Document of The World Bank FOR OFFICIAL USE ONLY Report No. 117771-PH INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL FINANCE CORPORATION MULTILATERAL INVESTMENT GUARANTEE AGENCY PERFORMANCE AND LEARNING REVIEW (PLR) OF THE COUNTRY PARTNERSHIP STRATEGY FOR THE REPUBLIC OF THE PHILIPPINES FOR THE PERIOD FY15-FY19 August 31, 2017 Brunei, Malaysia, Philippines and Thailand Country Management Unit East Asia and Pacific Region International Finance Corporation East Asia and Pacific Department Multilateral Investment Guarantee Agency This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank Group authorization. The date of the last Country Partnership Strategy Report was June 12, 2014 FISCAL YEAR July 1 – June 30 CURRENCY EQUIVALENTS Exchange rate effective as of July 28, 2017 Currency unit: Philippine peso (PHP) US$1 = 50.54 ABBREVIATIONS AND ACRONYMS AAA Analytical and Advisory DRFI Disaster Risk Finance and Activities Insurance ADB Asian Development Bank DRM Disaster Risk Management AF Additional Financing DSWD Department of Social Welfare AIIB Asian Infrastructure and Development Investment Bank EAP East Asia and Pacific ARC Agrarian Reform Community EGRA Early Grade Reading ARMM Autonomous Region of Assessment Muslim Mindanao EGMA Early Grade Math Assessment ASA Advisory Services and FASTRAC Facility for Advisory Support Analytics for Transition Capacities BDA Bangsamoro Development FCV Fragility, Conflict, and Agency Violence BIR Bureau of Internal Revenue FDI Foreign Direct Investment BOC Bureau of Customs FIES Family and Income BUB Bottom-Up Budgeting Expenditure Survey CAB Comprehensive Agreement on FINDEX Financial Inclusion Data the Bangsamoro FM Financial Management CAT-DDO Catastrophe - Deferred FRS Fiscal Risk Statement Drawdown Option GAA General Appropriations Act CCT Conditional Cash Transfer GDP Gross Domestic Product CDD Community Driven GEF Global Environment Facility Development GFMIS Government Financial CGAP Country Gender Action Plan Management Information CPF Country Partnership System Framework GHG Greenhouse Gas CPS Country Partnership Strategy GOCCs Government-Owned and CTF Clean Technology Fund Controlled Corporation DA Department of Agriculture GoP Government of the Philippines DBM Department of Budget GPBP Grassroots Participatory Management Budgeting program DILG Department of Interior and IBRD International Bank for Local Government Reconstruction and DP Development Partners Development DPL Development Policy Loan IEG Independent Evaluation Group DPWH Department of Public Works IFC International Finance and Highways Corporation i ILO International Labour NRIMP National Roads Improvement Organization and Management Project IMF International Monetary Fund PBB Performance-Based Bonus JICA Japan International PDP Philippine Development Plan Cooperation Agency PEFA Public Expenditure and JNA Joint Needs Assessment Financial Assessment KPI Key Performance Indicator PforR Program for Results KPS Key Performance Standard PLR Performance and Learning LEAPS Learning, Equity and Review Accountability Program PPP Public-Private Partnership Support PRDP Philippine Rural Development LGUs Local Government Units Project LISCOP Laguna de Bay Institutional PSA Philippine Statistics Authority Strengthening and Community RAS Reimbursable Advisory Participation Project Services LNG Liquefied Natural Gas REC Renewable Energy Certificate M&E Monitoring and Evaluation RPMS Results-Based Performance MIGA Multilateral Investment Management System Guarantee Agency SALN Statement of Assets, Liabilities MILF Moro Islamic Liberation Front and Net Worth MRDP Mindanao Rural Dev. Project SME Small and Medium Enterprise MSME Micro, Small and Medium SWDRP Social Welfare and Enterprises Development Reform Program MTF Mindanao Trust Fund TA Technical Assistance NCDDP National Community Driven UACS Unified Account Code Development Program Structure NCR National Capital Region UNDP United Nations Development NDHS National Demographic and Programme Health Surveys UNFPA United Nations Population NEA National Electrification Fund Administration WAVES Wealth Accounting and the NEDA National Economic and Valuation of Ecosystem Development Authority Services NEP National Expenditure Program WBG World Bank Group NHIP National Health Insurance WDR World Development Report Plan WRC Water Regulatory Commission NHTS-PR National Household Targeting WSS Water Supply and Sanitation System for Poverty Reduction IBRD IFC MIGA Vice President: Victoria Kwakwa Dimitris Tsitsiragos Keiko Honda, EVP Director: Mara Warwick Vivek Pathak Merli M. Baroudi Task Team Leader: Georgia Wallen Yuan Xu Paul Antony Barbour ii TABLE OF CONTENTS I. INTRODUCTION ......................................................................................................................................... 1 II. MAIN CHANGES IN COUNTRY CONTEXT............................................................................................... 2 Changes in Poverty Reduction and Shared Prosperity ........................................................................................... 2 Macroeconomic Developments and Outlook .........................................................................................................3 Evolving Context for Partnership ........................................................................................................................... 4 III. SUMMARY OF PROGRAM IMPLEMENTATION ...................................................................................... 6 Partnerships and Leveraging ..................................................................................................................................6 Portfolio Evolution and Performance (FY15-FY17) .............................................................................................. 7 Progress Towards Achieving CPS Objectives ........................................................................................................9 IV. EMERGING LESSONS ........................................................................................................................... 13 V. ADJUSTMENTS TO THE COUNTRY PARTNERSHIP STRATEGY ............................................................ 14 Objectives and Plan of Activities for FY18-19 .................................................................................................... 15 Strengthening WBG support for Peace and Development in Mindanao .............................................................. 16 Fit for Purpose: Adjustments to the CPS Results Matrix ..................................................................................... 17 VI. RISKS TO CPS PROGRAM ................................................................................................................... 18 VII. CONCLUSION ...................................................................................................................................... 19 ANNEX 1. PHILIPPINES UPDATED CPS RESULTS MATRIX (FY15-19) ..................................................... 20 ANNEX 2. SUMMARY OF CHANGES TO THE PHILIPPINES CPS RESULTS MATRIX ................................... 27 ANNEX 3. PHILIPPINES COUNTRY PARTNERSHIP STRATEGY (CPS) FY15-18 ORIGINAL RESULTS MATRIX - STATUS UPDATE ......................................................................................................................... 40 ANNEX 4. IBRD COMMITMENTS AND TENTATIVE PIPELINE, FY15-19 .................................................. 70 ANNEX 5. IBRD ADVISORY SERVICES AND ANALYTICS (FY15-17)....................................................... 71 ANNEX 6. IBRD ADVISORY SERVICES AND ANALYTICS WORK PROGRAM FOR FY18-20 ..................... 74 ANNEX 7. IFC COMMITMENTS, FY15-FY17 ........................................................................................... 75 ANNEX 8. IFC ADVISORY SERVICES PORTFOLIO, FY15-FY17 ............................................................... 76 ANNEX 9. PHILIPPINES PLR REGIONAL CONSULTATIONS – HIGHLIGHTS ............................................... 77 Boxes: Box 1: Drivers of violence in conflict-affected Mindanao include social inequality, injustice and weak governance…………………………………………………………………………………………………. 5 Box 2: Trust Fund partnerships continue to strengthen client engagement for improved results…………. 7 Box 3: Results at a Glance -- WBG support for Inclusive Growth, Poverty Reduction and Shared Prosperity in the Philippines (FY15-FY17)………………………………………………………………. 10 Box 4: Highlights on Mainstreaming Gender across the WBG Portfolio………………………………...11 Box 5: The main component of the Comprehensive Program for Regional Development in Mindanao...17 Box 6: Systematic Risk-Rating Tool…………………………………………………………………….. 18 iii PHILIPPINES PERFORMANCE AND LEARNING REVIEW (PLR) This PLR reviews the implementation of the World Bank Group (WBG) Country Partnership Strategy (CPS, FY15-18) for the Republic of the Philippines, discussed by the Board in June 2014. The PLR focuses on adjustments to the CPS program in light of implementation experience, lessons learned, and evolving country circumstances and demands. I. INTRODUCTION 1. The context for WBG partnership with the Philippines has evolved since the launch of the CPS in 2014, driven by several key factors. First, the election of President Rodrigo Duterte in 2016 marked an important political transition. Grounded in a strong election mandate, the government is aiming to leverage the solid position of the Philippine economy to scale up public investment for poverty reduction, job creation and economic growth. While inclusive growth and poverty reduction remain at the center of the Philippine development agenda, the government has proposed new approaches for attaining these objectives in the context of a wide-ranging legislative agenda. Second, the Philippines has emerged as one of the fastest growing economies in Asia, with growing access to finance for development. As the Philippine government’s demands for WBG services evolve, there is increasing focus on the need to maximize WBG comparative advantages to help address the most complex development challenges facing the country, including deep poverty in areas that are conflict-affected, remote, and/or highly vulnerable to climate change and natural disasters. Third, the new Philippines Development Plan (PDP 2017-2022), launched in June 2017, reflects heightened ambition and aims to lift roughly six million Filipinos from poverty and to achieve upper middle income status by 2022. The PDP 2017-2022 also highlights a prominent priority of the government: delivering a comprehensive agenda for peace and development in conflict-affected areas.1 Challenges associated with conflict and internal security add urgency to the focus on accelerating gains in peace and development in the Philippines, particularly in conflict-affected areas in Mindanao. 2. The WBG is well-positioned to provide strong support for delivery on the new PDP. The CPS aims to promote inclusive growth, poverty reduction and shared prosperity across five Engagement Areas (EAs): (i) transparent and accountable government; (ii) empowerment of the poor and vulnerable; (iii) rapid, inclusive and sustained economic growth; (iv) resilience to climate change, environment, and disaster risk management; and (v) peace, institution building, and social and economic opportunity, with focus on conflict-affected areas in Mindanao.2 Dialogue with the government, partners and stakeholders affirm strong strategic alignment between the CPS and the PDP 2017-2022. WBG engagement for peace and development in Mindanao is also gaining new prominence. Looking ahead, WBG partnership for delivery on the PDP 2017-2022 will require building on the strengths of the WBG program, tackling implementation weaknesses, maximizing synergy across IBRD, IFC and MIGA, and addressing key risks. 