Public Disclosure Copy The World Bank Implementation Status & Results Report Honduras First Fiscal Sustainability and Enhanced Competitiveness DPF (P155920) Honduras First Fiscal Sustainability and Enhanced Competitiveness DPF (P155920) LATIN AMERICA AND CARIBBEAN | Honduras | Macro Economics & Fiscal Management Global Practice | IBRD/IDA | Development Policy Lending | FY 2016 | Seq No: 1 | ARCHIVED on 07-Apr-2017 | ISR25919 | Implementing Agencies: Key Dates Key Project Dates Bank Approval Date:15-Dec-2015 Effectiveness Date:28-Dec-2015 Planned Mid Term Review Date:-- Actual Mid-Term Review Date:-- Original Closing Date:30-Mar-2017 Revised Closing Date:30-Mar-2017 Program Development Objectives Program Development Objective (from Program Document) The Program Development Objective of the Development Policy Financing (DPF) is to support the Government’s efforts in (i) strengthening institutional arrangements to support fiscal sustainability; and (ii) enhancing the regulatory framework to promote competitiveness. PHRPDODEL Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  --  Moderately Satisfactory Overall Implementation Progress (IP)  --  Moderately Satisfactory Overall Risk Rating  --  Substantial Implementation Status and Key Decisions The implementation of the project is ongoing and the progress towards the project development objective is moderately satisfactory. The authorities have been implementing structural reforms supported by the operation and have already achieved tangible results towards strengthening institutional arrangements to support fiscal sustainability and enhancing the regulatory framework to promote competitiveness. Risks Systematic Operations Risk-rating Tool 4/7/2017 Page 1 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Honduras First Fiscal Sustainability and Enhanced Competitiveness DPF (P155920) Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  Substantial  --  Substantial Macroeconomic  Substantial  --  Substantial Sector Strategies and Policies  Moderate  --  Moderate Technical Design of Project or Program  Moderate  --  Moderate Institutional Capacity for Implementation and Sustainability  Substantial  --  Substantial Fiduciary  Substantial  --  Substantial Environment and Social  Moderate  --  Substantial Stakeholders  Substantial  --  Substantial Other  --  --  -- Overall  Substantial  --  Substantial Results Results Indicators PHINDIRITBL  The deviation of actual from projected recurrent expenditure as specified in the medium-term fiscal framework is less than 10 percent in 2016 (against 2015 MTFF) and 2017 (against 2016 MTFF). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Central Administration: 5.4 percent 10 percent in Value Not available -- Non-financial public 2016 and 2017 sector: 23.2 percent Date 31-Dec-2014 -- 31-Dec-2016 31-Dec-2017 Comments Partially met. The indicator is met for the central government, but not for the non-financial public sector. 4/7/2017 Page 2 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Honduras First Fiscal Sustainability and Enhanced Competitiveness DPF (P155920) PHINDIRITBL  ENEE’s financial deficit is reduced by at least 60 percent in nominal Lempiras relative to its level in 2014 (6,314 million). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 2,525 million Value 6,314 million Lempiras -- 2,557 million Lempiras Lempiras Date 31-Dec-2014 -- 30-Nov-2016 31-Dec-2017 Comments Partially Met. ENEE reduced its deficit substantially during 2015 to 214 million Lempiras (96 percent reduction vis a vis December 2014). However, during 2016, ENEE has accumulated an important amount of arrears causing its deficit to increase to around 2,557 million Lempiras. Nonetheless, the financial deficit in end November 2016 was almost 59 percent smaller than in 2014. Additional comment: the baseline value of the indicator was updated due to data revision by ENEE. The original value from the approved documents was 5,204 million Lempiras. PHINDIRITBL  Share of public debt issuances that are conducted using competitive auction mechanisms is at least 85 percent in 2017 (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 42.00 -- 100.00 85.00 Date 31-Dec-2014 -- 31-Dec-2016 31-Dec-2017 Comments Met. All public debt issuances were conducted using competitive auction mechanisms in 2016. In 2015 it had already grown substantially to 94.5 percent. PHINDIRITBL  Share of the public sector workforce that has been evaluated by an institutional functional review is at least at 50 percent by 2017 (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 60.10 50.00 Date 31-Dec-2014 -- 31-Dec-2016 31-Dec-2017 