PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: PIDA3514 Public Disclosure Copy Project Name Learning, Equity and Accountability Program Support Project (P118904) Region EAST ASIA AND PACIFIC Country Philippines Sector(s) Primary education (70%), Secondary education (30%) Theme(s) Education for all (100%) Lending Instrument Investment Project Financing Project ID P118904 Borrower(s) Department of Finance Implementing Agency Department of Education Environmental Category B-Partial Assessment Date PID Prepared/Updated 29-Jan-2014 Date PID Approved/Disclosed 22-Feb-2013, 28-Jun-2013, 09-Jul-2013, 29-Jan-2014 Estimated Date of Appraisal 01-Feb-2013 Completion Estimated Date of Board 06-Mar-2014 Approval Decision The meeting authorized appraisal of the project Public Disclosure Copy I. Project Context Country Context The Philippines is a lower middle-income country (Gross National Income per capita of US$2,210) with a population of 94.8 million, with 26.5 percent living below the national poverty line. Despite respectable economic growth during the past decade, poverty incidence and income inequality remain high. The country’s main development challenge, therefore, continues to be the achievement of more inclusive growth. To meet this challenge, the Government has laid out in the 2011-2016 Philippine Development Plan three strategic objectives: (i) attaining a sustained and high rate of economic growth that provides productive employment opportunities; (ii) equalizing access to development opportunities for all Filipinos; and (iii) implementing effective social safety nets to protect and enable those who do not have the capability to participate in the economic growth process. As a first step, GOP increased the budget of the social services sectors with the Department of Education (DepEd) receiving a 15.2 percent increase in its budget in 2012 compared to the previous year. Sectoral and institutional Context The most critical issue in the Philippines is the growing number of non-readers and non-numerates, mainly at the primary level. Available evidence, both international and local, shows that the poor Page 1 of 5 performance of students in terms of enrolment, retention, and completion as well as in terms of learning outcomes, as measured by results of student assessments, is partly explained by the lack of foundational skills in reading and math in the early grades. Recent reading-related subtests in the Public Disclosure Copy Grade 3 National Achievement Test (NAT)show disturbing trends, as Mean Percentage Scores (MPS) in the English Reading Comprehension and Grammar tests decreased from 61.74 and 61.94 in SY 2009-2010 to 54.42 and 57.23 in SY 2011-2012, respectively. The results are just as dismal in the Filipino Reading Comprehension and Grammar tests over the same period, as the respective decreases are from 61.25 and 63.94 to 58.61 and 56.97. In terms of math, the decline in MPS over the same period is from 65.09 to 59.87. The challenge of poor educational access and low student learning is far worse for certain population subgroups, reflecting high education inequality. There are four major dimensions of inequality: income, ethnicity, disability and geography. Data from the Department of Social Welfare and Development (DSWD) through the National Household Targeting System for Poverty Reduction identified 5.2 million poorest households in the country. Out of the 5.2 million poor households, 3.9 million individuals aged 3-18 do not attend school. Lack of access and low quality of learning is particularly pronounced among the Indigenous People (IP) communities and those with disabilities. In some barangays, many pupils and even teachers need to travel (usually on foot) long distances to and from school. In the Philippines, the issue of accountability and incentives for performance has largely been a missing factor in past education reforms. Salary increases are provided regardless of performance; underperforming teachers languish in the system until retirement; and budget allocations to schools and divisions do not reward results, and sometimes even provide incentives to remain as poor performers. Despite its recognized importance as a driver of performance, there is a need to forge a consensus on how to raise student and teacher motivation (external vs. intrinsic) to improve learning outcomes. Public Disclosure Copy II. Proposed Development Objectives The project development objective is to improve the quality of grade 1 to 3 reading and math skills of children in Target Regions and Target Schools, with a special focus on those belonging to Target Disadvantaged Groups. III. Project Description Component Name Improvement of Teaching and Learning in Grades 1 to 3 Reading and Math Comments (optional) Seeks to develop the capacity of teachers and schools to improve the teaching of reading and math skills of Grades 1 to 3 students in the target schools and consequently students’ learning outcomes. Component Name Strengthening of Accountability and Incentives of Department of Education Employees Comments (optional) Ensure the implementation of the Performance-Based Incentives, intensify the culture of accountability in schools, address financial management constraints and bottlenecks. Component Name Improvement of Program Design for Targeting Disadvantaged Groups Page 2 of 5 Comments (optional) The project will support the improvement of access and quality outcomes for disadvantaged groups in the target regions. Public Disclosure Copy IV. Financing (in USD Million) Total Project Cost: 300.00 Total Bank Financing: 300.00 Financing Gap: 0.00 For Loans/Credits/Others Amount Borrower 0.00 International Bank for Reconstruction and Development 300.00 Total 300.00 V. Implementation Overall responsibility for the project will be vested with the Department of Education (DepEd), which is in charge of meeting the education goals and objectives articulated in the Philippine Development Plan, the President’s Social Contract and the Basic Education Sector Reform Agenda (BESRA). The DepEd units at the central, regional, division offices and schools will be responsible for their respective roles, as reflected in their revised organizational restructuring plan . The Executive Committee composed of senior management of the DepEd, chaired by the Secretary of Education, will provide the overall strategic directions for the project, review its progress, and address major issues. With the policy shift in recent years, decision-making powers are being decentralized to local-level managers at the region, division, district, and school levels. Direct release of funds to the DepEd regional offices, division offices, and secondary schools, will continue. The Department of Budget and Management (DBM) will ensure the timely release of the DepEd budget allocation, including the DepEd budget line items included in the Eligible Expenditures Program of the project. DBM will provide supervision and advisory role in the overall Public Disclosure Copy implementation of the government-wide Performance-Based Incentive system. Together with the Commission on Audit, the DBM will work closely with the DepEd to improve the financial management capability of the DepEd, and consequently improve budget execution and redound to the improvement in the targeted outcomes. The National Economic and Development Authority (NEDA), the government’s socio-economic planning agency, will ensure alignment of the project targets with the overall priorities of the government in basic education, and its consistency with the Social Contract and the Philippine Development Plan. NEDA will also monitor the implementation of the project as part of its annual portfolio review. The Department of Finance will be the main representative of the Philippine Government with respect to the implementation of the loan. The Civil Service Commission and other agencies will have specific roles in the implementation of the project to ensure the delivery of the results that the Government will commit to achieve by the end of the project. The project will utilize the results-based approach, with the amount and event of disbursements based on the achievement of pre-identified results, referred to as disbursement-linked indicators (DLIs). These DLIs include intermediate outcomes, implementation performance or institutional change indicators which are critical to achieving the sector’s desired outcomes. Disbursements will be made against selected key DepED budget line items referred to as Eligible Expenditure Programs (EEPs). The project will be implemented using the DepEd’s financial management (FM) systems as Page 3 of 5 the basis for budgeting, accounting and internal controls, and auditing. Disbursements under the project shall comply with the Bank policies and procedures on disbursements and FM as reflected in the Bank’s Disbursements Handbook and Financial Monitoring Report Guidelines. Public Disclosure Copy VI. Safeguard Policies (including public consultation) Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 ✖ Natural Habitats OP/BP 4.04 ✖ Forests OP/BP 4.36 ✖ Pest Management OP 4.09 ✖ Physical Cultural Resources OP/BP 4.11 ✖ Indigenous Peoples OP/BP 4.10 ✖ Involuntary Resettlement OP/BP 4.12 ✖ Safety of Dams OP/BP 4.37 ✖ Projects on International Waterways OP/BP 7.50 ✖ Projects in Disputed Areas OP/BP 7.60 ✖ Comments (optional) VII. Contact point World Bank Contact: Lynnette Dela Cruz Perez Title: Senior Education Specialist Tel: 5776+2634 Email: lperez@worldbank.org Public Disclosure Copy Borrower/Client/Recipient Name: Department of Finance Contact: Ms. Stella Laureano Title: Director, International Finance Group Tel: 632-523-9223 Email: slaureano@dof.gov.ph, sclaureano@gmail.com Implementing Agencies Name: Department of Education Contact: Francisco Varela Title: Undersecretary Tel: (63 2) 6339342 Email: fmvarela68@gmail.com Page 4 of 5 VIII. For more information contact: The InfoShop The World Bank Public Disclosure Copy 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-4500 Fax: (202) 522-1500 Web: http://www.worldbank.org/infoshop Public Disclosure Copy Page 5 of 5