3. The PLR affirms the continued relevance of the CPS while proposing to deepen WBG engagement for peace and development in Mindanao going forward. In view of the recent launch of the PDP and to build the analytical basis for the next Country Partnership Framework (CPF), a one-year extension of the CPS period is also proposed.3 The WBG will also introduce new instruments and promote co-financing arrangements with other development partners. The following report, which discusses CPS implementation from July 2014 through June 2017, includes: (i) main changes in the country context; (ii) a summary of program implementation, including portfolio performance and partnerships; (iii) a summary of CPS implementation, including emerging results; (iv) lessons learned; (v) proposed adjustments to the CPS; and (vi) risks to achieving CPS objectives, including political and governance risks and challenges related to implementation. The report has benefitted from consultation with a range of stakeholders in the Philippines, including regional consultations in the three major island groups (see Annex 9). 1 AmBisyon Natin 2040: The Vision, Our Ambition; Philippine Development Plan (2017-2022) 2 World Bank Group: CPS for the Republic of the Philippines for the period FY2015-2018. Report No. 78286-PH 3 The mid-point of the CPS period in 2016 coincided with national elections and the transition to the new government. Given this transition and to allow for alignment with the new PDP, delivery of the PLR was shifted to FY17. WBG fiscal years (FY) extend from July 1 through June 30. 1 II. MAIN CHANGES IN COUNTRY CONTEXT Changes in Poverty Reduction and Shared Prosperity 4. Continuous high economic growth, along with well-targeted social sector spending, contributed to significant recent poverty reduction gains in the Philippines. The country’s real per capita income growth averaged 4.6 percent between 2010 and 2016.4 Since the launch of the CPS period, real per capita income growth in the Philippines was 4.3 percent in 2015 and 5.2 percent in 2016. This fast and sustained economic growth led to significant poverty reduction, reflecting more inclusive growth. While the World Bank is currently completing a poverty assessment to identify the key factors behind the observed drop in the poverty rate, rising employment and income levels as well as low inflation likely contributed to the declining trend. At the same time, the government more than doubled social services spending between 2011 and 2015, enabling significant allocations for health care and for poverty reduction through the Pantawid Pamilyang Pilipino Program (4Ps), the national program providing conditional cash transfers. The program expanded its coverage and now reaches roughly 4.4 million poor households. Robust evaluations of the 4Ps program substantiate gains in increased health and education outcomes for poor children, as well as poverty reduction impacts. This was accompanied by an expansion of the benefit package and improved targeting through an update of the national poverty targeting system, Listahanan, which is among the most effective targeting systems globally. 5. Recent strong progress on poverty reduction and shared prosperity in the Philippines represents an important breakthrough. The proportion of the population living in poverty fell from 25.2 to 21.6 percent over the period 2012-2015, a rate of roughly 1.2 percentage points annually.5 Shared prosperity also increased: while household per capita incomes in the Philippines increased for all income deciles between 2012 and 2015, the incomes of the bottom 40 percent of the population grew at nearly twice the overall rate of real household income per capita in that period.6 These advances contributed to a dip in inequality. Measured by household income per capita, the Gini coefficient declined from 46.1 in 2012 to 44.4 in 2015.7 Despite recent progress, poverty reduction in the Philippines still lags other East Asian economies, including Indonesia and Vietnam, and the country remains one of the most unequal in Asia. Progress was made towards achieving the Millennium Development Goals on gender equality,8 infant and child mortality, and access to safe water. However, performance in basic education and maternal health lagged. The Philippines did not meet MDG 1 targets on ending hunger by 2015, and the rate of stunting showed no progress over the last decade, remaining at one-in-three children under age 5.9 6. The profile of poverty has changed little and is characterized by deep rural poverty, vulnerability to shocks, and a nexus between poverty and conflict. The majority of the poor are agriculture-dependent households for which low productivity agriculture and lack of education have perpetuated poverty. Across rural and urban areas, many Filipinos still hover just above the poverty line and are vulnerable to climatic, disaster, financial and price shocks. Recurrent flooding, for example, has the greatest impact on informal settler families living in higher-risk flood prone areas. Spatial dimensions of poverty and inequality are stark. Poverty rates are lowest in the National Capital Region (NCR) and highest in areas with strong disaster risk or conflict. Mindanao accounts for 36 percent of all poverty in the Philippines, and poverty is highest in Mindanao’s conflict-affected areas. 4 Source: World Bank World Development Indicator database. 5 Measured by the annual per capita official poverty line of PhP18,935 (or approximately US$2.66/day in 2011PPP). Philippine Development Plan (2011 – 2016) targeted poverty incidence of 22.5 percent by 2016. 6 Source: 2015 Family Income and Expenditure Survey (FIES). 7 Source: Philippine Statistics Authority 8 Bank research suggests that in recent years (2012-2015), wage growth for women is faster than for men, though women earn less than men for the same level of education. 9 While stunting prevalence was not an explicit MDG, it is highlighted here as an important human development indicator for monitoring in the Philippines. 2 Macroeconomic Developments and Outlook 7. Strong policy efforts to ensure macroeconomic stability enabled the Philippines to secure investment grade credit ratings – a significant change since CPS approval. GDP growth remained robust at 6.1 percent in 2015 and accelerated to 6.9 percent year-on-year in 2016, outpacing most regional comparators. At the same time, the government continued a fiscally conservative stance throughout 2014 and 2015, reaching a deficit of 0.6 percent and 0.9 percent of GDP respectively; the switch to a more expansionary path was evident in the 2016 election year, with a deficit of 2.4 percent of GDP. The debt- to-GDP ratio has declined from 45.4 percent in 2014 to 42.1 percent in 2016, helped by the investment grade credit rating, careful debt restructuring and strong growth. Remittances remained important macroeconomic and household-income stabilizers: remittance growth accelerated in 2016, to a record of 4.9 percent year-on-year from 3.8 percent in 2015, well above the central bank’s forecast of 4.0 percent . Robust external and fiscal positions, stable and low inflation and decreased debt levels underlie the country’s investment grade rating. 8. Recent strong growth has stimulated job creation. The unemployment rate fell to 5.5 percent in 2016, a drop of 2.5 percentage points from the eight percent recorded in the previous decade. While unemployment has fallen to a historic low, underemployment in the Philippines remains high at 18.3 percent and has been stagnant at this relatively high level for over a decade. 10 High underemployment in the Philippines is related to high informality. The informal sector accounts for the vast majority of jobs created; for those who are informally employed, the creation of more and better jobs in the formal sector will be important by improvement to the investment climate for international and domestic private firms. Access to higher-paying and more stable jobs in the formal sector will likely require a different skill profile for workers; equipping young workers to develop appropriate skills will be important, including for reaping the Philippines’ expected demographic dividend. 9. Solid economic fundamentals have placed the Philippines on a higher growth trajectory. The Philippine economy grew at an average of 6.1 percent between 2011 and 2016 and is projected to grow at 6.9 percent in in the next two years. 11 The services sector, including the Business Process Outsourcing (BPO) sector, is the fastest growing sector in the economy and also the one that accounts for the largest share of new jobs. The expanding BPO sector generated in 2016 total revenues of US$25.0 billion – matching the country’s volume of remittances. Strong growth of remittances is expected to continue, increasing from US$26.9 billion in 2016 to some US$30.0 billion in 2017. Foreign Direct Investment (FDI) is becoming increasingly a more important driver of growth. Net FDI inflows to the Philippines surged to US$7.9 billion in 2016 – the highest level in Philippine history and a 40.7 percent increase from 2015 – yet, FDI to the Philippines still lags several regional comparators, including Malaysia, Vietnam, and Singapore. 10. Looking ahead, a primary growth engine will likely be increased capital investment, largely driven by the expansive public infrastructure development agenda along with private investment .12 In the context of the government’s “Golden Age of Infrastructure” program, the significant planned scale - up in delivery of infrastructure projects could generate positive spillover effects for the rest of the economy, spurring additional business activity, and accelerating job creation. Crowding in private investment will call for continued focus on enhancing the doing business environment, reducing risk and improving competitiveness. 11. Risks to the economic outlook remain prominent and will require continued strong economic management. Rising global interest rates and oil prices remain a source of vulnerability for the Philippine economy. Domestically, the key short-term downside risk to growth is the government’s ability to deliver on its infrastructure investment commitments. The new administration has committed to a significant surge 10 Philippine Development Plan (PDP), 2017 11 Ibid 12 World Bank: Philippines Economic Update, April 2017 3 in public infrastructure spending, as reflected in the 2017 budget’s 12 percent increase in planned infrastructure expenditures. Of the PHP3.4 trillion 2017 budget, PHP858.1 billion, or an estimated 5.4 percent of GDP, is allocated to public infrastructure.13 Moreover, the administration plans to spend up to PHP9 trillion from 2017-2022 on new infrastructure projects. The 2017 fiscal deficit is projected to increase to 3.0 percent of GDP, after having more than doubled to 2.4 percent in 2016. The government intends to finance the deficit primarily through domestic sources. Based on World Bank estimates, GDP growth is expected to continue to outpace growth of the debt stock, and the debt-to-GDP ratio is projected to decline from 42.1 percent in 2016 to 40.4 percent in 2017.14 Nevertheless, in the longer term, if the fiscal deficit keeps rising, fiscal sustainability may emerge as a concern. 