparatioddrafting of guidelines and the costs of consultation workshops, publication and dissemination of the guidelines Sub-component B.2 Network of Training Providers for the Integrated WHSMP-SP This subcomponent will support the development of a network of training providers accredited to provide efficiently designed courses on (i) appropriate delivery of the integrated WHSMP-SP the for each category of WHSM worker and (ii)team work and collaboration for each type of W H S M team. To this end, the project will provide (i)technical assistance to DOH to help flesh out the proposed training strategy following the principles described in the Human Resource Management and Development (HRMD) strategy (as described in the PIP), develop TORSfor the training providers to be accredited for provision of the integrated WHSM training programs described above, and develop an accreditation process; and (ii) training development grants to at lezst three training providers, selected competitively (one each in Luzon, Visayas and Mindanao), to develop the said training programs. Two TA contracts will be awarded to assist in implementing the HRMD/training strategy: the major one for a qualified national firm, to help coordinate and deliver the HRMD training program; and a supplementary one for an international firm to provide intermittent support to the national firm on the design of "learning for organizational change" and "learner responsibility" approaches. Sub-componentB.3 Monitoring, Evaluation,Research and Dissemination (MERD) This sub-component will provide the following types of information for project management and impact evaluation: Regular assessment of inputs and processes related to the Project Development Objective and sub-components 0 Annual reporting of service delivery performance 0 Changes in key result indicators at mid-term and end of project as measured against baseline status and comparison groups (later for selected sites only) 0 Operations research and special studies that evaluate the effectiveness of innovative activities for use in replication and scaling-up 0 Dissemination of results to support evidence based decision-making processes The collection and analysis of data generated b y these different mechanisms will be embedded within W H S M Project management functions, with emphasis on developing evidence-based decision making capacity. In particular the service delivery performance reporting will utilize routinely collected statistics derived from the D O H information system. These activities are described in greater detail inTechnical Annex 3. 48 The Project will finance technical assistance for (a) the development of the integrated WHSM monitoring system; (b) completion of the baseline survey, including full data analysis, and the mid-term and end-line surveys and full project evaluation; and (c) the special studies on innovative interventions as described in Technical Annex 3. It will also finance dissemination workshops and publications and other dissemination costs. Sub-component B.4 Project Management This sub-component will support the establishment and maintenance of project management capacity at central and local levels as described in sections I11and IV of Technical Annex 6. To this end, the Project will finance office equipment and consultancies on (i) management; project (ii) financial management; and (iii) procurement. 49 Appendix 4.1 Project Site Selection Two provinces and one city were selected using three sets of criteria that were designed to progressively narrow down the list of possible sites to only those LGUs that meet all of the criteria. The first set of criteria, as measured by maternal mortality, infant mortality and contraceptive prevalence rates, was used to identify provinces and cities with the greatest need for enhanced W H S M services. The second set, provinces and cities with population between 200,000 and 800,000, indicated LGUs with the appropriate scale for implementation of a full and integrated WHSMP2 from among the 50 LGUs most in need. The third step, which i s the most important for the Project, was to solicit from LGUs their expressions of interest and willingness to participate by complying with the following: (a) LGU track record in managing the local health care delivery system, (b) willingness to implement all components of WHSMP2 in the areas of maternal care, family planning, STI/HIV prevention and control, and adolescent reproductive health, (c) LGU willingness to ensure delivery of quality health service particularly women's health services to the intended beneficiaries through an LGU-WHSMP2 co-share scheme, or LGU-private sector collaboration, (d) LGU support to the Philippine Health Insurance Corporation (PhilHealth) Sponsored Program through a sustained enrolment of indigents. Based on MMR, IMR, and CPR in 2000 for 163 basic areas, their composite rate, and ranking, the list was narrowed down to 50 LGUs based on the first set of criteria, and further reduced to 25 LGUs based on the second set. With the third set, the choice led to two provinces - Sorsogon and Surigao del Sur - and Iloilo City as Project sites. (More detail on the selection process will be available inthe PIP) 50 Appendix 4.2 Strategy for Contraceptive Self-Reliance - Three Models to Implement Diversified Financing and Market Segmentation The Problem: USAID has started reducing its donations of pills and injectables, which accounted for up to 80% of free supplies in the country over the past 30 years. These donations will decline to zero by 2008 for pills and 2009 for injectables. Condom donations have already been stopped completely. For the first batch of WHSMP2 sites, pill donations will cease by 2007 for Surigao del Sur and Iloilo City, and by 2008 for injectables. Sorsogon will experience a complete withdrawal of pills and injectables by 2008 and 2009, respectively. 2004 2005 2006 2007 2008 2009 Condoms 0 0 0 0 0 0 Pills 93% 59% 23% 6% 0 0 Injectables 100% 82% 59% 23% 5% 0 National Contraceptive Self Reliance(CSR): The National Government i s not prepared to cover the cost of contraceptive supplies, to replace the USAID donations. Instead, a proposed Administrative Order on "Guidelines on the Management of Contraceptive Supplies for Family Planning under the Contraceptive Self-Reliance (CSR) Strategy" i s being crafted with the overall objective of "formulating and implementing critical policies and plans, complementary actions and supportive measures that are necessary to prevent any possible disruption in the delivery of FP services with the phase-out of donated contraceptives and to sustain continued increase inFP use to eventually eliminate unmet needs." The A0 i s explicit about the directions to be taken by LGUs (defined as provincial and city LGUs) for the CSR strategy to work. First, the LGU should become the local guarantor of overall contraceptive availability, seeing to it that contraceptive supplies in the locality will always be sufficient to meet the needs of all current users. This i s consistent with Sec. 17 of RA 7160, otherwise known as the Local Government Code of 1991, which mandates LGUs to provide family planning services and ensure contraceptive availability in the community. Second, it should assure sufficient supply of free contraceptives for poorest users. In the beginning, this might mean simply reserving the increasingly scarce supplies of donated contraceptives exclusively for poorest users. Eventually, it will mean using public funds to procure contraceptives to support free distribution to poorest users even when donated supplies are short or no longer available. Third, it should promote expansion of other sources of contraceptive supply b y encouraging current users of donated contraceptives but with means to pay to shift their source of supply to commercial and NGO sources while making sure that such shifts will not lead to interruptions in their FP practice. The Strategy. Project LGUs will be required to prepare their own CSR plans, guided by the framework, principles, and contraceptive phasedown schedule of the draft AO. Technical assistance for the development of these plans can be sourced from the ongoing USAID project LEAD. 51 According to the coordination and implementation arrangements for the management of contraceptive supplies between D O H and provincial/city governments, project LGUs: 0 shall be encouraged and assisted by the D O H to adopt the CDLMIS as the basic recommended local distribution and logistics system for comprehensive management of all sources of contraceptive supplies in the whole province or city 0 shall generate annual forecasts of estimated total consumption needs of pills and injectables starting 2005 and onwards 0 shall adopt a framework for planning a local CSR strategy which consists of the following key market segmentatiodfinancing elements: o Donatedsupplies exclusively for free distribution. o LGU-finance/procured supplies either for free distribution; for sale at cost- recovery basis; or for sale at margins above costs. o Commercially consigned supplies either for free distribution (with payment by LGU) or for sale with payment by clients. o Socially marketed supplies for sale at cost recovery basis. 0 shall be authorized to issue and adopt their own desired local policies consistent with national policies, for governing the financing, procurement, distribution and management of all sources of contraceptives in the localities, provided that as far as use of donated contraceptives in public health facility i s concerned, such supplies shall be dispensed only for the actual voluntary and informed use by FP clients and without charge (free to clients), with priority as far as possible, for meeting needs of clients without means to Pay According to the coordination and implementation arrangements for contraceptive supply management between provincial/city governments and service outlets in the locality providing FP, project LGUs: 0 shall assume the role of local guarantors of adequate availability of contraceptive supplies in the whole province or city; 0 shall establish appropriate arrangements for component city and municipal governments to participate and contribute to the attainment of the CSR in the whole province; and 0 may, at their discretion, make portions of such donated contraceptives available not only to their own service outlets but also NGOs and private providers serving their localities. Local policies may allow charging of fees for services rendered in connection with the dispensing of donated contraceptives for free. There are three possible models that project LGUs may take in embarlung on their CSR strategy: the social-marketing franchise, the direct procurement model with LGUs managing market segmentation, and active promotion of a parallel commercial sector. With respect to social marketing, D O Hwill pursue the possibility of including project sites inthe KfW-funded Social Marketing Project. This project has DKT setting up franchise agreements 52 with 400 LGUs for their commodity and technical assistance requirements at a minimal franchise fee. For the direct procurement model to work, procurement of commodities, together with other drugs and medicines will be done at the provincial level and will be offered to the MLGUs. Management of market segmentation takes off from the recent evidence from the 2002 Market Segmentation Study using 1998 N D H S data which showed that a significant segment of FP users in the public sector come from better-off households with average monthly incomes above PhP 9,375. As much as 30% of pill users, 32% of IUD acceptors, 28% of injectable users and 20% of condom users come from these better-off households able to pay yet obtain their contraceptive supply free from public sources. USALD has proposed to D O H and to the donor community that a "market segmentation" approach limiting public support to the "poor" segment of the market be applied to improve prospects for sustainability of contraceptive supplies. While non-poor clients of public services will be required to pay for their commodities, poor clients will receive free commodities, to be funded by the LGUs: 0 To assist LGUs, while complying with its policy of not using National Government funds to purchase contraceptives, D O H i s prepared to consider a "swap" arrangement whereby LGUs would purchase contraceptives for the poor and DOHwould inturn provide LGUs with essential WH drugs of value equal to the contraceptives purchased. If this arrangement does not apply (e.g., in non-project areas or in project areas, after the project), LGUs will be requiredto cover the cost of contraceptives for the poor. 0 Where appropriate, clients will be encouraged to use methods that are covered under PhilHealth's benefit package (IUD,NSV, BTL). Active promotion of a parallel commercial sector can be initiated in areas where a private commercial sector does exist for FP and where household incomes as well as PhilHealth enrollment are highenough to encourage the commercial sector to intensify FPprovision. Inreality, the feasibility of each model may vary by LGUand over time, depending on the nature of demand and organizational capacity. Client Classification. Implementation of this strategy will require application of a means test to identify the poor and operating guidelines for applying client classification at the point of service. A barangay-based census of assets and other household characteristics i s proposed as the basis for identifying the poor. This identification methodology i s being developed as part of preparation of the Health Sector Reform Project. The "identified" poor will then be eligible for LGU and other public support, although not all those identified may receive support, given limited LGU budgets (e.g., coverage under PhilHealth's Sponsored Program will depend on the MLGU's ability to pay it's share of the premiums for the poor). Operating guidelines for the client classification methodology will be included in the Project Implementation Plan (PIP). 