Comments Met. 4/7/2017 Page 3 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Honduras First Fiscal Sustainability and Enhanced Competitiveness DPF (P155920) The Government has conducted institutional functional reviews to 5 sectorial ministries (Education, Health, Public Works, Security and Finance), because the authorities had some previous assessments on Health and Education, the analyses conducted during 2015 were focused on the administrative staff of those two sectors. PHINDIRITBL  The number of children in extreme poor households attending 7th to 9th grade that receive cash transfers from the Bono Vida Mejor has increased by at least 60 percent relative to the number in 2015 (7 (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The number of children in extreme poor households The number of children in attending 7th to extreme poor households 9th grade that attending 7th to 9th grade receive cash Value that receive cash transfers -- Data not available transfers from from the Bono Vida Mejor the Bono Vida in 2015 was 78,739 and 48 Mejor in 2017 percent were boys should be at least 125,982 and 49 percent are boys Date 31-Dec-2015 -- 23-Mar-2017 31-Dec-2017 Comments Data on the indicator is not immediately available. The request has been sent to authorities to update the information. Overall, the changes in the number of beneficiary children is reflected in the program coverage, which shows large increase in 2016 relative to 2015. Changes in the Program coverage over time: December 2014 250,000 households December 2015 146,000 households December 2016 212,546 households The reduction in the number of households from 2014 to 2015 was due to the Program’s retargeting to households in extreme poverty and a significant cleanup of the beneficiary database. 4/7/2017 Page 4 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Honduras First Fiscal Sustainability and Enhanced Competitiveness DPF (P155920) PHINDIRITBL  Number of years for which the EPHPM microdata (2001-2015) used to calculate official poverty statistics have been made available through INE’s website or on Redatam: (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 0.00 14.00 Date 31-Dec-2014 -- 23-Mar-2017 31-Dec-2017 Comments Partially met. In 2016, the National Statistical Institute (INE) substantially increased access to data from the country's household surveys, including an expanded web-based search tool allowing users to access specific tabulations. Due to confidentiality concerns INE has not yet published the microdata, but instead has established an onsite data lab granting access to the microdata for external users. PHINDIRITBL  Number of legal counsels trained to provide advice on a leniency application is at least 30 by end 2017 (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 82.00 30.00 Date 31-Dec-2014 -- 31-Dec-2016 31-Dec-2017 Comments Met. The Competition Authority has trained 82 legal counsels on leniency applications. PHINDIRITBL  Number of days to start a business (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 14.00 -- 13.00 10.00 Date 31-Dec-2014 -- 31-Dec-2016 31-Dec-2017 Comments Partially met. According to the Doing Business report for 2017 (data for 2016), the number of days to start a business was reduced to 13 days from 14 days in the Doing Business 2015 report (data for 2014). The reduction is a result of simplified online procedures and the elimination of the paid-in minimum capital requirement. 4/7/2017 Page 5 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Honduras First Fiscal Sustainability and Enhanced Competitiveness DPF (P155920) PHINDIRITBL  Number of days to export and import: (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Export: 12 days Export: 11 days Export: 11 days Value -- Import: 16 days Import: 14 days Import: 14 days Date 31-Dec-2014 -- 31-Dec-2016 31-Dec-2017 Comments Met. The Honduran Congress approved the Trade Facilitation Agreement in July 2016. The Customs Union with Guatemala will lead to further facilitate customs procedures and will lead to improved indicators for 2017. Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P155920 IDA-57500 Closed USD 50.00 50.00 0.00 50.00 0.00 100% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P155920 IDA-57500 Closed 15-Dec-2015 15-Dec-2015 28-Dec-2015 30-Mar-2017 30-Mar-2017 4/7/2017 Page 6 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Honduras First Fiscal Sustainability and Enhanced Competitiveness DPF (P155920) Tranches Restructuring History There has been no restructuring to date. Related Operations There are no related projects. 4/7/2017 Page 7 of 7 Public Disclosure Copy