12. The Philippines recent more inclusive growth pattern is a major achievement, and maintaining it will require a commitment to policy reforms that encourage human capital development and investments in sectors that create quality employment. Severe underinvestment stemming from a lack of competition in key sectors, restrictions on foreign investment, insecure property rights, a high degree of regulatory complexity and other obstacles to doing business, continue to discourage private investment and have prevented the economy from completing its structural transformation. Sustaining strong economic performance and inclusive growth will call for rapid progress in policy reforms that foster private investment, which can generate an increase in high-quality, formal-sector jobs that would help accelerate the pace of poverty reduction and reduce the number of working poor. Evolving Context for Partnership 13. Since taking office in 2016, the government has carried forward a strong focus on inclusive growth while adding new urgency and more ambitious targets. The PDP 2017-2022 expands upon the government’s 0+10-point agenda, which promoted continuity on core aspects of development policy in the Philippines – from maintenance of macroeconomic stability, to stepping up rural and value chain development, to improving social protection. Rooted in extensive national consultations, the new PDP has three overarching pillars: (i) enhancing the social fabric, (ii) inequality reducing transformation, and (iii) increasing growth potential. Cross-cutting strategies, referred to as Foundations for Sustainable Development, focus on “balanced and strategic development of infrastructure while ensuring ecological integrity and a clean and healthy environment.” The PDP 2017-2022 integrates the National Spatial Strategy (NSS), which seeks to address spatial and socioeconomic inequality and to improve connectivity to expand access to opportunity.15 Targets of the PDP 2017-2022 include the aim to expand the economy by 50 percent, with per capita income rising from US$3,550 in 2015 to US$5,000 in 2022; to shrink subsistence poverty from 8.1 percent to 5.0 percent by 2022; to generate 950,000 to 1.1 million jobs annually over the six-year PDP period; and for the Philippines to rank among the top one-third of countries in the Global Competitiveness Index by 2022.16 Other key targets include the aim to develop a high level of human development, to strengthen the resilience of individuals and communities and to foster greater trust in government and in society. 14. While the overarching focus on inclusive growth reflects continuity, the modalities and policy emphases for achieving inclusive growth have changed under the new government. For example, the Duterte administration’s focus on rapidly scaling up infrastructure investment places new emphasis on increased use of public sector financing and construction, and investment outside of Metro Manila. Though recognizing the value brought by the private sector, the government also acknowledges the important role of the public sector in infrastructure investments along with challenges with public-private partnerships based on its past experience. The government is thus introducing a “hybrid financing” model that leads with public financing, particularly for large transport projects (roads, bridges, urban) and local infrastructure, 13 http://www.dbm.gov.ph/wp-content/uploads/BESF/BESF2018/B5.pdf 14 World Bank projections. Government projects debt to GDP ratio of 40.6 percent for 2017. 15 PDP (2017-2022), Chapter 3 – Overlay of Economic Growth, Demographic Trends, and Physical Characteristics 16 PDP (2017-2022), Chapter 4 – Philippine Development Plan 2017-2022, Overall Framework. 4 and subsequently integrates private investment for operations and maintenance.17 To achieve the objectives of the “Golden Age of Infrastructure” program, dubbed “Dutertenomics,” highly consequential national policy reforms are proposed. A comprehensive tax reform package, approved by the House of Representatives in May 2017, seeks to ensure higher domestic revenue mobilization to sustainably finance the planned infrastructure program.18 The Budget Reform Bill, filed in both houses of Congress in May 2017, carries forward efforts to strengthen accountability and will support stronger linkages between planning, programming and budgeting. As reflected in the PDP 2017-2022, the government's thrust on ensuring security, safety, and public order also reflects a new policy emphasis.19 Finally, as with any new administration, bilateral relations and alliances are also evolving, with stronger focus on regional partnerships. 15. A key priority of the government is to advance the peace process in the country, Box 1: Drivers of violence in conflict-affected Mindanao including finalizing peace agreements with all include social inequality, injustice and weak governance internal armed conflict groups and pursuing Roughly 60 percent of Mindanao’s cities and municipalities greater integration of the development and are affected by conflict, including the Autonomous Region peace agendas.20 For Mindanao, along with in Muslim Mindanao (ARMM). As discussed in the the deliberation of a new Bangsamoro Basic Philippines Mindanao Jobs Report (2017), the main drivers Law (see Box 1) as expected in 2017, the of conflict are both economic and political. They include government is pursuing the adoption of a discrimination, land conflict, injustice, and weak federal form of government that includes the governance. Resolving conflict in Mindanao rests on creation of the state of Bangsamoro.21 addressing root causes and providing jobs and economic opportunities as alternatives to violence. The PDP 16. Delivering the expansive policy highlights key aspects of the peace process in Mindanao, including the two breakthroughs in the peace talks between agenda with a strong degree of urgency may the government and the Moro Islamic Liberation Front pose new challenges, affecting the already (MILF) – namely, signing of the Framework Agreement on complex political economy of reform. The the Bangsamoro (FAB) in 2012 and signing of the governing coalition is highly diverse and Comprehensive Agreement on the Bangsamoro (CAB) in reflects a wide spectrum of constituencies. 2014. There is yet no enabling law to implement the peace Such diversity can strengthen agreement. The CAB proposes a comprehensive political representativeness while also potentially settlement through passage of the Bangsamoro Basic Law increasing challenges for consensus building (BBL) that will create the new Bangsamoro entity and and cohesive policymaking. Implementing the replace the current ARMM and the normalization process in government’s agenda will test capacity at all the Bangsamoro. The enabling law for the Bangsamoro levels of government, as significant reforms political entity is one of the pillars of the government’s aim to simultaneously scale-up public legislative agenda for attaining just and lasting peace. investments and improve service delivery to the Filipino people. This will include the Source: Philippines Mindanao Jobs Report (World Bank Group 2017, forthcoming); PDP Chapter 17 – Attaining rollout of the National Rightsizing Program, Just and Lasting Peace. which aims to enhance institutional capacity for improved public service delivery through rationalization.22 In relation to the peace agenda, the evolving security environment in Mindanao includes risks of intensification of conflict, such as the outbreak in Marawi Box 2: Trust in May 2017, beginning continue Fund partnerships that add to strengthen 23 uncertainty and urgency for completion of the peace process. client engagement for improved resultsBox 2: Drivers of violence in conflict-affected Mindanao include social 17 In the context of the hybrid PPP formula, “the government selects, inequality, injustice finances (including and borrowing atweak governance lower rates through grants and concessional loans) and builds big-ticket projects through competitive public bidding and, upon completion, auctions off their operation and maintenance (O&M) to the private sector.” (Source: Philippines News Agency; Presidential Communications Operations Office) 18 Roughly 60 percent of Mindanao’s cities and municipalities Seventeenth Congress of the Republic of the Philippines. Senate Bill No. 1450. 19 PDP (2017-2022). In Chapter 18 – Ensuring Security, Public Order andaffected are Safety, theby conflict, PDP including breaks down the Autonomous the accomplishment Region of this strategy into: in Muslim (a) territorial integrity and sovereignty upheld and protected, (b) all forms and illegal (ARMM). Mindanao of criminality Asreduced, drugs significantly discussed in safety the (c) public ensured, and (d) security and safety of OFs ensured. Philippines Mindanao Jobs Report (2017), the main drivers 20 PDP (2017-2022), Chapter 17 – Attaining Just and Lasting Peace 21 of conflict are both economic and political. They including Republic of the Philippines House of Representatives, Seventeenth Congress. Resolution of both Houses No. 9. 22 Seventeenth Congress of the Republic of the Philippines. Senate Bill discrimination, No. 1167. land conflict, injustice, and weak 23 Proclamation No. 216 Declaring a State of Martial Law and Suspending governance. Resolving the Privilege of the Writ ofconflict in Mindanao Habeas Corpus in the Whole of rests on Mindanao. 5 addressing root causes and providing jobs and economic opportunities as alternatives to violence. The PDP highlights key aspects of the peace process in Mindanao, including the two breakthroughs in the peace talks between the government and the Moro Islamic Liberation Front 17. The new PDP’s focus on inclusive growth and poverty reduction is congruent with the WBG goals and provides a platform for robust continued development partnership with the Philippines. The government has confirmed the continued relevance of the CPS and the value of strong WBG partnership to end poverty and promote shared prosperity sustainably.24 Further, the Philippines has outlined national priorities for the Sustainable Development Goals (SDGs)25 and has ratified the Paris Agreement for Climate Change (COP21) in March 2017, aiming to reduce Green House Gas (GHG) emission by 70 percent by 2030. International partnership will continue to play a role in supporting delivery on this agenda. In a dynamic operating context, WBG engagement in the Philippines in FY18-FY19 will need to be both robust and adaptive – proactively addressing implementation challenges; integrating lessons; and mitigating risks in close collaboration with the government, stakeholders and development partners. III. SUMMARY OF PROGRAM IMPLEMENTATION Partnerships and Leveraging 18. Partnership with the development community, the private sector and civil society is integral to the WBG partnership with the Philippines. Key dimensions of WBG support for collaboration among Development Partners (DPs), for example, include: (i) quarterly meetings at the policy and program level with major Overseas Development Assistance (ODA) partners;26 and (ii) operational partnerships, such as Trust Funds and a new co-financing partnership with the Asian Infrastructure Investment Bank (AIIB). Towards wider dialogue, the WBG and the Asian Development Bank (ADB) supported the 2016 Philippine Development Forum in November 2016, allowing for early discussion of the new policy directions of the government. 19. Led by IFC, engagement with the private sector at the local and national levels in the Philippines is enhancing the enabling environment for investment. IFC partners with private firms on a range of programs, including partnerships with financial institutions to build agri-financing capacity in order to support farmers and agribusinesses Micro, Small and Medium Enterprises (MSMEs) and develop agriculture micro-insurance products to protect farmers against weather/typhoon risks. On the broader reform agenda, IFC engages closely with entities that facilitate public-private dialogue, such as the National Competitiveness Council, the Export Development Council and national and local chambers of commerce on diverse issues such as the ease of doing business, logistics efficiency, trade facilitation, and other reforms that support private sector development. To strengthen corporate governance, IFC engaged with the Securities and Exchange Commission (SEC) on the revision of the corporate governance code for publicly listed companies (completed in January 2017) and advised the Shareholders Association of the Philippines to help educate investors and shareholders of their rights, duties and responsibilities. The IFC Transactional Advisory team also helped the country to mobilize private sector resources to deliver critical infrastructure PPP projects, notably Manila Light Rail Transit (LRT) System 1 and the Ninoy Aquino International Airport (NAIA) expressway. 