53 Appendix 4.3 Performance-basedGrantsfor LGUs,Providersand Clients The grant mechanisms described below are envisioned to encourage critical behavior changes among the important stakeholders of the Project, e.g., the target clients, the ground-level providers and the LGUs to achieve desired performance and outputs. These mechanisms shall be supported b y advocacy and BCC programs. Detailed operating rules for the performance grants are given inthe PIP. Grant to SupportWHT Operations The WHT plays an important role as the community-based team of the service delivery mechanism. It i s tasked not only to deliver services but also to encourage women to improve their health-seeking behavior. Wanting to give birth in a facility instead of at home i s one such change that i s critical to the success of the model. The WHT i s key to effecting the change since the work of its members currently revolve around attending to home births. It i s therefore important to encourage WHT members to effect such a shift. The Project Grant to Support WHT Operations i s an important part of such an effort as it i s designed to 1) ensure that the compensation for birth attendance by the WHT members i s not diminishedas a result of the shift to facility births and 2) support the poor in addressing the cost implications of such a shift. Under this grant mechanism, the project shall grant the WHT one thousand five hundred pesos for every birth to a poor woman in a facility (BEmOC or CEmOC), to be co-financed b y the D O H (P1000) and the W C L G U (P500). Of this amount, 500 pesos i s meant to cover the cost of the mother's transport and other expenses (e.g., drugs, supplies, care for other children during facility stay, etc.). Women eligible for this grant will be those identified as poor through the project's client classification scheme. The implementation of the grant mechanism shall be strengthened through an accompanying BCC effort to further encourage the shift to facility births. This will hopefully result in increasing political pressure for the LGU to continue its support for helping the poor hurdle cost barriers to access. The Project shall use this opportunity to advocate for increased LGU enrollment in the PhilhHealth Sponsored Program by presenting the Program as a cheaper financing alternative for addressing the cost issue. This advocacy effort shall seek to reinforce the grant mechanism, described below, targeted at increasing enrollment to the above Sponsored Program. Grant to EncourageLGUEnrollmentinthe PhilHealthSponsoredProgram Cost projections reveal that LGU budgets alone may not be able to support the effective and sustained implementation of the service delivery model. Budgetary resources will have to be augmented b y other financing sources, the most important being PhilHealth. The grant mechanism shall encourage LGU enrollment in the PhilHealth Sponsored Program by providing grants for attainment of annual LGU enrollment targets for up to three years. The grant shall be equivalent to one half of the LGU share of the premium (which i s co-financed by the national government) for the target population. The LGU shall be mandated to spend the grant on 54 WHSMP2 inputs. Annual targets shall be based on the overall PhilHealth target of 75% population coverage (projections for Project financial analysis assume 75% coverage across all sectors, e.g., formal/employed, informal/individually paying, indigents). Grantto EncourageLGUFinancingof CommodityInputs The effective and sustained implementation of the service delivery model also critically depends on the availability of adequate commodity inputs. To help ensure this, a commodity grant scheme shall be implemented where DOH shall award in-lund commodity grants in the form of WHSMP2 essential drugs for LGU purchases of contraceptives to meet client demand, particularly of the poor. These purchases shall augment the declining level of donated contraceptives which are currently distributed by DOH. The scheme i s envisioned to assist LGUs in hurdling possible initial political resistance to using budgetary resources for contraceptives and to ensure adequate commodity supply while more sustainable financing schemes are developed and put in place. Only LGUs participating in pooled procurement arrangements for FP commodities will be eligible for this grant. 55 Annex 5: ProjectCosts PHILIPPINES: SECONDWOMEN'S HEALTH & SAFE MOTHERHOOD Table 5.1 Components Project Cost Summary (US$ thousands) Project Cost by Component or Activity Local Foreign Total A. LocalDelivery of IntegratedW H S M Service Package Develop Health Services in Sorgoson 6,589.3 236.7 6,826.0 Develop Health Services in Surigao-del-sur 4,397.1 258.0 4,655.1 Develop Health Services inIloilo City 5,046.4 213.6 5,260.0 Develop Health Services inSecond Batch of Sites 9,615.2 572.5 10,187.7 Develop Health Services Nationwide 995.3 175.6 1,170.9 Subtotal Local Delivery of IntegratedW H S M Service Package 26,643.3 1,456.3 28,099.7 B. National Capacity to Sustain W H S M Services B.National Capacity to Sustain WHSM Services 4.544.2 308.3 4,852.5 Subtotal National Capacity to Sustain W H S M Services 4,544.2 308.3 4.852.5 Total BASELINE COSTS 31,187.5 1,764.6 32,952.1 Physical Contingencies 1,559.4 88.2 1,647.6 Price Contingencies 3,412.9 135.9 3,548.8 Total PROJECT COSTS 36,159.7 1,988.7 38,148.5 56 3 m WIm 3 Y - I * 5 3 - 5 .c, .2 5 cj 15 1- 8 0m I m Annex 6: InstitutionalAnalysis andProjectManagement PHILIPPINES: SECONDWOMEN'SHEALTH & SAFE MOTHERHOOD I. InstitutionalAnalysis The 1991devolution of public health services delivery inthe Philippines has yielded many gains. A number of key institutional weaknesses could, however, limit and even prevent the attainment of women's health and safe motherhood objectives inmany localities. 0 Provincial governments and municipal governments within the province operate their respective segments of the public health system often without common purposes and directions. As a result, it has become more difficult to achieve coordination of community-based, clinic-based and hospital-based health services serving a common population within a geographic area. This situation prevents effective triage, routinely appropriate referral, and cost-effective targeting of multi-level interventions. Given the area-wide service delivery model required by the project, some means of bridging the gaps between provincial and municipal health operations are essential. 0 The post-devolution performance of D O H in project management has been dismal. Many large projects were hobbled by symptoms of weak performance such as slow start after approval, delayed decision-making, high incidence of poor quality work and paralyzing organizational conflicts, among others. These symptoms led to a cycle of lagging physical accomplishments and slow fund disbursement leading to unwanted cutbacks in allocated investments and ultimately to failure to realize full benefits from projects. Clearly project management performance needs to improve radically for project goals to be achieved. 0 There i s strong demand for funds to invest in expanded capacity for health services among local governments. Their demand for capital funds to improve facilities, however, exceed their willingness to increase operating budgets for these facilities so that these can be maintained better and used more by poorer clients with limited ability to pay. For the project objectives to be attained, supply of WHSM services in poor localities should be improved by increased capacity of facilities, but it will be essential to mobilize more resources for operating costs to finance the proper maintenance and optimal use of these facilities. An approach to meeting the demand by LGUs for capital funds to invest in health facilities needs to be linked with securing their commitment to mobilize more resources to cover increased operating costs. 11. Key Featuresof ImplementationArrangements The project implementation arrangements sought to address these key institutional weaknesses. 1. Determination of Project Sites: The project sites were limited to provinces and cities only. The provinces were required to enlist and engage their component municipalities to become part of a province-wide project effort under the lead of the provincial government. This arrangement insures that every project site will have a basic political agreement among the LGUs responsible for health services over a large enough area and 58 population. Within these project sites, the W H S M service package can be provided efficiently through the coordinated delivery of community-based, clinic-based and hospital-based services, as appropriate. 2. Involvement of Local Chief Executives: The D O H engaged the highest elected officials of the LGUs, not just the civil servant serving as chief of the local health bureaucracy. The involvement of local chief executives in the decision to participate in the project i s crucial because successful project implementation in the locality will require action, not just by the local health services, but also by other parts of the local government machinery. The D O H discussed and negotiated with participating LGUs on the basis of a broad political agreement on common WHSM goals and acceptance of a specific strategy to attain the goals. Consensus on the broad strategy facilitated strong LGU participation inproject preparation. 3. On-lending for capital costs of devolved activities; grants for other costs: The project complies with a recent government policy requiring that projects financed by foreign loans taken by the national government should by on-lent to LGUs whenever these include financing capital costs of devolved responsibilities. This on-lending requirement could constrain excessive LGU demand for capital funds to invest in civil works and equipment of local facilities, compared to previous practice permitting such investments to be given as grants-in-kmd to the locality by the national government. To balance LGU demand for facility improvements with demand for the full package of project interventions deemed necessary to achieve project objectives, D O H makes other inputs such as training, commodities, technical assistance and performance-based payments, which will be financed by loans to the national government and are considered as "non- devolved" responsibilities, available to LGUs as grants-in-hnd. Given recent and ongoing changes in on-lending policies of the National Government and in institutional arrangements for on-lending, the specific modalities for transfer of loan proceeds to LGUs under this project remain to be defined. As a condition of disbursement of loan proceeds to be on-lent to LGUs under this Project, Government will adopt a Funding Modalities Plan acceptable to the Bank setting out said modalities. The D O H will execute all the other project inputs to be made as grants-in-lund to LGUs. 4. Improvements inD O H Project Management: The D O H project management capacity has been strengthened. An existing administrative order on the management of foreign- assisted projects i s being revised to incorporate recommendations made by the Bank. Assignments of senior D O H executives to key positions in the project management hierarchy have been formally made. Staffing of the Unified Project Management Division, which i s responsible for overall project management, i s deemed adequate for start-up and the project costs include funds for scaling up staffing as project implementation requires. The National Center for Disease Prevention and Control, which i s responsible for general technical direction of the project, has been granted sufficient administrative authorities to require technical support from all other units of the DOH. The D O H units in the regions of the project sites, the Centers of Health Development at Regions V, VI and Caraga, have been instructed and prepared to undertake specific functions related to project implementation. A Project Implementation Plan containing the details of these arrangements has been prepared and adopted. 59 5. Organization of project management at project sites: The provincial and city governments of the project sites are organizing their respective project management teams headed by their respective provincial or city health officers. Executive orders by the governors or city mayors containing the detailed arrangements are being drafted for issuance and eventual confirmation by local legislative councils. Considerable portions of project activities at the local level will be implemented by existing organic offices of the local governments such as, for example, the local general services offices and existing bids and awards committees for procurement, and the local engineering offices for the supervision of civil works. Full preparation of the civil works plans, equipment lists and specifications, staffing plans and operating budget plans for all facilities to be improved by the project within the first year of implementation i s being completed. 111. ProjectManagementat Department of Health A. Central Office Existing D O H regulations on the implementation of Foreign Assisted Projects (FAPs), including WHSMP2, are contained in Administrative Order No. 10-A, series 2001, dated April 26, 2001. Based on recommendations made by the Bank, Administrative Order No. 162 s. 2004 approved in 12July 2004 contains revisions to this order to incorporate the following provisions: 0 Adding clearer specifications on the executive functions of the Project DirectorRroject Implementation Officer to emphasize the need for active and direct involvement of senior D O H management. 0 Defining a more facilitative and supportive role for the director of the Bureau of International Health Cooperation in relation to the UnifiedProject Management Division, which performs the day-to-day management of project implementation. 0 Granting specific and sufficient authority to enable the Project Technical Coordinator to perform the D O Htechnical leadership functions in project implementation. Overall, responsibility of the project will be placed in the D O H Cluster for External Affairs, which i s headed by an Undersecretary. H e reports directly to the Secretary of Health, the designated Project Director for all on going Foreign Assisted Projects and shall be responsible for making decisions and taking all actions necessary to promptly and effectively carry out project implementation. The Unified Project Management Division (UPh4D)under the Bureau of International Health Cooperation (BIHC) will serve as the Project Management Office. The chief of UPMD shall be designated as Project Manager. The Director o f the National Center for Disease Prevention and Control (NCDPC) i s designated as the overall Project Technical Coordinator (PTC). A FAPS Desk under the Procurement and Logistics Service (PLS) will handle procurement activities related to the project. Likewise a FAPS Desk under the Finance Service, Office of Management Services will handle the accounting, disbursements, and bookkeeping requirements for the Project. 