20. Trust Funds have deepened joint action with development partners in priority areas (see Box 2). With a total of 70 grants and commitments of US$211 million in end-May 2017, the trust fund portfolio is dominated by recipient executed grants. Close to three quarters of the TF portfolio is fully integrated and monitored with the loan portfolio. 21. Co-financing partnerships and joint implementation with DPs extend the reach of WBG engagement in the Philippines. The Bank is pursing co-financing at the project level, including an 24 The World Bank accounted for 19.55 percent of the ODA portfolio of the Philippines as of March 2017. 25 Philippine Initiatives in the Implementation of the Sustainable Development Goals. National Voluntary Reviews. HLPF, July 2016. 26 Participation includes the ADB, Australia, Canada, European Union, France, Germany, IMF, Japan, Korea, Spain, the United Kingdom, the United Nations, and the United States. 6 Box 2: Trust Fund partnerships continue to strengthen client engagement for improved results The Bank-administered Mindanao Trust Fund is supported by long-term partnership among the European Union (EU) and the governments of Sweden, Australia, Canada, the United States, and New Zealand. The MTF has delivered significant peace-building support to conflict-affected areas in Mindanao and has been extended to June 2019. The Bank serves as co-chair of the MTF alongside the go vernment’s Office of the Presidential Adviser on the Peace Process (OPAPP) and the Bangsamoro Development Agency, the development arm of the Moro Islamic Liberation Front. The programmatic Australia WB Philippines Development Trust Fund (PH-PTF), the backbone of Bank collaboration with Australia in the Philippines, has been extended through 2019 with a sharper focus on (i) inclusive economic growth and (ii) peace and stability, themes closely resonant with the PDP 2017-2022 and the WBG country strategy. Established in 2009 and currently funded at US$44.8m, the PH-PTF has strengthened the Bank’s responsiveness to government requests for technical advice and analytical work, including policy dialogue during the political transition in 2016. Collaboration through TFs in the energy sector has increased during the CPS period, including approval in FY16 of the €29m EU-financed Access to Sustainable Energy Project (ASEP); US$3 million from the Global Partnership on Output-based Aid (GPOBA) will support solar energy-based electrification and network supply in the context of the project; and the Philippines Renewable Energy Development (PHRED) project, financed by the Clean Technology Fund (CTF) and structured as a stand-alone CTF Guarantee. upcoming operation for FY18 (Metro Manila Flood Management Project) that is being prepared for co- financing with the Box 3: Results at AIIB. a GlanceCollaboration for the between -- WBG support Bank and Inclusive the ADB Growth, includes Poverty mutual andsupport Reduction Sharedfor Pantawid Pamilyang (4Ps) and the National Prosperity in the Philippines (FY15-FY17) Community-Driven Development Project (NCDDP). The Bank has worked with the ADB and the Japan International Cooperation Agency (JICA) to harmonize procedures across the three agencies around government regulations related to procurement. Together with Australia, the agencies have also cooperated in establishing the Philippine Learning Center on Environmental and Social Sustainability to help promote environmental and social safeguards and standards in the Philippines. On Mindanao, the Bank and the United Nations Development Programme (UNDP) jointly administer the Facility for Advisory Support for Transition Capacities (FASTRAC), which provides Technical Assistance (TA) that includes on-demand training, policy advice, research, and access to a pool of experts to help address key issues for the transition to the Bangsamoro. 22. Dialogue with civil society has provided valuable perspective on country development issues and on WBG partnership with the Philippines. WBG engagement with stakeholder groups during the CPS period has been wide-ranging, from targeted consultations for flagship reports such as the Philippines Mindanao Jobs Report to increased recent outreach to youth leaders and online influencers. Partnership with the Knowledge for Development Community (KDCs), consisting of institutions of higher learning, foundations, and policy/research institutions, has helped promote constructive dialogue with local government, business groups, media, youth and other stakeholders. KDC partners from the Central Philippine University in Iloilo, St. Paul University Philippines in Tuguegarao and Notre Dame University in Cotabato co-organized focus group consultations for the Philippines PLR in May 2017 (see Annex 9). Portfolio Evolution and Performance (FY15-FY17) 23. The WBG program has been relatively steady in terms of project number, size and sectoral coverage, notwithstanding the political transition in 2016. The active IBRD portfolio during fiscal years (FY) 2015-2017 remained at roughly US$3 billion. Lending for the first two years of the CPS was at the higher end of the annual envelope, amounting to US$917 million (three projects including one DPL) in FY15 and US$950 million (two projects including a CAT-DDO), in FY16.27 Fiscal year 2017 was a Box 4: Highlights on Mainstreaming Gender across the WBG PortfolioBox 3: Results at a Glance -- WBG 27 The CPS envisioned support an IBRD lending for Inclusive Growth,program of 1-2 multi-sectoral Poverty Reductioninvestment projects Prosperity and Shared inyear and one DPL per the from FY15-18, with Philippines lending in (FY15- the range of US$600 FY17)Box to US$1 millionFund 2: Trust billion per year.continue to strengthen client engagement for improved results partnerships 7 TBox 3: Results at a Glance -- WBG support for Inclusive Growth, Poverty Reduction and Shared Prosperity in the Philippines (FY15-FY17) AustraliaBox 4: Highlights on Mainstreaming Gender across the WBG Portfolio significant peace-building support to conflict-affected areas in Mindanao and has been extended to June 2019. transitional year for the IBRD program due to national elections and political transition. Nonetheless, two important projects were delivered in support of the inclusive growth and infrastructure agenda: the US$40.7 million Manila Bus Rapid Transit Line 1 Project (in collaboration with Agence Française de Développement and the Clean Technology Fund) and the US$99 million Inclusive Partnership for Agricultural Competitiveness Project. In terms of sectoral coverage, the IBRD portfolio has maintained its focus on human development (27 percent of the overall commitments), followed by infrastructure, agriculture and social development (approximately 20 percent each). During the CPS, support to the Disaster Risk Management (DRM) agenda increased from zero to 18 percent. By end-2016, the IFC portfolio amounted to US$613 million in commitments, led by investments in financial institutions (53 percent); infrastructure and natural resources (39 percent) and manufacturing, agribusiness and services (8 percent). MIGA has no exposure in the Philippines. 24. Advisory services and analytics (ASA) underpin the lending program and serve as a platform for sharing knowledge from the development experience of the Philippines. ASA deliverables rose steadily from FY13 to FY16, peaking at some 45 in FY16. In line with the CPS, programmatic ASAs underpinned nearly 80 percent of all deliveries, including just-in-time advice, analytical studies and capacity building. In response to the Framework Agreement on the Bangsamoro in October 2014, for example, the Bank significantly expanded its ASA program (partly in partnership with the United Nations), with a mix of activities focusing on the anticipated transition to the Bangsamoro and on long-term development challenges in conflict-affected areas such as weak governance, insecurity and limited economic opportunity. More broadly, intensive WBG advisory work and technical support during the CPS period have included actionable policy analysis, such as work on mainstreaming climate change in the budget process; power sector strategy advice; a major urbanization review; and support for development of the Flood Management Master Plan for Metro Manila and Surrounding Areas.28 During the political transition in 2016, the WBG also developed a package of 19 “Transition Policy Notes” on themes ranging from governance and to social protection to rice policy and traffic management. Delivered to the new administration within days of inauguration, the Transition Notes proved to be a useful springboard for engagement and policy dialogue. 25. Proactive efforts over several years have helped to address weak project outcome ratings, which are now showing improvement.29 A review of the Philippines portfolio near the start of the CPS period in FY14 identified several factors that contributed to unsatisfactory exit ratings in the portfolio, including overly ambitious project design; inadequate results frameworks and weak monitoring and evaluation arrangements; weak capacity of implementing agencies; and failure to restructure projects. The WBG has undertaken measures during the CPS period to strengthen the implementation and monitoring of the portfolio, including comprehensive reviews of the results frameworks of ongoing projects and intensified supervision of complex operations, with hands-on support to resolve issues related to FM and procurement. As a result, the Philippines portfolio shows a higher rate of proactivity – i.e. taking actions to address implementation problems – than the average within the WB East Asia and Pacific (EAP) region. During the CPS period to date, 10 projects were restructured and four projects were cancelled or dropped.30 Although the number of problem projects has declined from five in FY15 to three in FY17, the commitments at risk remain at 15 percent of the total. 26. Longstanding portfolio quality issues in the Philippines have included lengthy project preparation, delays in project start-up, and implementation bottlenecks. Complex bureaucratic procedures and implementation capacity on the ground are among the key factors contributing to slow start- 28 The Philippines Urbanization Review (2017), for example, notes that policy measures to improve inter-city connectivity should be prioritized based on an integrated transport framework that takes into account selectivity, sequencing and prioritization. 29 In FY12-13 only one out of nine closed projects evaluated by the Independent Evaluation Group (IEG) was rated as having satisfactorily achieved its outcomes (MS rating). In FY14, four out of nine projects received rating of MS or higher. During FY15-16 IEG evaluated three of eight closed projects, all three of which were rated MS or higher. 30 Specifically, an agribusiness financing facility in conflict-affected areas in Mindanao and the fourth project in a series of development policy operations were cancelled in FY17 due to changes in the priorities of the new administration. In addition, a regional infrastructure project and a project for universal health coverage were cancelled in FY15 and FY16 respectively due to change in government’s demand. 8 ups that in turn lead to disbursement delays and frequent extensions (particularly for investment loans). The new administration has streamlined the process of project approval by the Investment Coordinating Committee (ICC), which is an important milestone necessary for the project to move to appraisal. However, the timeframe from that point to full power to negotiate remains long (averaging 14 months between FY15- 17) owing to complex and multi-layered government decision-making. The Bank is also simplifying and streamlining its own operational procedures to help facilitate faster internal decision-making. In addition, the Bank is supporting several implementing agencies on operational issues through provision of TA as part of regular implementation support as well as capacity building activities funded by projects or Trust Fund resources. 27. Ongoing efforts aim to address and mitigate key implementation risks in individual projects and across the portfolio. First, there has been a shift towards more strategic operations, modernizing project design and disbursement arrangements, and strengthening the results focus. Second, the Bank introduced report-based disbursement for new operations to facilitate faster disbursements of the size and frequency needed by the borrower for smooth project implementation. In addition, project restructuring has been pursued to strengthen project results frameworks, support project Monitoring and Evaluation (M&E) and enhance quality at exit. In the context of proactive client engagement, close and continuous dialogue among task teams, implementing agencies and key counterparts at the national, regional and local levels focus on key challenges, such as procurement bottlenecks. Quarterly meetings with the government have also been instituted since FY16 to discuss implementation issues and action steps for projects and the overall portfolio. In addition, monthly internal WBG meetings with specialists in safeguards, procurement, FM and procurement along with the CMU and GPs are an early warning mechanism on potential project- specific issues requiring management attention. Progress Towards Achieving CPS Objectives 28. Solid progress on CPS objectives is underway across the WBG program, despite a wide- ranging unfinished agenda. The WBG team has conducted annual reviews of the CPS results matrix, which includes 33 outcome indicators and some 126 progress milestones. At the CPS mid-point in FY17, 61 percent of the outcome indicators (20 of 33) have been fully achieved or are on track for achievement within the CPS period while 75 percent of progress milestones are partially achieved, fully achieved or on track for achievement within the CPS period (95 of 126). Strong performance on CPS results milestones in EA5, focused on peace, institution building and social and economic opportunity in Mindanao, is notable; all but one progress milestone was fully or partially reached or on track. To complement the detailed stocktaking of CPS outcomes and milestones in Annex 3, qualitative highlights of emerging results are below along with results at-a-glance across CPS engagement areas (see Box 3). 29. The WBG program under Engagement Area #1, Transparent and Accountable Government, shows progress on the three target outcomes, namely: (i) strengthening public finances, fiscal transparency and financial accounting, with four of eight milestones achieved, partially achieved or on track; (ii) strengthening public sector institutions, with nine of 12 milestones achieved or on track; and (iii) strengthening pressure for government accountability, with 10 of 12 milestones partially achieved, achieved or on track. Looking ahead, crucial institutional reforms will require strong implementation and continued technical assistance. • WBG policy lending and technical advice has helped to enhance the effectiveness and efficiency of public resource use, also boosting accountability. At the national level, the WBG Development Policy Loans series (DPL I, II and III) helped fund reforms across DPL pillars and benefitted the bottom 40 percent of the population by supporting well-focused policy actions, including for farm-to-market roads, social protection, and the sin tax reform.31 Public financial management has also strengthened in key dimensions (including in planning; policy-based budgeting; and budget execution32 while fiscal 31 See Implementation Completion and Results Report (Report No. ICR00003450). A recently completed sin tax monitoring and evaluation report shows marked reduction in consumption of cigarettes by the poor. 32 2016 Public Expenditure and Financial Assessment (PEFA) showed improvements in each of these areas relative to 2010 assessment. 9 Box 3: Results at a Glance -- WBG support for Inclusive Growth, Poverty Reduction and Shared Prosperity in the Philippines (FY15-FY17) ▪ Roughly 2 million people – half of whom are women –benefitted from improved public Transparent and services, including over 702,000 benefitting from cleaner, safer public markets and/or public Accountable terminals Government ▪ CDD program has already reach 94 percent of the target, currently providing support in 19,593 villages across 794 municipalities. ▪ Listahanan, the national household targeting system, reaches three out of four households Empowerment of across the country the Poor and ▪ 20,000 education officials trained and equipped to train others on teaching early grade reading Vulnerable and mathematics ▪ 43,779 beneficiaries have been given access to improved water supply, with 9,974 new connections corresponding to a 3% increase in service coverage Rapid, Inclusive ▪ 298 km roads, 1,996 linear meters of bridges, and 39 slip sites built/improved and Sustained ▪ PhP 2.184 billion (or US$43.52 million) saved by geo-tagging rural development projects to Economic Growth avoid duplication or overlap with existing infrastructure ▪ 2 million metric tons of greenhouse-gas (GHG) emissions avoided annually due to projects financed through IFC Sustainable Energy Finance(SEF) program; contributed to the publishing of the Green Building Code Climate Change, Environment and ▪ 12,234 hectares developed into agroforestry, assisted natural regeneration and reforestation Disaster Risk ▪ Ongoing development of a methodology for risk-informed development planning for national Management and local government agencies Peace, Institution Building and ▪ Over 682,000 people in Mindanao – about 53 percent of whom are women – have benefited Social & Economic from community infrastructure, livelihood and functional literacy projects Opportunity discipline, including fiscal risk management, has improved in the context of enhanced performance from the Commission on Audit (CoA)). • Support for citizen engagement, participatory local planning processes and access to information, is boosting demand for accountable government. Advances during the CPS period include partnering with CoA on Citizens’ Participatory Audits, which were broadly affirmed as an effective tool during the PLR consultations with stakeholders. The scope of Bank engagement has been wide, ranging from support for the Open Government/Open Data Initiative through which hundreds of data sets have been made public to technical support for creating the Seal of Good Housekeeping and the Full Disclosure Portal that are helping to strengthen the performance orientation of local governments.33 These efforts aim to address persistent weaknesses in service delivery, including a lack of adequate mechanisms to hold Local Government Units (LGUs) accountable; overlapping service delivery responsibilities across different levels of government; and lack of citizen feedback mechanisms. 30. WBG support under Engagement Area #2, Empowerment of the Poor and Vulnerable, targeted four outcomes: (i) strong gains in improving poverty measurement and strengthening socio-economic data systems, with three of five milestones partially achieved; (ii) improving health outcomes, with seven of nine milestones partially achieved or on track; and (iii) improving the quality of basic education and access for the vulnerable, with both milestones achieved or on track; and (iv) social protection system, with two of three milestones partially achieved. • Bank support to the social sectors has helped to strengthen the quality, targeting and impact of the government’s own anti-poverty programs. By 2016, for example, the coverage of Pantawid Pamilyang (4Ps) reached 100 percent of households with children identified as poor by Listahanan. Impact 33 The Bank provided orientation for the new administration on the platforms through the Presidential Communications Operations Office towards support for operationalizing the Freedom of Information (FoI) initiative. 10 evaluations supported by the IBRD-financed Social Welfare and Development Reform Project (SWDRP) Box 4: Highlights on mainstreaming gender confirmed that the program has boosted school across the WBG Portfolio • Social Protection: The impact evaluations enrollment and health service usage, with equal supported by the IBRD-financed SWDRP effectiveness for boys and girls as well as impacts confirmed that Family Development Sessions have related to empowering women (see Box 4).34 While played a significant role in empowering women— the PDP 2017-2022 highlights the importance of social through sessions such as citizens’ rights, spousal protection that builds the socioeconomic resilience of relationship, or maternal health. the poor and those who recently graduated from • Improving the Investment Climate: Gender poverty,35 the recent contraction in the number of Toolkit for Transportation has been officially beneficiaries of the 4Ps due to constraints in registering adopted by the Department of Public Works and new poor families identified by updated poverty Highways. targeting data (Listahanan 2015) poses a challenge. • Improved Public Service Delivery: The government aims to converge social protection Learning, Equity and Accountability Project programs, recognizing that ending cycles of poverty supports special focus on gender-balanced access to basic education through a school-based does not end with the provision of conditional cash management approach. transfers. • Informing Community-based service • Close partnerships with government agencies delivery: NCDDP has developed a guidance note on have supported improved annual poverty estimates and enhancing the gender dimension of CDD operations solid education and social protection data that are that has provided a platform for inclusion of women already used to inform policies. Support to the to increase access to public goods/services and to Philippine Statistics Authority (PSA) has wide impact promote gender-balance in community labor. and relevance, including for strengthening capacity to measure progress towards the SDGs.36 Advisory Box 5: The main component of the support has promoted robust targeting, budgeting and programming, Comprehensive including throughfor Program support for Regional Listahanan, the national targeting system. The Bank has also supported Listahang Tubig Development in Mindanao include:Box 4: , the first now owned nation-wide survey of all water service providers, which isHighlights on and maintained by Mainstreaming the National Gender across the Water Resources Board.37 Looking ahead, government WBG counterparts Portfoliohave highlighted the need for intensified efforts to improve access to data for planners•at the Social Protection national evaluations : The impactlevels and sub-national to improve programming as well as monitoring and evaluation. supported by the IBRD-financed SWDRP confirmed that Family Development Sessions have 31. The target outcomes for Engagement Area #3 - Rapid, a significant played Inclusive androleSustained in empowering women— Economic through sessions such as citizens’ rights, spousal Growth, comprise (i) strengthening economic policy, with 12 of 17 milestones partially or fully achieved relationship, or maternal health. or on track; (ii) improving the investment climate – including•greaterImproving access tothefinance, with seven of 11 Investment Climate: Gender Toolkit for Transportation productivity milestones partially or fully achieved or on track; and (iii) increasing economic growth, and has been officially or fullyby employment in rural areas, with nine of 12 milestones partiallyadopted achieved or on track. the Department of Public Works and • the enabling environment for more rapid, Several policy advances since 2014 have improved Highways. inclusive and sustained growth of the Philippine economy.