60 A procurement specialist with adequate qualifications and experience has been assigned to the project and i s already based at the UPMD. A technical specialist to assist the project technical coordinator i s being identified for eventual full-time assignment to the project. B. Centersfor Health Development The D O H issued Department Order No. 1267 s. 2004 designating the key officials specifically responsible for Project implementation at central and regional levels. This same order contains the roles and responsibilities of the Regional Project Coordinator, inparticular: Coordination with technical key players in-charge of national programs and services and their local government counterparts; Ensure the consolidation and integration of all project technical inputs; Evaluation and acceptance of project goods, civil works and technical outputs on contracted services, in consideration of the approved specifications, plans, TOR in coordination with the Provincial and Municipal project stakeholders; Institutionalization and sustainability of project strategies, initiatives and interventions; Resolution of technical issues emanating from project missions, evaluation, assessment, and other similar activities; Ensure that project support for technical programs i s properly coordinated with other projects supporting the same program to eliminate redundancy and duplication of Project inputs; and Mobilize appropriate units within the CHD towards effective project implementation. A Regional Unified Project Management Team (RUPMT) under office of the Director at each CHD shall be adequately organized with regular staff and adequate funds for maintenance and operation to support the Regional Project Technical Coordinator (RPTC). IV. Project Management at Local Governments A. Provincial and City Government The chief executives of the provincial or city governments participating in the Project (Le., the governor or city mayor, respectively) i s responsible for overall implementation of the Project at the Project site, subject to technical guidelines of the DOH. To operationalize this responsibility, the governors and city mayor of Project sites are in the process of issuing a provincial or city executive order establishing their respective project management teams with the following indicative provisions: 1. The provincial health officer or city health officer i s designated as the province or city project director and head of the project management team. He/she shall be the provincial or city executive responsible to the governor or mayor for the day-to-day implementation of the Project. To enable the provincial/city health officer to discharge this responsibility, he/she i s authorized to: 61 0 Establish a project secretariat composed of full-time staff, either seconded from existing offices or contractually hired under the project, which shall provide administrative and technical support services specifically for the project. This secretariat shall include at least one full-time civil engineer who shall be devoted to the full-time supervision of civil works under the project. (Each province/city shall define the specific number, qualifications, function and sourcing of staff for this secretariat.) 0 Mobilize any available resources or instruct existing staff from the provincial/city health office to perform tasks or provide support as necessary for Project implementation. 0 Constitute technical staff of the provincial or city health office to perform the unified program supervision under one team leader the field monitoring activities for family planning, maternal care and control of sexually transmitted infections. 0 Call up and require prompt responses from any provincial/city government unit performing regularly mandated tasks essential to Project implementation. 2. Instruct existing provincial/city government offices to perform their regularly mandated functions essential to project implementation. These include the following offices: 0 Provincial/City Health Offices: technical and operational support for health service delivery 0 Provincial/City General Service Office and Bids and Awards Committee: procurement, bids and awards 0 Provincial/City Budget and Finance Departments: financial management from budget to accounting to cashiering 0 ProvinciaKity Engineering Office: civil works planning, supervision and acceptance 3. Constitute a province/city project steering committee to be chaired by the governor/mayor to meet as necessary to review project plans and progress and discuss issues concerning project implementation. This steering committee should, at the minimum, include: the Provincial/City Administrator; Provincial/City Health Officer; Provincial/City Budget Officer; Provincial/City Engineer; Provincial/City General Services Department Head; Provincial/City Social Welfare and Development Officer; plus a representative for main clients of the Project and representative from local advocates of women's health and safe motherhood. 4. Define the specific coverage and defined scope of all the BEmOCs and CEmOCs to be developed and operated within the province or city, including the participating facilities of the municipal govemments within the coverage of each BEmOC or CEmOC. The provincial/city Project Director (with support from the CHD) shall prepare and submit the civil works plans, equipment lists and specifications, staffing plans and operating .budgetplans for the facilities included as BEmOC or CEmOC sub-projects in each Project site. 62 B. Municipalities in Project Provinces As chief executives of their respective municipalities, the municipal mayors shall be responsible for their local government's participation in the project. To operationalize this responsibility, each mayor will be asked to issue a local order that should contain the following key provisions: 1. Designation of the municipal health officer as the project coordinator for the municipality, with responsibility to attend to the implementation of project activities involving the municipality. 2. Instructing the municipal health officer to organize the Women's Health Teams, from among the existing staff of the municipal health office and the barangay health workers, as well as trained birth attendants in the community. The organization and functions of these teams shall follows the guidelines to be issuedby the DOH. 3. Implementing the enrollment of qualified indigents from the municipality under the Sponsored Program of PhilHealth, based on guidelines issuedby PhilHealth. 4. Instructing the municipality's rural health units and component barangay health stations to become part of the network of facilities and staff comprising the area served by the BEmOC and CEmOC designated by the provincial government. The guidelines for the organization and operations of these networks of facilities shall be issued by the DOH. Second Women`s Health &Safe Motherhood Project Overall Implementation Structure Governor / City Mayor Municipal Mayor Provincial / City Health Municipal Health Officer Cen'uai Offices Provincial / City Government Offices and I Government Offices Centers of Health Facilities and Facilities Development I 63 Second Women's Health &Safe Motherhood Project DOH Central Office Structure I Secretary of Health I Office of External Affairs - Usec. Alexander A. Padiila Disease Prevention Project Director ,,.,............. ~ 1 Control Dr Myrna Cabotaje Unified Project Procurernent Project Coordinator Management Division Dr Virginia B Ala Assistant Project Project Manager FAPs Desk FAPs Desk Coordinator Connie bberan Edison Cetvantes Zetiaida Recidotu ' I Program I - I Managers for Project MCH, FP, ARH for Loans Operations for STI/H IV 1 I I Directors of World Bank Desk ProcurementOfflcer Homergene Poquez HHRDB, Heidi Kaw Desk Officer/Asst Project ~ NCHP, Manager NEC, LoveiieZulueta HPDPB, Project Officer BLHD, Des delos Reyes NCHFD Asst Project Officer SecondWomen's Health 8Safe Motherhood Project DOH Centers for Health Development Structure I Secretaryiof Health I ICenter for Health Development 1 CHD Director Regional Unified Pro]ec t Management Team Health Operations Local Health Division Assistance Division Provincial Health Team 1 DOH Representative 64 Second Women's Health &Safe Motherhood Project ProvincialGovernment Sbucture Governor Project Steering Committee Other Provincial Provincial Health Officer Government Provincial Proiect Director Offices I+ I - General Services - Planning 8 Dev't - Engineering Project Secretariat -- Finance Budget Provincial Health Office , , , I , `>;, , i'_ , I Provincially Owned Facilities .- -- ---- I & -7` :,- ~ .- ---.-1 _--I,I ILHZ 1 ::> I e<--- -.--..ILHZ 2 ILHZ 3 ILHZ 4 --._ :,,? _/---- `x. ,,' <<.-- / e - - I Municipally Owned Facilities I SecondWomen's Health &Safe Motherhood Project City Government Structure City Mayor Project Steering Committee City Health Officer Government City Project Director Offices - General Services - Planning & Dev't - Engineering Project Secretariat -- Finance Budget City Health Office I City Owned Faciiities 65 Second Women's Health &Safe Motherhood Project MunicipalGovernment Structure Municipal Health Officer IMunicipal Mayor Y I 4-7 I 1 Municipal Health Office Rural Health Unit Team 1 Team 2 Team 3 66 Annex 7: FinancialManagementand DisbursementArrangements PHILIPPINES: SECONDWOMEN'SHEALTH& SAFE MOTHERHOOD Summary of the Financial Management Assessment: Country Issues: Funds from the Bank take at least 17 days from loan release until it gets credited to the special account of the project. Funds from the Bank go to the Bangko Sentral ng Pilipinas (BSP) for the account of the Bureau of Treasury (BTr). I t takes about 1to 3 days for the BSP to notify the BTr of the receipt of the loan proceeds. Upon receipt of the notice from BSP, the BTr notifies the Department of Budget and Management (DBM) within 1 to 3 days with a copy to the project of the availability of funds. Based on this notice, the DBM issues a Notice of Cash Allocation (NCA) within 5 to 10 days to the BTr, copy to the project, which serves as the authorization for BTr to release the loan proceeds. The BTr then remits the loan proceeds within 1 to 3 days to the special account accompanied with a notice which i s copy furnished the project. FinancialManagement: All aspectsof financial management of the Project shall be performed by the organic Finance Service, which includes a Foreign-Assisted Projects Desk, of DOHthat reports directly to the Office for Management Services headed b y an assistant secretary. Accounting Policies and Procedures and Management Information System: The Project shall adopt the accounting policies and procedures prescribed under the New Government Accounting System (NGAS) which i s prescribed by the Commission on Audit (COA). A computerized version of the NGAS has been installed and i s now on a parallel run. The NGAS, however, i s basically an accounting reporting system and, hence, does not generate other information such as physical accomplishment reports and procurement reports that are necessary for project management. These other reports required for project management will be generated by other systems in the project such as the procurement management system and the monitoring and evaluation system. The organic FM system will be supplemented by sub- systems for transactions that are unique to the project such as performance-based grants. Simple accounting system will also be designed for the WHT grants which will be administered at the BEmOC and CEmOC level. These supplemental systems will be designedand installed by DOH FMServices who will also train the FMstaff of all participating sub-national agencies. Staffing: The sub-units of the Finance Service has the necessary core staff complement. However, these must be augmented with contractual staff the number and timing of hiring of which will depend on the volume of transactions of the Project. A staffing plan will be submittedto the Bank before negotiations. Supervision: The supervision of the Project shall be done by the United Project Management Office with supports from the concerned organic units of the DOH. The Internal Audit Group can also provide assistance to ascertain the implementation of prescribed policies and procedures and to recommend necessary corrective measures. RiskAssessment: The riskthat the Project faces at this time are: ( i) delay inthe remittance of loan proceeds to the special accounts; (ii)the financial management reporting system will not be in place by loan effectiveness; (iii)the financial management unitmay not havethe right 67 number of staff complement with appropriate qualifications; and (iv) municipal LGUs may not be able to provide the required counterpart funds for the WHT grant and for the continuous operations and maintenance of the facilities and equipment that will be given to them by the provincial LGUs in the form of grant; and (v) DOH may not be able to provide the necessary counterpart contribution on a timely manner. In order to minimize these risks, the following should be undertaken: 1. To avoid cash shortage due to delays in the remittance of funds from BTr to the special accounts, as well as other delays in fund flows such as those caused by slow liquidation of expenditures, beneficiary provincial and city LGUs concerned shall be required in the memorandum of agreement to maintain a revolving fund as seed money to cover their anticipated share in project costs for three months, both in the form of on-lent funds or grants from the DOH. DOH shall also be required to deposit into the project account their counterpart contribution equivalent to three months. 2. Design and installation of supplemental systems for unique transactions to the Project and linkmg these sub-systems to the organic systems of the DOH, and the provincial LGUs. 3 . Training of the financial management staff of D O H and the provincial and municipal LGUs on the supplemental systems. 4. Require the LGUs to submit to D O H an operation and maintenance plan for the duration of the project and to establish and fund a special fund for the operations and maintenance of the facilities and equipment. In addition, institutional arrangements and covering memorandum of agreements among the DOH, and the pilot beneficiary provincial and city LGUs and participating municipal LGUs should be finalized by project negotiations. Audit Arrangements: The external audit of the Project's financial reports of the beneficiary provincial and city LGUs and D O H level shall be done by their respective offices of the COA. The COA auditor of D O H shall be responsible for the audit of the consolidated Project financial reports. The audit reports shall be submitted to the Bank no later than June 30 of the following year. The audit shall be conducted in accordance with generally accepted international auditing standards and a Terms of Reference shall be agreed upon between D O H and COA, with a prior Bank approval, no later than September 30 of the year under audit. Traveling expenses of the auditors shall be for the account of the Project and could be paid out of the loan proceeds. D O H has an internal audit group which reports directly to the Office of the Secretary. With a staff complement of eleven, they do an internal audit of foreign assisted projects on a need basis. They can therefore, audit the Project if necessary prior arrangements are made. 68 DisbursementArrangements: A. Loan Proceeds Two special accounts (SA) will be maintained for the Project with the Land Bank of the Philippines. The loan proceeds from the Bank will pass through the National Treasury and then to the Special Accounts of DOF and D O H to fund their respective components. SA No. 1will be maintained b y D O H to fund D O H Central-driven activities under Components A and B. SA No. 2 will be maintained at the DOF for on-lending to Batch 2 LGUs to finance procurement of civil works, equipment and other commodities under Component A. DOF, with the endorsement of DOH, will release funds directly to the beneficiary Batch 2 LGUs with notice to DOH. The beneficiary provincial and city LGUs will disburse money directly to contractors of goods and services it will finance including procurement of civil works, goods and services which will be passed on as grants to the municipal governments. The LGUs shall maintain separate bank accounts for the bank loan proceeds. Authorized allocation for D O H Special Account No. 1 shall be USD 1,300,000 while the authorized allocation for D O F Special Account No. 2 shall be USD 150,000. The Bank funding will be in the form of a 20-year, USD 16 million fixed spread loan, inclusive of an 8-year grace period. Disbursements under the Project shall be based on the agreed eligibility/financing percentages in the Loan Agreement and shall comply with the Bank's policies and procedures on disbursements and financial management as reflected in its Disbursement Handbook. N o advances shall be allowed to be paid from the SAs. Reimbursements shall be made only for eligible and duly supported expenditures. All expenditures will have adequate supporting documents. Attachments of supporting documents to the SOEs will be based on threshold limits for SOEs without attached supports. All other withdrawal applications above the SOE threshold will be supported by full documentation and signed contracts. Withdrawals from the loan would be through the submission of duly signed Withdrawal Applications and SOEs, with option to convert to a periodic disbursement method using Financial Management Reports (FMR). In any case, FMRs consisting of the financial report and the physical progress report as well as the procurement report shall be required to be submitted. The format of such report has been agreed upon. The following FMRs shall be submitted: 1. FinancialReport : Statement of Sources and Uses of Funds -Should be the same format as the Physical and Financial Status Report but should be in financial terms which should at least include Current and Cumulative columns. 