• IFC advisoryImprovedsupportPublic Bank technical and Service Delivery: work have helped to inform key legislative achievements during the CPS Learning, period, Equity andincluding the landmark Accountability Project Philippine Competition Act and the Foreign Ships Co-Loading supports Actspecial on gender-balanced focus The in 2015. access to National Financial Inclusion Strategy was launched in 2015 while Secured basic education Transactions Reform – Personal through a school-based Property management approach. Securities Act, now a priority bill with the current Congress, will increase access to finance for SME entrepreneurs and farmers as well as enhance competitiveness. • Informing Community-based service • delivery: NCDDP WBG support has focused on addressing significant ongoing has developed challenges and on a guidance note to competitiveness enhancing the gender dimension of CDD operations rural development that hinder the achievement of CPS objectives. Low agricultural productivity and that has provided a platform for inclusion of women high food prices, for example, make overall economic growth less inclusive. The Mindanao Rural to increase access to public goods/services and to Development Program 2 (MRDP2), which closed in December 2014, supported 976,694 promote gender-balance project directlabor. in community 34 IEG Review of SWDRP. “Analytic and Advisory Activity provided by Bank can have influence beyond a single project: DSWD’s access to Box cascaded technical, analytical, policy, and implementation-related advice throughout implementation 5: to main and other agencies The also benefited the component of the general social welfare reform policy and implementation process.” Comprehensive Program for Regional 35 PDP 2017, Chapter 11 – Reducing Vulnerability of Individuals and Families. 36 Development National Review at the 2016 High-Level Political Forum on the Sustainable Development Philippines. include: (1) raising in Mindanao Goals (SDGs): 37 gaps productivity agricultural Listahang Tubig generated a robust database of water service providers aimed at identifying and developing and improving benchmarks connectivity to improve and expand service levels. from farm to market; (2) boosting human 11 development; and (iii) addressing the drivers of conflict and fragility along with strengthening institutions in ARMM and conflict-affected areas. Proposed activities, to be financed in a sequenced approach over time, include the following: beneficiaries of which 49 percent were women.38 The follow-on Philippine Rural Development Project (PRDP) is nationwide in scope and was acknowledged by stakeholders in PLR consultations in Iloilo and Tuguegarao. As of April 2017, some 427,000 households have benefitted from the PRDP, and construction has generated more than 5,800 short-term jobs. Early impacts indicate about a 60 percent reduction in travel time and 50 percent increase in road usage in project areas. Importantly, WBG partnership during the CPS period has also continued to emphasize implementation capacity, including technical dialogue with the Department of Public Works and Highways (DPWH) on governance and geotagging of infrastructure projects to enhance transparency. 32. The Philippines is among the most vulnerable countries to extreme weather events, rising sea levels and earthquakes. The CPS outlined two core outcomes for Engagement Area #4, Climate Change, Environment and Disaster Risk Management, namely to (i) increase resilience to natural disaster and climate change impacts, with all eight milestones either partially or fully achieved or on track; and to (ii) improve natural resource management and sustainable development, with eight of 12 milestones partially or fully achieved or on track. • The Philippines has made strong progress to strengthen the foundation for managing risks associated with climate change and disasters. Overall, the climate-related share for IBRD lending in the Philippines from FY15-17 is 46.5 percent.39 Technical advisory work has supported the establishment of climate budgeting in the Philippines, and Climate Change Expenditure Tagging (CCET) has been mainstreamed in the government planning process.40 Key advances in disaster risk management include the enhanced management of fiscal exposure to natural hazards impacts; mainstreaming of disaster risk planning; and delivery of the Disaster Risk Finance and Insurance Strategy, an important milestone for the government. The Bank-financed CAT-DDO helped to facilitate the piloting of a community-driven response for disaster relief and early recovery that was put into immediate use in response to Typhoon Haiyan (Yolanda) as part of the National Community-Driven Development Project (NCDDP).41 The follow-on CAT-DDO2, a standby credit facility that can facilitate swift disbursements upon declaration of a national calamity, includes advisory services (on building codes and assessment of heritage sites, for example) that are making an important contribution to the country’s disaster risk reduction management agenda. • WBG support aims to encourage development of renewable energy and improvement of energy efficiency to support a low-carbon economy and the Philippines’ COP21 commitments. IFC helped to increase financing for projects in energy efficiency (EE) and renewable energy (RE) by introducing a new business line to banks through the Sustainable Energy Finance (SEF) program in the Philippines. Four IFC advisory client banks finance some 193 projects worth US$880 million from 2009-2015, helping to avoid 2 million metric tons of greenhouse-gas emissions annually.42 33. Target outcomes for Engagement Area #5 – Peace, Institution Building and Social and Economic Opportunity, were (i) increasing trust within communities and between citizens and the state in conflict areas, with all five milestones either fully achieved, partially achieved or on track; and (ii) development and implementation of a “peace dividend” program in the Bangsamoro, with nine of 10 indicators partially achieved, fully achieved or on track. • Engagement across the WBG program has extended services and basic infrastructure to the poor in Mindanao, including a deepening of support to conflict-affected areas. Bank financing reaches Mindanao through national projects, including PRDP, NCDDP, SWRDP 2 and the National Roads Improvement Project 2. The Bank-administered Mindanao Trust Fund (MTF) has helped to build the 38 Mindanao Rural Development Program 2: IEG Implementation and Completion Report. (Report Number: ICRR14906). 39 FY17 data is based on April 2017 analysis. 40 Progress is grounded in close engagement across the Department of Budget Management (DBM), the Climate Change Commission (CCC) and NEDA among other agencies. With the information provided by Climate Change Expenditure tagging, now in its third year, DBM now has a better picture of funding for Climate change in the General Appropriations Act. This is now leading to proposed changes in priority funding for climate resilience activities through the Risk Resiliency and Sustainability Program (RRSP). 41 Implementation Completion and Results Report, Disaster Risk Management Development Policy Loan with a Catastrophe Deferred Drawdown Option (CAT-DDO). Report No. ICR00003102. Also see, IEG ICR Review (Report No. ICRR14794). August 2015. 42 World Bank: EAP Regional Update, February 2017 12 institutional capacity of the Bangsamoro Development Agency (BDA) and other agencies of the Moro Islamic Liberation Front (MILF) and has also reached over 682,000 beneficiaries through CDD-based subprojects in water supply, post-harvest facilities, access roads and other community-based infrastructure. While the MTF’s community-enterprise development component has reached over 1,100 people with training and capacity support to run micro-enterprises, the implementation experience has also highlighted challenges associated with ensuring the long-term viability and profitability of the enterprises. • WBG analytical work and technical support have had wide policy impact. For example, the Bank- financed Public Expenditure Review in Basic Education for ARMM helped to stimulate policy action and dialogue between the national and local levels of government and enabled ARMM to secure a larger budget for education.43 The WBG-financed MILF Ex-Combatants Needs Assessment helped to capture the aspirations for peace and economic opportunity while the recommendations of the Land Conflict study prepared for the Transitional Justice and Reconciliation Commission had significant policy uptake. World Bank technical advice also informed the Islamic Finance Bill filed in the Senate in July 2016 to help ensure alignment with international standards and good practice for regulation and supervision of Islamic finance. IV. EMERGING LESSONS 34. In the context of significant institutional fragmentation, complementary support across CPS Engagement Areas can promote inter-agency collaboration for service delivery. The CPS highlighted the challenge of institutional fragmentation and pinpointed the notion of “convergence” – i.e. government working across sector boundaries and silos – as an explicit criterion for WBG engagement. The CPS experience to date shows that WB financing for Pantawid Pamilyang (4Ps), community-driven development, and rural development have served as platforms for implementation and service delivery across various implementing agencies that otherwise operate mainly within their respective sectors. 44 Looking ahead, continued effort to promote inter-agency collaboration for results can support the new PDP’s “whole-of-government” strategy for more seamless service provision and help to boost delivery on the SDGs. For example, future ASA engagement in the water sector can support increased linkages across key sectors (health, nutrition, poverty reduction programs, and water supply and sanitation programs) to improve the complementarity of investment operations towards achieving health, nutrition, and population outcomes.45 The proposed Mindanao program, which includes a set of complementary activities, will aim to promote inter-agency synergies where appropriate and supported by implementing agency partners. 