2. Physical Progress Report - Must have breakdown by components and sub-components. The financial columns must be linked to the financial reports in terms of the figures reflected. This will be submitted on a quarterly basis. 69 3. Procurement Report - Current report on annual procurement plan with addition of forecast and status in terms of stage and amount. This will be submitted on a semi- annual basis. Financial Covenants The following financial covenants shouldbe included inthe loan agreement: 1. That the project maintain an adequate financial management system with appropriate books of accounts and in accordance with generally accepted accounting principles; 2, Annual audited fipancial statements for the Project shall be submitted no later than June 30 of each year; 3. That a separate bank account shall be maintained for the loan proceeds; 4. ' Project municipalities shall be required to maintain a revolving fund as seed money for their anticipated expenditures under the Project; 5. Provincial LGU beneficiaries shall be required to enter into a memorandum of agreement (MOA) with each municipality LGU. Such M O A shall include the following covenants: Resolution of the sanggunian bayan of the municipality of a budget allocation for the operations and maintenance and other recurrent costs of the facility financed b y the provincial LGU. w Resolution of the sanggunian bayan approving a budget allocation for the procurement of family planning products and to enter into an agreement with DOHfor the swapping of these products with essential drugs. 70 Annex 8: Procurement PHILIPPINES: SECONDWOMEN'SHEALTH & SAFE MOTHERHOOD General Guidelines: Procurement for the proposed project would be carried out in accordance with the World Bank's "Guidelines: Procurement Under IBRDLoans and IDA Credits" dated May 2004; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004, and the provisions stipulated in the Legal Agreement. While the new Philippine procurement law (RA 9184) i s reasonably in harmony with the Guidelines at the NCB level, the Procurement Schedule of the Loan Agreement will include an annex detailing the procedures under the national law that are not acceptable to the Bank. The general description of various items under different expenditure categories for the first 18 months are described below and summarized in attached Procurement Plan. For each contract to be financed by the Loan, the different procurement methods or consultant selection methods, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank project team in the Procurement Plan. The Procurement Plan will be a rolling plan that will be updated at least semi- annually or as required to reflect the actual project implementation needs and improvements in the institutional capacity of DOHand the LGUs. Accordingly, procurement of inputs for project- related activities in Batch 1 LGUs, which will be financed separately under LOGOFIND, will follow the procedures described in the LOGOFIND (Loan No. 4446-PH) Loan Agreement. Procurement of Works: Works (US$ 3.50 million equivalent) to be procured under this project include construction, improvement or rehabilitation of various health facilities such as Rural Health Units, District and or Provincial Hospitals and Regional Hospitals to meet the technical requirements of BEmOC or CEmOC, and a few birthing homes. N o international competitive bidding (ICB) i s expected under the proposed project due to the small size and dispersed nature of the subprojects. Contracts estimated to cost US$ 50,000 or more will be procured following National Competitive Bidding (NCB) procedures acceptable to the Bank. Small works costing less than US$ 50,000 will be awarded based on shopping procedures, by comparing priced quotations obtained from several contractors, as defined in Para. 3.5 of the Guidelines. The Philippine Government's Harmonized Bidding Documents (dated August 2004) for Works will be used for NCB and Small Works. Works subprojects meeting the requirements of paragraph 3.8 of the Guidelines, may with the Bank's prior agreement, be carried out by Force Account by LGUsinaccordance with the provisions of said paragraph of the Guidelines. Procurement of Goods: Goods (US$ 2.60 million equivalent) to be procured under this project includes various health goods/pharmaceuticals, medical equipment/instruments/supplies, office/IT equipment and BCC materials. Proprietary pharmaceuticals and FP commodities will be procured following Direct Contracting procedures. Except for specializedhealth equipment to be sourced from outside the country, requiring ICB or International Shopping, goods estimated to cost US$50,000 or more per contract will be procured following national competitive bidding (NCB) while those goods estimated below US$50,000 will be procured following national shopping procedures. The Bank's SBD will be used for all ICBs, while the Philippine Government's Harmonized Bidding Documents for Goods (dated August 2004) will be used for 71 NCB. DOH i s considering adopting the Bank's SBD for Health Goods for procurement of pharmaceuticals as it provides more relevant provisions for health goods. Selection of Consultants: Consultant services, estimated at US$ 2.70 million equivalent, will * include the provision of technical assistance for (i) advocacy and promotion / behavior change communication, (ii) development of operational and regulatory guidelines, (iv) monitoring and evaluation, (v) baselinehesearch and dissemination, (vi) support system for WHSMP Service delivery/ FP commodity provisions, (vii) client classification scheme and (viii) development and implementation of pilot interventions for high risk groups. This will also include other services for training systems development, planning and preparation, demonstration, research and special studies, and project management. Selection of consultants and their contracts will be mostly based on the Standard Request for Proposal issued by the Bank and as appropriate the Philippine Government's Harmonized Bidding Documents for Services (dated August 2004). It i s likely that the contract for the baseline survey, selected on basis of the Bank's QCBS during the preparation stage, will be continued during implementation based on Single Source Selection. Contracts of consulting firms estimated to cost US$ 200,000 or more will be selected following QCBS and those estimated to cost below US$ 200,000 will be selected following Consultants Qualifications. Services of Individual Consultants meeting the requirements set forth in paragraph 5.1 of the Consultant Guidelines shall be selected under contracts awarded to individuals in accordance with the provisions of paragraphs 5.1 through 5.4 of the Consultant Guidelines Non-consulting Technical Services. The project will provide funds estimated at US$ 1.0 m to finance communication services related to behavioral change activities. These technical services will be procured following shopping procedures acceptable to the Bank. The advocacy strategy which will be developed under the project will be the main consideration in defining technical specifications. Requests for Quotations will be made available to service providers meeting the minimum public ratings or other criteria (to measure communications effectiveness) as determined in the strategy. Training and Workshop. About US$ 1.60 million will be allocated to finance project related workshops and trainings, including related expenditures such as travel (accommodation, meals, airfare, etc.) enrollment cost and materials, and will be procured in accordance with existing Government prescribed procedures and limits acceptable to the Bank. Performance-Based Grants. Project budget will be available to provide funds, about US$ 3.60 million, for selected LGUs or health service providers for achieving desired project performance outputs, in accordance with the procedures acceptable to the Bank, as provided in the Operating Guidelines for Performance Grants as detailed inthe PIP. Notification and Advertising. In accordance with the Guidelines, contract award as appropriate will be published on-line with UNDB and dgMarket. While advertising will be in accordance with the Guidelines, electronic publication of Specific Procurement Notice will follow the Government's procedures. 72 Assessment of the agency's capacityto implementprocurement An assessment of the capacity of the Implementing Agencies to implement procurement actions for the project was carried by Noel Sta. Znes, Procurement Specialist (EAPCO)with participation from DOHand LGUs, between the period August to October 2003. The assessment included the review of the procurement policies and procedures adopted and implemented in the DOHin the recent past, including the 2002 PCA for SEMP2 done by Yolanda Tayler, and Project Completion / Supervision Reports for earlier and current operations in the Health Sector (i.e. UHNP and WHSMP, and ECD and SEMP2) inthe country. The assessment included the review of the organizational structure for implementing the project, skills of staff at various levels, quality and adequacy of the supporting systems and the interaction between the project staff that will be responsible for project procurement and IAs relevant central unit for administration and finance. The assessment found that DOHhas a team of staff trained in Bank's procurement procedures and participated in previous Bank financed projects. The conclusion of the assessment i s that while DOHmay no longer be considered a high risk category agency, and while there had been recent improvements in the DOHprocurement environment, as indicated in the December 2003 CPAR update, the reform measures have yet to be translated to efficiency in the turn around of transactions at various levels of procurement and payment processes, particularly in the selection of consultants and procurement of health goods. At the LGUs, most of the issues/risks concerning the procurement component for implementation of the project have been identified, including - (a) resistance from interest groups on changes in LGUprocurement arrangements /procedures (b) potential negative political interference in procurement decisions, (c) weak or nil capacity of LGUs to implement procurement following Bank procurement guidelines and R.A. 9184 (the Government's new procurement law); (d) long, fragmented and multi level plannjng and procurement, and (e) inadequate capacity in planning, implementation and record keeping. Another critical implementation risk that i s likely to impede implementation of the project's procurement activities i s the ability of the LGUs to commit funds in view of the limitations /restrictions of the new LGU-NG cost sharing arrangements. Overall risk assessment for the project i s highrisk category. The following will be implementedby DOHunder the project to mitigate the risks, a. B y negotiations, DOHto appoint or confirm the designation of full time (i) Procurement Specialist with qualification^'^^, experience and TOR acceptable to the Bank to coordinate and help implement procurement at the DOH,and oversee and supervise the procurement by the LGUs, and (ii) technical person who will be responsible for the technical inputs (e.g. TORS, specifications) for procurement and for coordination with NCDPC management and staff; b. B y negotiations, DOHto issue the Procurement Implementation Manual including the . SBDs, technical specifications for goods and BER forms to be used for each type of procurement method; l3PS should have (i) undergoneformal procurement training under World Bank procedures, and (ii) minimum of 5 years relevant experience in health goods procurement 73 c. B y negotiations, the Procurement Specialist in collaboration with the LOGOFIND PMO, to carry out procurement action for the Batch 1 LGUs by way of producing the plans, specifications and TORSincluding the BiddingDocuments for works, services and goods for the projects' first 18 months and for project-related activities funded under LOGOFIND; d. B y no later than one month after negotiations - UPMD to conduct Project Launch Workshop for LGUs and other stakeholders for the Batch 1LGUs And CHDs Coverage of PLW will include the World Bank procurement guidelines and procedures and RA 9184. Project Procurement Implementation. The Department of Health (DOH)i s the lead implementing and coordinating agency, and will be mainly responsible for overall leadership in procurement and project implementation, excluding project-related activities for Batch 1LGUs which will be financed separately under LOGOFIND. The project procurement will be managed and supervised by the Unified Project Management Division (UPMD) under the Bureau of Health and International Cooperation (BIHC) at DOH.Procurement of goods, works, non-consultant services and selection of consultants for national inputs will be handled by the DOH. Procurement and implementation of goods and works inputs for Batch 2 LGUs will be undertaken under the supervision of the WMD. Pooled Procurement (as described in Component A of Annex 4), which i s proving to be a more efficient approach for LGU-level procurement, i s plannedto be implemented at the Project's provincial level for the purchase of Project-relateddrugs and contraceptives for distribution in publicly-owned facilities. Procurement Plan A Procurement Plan detailing the activities and procurement methods for the first eighteen (18) months was drafted and included in the PIM. Those that will be financed under the project are listed under Appendix 8.1. This plan has been agreed between the Borrower and the Project Team on December 8, 2004. It will also be available in the Project's database and in the Bank's external website. The Procurement Plan will be updated based on the guidelines for the updating of the Procurement Plan which should be agreed at negotiations and reflected in the agreed minutes of negotiations. Frequency of Procurement Supervision Based on the overall risk assessment a twice a year field supervision missions visit including post review of procurement action i s to be implemented in addition to the prior review supervision to be carried out from the Bank's Manila Office. With respect to each contract not subject to prior review, the procedures set forth in paragraph 4 of Appendix 1to the Procurement and Consultant Guidelines will apply at an initial ratio not less than one (1) in five (5) contracts. This ratiomaybe be adjusted based on the satisfactory performance of the executing agencies. 