35. Project preparation and delivery in the Philippines is a long process, calling for increased realism at the project and program level. The experience to date highlights the need for strong dialogue and upfront agreement on the pipeline, continued effort to simplify/accelerate approval,46 and flexibility to scale-up engagements that demonstrate good implementation and results with due consideration of readiness. The CPS experience also affirms the importance of realism in the design of development interventions to promote alignment with country circumstances and political economy. Findings of the Independent Evaluation Group (IEG) of the WBG highlight the role of continual dialogue with counterparts and in-depth analytical work for identifying risks and ensuring realism.47 Regular dialogue at the level of both implementing agencies and oversight agencies is a critical part of program discussions with the government and will continue to be undertaken to ensure that the program will reflect the above factors, 43 Although ARMM regional socioeconomic indicators lag well behind national indicators, recent improvements are most plausibly attributable to improved security, better governance and significant increases in the ARMM budget. The Bank's AAA program contributed materially to these latter two factors. 44 This discussion refers to the National Community Driven Development Project (NCDDP); the Social Welfare and Development Reform Project 2 (SWDRP2), and the Philippine Rural Development Project (PRDP). 45 Reflects a key recommendation from the Synthesis Report for the WB Programmatic ASA “Support to Rural Sanitation Scale Up under the Philippine National Sustainable Sanitation Plan” (P132174), May 2016. 46 Government efforts are ongoing to streamline/fast track the approval process including a recent policy directive that will allow the ICC to expedite the clearing of the pipeline of projects while promoting greater flexibility and accountability of implementing agencies. 47 Results and Performance of the World Bank Group 2012. (World Bank, IEG: Washington, DC. 2012) 13 including in the design of specific projects and the choice of instruments. Insights from civil society, including think tanks, can also inform project design and promote realism. 36. With an increasing proportion of major conflicts now taking place in Middle Income Countries (MICs), the Bank's experience of long-term engagement in Mindanao has wide relevance. In 2016, IEG highlighted the WBG’s conflict-related work in Mindanao as “a good example of active and effective long-term World Bank Group engagement for FCV situations in MICs.” WB support for peace and development in Mindanao has emphasized the fundamentals: long-term partnership; delivery of services valued by conflict-affected communities; building social cohesion; and investing in knowledge and technical support for informed dialogue and policy-making. IFC experience in working in ARMM points to the importance of partnering with the right private sector partners who understand the culture and beliefs of the people in the area and maintain good relationships with them. A decade of continuity has enabled the WBG to translate global experience into relevant expertise and to thereby earn the trust of local counterparts. Global experience on transformation in fragile situations illustrates the need for continuity in approach, as building legitimate institutions is a long-term process. Going forward, the Mindanao program will build on this engagement and partnership in Mindanao and will include analytical and advisory work and direct investments. 37. Regarding Bank-financed CDD projects, stakeholders emphasized the value of participatory processes while noting the challenge of ensuring strategic coherence and wider transformation. Feedback from PLR consultations proposed that participatory processes through CDD sub-projects had boosted accountability and local ownership, also creating space for increased participation of women and Indigenous People. Lessons from Bank engagement in Mindanao and evaluations of national CDD programs in Afghanistan and Indonesia affirm these perceptions, noting that principal impacts of well- managed CDD programs are interpersonal and institutional. At the same time, project experience and participant feedback also highlighted challenges. The evaluation of the MRDP2 project pointed to the need for CDD approaches to incorporate or align with national and regional strategic objectives towards ensuring cost-effectiveness. For example, CDD-supported development of rural roads at the request of communities needs to link to main arteries or markets. These considerations were recognized in mid-course corrections to MRDP2 and are reflected in the design of the follow-on PRDP.48 V. ADJUSTMENTS TO THE COUNTRY PARTNERSHIP STRATEGY 38. Given strong alignment with the PDP 2017-2022, the objectives and engagement areas of the CPS will be maintained while the CPS period will be extended by one year through FY19. Dialogue with government counterparts has affirmed that the CPS objectives to promote inclusive growth, poverty reduction and shared prosperity are highly relevant for the PDP 2017-2022. The CPS objectives are also firmly anchored in the WBG goals and are supportive of continued progress by the Philippines on the SDGs. Stakeholders during PLR consultations in Tuguegarao, Iloilo and Cotabato also affirmed that the alignment between the CPS and the PDP 2017-2022 extends across a range of fronts – from focus on delivering social protection for the poor and vulnerable, to promoting competitiveness, to boosting rural development and strengthening resilience. In light of the recent launch of the new PDP in 2017, a one-year extension of the CPS period is proposed to allow for further progress under the current program and for building the analytical foundations for the new CPF, including delivery of a Systematic Country Diagnostic (SCD) for the Philippines. The SCD will incorporate key analytical inputs, including from the ongoing Poverty Assessment, the Nutrition ASA, and a simplified Risk and Resilience Assessment (RRA). 39. The FY18-19 program is responsive to evolving client demand, including for deeper WBG engagement in Mindanao, and integrates lessons learned.49 Client demand shows a gradual shifting from large single investment operations towards focused and selective implementation support operations 48 IEG Implementation Completion Review (ICR). Mindanao Rural Development Project - Phase 2. Report No. ICRR14906. 49 The CPS selectivity filters (focus on poverty and shared prosperity; transformational engagements; and convergence/multi-sectoral solutions) were applicable at the program level for the Comprehensive Program for Regional Development in Mindanao. 14 that emphasize the transfer of knowledge and technical expertise. Budget support also remains a preference of the government. Towards delivering on the “Golden Age of Infrastructure,” the government has also outlined a significant scale-up of infrastructure expenditure. IFC’s investment program will include focus on mobilizing investment in infrastructure (including for tourism) among other critical sectors. The Bank will also work together with government to identify opportunities to inform and contribute to the infrastructure agenda; the ASA program, for example, will incorporate technical advice on local infrastructure for tourism and the national and provincial roads program. A planned expansion in the mix of instruments in the FY18-FY19 program, which will include the introduction of Reimbursable Advisory Services (RASs) and the Program for Results (PforR), will allow for enhanced customization in Bank support for government priorities and programs. In addition, lessons from implementation to date have informed the FY18-19 program. The proposed scale-up of WBG engagement in Mindanao, for example, will be complemented by continued support for community-driven development, which has been proven effective for promoting confidence-building, participation and small scale projects in conflict-affected areas (see Annex 9, feedback from PLR consultations). Delivery of the program will also consider broader lessons learned, including from ongoing WBG support for inclusive growth, value chain development and inter-agency collaboration. Objectives and Plan of Activities for FY18-19 40. While the lending program cuts across all engagement areas, three EAs feature prominently in the FY18-19 program (Annex 4). First, the WBG will take initial steps on delivery of the Comprehensive Program for Regional Development in Mindanao, which falls under EA5 and is discussed below, including both grant support and lending over the next two years. In addition, IBRD lending associated with aspects of transparent and accountable government (EA1) and rapid, inclusive and sustained economic growth (EA3) feature prominently. For EA4, planned analytical work for FY18-19, presented in Annex 5, continues to reflect deep investments in knowledge, including the Risk Resiliency and Sustainability Program that will inform future support related for climate change. Likewise, for EA2, strong engagement on social protection through the SWDRP 2 program is ongoing and a substantial body of analytic work will further anchor WBG engagement for empowering the poor and the vulnerable. • As reflected in Annex 4, the FY18 IBRD pipeline comprises four projects, with total commitment amounting to US$660 million. Selectivity criteria for the FY18-19 program consisted of client priorities and demand, relevance for the PDP 2017-2022, relevance for CPS objectives and areas where the Bank can bring value addition in terms of global experience and technical expertise.50 The pipeline includes a fiscal space and transparency DPL (US$300 million); the Metro Manila Flood Management Project (US$210 million),51 co-financed with AIIB; and additional financing for the Philippine Rural Development Project (US$150 million). The FY19 program comprises five projects with total commitment of US$750 million, including: a customs and trade modernization project; an e-government transformation project; a first-tranche of a new DPL series on competitiveness; and the first two projects proposed for the Comprehensive Program for Regional Development in Mindanao (see below) on inclusive agriculture and the other on basic education. Two projects are on stand-by for FY19: a program to develop MSMEs through a PforR; and a scholarship project for strengthening institutional capacity. Dialogue on potential RAS related to public financial management is ongoing. Active program management through continued dialogue on a three-year rolling pipeline (FY18-FY20) will incorporate discussions on potential co- financing to complement IBRD financing. Finally, any IBRD lending volumes over the next two fiscal years may depend on country demand, overall performance, as well as global economic/financial developments which affect IBRD’s financial capacity, and demand by other Bank borrowers. • The WBG will continue to seek opportunities for robust engagement and collaboration in support of early delivery on the PDP 2017-2022. The WBG will also aim to 50 This includes conflict-related operations and drawing lessons from relevant policy work in other countries, such as in customs modernization. 51 Reflects rounding; precise IBRD financing amount for Metro Manila Flood Management Project is US$207.63 million. 15 support the Philippines in optimizing the use of public resources and maximizing financing for development by leveraging the private sector in line with the Cascade approach.52 In the context of synergies as One WBG, complementary involvement by both IBRD and IFC will be important for the proposed the Competitiveness DPL series, potential engagements on SME development and competition policy and the Philippines Customs Modernization project, noted above. IFC’s investment and advisory program will focus on mobilizing more private sector resources to critical sectors such as power, infrastructure (including for tourism), MSME financing, health, education and agribusiness. MIGA is actively seeking to support international investors and lenders for projects aligned with the PDP 2017-2022 and the CPS goals. Given the improving investment climate in the Philippines, and the strength of local commercial banks, demand for MIGA political risk insurance from international banks and investors is limited. However, the Mindanao region presents a particular set of risks, and in this region MIGA has a stronger role to play. MIGA is engaging with several international investors about support for potential projects in Mindanao. MIGA is also ready to support the Philippines’ PPP program, if such projects are supported by international, rather than domestic, investors and banks. 