74 Appendix 8.1 ProcurementPlan Detailsof the ProcurementArrangement (This procurement plan agreed between DOHand the Bank covers the first 18 months of the activities that will be financed under the Project. Project-related activities that will be financed under LOGOFIND are also detailed in the PIM, to assist in coordination between the two projects. Goods and Works and non-consulting services. (a) List of contract Packages, for Batch 1project sites to be implementedby DOH,which will be procured following NCB and Shopping procedures. Those inputsfor Batch 2 i 1 1 project sites will be identified and agreed with the Bank b y Year 2 r 1 I 2 I 3 I 4 I 5 I 6 I Ref. No. Contract Estimated Procurement Review Expected (Description) cost ( US$ Method by Bank Bid-Opening Million) (PriorI Post) Date 0.20 NCB Prior May 2005 05-CHDG-ROl Western Visayas Med. Center 0.40 NCB Prior Nov 2005 Hospital 2WHSMP-Goods- Lab. / MedEqmt & 0.03 Shopping Post Nov 2005 05-CHD6-01 to Med Inst for Western 03 Visayas Med. Center 2WHSMP-Goods- Lab. / Med Qmt & 0.01 Shopping Post May 2006 05-CHD15-01to Med Inst for Adela 03 SerraTy Regional Hospital 2WHSMP-Goods- Office Equipment& 0.04 Shopping Post April 2005 05-120-01 to 04 Furniture 2WHSMP-Goods- BCC Materials Printing 0.50 NCB Prior Mar 2006 05-CO-06 2WHSMP-NCS- BCCMedia Time and 0.30 Shopping Prior March2006 06-(20-01 RadioSpots (b) The following contracts will be subjected to Bank's prior review: (i) first three the works contracts to be implementedby DOH, (ii) the first contract for works and goods to be procuredby each LGU, (iii) non-consulting technical services all contracts for cemmunication advocacy, (iv) goods estimated to cost US$200,000 per contract, and (v) works estimated to cost US$ 500,000 per contract. Consulting Services. (c) List of Consulting Assignments Batch 1Project Sites. Services for Batch 2 Project Sites will be identified and agreed with the Bank by Year 2 : 75 (b) Consultancy services estimated to cost above US$50,000 equivalent per individual consultant contract and all contracts of firms of US$lOO,OOO or more, equivalent per contract, and Single Source selection of consultants will be subject to prior review by the Bank. (c) Short lists composed entirely of national consultants: Short lists of consultants for services estimated to cost less than US$ 200,000 equivalent per contract, may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. 76 Annex 9: Economicand FinancialAnalysis PHILIPPINES: SECOND WOMEN'SHEALTH & SAFE MOTHERHOOD EconomicAnalysis14 The traditional welfare economics framework justifies government intervention in reproductive health on the grounds of optimization in (1) efficiency and productivity in the use of resources, and (2) equity in the distribution of resources. That is, resources would be used efficiently only when they are allocated among alternative uses such that society derives the maximum possible benefit from them; they would be distributed in a socially acceptable way if poverty i s reduced. Efficiency There would be efficiency if consumers and producers pursuedtheir self-interest in competitive markets under certain conditions. These conditions however are absent in certain markets, giving rise to market failure. Those typically encountered in health care markets occur when there are differences between the private and social valuation of benefits or costs. Market failure in benefit valuation occurs in the following ways, in the case of reproductive health: (a) Externalities. Market failure occurs when the consumption of health services by an individual affects the well being of others so that the latter benefit even without directly consuming the service. When the consumption decision i s made without taking these external benefits into consideration, under-consumption of the service results. For instance, a couple practicing FP are not likely to consider the effects that birth spacing and limiting may have on the overall population growth, and the impact this would have in turn on broader economic and social development outcomes. Or a husband making decisions on contraception may not consider the impact of frequent pregnancies on the woman's health. In another example, high- riskindividuals may consider the benefits to themselves, and even to their partners, of practicing safe sex, but not to the rest of the population. Likewise, prevention of unwanted births or of STI among young adults would have the added benefit to society of increasing the chances of the beneficiary completing hidher education and hence reducing society's future responsibilities for supporting the individual a.nd hidher offspring as well as reducing the chances of abortion. In general, maintaining the mother's health and increasing her chances of surviving childbirth affects not only her health and her child's health directly (factors she would likely consider) but also her ability to care for her other children and her long-run productivity. Project interventions aim to correct these cases of undervaluing of social benefits by reducing both financial and social costs to the woman and her family of utilizing the services, as shown inTable 9.1. l4The framework used here for evaluating the economic aspects of the Project i s based on Knowles and Behrman (1998,2000). 77 nsto mitigate market failures inWHSM services D Type of Definition Failure in WHSM services Project intervention to mitigate failure Market market Failure Externalitie Consumption low levels of consumption of MC, I reduction of financial and non-financial S of a service FP, STI servicesdo not capture costs of M C and FP care to increase affects the full benefits to society, including women's use of services and thereby health or indirect benefits to the children maximize social benefits, including: welfare of and family and to the rest of o performance grants for PhilHeath other society enrolment coverage, facility-based consumers I husband's decision on deliveries, advocacy for contraception may not consider community-organized impact on woman's health layaway/savings schemes, transport arrangements, etc. o zero co-pay for use of WHSM services inPhilHealth benefit package o family-friendly birthing facilities o subsidized services inBEmOC, CEmOC facilities o STI outreach to high-risk groups o WHT outreach services to all pregnant women in the barangay o commodity swap and revolving fund scheme to ensure contraceptive security and drug availability 1increased information, reduced costs for men, including: o FP advocacy for men o itinerant VSS services Public Consumers I Insufficient stewardship and 1preparation of national guidelines and goods who do not research by D O H results in protocols on service delivery pay for a general lack of knowledge of 1pilot studies on effective approachesto service efficient approaches to WHSM reach young adults, FSWs and OFWs receive the service delivery among providers same benefits and LGUs as those who Pay Incomplete Consumers Ilack of information on the risks Provisionof information, education, and information make choices related to unskilled attendance communication on MC, FP methods, on the basis leads to continued deliveries by and STI prevention to women of of TBAs reproductive age, their partners, and to incomplete Imisinformation on effectiveness the youth at the barangay level information and side-effects of FPmethods 1Provisionof IEC onPhilHealthbenefits leads to distortions in demand Ilack of information on how to access services or on PhilHealth benefits leads to underutilization of services Information Buyer and IPerception among women that 1Advocacy on safe delivery and asymmetry seller have TBAs have appropriate skills redefined role for TBAs different IProviders better informed of 1Zero co-pay for WHSM services for SP levels of PhilHealth benefits do not pass members in public facilities 78 Table 9.1 P: ject intervent 1s to mitigate market failures in W SMservices Type of Definition Failure in WHSM services Project intervention to mitigate failure Market market Failure information these on to consumers; continue high co-pays Taxes and Governments 1 subsidized NSD in tertiary care 1Improved sccessibility of NSD services subsidies provide facilities leads to overuse of at BEmOC level subsidies to tertiary care services I Free contraceptives and FP services for or impose 1 free pills and injectables in public all methods to be limited only to poor; taxes on facilities distort commercial I Promotion of all methods, with full services or market; distort clients' choice of information to clients on each method, inputs used method including on cost-effectiveness inproducing these services Monopoly One seller in IQuasi-monopolies in drug market IImprove efficiency of public channels a market lead to excessively high prices; for distribution of drugs and results in IHigh profit margins allow contraceptives high prices commercial suppliers to IEncourage social marketing to reduce concentrate on high end of price effects of a monopolistic market, ignore others commercial market.for contraceptives Inefficient Government I Inefficient targeting - free 1Market segmentation to reduce free- government produces contraceptives to all clients, rider effects with access to free services services including non-poor contraceptives while protecting the poor inefficiently I free M C and FP services in public 1Encourage financial sustainability inthe facilities are an unsustainable through user fees for non-poor, absenceof burdenon the public budget PhilHealth reimbursements, budgetary competition I Resource constraints such as the support lack of finances, equipment, and 1Monitoring and evaluation of service skills, or the absence/lack of delivery; impositionof minimum service standards or competition standards through operational guidelines contribute to poor quality of 1Sustainable business and financing plan service by facilities; procurement system; revenue retention 1 Skills enhancement 1 Management contracts for NGOs to design and provide outreach services for high-risk groups 1 Accreditation of facilities and professionals 1 Contracts with private midwives to expand coverage 1 Partnership with private health practitioners to be part of the referral network for STI services and widen the reach of the delivery system (b) Public goods. Incertaincases, health services benefit even those who do not pay for them, so that producers are not be able to charge enough to recover costs since they cannot exclude non- payers from consuming them. Examples of public goods in health are vector control of parasitic disease and public sanitation. Although the WHSM services covered in the Project do not have the nature of pure public goods, the "stewardship" activities of the DOH with respect to 79 development of clinical practice guidelines for WHSM services and research activities to test and evaluate new approaches to reaching high-risk groups will eventually benefit the general population, and are public goods underthis definition. These activities would have the benefit of improving the level of knowledge and skills of providers related to efficient and effective service delivery. (c) Incomplete information. Market failure also arises when consumers do not have complete knowledge of the available choices and the implications of their choices to their well-being. For example, the risks related to unskilled attendance at delivery are not often known to women, given the relative infrequency of incidents of maternal death and the limited probability that a specific woman will be exposed to this outcome. In fact, providers themselves (TBAs especially, but also slulled professionals) may not be aware of this fact, given that the D O H itself has supported deliveries by TBAs in the past. Likewise, misinformation on the relative effectiveness or the side-effects of different FP methods or on the effectiveness of condoms in preventing the spread of STI/HIV - including among men - may lead to distortions in demand for FP. Inthe market for health insurance, lack of information on benefits covered by PhilHealth leads either to reduced demand for membership by potential members or by LGUs (on behalf of indigents) or to underutilization of benefits. Realizing the importance of behavior change to achieve WHSMP2 objectives, the project will undertake an intensive and appropriately designed information, education, and communication campaign to help clients make informed choices. (d) Information asymmetry typically results in the health care market because one party - generally the provider - has more information on the nature of the product (health care) than the consumer. Often this results in over-use of services in the form of "supply-driven'' health care. One commonly cited example i s the higher than necessary rate of caesarean sections resulting when insurance coverage i s introduced (as i s happening today under PhilHealth). At the present time, though, this problem i s less relevant for poor clients for whom under-utilization, not over- utilization, i s the more common problem. Perhaps of more relevance i s the perception on the part of women that TBAs have the necessary skills and knowledge to provide safe deliveries, and to refer them to higher levels of the system at the appropriate time in the event of complications. Incertain eventualities, this confidence may turn out to be misplaced. Another case of distortion resulting from asymmetric information i s when providers are able to take advantage of their greater access to information (compared with their clients) on increases in PhilHealth benefit levels by increasing their prices correspondingly with each benefit increase, without reducing members' co-pays, as has been documented in the past. Marketfailures in cost valuation occur in the following way: (a) Taxes and subsidies. Items can be subsidized, commonly by government, causing private costs to be lower than social costs, in turn creating an incentive to use more than the efficient level of the service. For example, when normal spontaneous deliveries are offered at subsidized cost in publicly-owned tertiary-level facilities, this results in inefficient use of these facilities. Also, the provision of free.pills and injectables in public facilities has led to distortions in the price of these contraceptives in the commercial market, resulting in,under-provision and under- competition. This also results in distortions in relative prices to the consumer of the different contraceptive methods and in an overall method mix that i s not optimal in the long-run, 80 particularly once donations are withdrawn. Table 9.2 shows how the cost per couple year of protection (CYP) of providing modem methods of contraception would change with a change in method mix. For example, under one scenario (scenario 4), if the use of permanent methods increases from the current level of 10.6% to 16%, as targeted in the project, split equally between BTL and NSV (8% each), and in addition, if half of pill and injectable users switch to I U D s (the most cost-effective method), the total cost per CYP of providing modern methods would decline by 36%, from PhP271.8 to PhP173.9. The design of the WHSMP2 service package includes mechanisms and approaches to reduce inappropriate use of tertiary facilities and to facilitate the transition to a more cost-effective method mix following the withdrawal of donated contraceptives (see Table 9.1). (b) Monopolv. If the provider i s a monopolist, it could charge more for its service, restricting consumption below efficient levels. In the Philippines, the existence of quasi-monopolies in the distribution and retail markets for drugs, and effective monopolies by many branded products relative to generic equivalents are believed to contribute to the exceptionally high drug prices. High profit margins in turn allow suppliers to concentrate on the higher end of the market and ignore the rest of the population, in particular low income groups. Until recently, this situation has affected the market for WHSM drugs more so than for contraceptives, given the presence of donated contraceptives. However, it i s expected that the monopolistic character of the drug market in general will have the same impact on prices of contraceptives even as subsidizeddonated products disappear from the market. Hence, while commercial provision of contraceptives may increase, they cannot be expected to increase sufficiently, nor their prices to decline sufficiently to meet the needs of lower-income families. The Project will help counter these distortions in the markets for drugs and contraceptives by strengthening public sector channels for drug and contraceptive provision and by supporting social marketing of contraceptives. (c) Inefficient government service provision also inflates costs or lowers quality, leading to under-supply of services aimed at the lower income groups. In addition, inefficient targeting, as evidenced by the high levels of use of publicly-subsidized services b y the non-poor, results in an unsustainable burden on the public budget. The project will support interventions to improve the quality of publicly-provided services and to improve the targeting of these services to the poor (see Table 9.1). Equity If resources are allocated solely on the basis of market mechanisms, many people would be unable to achieve a minimally acceptable standard of living where there i s a highly inequitable distribution to start with. This makes redistribution a convincing justification for government intervention within the standard economic framework. The equity dimension i s underscored by recent data on attendance at delivery and contraceptive use by socio-economic status" reported in Table 9.3. Hilots (traditional birth attendants) attend l5Socio-economic status is based on the presence of housing conveniences (electricity, radio, television, telephone/mobile phone, refrigerator or freezer) and ownership of bicycle, motorcycle, and car/jeep/van. 81 to the majority (63%) of deliveries by poor women nationwide, in contrast to the non-poor who are mainly assisted by a health professional. This implies that it i s the poor who are mainly unable to mitigate the risks accompanying childbirth because they either prefer, are uninformed, or do not have options other than to use unskilledattendants in a home setting. 82 -T q .o, x 5 5 0 c Eos 0 3> U K (d m I- K a, c g a, L) .-X E .-K a, 0, K r (d 0 2 5 '3 $. 7 c0 .F'j 1 Economic # of children (000) Doctor Nurse Midwife Hilot Others Status Poor 3780 13.0 0.7 21.4 63.0 1.5 Non-poor 5840 46.2 1.2 29.4 22.7 0.4 The majority of the poor (57.1%) also do not use any contraceptives, and those who do tend to use modern methods less frequently (Table 9.4). This may be partly a result of unavailability, unequal availability of FP methods, or a failure of information. For instance, current users with means to pay are crowding out large numbers of poor potential clients in public facilities. An FP market segmentation study confirms that in 1998 about 60% of public sector clients come from middle- to high-income groups, compared to 43% in 1993 (Alano et a1 2003). FP i s also counseling-intensive and counseling requirements vary between methods, making them not equally readily available; since non-pill methods require much counseling, the hard-to-serve segment i s usually not reached or underserved. Poor Non-Poor Number of women (000) 3581 8022 Anv method 42.9 51.5 Modern Method 29.5 37.6 Pill 14.5 15.6 IUD 3.8 3.6 Iniection 3.7 2.8 Female sterilization 5.8 13.3 Male sterilization 0.1 LAM 0.3 0.2 Traditional Method 13.4 13.9 Calendarhhythm 7.7 7.9 Withdrawal 4.6 5.6 Other 1.1 0.3 INSource: o method 57.1 48.5 National Statistics Office, 2002 Family Planning Survey J As shown in Figure 9.1, the use of traditional methods increases with age among the poor. In contrast, among the non-poor, use of permanent methods increases with age. This difference in choice of method could explain, to some extent, why the difference between desired fertility and actual fertility i s higher among the poor. 84 Figure 9.1: Specific Method Distribution by Income and Age Group, 1998 NDS I loo% 80% 60% 40% 20% 0% 15- 23- 32- 40- 15- 23- 32- 40- 15- 23- 32- 40. 22 31 38 49 22 31 38 49 22 31 38 49 Low Income MiddleIncome High Income Total Income Group Table 9.5 shows the difference in cost-effectiveness in the method mix of the poor versus the non-poor. The poor tend to use more temporary methods than the non-poor, particularly the pill and injectables, which are the two most expensive contraceptive methods (PhP682.5 and PhP307.8 per CYP respectively). This i s likely the effect of the distortion in price of these methods relative to other methods, a result of the availability of free donated contraceptives. Permanent methods, although more cost-effective in the long-run, have lower rates of use among the poor, because they cost more at the time of service provision. As a result, average cost per CYP for the poor i s 12% higher than for the non-poor (PhP299.1 versus PhP267.7). There will be safeguards / counseling to ensure that poor women and men understand these methods and are making informed choices. Table 9.5 Cost-effectiveness of method mix of the Door versus the non-Door Method mix Weighted Method mix Weighted cost for poor (%) cost per CYPfor non-poor per CYP for for poor (%) non-poor (PhP) Cost per CYP317.3 (*) (PhP) _. ?ills 49.8 158.0 41.9 132.9 kjectables 684.6 12.7 86.9 7.5 51.3 IUD 42.5 13.1 5.6 9.7 4.1 Condoms 259.1 4.5 11.7 4.8 12.4 ~BTL 185.7 19.9 37.0 35.8 66.5 Vasectomy 135.8 0 0.0 0.3 0.4 100 299.1 100 267.7 (*) see Appendix 9.1 85 To address the distributional objective and alleviate poverty, WHSMP2 targets poor disadvantaged women and other vulnerable groups through the interventions listed in Table 9.6. Both supply and demand-side factors are addressed. In particular, demand-side interventions will be pursued that are crucial to changing client behavior such as the provision of full information, education, and communication on MC, FP and STI to disadvantaged women of reproductive age and their partners in all barangays and addressing the direct and indirect costs of facility deliveries, contraceptive use, and STI prevention. Table 9.6. Proiect Interventions to mitigate ineauitv inaccess to WHSM services Barriers to access for the poor Project intervention to improve access Financial barriers to access Increased insurance coverage for the poor through enrolment in the PhilHealth Sponsored Program Direct and full subsidy for facility-based deliveries for poor women not covered by insurance, and for contraceptives not covered by PhilHealth Targeting the poor through a client classification system, and restricting access to public subsidies to the poor Community-organized"paluwagan" system (layaway plan) Physical/geographic barriers to Outreach services to pregnant women by WHT; access itinerant NSV/BTLteams; contracting with private midwives in rural areas to enhance staff-to-population ratios referral system for timely access in cases of emergency Community-based transport arrangements birthingfacilities inremote or coastal barangays where the maioritv are Door Cultural and other barriers to Provision of information, education and access communication, counseling for woman and her partner Skills upgrading, cultural sensitivity training for health workers comfortable accessible facility with accommodations for family and TBA companion FinancialAnalysis Meeting the Increased Financing Needs of the WHSMProgram Government's strategies for improving WHSM outcomes will require substantial additional resources to: (a) upgrade the delivery system; (b) sustain the incremental operating costs for expanded services; and (c) replace the donated contraceptives that will be phased out of the market between 2004-2009. 86 Three strategic measures will be applied to meet these challenges: 0 Diversify the mix of funding sources. Financing of WHSM services will no longer be the sole responsibility of the NG but of a mix of funding sources - LGUs, PhilHealth, NG and out-of-pocket. Financial access for the poor will be addressed mainly by expanding membership in PhilHealth's Sponsored Program and by increasing allocations by LGUs to WHSM services, including for contraceptives. Given that SP membership i s financed jointly b y LGUs and the NG, the ultimate additional burden for protection of the poor will rest, in fact, principally with the LGUs. Expanded membership in PhilHealth for the non-poor, either through its mandatory program for formal sector workers or its Individually Paying Program (IPP) for informal sector workers will also be essential in order to further reduce the financial burden on government, and shift it to the non-poor who can afford to pay. 0 Apply a policy of market segmentation, with non-poor clients (or PhilHealth on behalf of non-poor members) taking an increasingly larger share of the burden for financing services (including previously free contraceptives) and with public funding reserved for the poor. Expanded enrolment in PhilHealth for the non-poor will protect them against the risk of sudden "catastrophic" health expenditures. Seek external funding for initial capital expenditures. Upgrading the human and physical resources of the health care system to meet the higher quality standards and coverage targets of the WHSM Program will require substantial investment funding that i s generally not available from local sources `today. Government will seek loan or grant funding from international donors (such as the World Bank) to meet the large initial investment requirements of the Program. Repayment of loans will be the shared responsibility of the NG and the LGU, as spelled out in Resolution No. 03-11-29-2002. Given the central position of women's health services in the basic health service package, especially at the primary and secondary levels, investments in WHSM delivery systems will in fact have far-reaching benefits for the rest of the health system. For this strategy to succeed operationally, the following actions will be implemented in each project site: 0 For NG/DOH, provide budget support to LGUs, possibly in the form of matching grants, to promote the WHSM Program and assist LGUs in seeking external investment funding; 0 For LGUs: a) increase their budget allocations for (i)WHSM services operations, including for contraceptives, to cover the needs of the poor; (ii)premiums for membership of indigents inPhilHealth's SP b) accelerate the skills upgrading of midwives and physicians in the various WHSM teams to meet the requirements for PhilHealth accreditation; c) accelerate the upgrading of LGU-owned health facilities to meet the requirements for PhilHealth accreditation 87 arrange through the appropriate contracting instrument for public midwives in LGUs without PhilHealth accredited maternity care facilities (BEmOCs) to bring clients for delivery inneighboring BEmOCs. arrange through the appropriate contracting instrument for private midwives with appropriate skills to bring clients for M C and FP services in neighboring BEmOCs implement the market segmentation strategy which would require (i) implementing a client classification scheme to identify the poor; (ii)enforcing the segmentation strategy on a routine basis in its health facilities; (iii) implementing the zero co-pay policy for indigents in LGU hospitals similar to the practice in DOH-retained hospitals. authorize revenue retention and management for LGU facilities that engage in cost recovery promote the expansion of social marketing outlets for contraceptives where appropriate undertake the debt repayment obligations related to external loans 0 For PhilHealth: a) conduct a campaign to expand membership in all its member categories; work with LGUs to expand SP membership; work with LGUs to seek ways to facilitate P P membership such as making membership a requirement for business licensing, etc. b) conduct a campaign to informproviders and members of the WHSM-related benefits c) facilitate accreditation of W H S M service providers PhilHealth's WHSM Service Benefits PhilHealth benefits for W H S M services include the following: Provider setting Services Covered inan inpatient setting all maternal care, FP and STI cases, including normal spontaneous deliveries (NSD)except for the fifth child and onward16, IUD insertion, bilateral tubal ligation (BTL) and vasectomy treatment of STI, including HIV, and laboratory tests for STI screening if done during hospital confinement inaccreditednon-hospital NSDexcept for the fifth childandonward (midwife is requiredto birthingfacilities have established partnerships with two physicians, one for obstetric cases and one for newborn cases) as day surgeries or in IUD,BTLandvasectomy ambulatory surgical clinics Family planning commodities - pills, injectables, and condoms - are not covered by PhilHealth. PhilHealth-accredited rural health units (RHUS)may, however, use their PhilHealth capitation l6An amendment to the National HealthInsurance Law, adopted in 2003 expands coverage for NSDto the 31dand 4" child. However, as of March 11,2005, the implementing rules and regulations for this amendment had not been adopted and the amendment was not yet being implemented. 88 fund for purchase of particular pills and injectables included in the Philippine National Drug Formulary. To enhance PhilHealth's potential as a source of financing for the WHSM Program, the following modifications to the package will needto be introduced: coverage of pills, condoms and injectables coverage of STI screening and treatment in an outpatient setting issuance of implementing rules and regulations for R.A.No. 9241 (amendment to R.A. No. 7875, National Health Insurance Law) that would allow coverage of 3rd and 4thNSD under the maternal package. This would be a condition of effectiveness of the Project. To ensure that PhilHealth policies are in place to enable successful implementation of this strategy, the Secretary of Health, who chairs the PhilHealth Board, will present for Board endorsement a policy statement supporting the national women's health and safe motherhood program and authorizing PhilHealth to participate in various activities of WHSMP2 including piloting, within the project sites, of measures to expand SP and IPP enrollment, accelerate accreditation of WHSM-SP providers, endorse testing of the client classification scheme, and introduce modifications to the PhilHealth benefit package to enhance PhilHealth support for the program. Adoption by the PhilHealth Board of such policy statement will be a condition of effectiveness of the Project. LGU Budgets for WHSM Services LGUs and their health delivery systems are the main players in the implementation of the expanded and upgraded WHSM Program. To finance these activities, LGUs will have to increase their budget allocations for (i) W H S M services operations, including for contraceptives, to cover the needs of the poor; (ii) premiums for membership of indigents in PhilHealth's SP. Cost-sharing arrangements between provincial and municipal governments to cover these incremental costs have been negotiated and are reflected, for each municipality, in the MOASto be signed b y all participating LGUs. Fiscal Impact: The fiscal impact of these incremental expenditures - i.e., incremental budget requirements per year as a percent of total expenditure and total health expenditure for the latest year - have been estimated for each city, provincial, and municipality in the Batch 1 project sites. Overall, the fiscal impact of the project has been shown to be affordable in all cases. 89 Appendix9.1 Noteon Computationof Cost per CYP The cost of pills, injectables, and I U D s are the lower-end prices of these commodities in Well- Family Midwife Clinics, while the cost of BTL and vasectomy were taken from Flavier's (2003). As for the conversion factors, those for pills, injectables, IUD and condom were taken from the Policy Project's FP Market Segmentation report (by Alano et. al). The conversion factor of 8.11 for BTL and vasectomy represents the average remaining reproductive years of persons obtaining BTL or vasectomy. The high conversion factor for pills (15.39 cycles per year) takes into consideration spoilage. The above costs are then adjusted for estimated method failure rate or probability that a woman using the method could get pregnant. The failure rates in the first year of typical (not perfect) use of the method are taken from the 1994 edition of Contraceptive Technology. No. of Units Estimated PNnit Unit per CYP Failure Rate PKYP (%I Pills 20 cycles 15.39 3% 317.3 Injectables 150 vials/injections 4.55 0.3% 684.6 IUD' 150 pieces 0.28 0.8% 42.5 Condom 2.5 pieces 91.2 12% 259.1 BTL~ 1,500 procedure 0.12 0.4% 185.7 Vasectomy2 1,100 procedure 0.12, 0.15%, 135.8 90 Annex 10: SafeguardPolicy Issues PHILIPPINES: SECONDWOMEN'SHEALTH & SAFE MOTHERHOOD The rehabilitation, construction and operation of health care facilities to support the local delivery of the WHSM service package i s not expected to any large and long-term adverse affect to the environment. Most of the civil works activities will involve rehabilitation and upgrading of existing health facilities, with a limited number of new construction. Wastes generated from operating the facilities are expected to not significantly affect the environment if managed, treated and disposed of properly. It i s for this reason that the project i s classified as environment Category B because of its anticipated short-term, manageable and easily mitigable environmental impacts. Very limited land acquisition and resettlement i s anticipated from the upgrading and slight expansion of existing community-based health facilities situated in government land. And as a long-term practice in the country, sites for health facilities are generally situated in government lands or donated-private lands. Indigenous peoples are known to inhabit certain areas of the pilot provinces and are among the targeted beneficiaries of the project. It i s expected that the various project interventions will improve the access of indigenous peoples to improved and more sustainable health care. World BankSafeguardPolicyTriggered Environmental Assessment Policy (OP/BP/GP 4.01). The policy i s deemed triggered due to the anticipated environmental impacts from civil works and from operating the completed health care facilities. EnvironmentalImpacts An environmental assessment (EA) study was commissioned by the Department of Health as part of project preparation. The EA study covers health facilities already identified, which include those located in Bislig and Lingig, Province of Surigao del Sur; Matnog, Magallanes, Donsol, Irosin and Sorsogon City, Province of Sorsogon; and L a Paz and Jaro, Province of Iloilo. The facilities assessedrange from a small barangay (village) health system and rural health unit to district and provincial hospitals. The EA study identified two environmental issues that need to be addressed and these are: (a) environmental impacts from civil works activities; and (b) waste generation from operating the completed facilities. Civil works impacts. The rehabilitation, upgrading andor construction of health care facilities may contribute to the short-term and localized degradation of the environmental quality in the immediate vicinity of the construction site. It may increase the noise and dust levels that could affect the health of construction workers, patients and nearby settlements; degrade the quality of nearby water bodies if excavated materials and solid wastes are not properly disposed of and if sanitary facilities are not provided. It could also endanger the lives of workers if occupational 91 health and safety standards are not practiced at the construction site. These impacts, however, are short-term, localized and limited only during the construction of the facility and can be easily mitigated. Waste generation, handling, storage, treatment and disposal. The operation of completed facilities will generate certain types of wastes that would require proper handling, treatment and disposal. Wastes generated from health care facilities covered by the study consist mainly of general or non-risk health care wastes (80%) and only about 20% are regarded as truly hazardous that may bring about health risks. The EA study reveals that waste segregation i s being practiced at the source but the problem lies with disposal when garbage collectors lumped together all types of wastes into the truck for disposal into the open dumpsite of the municipality. This i s especially true when on-site treatment facilities are non-existent, as in the case of most facilities covered by the study. Hazardous wastes, if not properly handled and stored, pose occupational risks to health workers. If not properly treated and disposed of, hazardous wastes pose adverse health risks to scavengers and nearby settlements and may contaminate the environment. Contamination of ground and surface waters from leachate i s another potential impact, if treatment and disposal are not properly undertaken. Wastewater generation. Wastewater generated from health facilities, if not properly treated before discharge, can pollute water bodies and kill aquatic organisms. EnvironmentalManagementGuidelines The rehabilitation, construction and operation of health care facilities to be financed by the project will be designed in such a way that environmental impacts will be minimized, if not avoided. To this end, the following guidelines will be observed all the time. Civil Works Contracts to include environmental measures. The contracts for civil works activities will include clauses on proper construction site management and strict adherence to appropriate noise and dust standards, disposal of solid wastes, installation of sanitary facilities for workers and the observance of occupational and health safety standards. Blxilding design and site development plan. The buildings will be designed based on sound architectural and engineering practices. Where necessary, on-site treatment facilities (both for wastewater and hazardous wastes) will be required to be included in the site development plan and buildingdesign. Waste Management Materials acquisition and management.Wastes avoidance or minimization can be undertaken in the planning stage of materials acquisition by limiting acquisitions to what i s needed only. There i s also a so-called environment-friendly acquisition. For example, acquiring supplies from suppliers who offer a return-to-dispose feature for their products so that the volume of disposal can be reduced. 92 Waste segregation and identification. A key to effective management is the identification and proper segregation of wastes. Wastes will be segregated at the point of generation. Wastes segregation will follow the DOH-prescribedcolor codes. Observance of sound on-site waste management practices. Wastes will be properly sealed and packed to avoid spillage or leakage and cross contamination with other materials and media. Collection will be done on a daily basis. A waste storage area will be required, especially for bigger facilities, and wastes will be transported on either impermeable trolleys or carts dedicated for this purposed only. Treatment and disposal. A number of options will be made available to the facilities for the treatment of hazardous wastes. On-site treatment may be required, where off-site treatment i s unavailable. The design of on-site treatment facility will follow strict technical and environmental standards to avoid leakage, seepage and contamination of the environment. In some sites, off-site treatment facility i s available such as microwave and autoclave and the participating facility will be required to bring their wastes to the nearest treatment facility. Only those treated or disinfected wastes will be downgraded and considered general wastes for disposal in municipal dumpsites. There are other treatment options, which could be cheaper, but these should be in accordance with existing laws such as the Clean Air Act (RA 8749) and Ecological Solid Waste Management Act (RA 9003). General wastes will be disposed to the existing municipal dumpsite. Wastewater. Participating health care facilities will be required to install appropriate wastewater treatment system, the design of which will depend on the size of the facility, the volume of wastewater generated, the concentration of effluent and the ambient water quality level of the receiving body of water. Capacity building. The capacity of the participating facilities in terms of environmental and waste management will be built and enhanced through trainings and workshops. The project will support establishment of systems for waste storage, disposal of general wastes, installation of onsite capability for treatment and containment, infectious waste sterilization and treatment capability, and materials acquisition management inproject facilities. Involuntary Resettlement (OP/BP 4.12). Most infrastructure works involve the rehabilitation and upgrading of existing health facilities. For Year 1 subprojects, no land acquisition and involuntary resettlement impacts i s anticipated. For the subsequent years, subproject sites and scope of civil works are still to be finalized. Related to this, a Land Acquisition and Resettlement Policy Framework has been prepared and disclosed locally (through lccal posting and discussion with LGUs) to ensure that there are appropriate safeguards in dealing with issues related to involuntary resettlement. The same framework has been posted electronically at the Bank's Infoshop and at the DOH Website. Orientation of project implementing staff and participating LGUswill include orientation on both environment and social safeguards. Indigenous Peoples (OD 4.20). The Province of Sorsogon i s the home of around 53,000 I p s belonging to the agta-cimaron-tabagnon cultural-minority group. On the other hand, some 170,000 manobo/mandayas have been recorded in Surigao del Sur Province. IPSbelonging to 93 the atisulod-buludnon ethnic groups (estimated at 57,000) reside in certain portions of Iloilo Province. O f the 35 municipalities/cities in the three project sites, indigenous peoples were noted in 18 municipalities. Six of these municipalities are situated in Sorsogon, while the other 12 are in Surigao del Sur. A social assessment (SA) was conducted as part of the preparatory activities. The SA indicated that in the pilot provinces, access of indigenous peoples to maternal health services vary, with some currently having access to prenatal care while others totally relying on traditional services. Being among the target vulnerable groups in this project, the project prepared a Draft Indigenous Peoples' Development Plan (LPDP) which outlines the basic strategy and institutional arrangement for reaching and engaging the IP communities in the project sites. A specific IPDP shall be prepared each for Sorsogon and Surigao taking into account the nuances in the situations and existing inter-agency partnerships in the area. These plans will be firmed up prior to loan negotiations, in close partnership with the National Commission on Indigenous Peoples (NCIP) and the concerned LGUs, that would identify the specific measures and implementation arrangements to be made in order to maximize the engagement of indigenous people in the planning and implementation of various project interventions and come up with culturally- sensitive/appropriate strategies in improving the access of IPSto maternal and child care. ImplementationArrangements The Project Management Office at the Central and Regional levels will ensure that the participating health care facilities will adhere to the project's environment and health care waste management guidelines and comply with the relevant environmental requirements and standards. To this end, the approval process of the facility will include compliance to the guidelines and relevant standards. At the facility level, for smaller health care facilities (Barangay Health System, Rural Health Unit), the Facility Head will act as the one-man team and will likely delegate to an Assistant some of the more specific tasks. He has to coordinate his programs and activities with the Municipal Officer so that support services will be made available to him. For larger facilities (district, provincial and regional hospitals), an environmental team will be constituted and will have the following members: Head of the Hospital as the Chairperson, Department Heads, Infection Control Officer or Hospital Hygienist, Chief Pharmacist, Radiation Officer, Senior Nursing Officer, Hospital Administrator, Treasury Manager and Environmental Management Officer/Pollution Control Officer. Each member will be officially designated by the Head of the Hospital and will have his own terms of reference as regards environmental and waste management. The D O H will continue to build the capacity of the participating facilities through trainings and workshops. Compliance monitoring will be a joint undertalung of the D O H and the Department of Environment and Natural Resources (DENR), the primary environmental agency in the country. Compliance to the project's land acquisition and resettlement framework shall be the responsibility of the participating LGUs. To ensure compliance, a) such framework shall be 94 integrated into the Memorandum of Agreement to be executed between DOH and the LGU, and b) the WHSMP PMO shall be tasked in appraising and monitoring projects for possible land acquisition/resettlement. In terms of IF engagement, the Regional and Provincial Offices of the NCIP shall be tapped in the conduct of consultation/forum and IEC activities in IP communities. The same offices will be engaged in the design of specializedculturally appropriate IEC modules materials and teaching aides to ensure that concepts are effectively conveyed. These arrangements shall be formalized in a Memorandum of Agreement between DOH, the participating Provincial Governments and NCIP. Project-related activities to be financed by LOGOFIND will follow LOGOFIND environmental and social safeguard frameworks and guidelines which have been rated satisfactory by the Bank. 95 Annex 11:ProjectPreparationandSupervision PHILIPPINES: SECONDWOMEN'S HEALTH & SAFE MOTHERHOOD Planned Actual PCN review January 16,2003 January 29,2003 Initial PID to PIC January 27,2003 February 12, 2003 Initial ISDS to PIC January 27,2003 February 12,2003 Appraisal June 8,2004 June 21,2004 Negotiations December 13,2004 March 10, 2005 Board/RVP approval April 21,2005 Planneddate of effectiveness July 25, 2005 Planneddate of mid-term review December 31,2008 Plannedclosing date June 30,2012 Key institution responsible for preparation of the project: Department of Health A Japanese PHRD Grant amounting to US$1,341,380 (TF051880) was receivedby the recipient and 'used for project preparation to contract consulting services for the following preparation activities: 0 Project Preparation Management (including prepare full D O H project proposal, prepare WHSM strategies and investment plans of project sites, complete ICC requirement, finalize Project Implementation Plan, Procurement Implementation Manual, FM Manual, prepare MOA for signingby LGUs and DOH,project cost tables) 0 Technical studies on: o Maternal Care, Family Planning, STI/HIV, ARH o FPCommodities -contraceptive self-reliance study o Advocacy and Behavioral Change Communication o Safe Blood Supply o WHSM Human Resources o Monitoring and Evaluation (including key performance indicators, pre-test and baseline survey) 0 Safeguards studies: o Environment and Waste Management Operating Guidelines o Environmental Assessment Report o IP Strategy o IPDPof Sorsogon and Surigao del Sur o Resettlement Policy Framework 96 Bank staff and consultants who worked on the project included: Name Title Unit Teresa Ho Task Team Leader EASHD Florence Tienzo Health Specialist EASHD Noel Sta. Ines Procurement Specialist EAPCO Emesto Diaz Senior FinancialManagement Specialist EAPCO Josefo Tuyor Operations Officer (Environment) EASEN Jose Tiburcio Nicolas Operations Officer (Social Safeguards) EASSD Nina Masako Eejima Senior Counsel LEGEA Anthony Toft Senior Counsel LEGEA HungKimPhung Senior Finance Officer LOAG3 Thomas Merrick Consultant WBIHD E.Gail Richardson Consultant MNSHD Dale Huntington Consultant MarioTaguiwalo Consultant Janet Hohnen Consultant Susan Stout Peer Reviewer HDNGA Daniel Cotlear Peer Reviewer LCSHD Elizabeth Lule Peer Reviewer "HE Cynthia F.Manalastas Program Assistant EACPF Sabrina Terry Program Assistant EASHD Parivash Mehrdadi Program Assistant EASHD Bank funds expended to date on project preparation: 1. Bank resources: US$227,821 2. Trust funds: (PHRD TF051880: Recipient-executed) US$457,371 3. Total: US$685,198 Estimated Approval and Supervision costs: 1. Remainingcosts to approval: US$lO,OOO 2. Estimated annual supervision cost: US$90,000 97 Annex 12: Documentsinthe ProjectFile PHILIPPINES: SECONDWOMEN'SHEALTH& SAFEMOTHERHOOD 1. WHSMP2 Project Proposal (Volumes 1& 2) 2. Draft Project Implementation Plans 3. Project Preparation Reports: a. Development of Support and Health Facilities Referral Systems for the Provision of Safe BloodSupply b. Development of Support Systems for the Provision of Accessible and Affordable W H S M Commodities and FP Services c. Reducing Unmet Needs for FP Information and Services d. STI/HIV e. IntegratedWHSM Project Proposal f. Maternal Care (Appropriate Interventionto Reduce Maternal Mortality) g. Draft Indigenous People's Development Plan h. Resettlement Policy Framework i. AdolescentReproductiveHealthResearchandProgramAssessmentProject 4. Final W H S M Results Framework 5. Provincial / Faculty Mapping Process 6. IntegratedNeeds Assessment Tool 7 . Project Preparation Aide Memoire (Preparation, Pre-Appraisal and Appraisal Missions) 8. D O HDepartment Order No. 1267 s. 2004 DesignatingDOHKey Officials Responsible for the Implementation Activities of the Second Women's Health and Safe Motherhood Project (WHSMP2) 9. NEDA letter dated 12May 2004 re: ICC-TB endorsement of WHSMP2 for ICC- Cabinet Committee approval in its meeting of May 6, 2004 10. National Health Insurance Act of 1995 (R.A.7875) 98 Annex 13: Statement of Loansand Credits PHILIPPINES: SECONDWOMEN'S HEALTH & SAFE MOTHERHOOD Difference between expectedandactual Original Amount in US$Milhons disbursements R O J e C t D FY Purpose IBRD IDA SF GEF Cancel Undlsb Orig Frm Rev'd PO77012 2003 KALAHI-CIDSS PROJECT 100.00 0.00 0.00 0.00 0.00 96.97 -2.19 0.00 PO73488 2003 ARMM SocialFund 33.60 0.00 0.00 0.00 0.00 33.26 1.16 0.00 PO71007 2003 SecondAgrarian ReformCommunities 50.00 0.00 0.00 0.00 0.00 49.50 1.40 0.00 Devel PO69491 2002 PH-LGU URBANWATER APL2 30.00 0.00 0.00 0.00 0.00 30.75 6.21 0.00 PO69916 2002 PH-2ndSocial ExpenditureManagement 100.00 0.00 0.00 0.00 0.00 80.33 -7.67 0.00 PO66509 2001 PH-MMURTRIP-BicycleNwk '0.00 0.00 0.00 1.30 0.00 1.29 0.35 0.00 PO66069 2001 LAND ADMIN & MANAGEMENT 4.79 0.00 0.00 0.00 0.00 3.02 2.23 0.00 PO57731 2001 PH-Metro Manila Urban Transport 60.00 0.00 0.00 0.00 0.00 55.25 5.18 0.00 PO65113 2000 PH-SOCIAL EXPENDITURE MGMT 100.00 0.00 0.00 0.00 0.00 20.43 20.43 0.00 PO39019 2000 PH-First Nat'lRds Improve. 150.00 0.00 0.00 0.00 0.00 92.81 64.81 0.00 PO59933 2000 COASTAL MARINE 0.00 0.00 0.00 1.25 0.00 1.13 1.60 0.26 PO58842 2000 MINDANAORURAL DEV 27.50 0.00 0.00 0.00 5.50 13.39 18.89 -0.12 PO48588 1999 PH-LGU FMANCE & DEV. 100.00 0.00 0.00 0.00 40.00 52.94 43.54 0.34 PO57598 1999 RURAL FINANCE 111 150.00 0.00 0.00 0.00 0.00 70.17 69.17 0.00 PO04576 1998 PH-WATER DISTRICTS DEV. 56.80 0.00 0.00 0.00 0.00 24.93 43.13 24.63 PO04595 1998 COMMUNlTY BASED RES0 50.00 0.00 0.00 0.00 12.00 22.00 32.10 18.70 PO04566 1998 PH-EARLY CHILD DEV. 19.00 0.00 0.00 0.00 0.00 7.83 5.83 0.00 PO04602 1997 PH-THIRD ELEMENTARY 113.40 0.00 0.00 0.00 20.10 48.02 64.72 30.07 EDUCATION PO04613 1997 WATER RESOURCESDEVE 58.00 0.00 0.00 0.00 16.27 10.39 26.66 4.26 PO37079 1997 AGRARIAN REFORMCOMM 50.00 0.00 0.00 0.00 0.00 1.24 -1.46 0.00 PO04571 1996 PH-TRANS GRID REINFORCE 250.00 0.00 0.00 0.00 79.51 18.97 83.70 -0.04 PO04611 1996 PH-MANILA SEWERAGE I1 57.00 0.00 0.00 0.00 20.90 25.19 46.09 25.19 Total: 1,560.09 0.00 0.00 2.55 194.28 759.81 525.88 103.29 99 PHILIPPINES STATEMENTOF IFC's HeldandDisbursedPortfolio InMillions of U S Dollars ~~ Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 2002 AEI I .oo 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2001102 APW Trade 0.66 0.00 0.00 0.00 0.66 0.00 0.00 0.00 0 Alaska Milk 0.00 0.62 0.00 0.00 0.00 0.62 0.00 0.00 1996 All Asia Growth 0.00 0.30 0.00 0.00 0.00 0.30 0.00 0.00 1996 All Asia Manager 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1996 AllAsiaVen Mgmt 0.00 0.00 0.00 0.00 0.ou 0.00 0.00 0.00 2000 Asian Hospital 7.00 0.00 0.00 0.00 5.00 0.00 0.00 0.00 2002 Bancode Oro 0.00 0.00 20.00 0.00 0.00 0.00 20.00 0.00 1997 BataanPIE 29.82 0.00 10.00 116.55 29.82 0.00 10.00 116.55 1998 DrysdaleFood 11.79 0.00 0.00 8.53 9.99 0.00 0.00 7.33 2002 Eastwood 25.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00 2001 Filinvest 22.00 0.00 0.00 0.00 16.00 0.00 0.00 0.00 1998 H&Q PV Ill 0.00 5.76 0.00 0.00 0.00 5.76 0.00 0.00 1989 H&QPV-I 0.00 0.61 0.00 0.00 0.00 0.61 0.00 0.00 1993 H&QPV-I1 0.00 1.16 0.00 0.00 0.00 1.16 0.00 0.00 2000 MFIMEP 0.00 0.12 0.00 0.00 0.00 0.12 0.00 0.00 2001 MNTC 46.00 0.00 0.00 0.00 17.49 0.00 0.00 0.00 2003 MWC 30.35 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1970/72/00 Mariwasa 10.63 0.00 3.00 0.00 10.63 0.00 3.00 0.00 1993194 MindanaoPower 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1993 Mirant Pagbilao 24.00 10.00 0.00 1.40 24.00 10.00 0.00 1.40 2002 PSMT Philippines 12.50 0.00 0.00 0.00 10.20 0.00 0.00 0.00 1992 Pilipinas Shell 0.00 1.56 0.00 0.00 0.00 1.56 0.00 0.00 2000 PlantersBank 0.00 0.00 8.71 0.00 0.00 0.00 8.71 0.00 1998 Pryce Gases 13.00 0.00 0.00 5.00 13.00 0.00 0.00 5.00 2000 S?vIE.COM 0.00 0.21 0.00 0.00 0.00 0.12 0.00 0.00 2000 STRADCOM 11.99 0.00 8.00 0.00 9.59 0.00 8.00 0.00 1995 Sua1Power 25.55 17.50 0.00 111.77 25.55 17.50 0.00 111.77 1999 UPPC 20.00 0.00 10.00 0.00 20.00 0.00 10.00 0.00 1992 Union Cement 0.00 5.63 0.00 0.00 0.00 5.63 0.00 0.00 1994 WaldenMgmt 0.00 0.05 0.00 0.00 0.00 0.05 0.00 0.00 1994 WaldenVentures 0.00 1.27 0.00 0.00 0.00 1.27 0.00 0.00 Total portfolio: 291.29 44.79 59.71 243.25 211.93 44.70 59.71 242.05 Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic. 2000 Asian Hospital 0.00 0.00 0.00 5.00 2002 BDO-RSF 20.00 0.00 0.00 0.00 2002 Eastwood 0.00 3.00 0.00 0.00 2000 LTO Project 4.00 0.00 0.00 20.00 2001 PEDF 4.5c 0.00 0.00 0.00 2002 S&R Price 0.00 0.00 0.00 0.00 2003 SVI 0.00 4.00 0.00 0.00 Total pendingcommitment: 28.50 7.00 0.00 25.00 100 Annex 14: Country at a Glance PHILIPPINES: SECONDWOMEN'SHEALTH & SAFE MOTHERHOOD East Lower- POVERTY and SOCIAL Asia & mlddle- Philippines Pacific income Development diamond' 2001 Population,mid-year (millions) 77.0 1,826 2,164 GNI per capita (Atlas method, US$) Life expectancy 1,050 900 1,240 GNI (Atlas method, US$ billions) 80.8 1,649 2,677 - Average annual growth, 1995-01 Population (%) 2.0 1.1 1.o I Laborforce (%) 2.6 1.3 1.2 ' GNi Gross per +primary Most recent estimate (latest year available, 1995-01) I capita enrollment Poverty(% of population below nationalpoverty line) I/ 26 Urban population (% of totalpopulation) 59 37 46 I I Life expectancyat birth (years) 69 69 69 Infantmortality (per 1,000live births) 31 36 33 Child malnutrition (% of children under5) 32 12 11 1 Access to improved water source Access to an improved water source ("A ofpopulation) 87 74 80 Illiteracy(% of population age 15t) 5 14 15 Gross primaryenrollment (% of school-agepopulation) 117 107 107 PhilipplneS Male 106 107 Lower-middle-incomegroup ~ Female 108 107 KEY ECONOMIC RATIOS and LONG-TERMTRENDS 1981 1991 2000 2001 Economicratios' GDP (US$ billions) 35.6 45.4 74.7 71.4 Gross domestic investmentJGDP 27.5 20.2 17.6 18.0 Exportsof goods and servicesiGDP 23.8 29.6 56.3 49.3 Trade Gross domestic savingsiGDP 24.1 17.2 24.0 19.4 T Gross nationalsavingsiGDP 19.6 30.3 26.0 Current account balanceiGDP -5.8 -1.9 11.3 6 3 InterestpaymentsiGDP 2.3 3.2 3.2 3 5 Total debtJGDP 58.3 71.5 67.4 73.3 Total debt serviceiexports 33.6 23.0 13.7 18 7 1 Presentvalue of debtiGDP 67.9 Presentvalue of debtiexports 103.0 Indebtedness 1981-91 1991-01 2000 2001 2001-05 (averageannual growth) Philippines GDP 1.3 3.5 4.0 3.4 4.6 GDP per capita -1.1 1.4 2.1 1.5 2.6 Lower-middle-incomegroup STRUCTUREof the ECONOMY ("A of GDP) Agriculture 249 21 0 159 152 20 1 Industry 392 340 Manufacturing 255 253 Services 359 450 Private consumption 671 729 632 684 . z o 1 Generalgovernmentconsumption 8 8 9 9 128 122 Importsof goods and services * GDI " O " G D P Privateconsumption 2 5 3 9 1 2 2 1 20 General governmentconsumption 1 4 3 3 -1 1 -0 9 -30 Gross domestic investment -1 1 3 3 2 3 4 3 Exports "O"lmports 101 Philippines PRICES and GOVERNMENT FINANCE illii 1981 1991 2000 2001 Domestic prices Inflation (%) (% change) Consumer prices .. 18.7 T 4.3 6.1 l5 10 Implicit GDP deflatot 11.7 16.5 6.7 6.7 1 Government finance 1 5 (% of GDP, includes current grants) Current revenue 17.7 15.6 15.5 j E 97 96 99 a0 Current budget balance .. 1.9 -0.7 -0.8 Overall surplus/deficit -4.1 -4.0 GDP deflator - 4 - C P I TRADE 1981 1991 2000 2001 (US$ millions) 1 Export and Import levels (US$ mill.) Total exports (fob) .. 8,839 37,295 31,243 140 000 Electronicsilelecom 22,178 16,800 Garments 2,563 2,400 Manufactures 2/ 6,432 33,989 29,301 Total imports (fob) 12,051 31,386 29,546 Food 493 1,400 1,369 Fuel and energy 1,784 3,877 3,542 Capital goods .......... 2,952 12,161 11,665 1 Export price index (1995=100) 95 96 97 96 99 w 01 Import price index (1995=100) 1 0 Exports Imports Terms of trade (1995=100) BALANCE of PAYMENTS 1981 1991 2000 2001 (US$ millions) I Current account balanceto GDP (%) Exports of goods and services 7,513 12,367 41,267 34,394 Imports of goods and services 9,554 13,855 36,484 33,586 1 1 5 T Resource balance -2,041 -1,488 4,783 808 Net income -527 -208 3,212 3,268 Net current transfers 507 827 437 423 Current account balance -2,061 -869 8,432 4,499 Financing items (net) 1,496 2,972 -8,852 -4,588 Changes in net reserves 565 -2,103 420 89 Memo: Reserves including gold (US$ millions) .. 4,470 14,911 15,549 Conversion rate (DEC, local/US$) 7.9 27.5 44.2 51.O EXTERNAL DEBT and RESOURCE FLOWS 1981 1991 2000 2001 (US$ millions) Composition of 2001 debt (US$ mill.) Total debt outstanding and disbursed 20,786 32,451 50,382 52,358 IBRD 1,330 4,073 3,827 3,250 A 3,250 IDA 41 135 207 204 G 6,049 B 204 Total debt service 2,971 3,398 6,758 7,776 IBRD 126 622 573 491 IDA 0 2 5 6 Composition of net resource flows Official grants 70 293 157 Official creditors 777 797 28 -239 Private creditors 726 -146 245 -99 Foreign direct investment 172 544 2,029 F 26,650 u Portfolio equity 0 0 290 World Bank program Commitments 0 566 255 90 A IBRD E Bilateral - Disbursements 448 386 162 120 B IDA D- Othermultilateral F. Private Principal repayments 38 310 352 312 C IMF --- G Short-term - Net flows 410 76 -190 -192 Interest payments 89 314 225 185 Net transfers 322 -239 -415 -377 uevelopment tconomics Y i l b/W 21Manufactures includes electronics/telecom and garments 102