41. While the “hybrid financing” model may limit the immediate potential for private investment in construction, the private sector is still expected to play an important role in infrastructure. Continued increase in public investment is expected, from just over 5 percent of GDP in 2017 to 7 percent of GDP by 2022.53 Large transportation and infrastructure projects are expected to be financed under the “hybrid financing” model, which would provide limited opportunities for private financing of construction but would involve the private sector in operations and maintenance (O&M). The power sector, on the other hand, has benefited from important reforms in the past decade and is expected to continue being financed from the private sector under various models of PPPs, including in renewable energy capacity development. Looking ahead, there may be opportunities for “hybrid financing” in Mindanao. IFC PPP transaction advisory may also be able help facilitate identification of O&M operators from the private sector in line with the hybrid model. WBG value added will continue to be anchored in the capacity to help foster integrated approaches that can maximize the impact of infrastructure on economic development in collaboration with other development partners. Strengthening WBG Support for Peace and Development in Mindanao 42. Grant support to Mindanao will continue in FY18-19, maintaining strong focus on supporting confidence building and community-oriented engagement in conflict-affected areas. Although the first project under the MTF has closed, the MTF has been extended and the WBG has agreed with the government and development partners to carry out a follow-on project for two years (FY18-19) with US$3- 4 million in grant financing from donor partners. In addition, US$1.5 million in grant financing from the State and Peacebuilding Fund will significantly amplify the engagement for results in conflict-affected areas. CDD activities in contested areas remain a primary mechanism for serving affected communities and supporting the peace process. The crisis in Marawi that began in end-May 2017 has deepened the need to deliver on the “peace dividend” for conflict-affected communities in Mindanao. Strong engagement through CDD activities can play a role. As client demand and the operating context in Mindanao evolves, the Bank could also explore options to mobilize IBRD emergency project financing to scale-up grant financing. 43. In line with the new PDP’s focus on linking lagging regions to growth poles, the proposed Comprehensive Program for Regional Development in Mindanao will focus on the development needs of Mindanao as a whole. The Philippines Mindanao Jobs Report provides the analytical basis for the program and describes the rationale, scope and content of the program in detail. Briefly, the proposed program would carry forward WBG engagement on peace building while also broadening the engagement 52 A Stronger World Bank Group for All (Washington, DC: World Bank. March 2017) 53 State of the Nation Address (SONA), July 24, 2017. This compares to a low of 1.81 percent and 2.74 percent of GDP between 2011 and 2014. 16 to both the conflict-affected and non-conflict-affected areas of Mindanao. The program is responsive to the priorities outlined in the PDP 2017-2022 and to the NSS. It integrates a spatial/geographical focus for reaching the poorest beneficiaries in Mindanao while also linking hinterlands to main markets and ports along key corridors. Core components of the program include: (i) raising agricultural productivity, connectivity and logistics from farm to market; (ii) boosting human development; and (iii) addressing drivers of conflict. As reflected in Box 5, a range of mutually reinforcing activities are envisaged under these components. The Philippines Customs Modernization and Trade Facilitation; Basic Education with Focus on Mindanao; and Mindanao Inclusive Agriculture Development projects are in the FY19 pipeline. 44. Collaboration with other development partners will be integral to the program. Co-financing partnerships will be explored with bilateral development partners as well as with the ADB and AIIB. In addition, the proposed Mindanao program will incorporate conflict sensitivity in design and implementation to be responsive to drivers of conflict and fragility in Mindanao. Box 5: The main components of the Comprehensive Program for Regional Development in Mindanao and proposed activities are outlined below . The proposed activities would be pursued in a sequenced approach over time. I. RAISE AGRICULTURAL P RODUCTIVITY & IMPROVE CONNECTIVITY FROM FARM TO MARKET 2. Improving 1. Mindanao 4. Improving Key 5. Philippines Connectivity 3. Logistic Inclusive Ports to Connect Customs from Agricultural Services Agriculture Inland Mindanao Modernization & Hinterland to Competitiveness Development to Markets Trade Facilitation Market II. BOOST HUMAN DEVELOPMENT 7. Skills & Employment 6. Basic Education for Filipino Youth with with Focus on focus on Mindanao Mindanao Project Project III. ADDRESS DRIVERS OF CONFLICT & FRAGILITY AND STRENGTHEN INSTITUTIONS IN ARMM & CONFLICT AFFECTED AREAS 8. Supporting resilient 9. Promoting communities & citizen security responsive local and justice in governance Mindanao Fit for Purpose: Adjustments to the CPS Results Matrix Box 6: Systematic Risk-Rating ToolBox 5: The main component of the Comprehensive Program for 45. The Regional CPS Results Development Matrix will in Mindanao be simplified include: toagricultural (1) raising better align with the program, productivity to further and improving clarify connectivity from the results farm chain, to market; (2)and to facilitate boosting annual progress human development; monitoring. and (iii) addressing theThe Results drivers Matrix of conflict is fragility and expansive in its along with withinstitutions strengthening coverage, in ARMMmilestones over 120 progress and conflict-affected both the activities, areas. Proposed that encompass to be financed lending program in a sequenced (see Annex 4) as approach well as theover time, large of following: include the program ASA (see Annex 5). The breadth of the matrix had the advantage of comprehensiveness but raised challenges for monitoring and for appraising the big picture of CPS performance. In addition, changes to the program rendered a large number of milestones and some results indicators no longer relevant. In the context of the PLR, the WBG team updated the Results Matrix and undertook efforts to significantly simplify and streamline the matrix going forward. Three annexes related to the results matrix comprise the following: (i) Annex 1, reflecting the simplified CPS matrix going forward; (ii) Annex 2, includes all adjustments made to the Results Matrix along with the rationale for the proposed changes; and (iii) Annex 3, the full update of the original 2014 Results Matrix, including all 17 outcome indicators and milestones agreed at the launch of the CPS. The revised results matrix in Annex 1 continues to be structured around the five CPS engagements areas, with 15 CPS outcomes in total. Indicative milestones and outcome indicators have been realigned and are directly linked to the CPS program (both financing and ASA). VI. RISKS TO CPS PROGRAM 46. Risks to the achievement of CPS objectives are Substantial. Across the nine risk Box 6: Systematic Risk-Rating Tool categories of the Systematic Risk-Rating Tool Summary Risks (H: High; S: Substantial; (SORT), three are rated substantial (see Box 6). M: Moderate; L: Low) While this risk assessment remains broadly Risk Categories Rating consistent with the analysis at the launch of the 1. Political and governance S CPS period, the current assessment focuses mainly 2. Macroeconomic M on risks to delivery of the government’s wide- 3. Sector strategies and policies S ranging reform agenda, which directly bears on the 4. Technical design of project or M achievement of CPS objectives. Political and program governance risks are substantial. In the context of 5. Institutional capacity for S a diverse governing coalition, the reform agenda implementation and will present heavy demands for consensus sustainability building, cohesive policymaking and 6. Fiduciary M implementation. Political and governance risks 7. Environment and social M associated with policy, regulation and armed 8. Stakeholders M conflict are also noted in the PDP, highlighting Overall S impacts that can increase the vulnerability of individuals and families.54 Security-related issues ranging from law and order to occurrences of conflict also have potential to add pressure and uncertainty to policy dialogue, including around the peace process; the PDP acknowledges that a range of threat groups, including private armed groups and those aligned with terrorist cells, pose security risks and could further complicate the peace process in Mindanao.55 Risks associated with inter-government relations and the sometimes overlapping mandates across public agencies also present challenges for implementation. Proactive WBG risk management in close collaboration with development partners and the government will be essential for ensuring strong delivery. 47. Feedback from government counterparts and from PLR consultations sheds light on risks primarily related to implementation. Public sector counterparts highlighted risks related to limited access to accurate data to inform policymaking. For example, data gaps such as the absence of a national database of local roadways need to be addressed to promote evidence based planning.56 As reflected in Annex 9, PLR stakeholder consultation participants emphasized the need for increased access to quality data at the local and regional levels. The PLR consultations with stakeholders also noted political and governance risks focused on local government capacity, while concerns about technical design risk and fiduciary risks incorporated accountability challenges. Proposed risk mitigation measures included the suggestion to deepen WBG efforts to build capacity for data generation and management; to address capacity constraints of LGUs; and to promote the use of participatory methods to enhance relevance and accountability. 48. In relation to the proposed scale-up of engagement in Mindanao, security-related risks will require forward-looking risk mitigation. Over the next two years (and in preparation for the next CPF), the Bank will work to strengthen capacity for implementation on the comprehensive program for regional development in Mindanao. The WBG is actively reviewing lessons from engagement in Mindanao to inform implementation going forward. Risk mitigation will include (i) active scenario planning, with 54 PDP 2017, Chapter 11 – Reducing the Vulnerability of Children and Families. 55 PDP 2017, Chapter 17 – Attaining Just and Lasting Peace 56 Philippines Urbanization Review: Fostering Competitive, Sustainable and Inclusive Cities (World Bank, 2017). 18 adaptable implementation responses; (ii) translating the concept of conflict sensitivity into practice, including through enhanced project design; and (iii) establishing mechanisms for third-party implementation when warranted by circumstances. The WBG will also undertake a simplified RRA related to support for conflict-affected areas in the Philippines to inform the SCD and the new CPF. VII. CONCLUSION 49. Strong delivery of the CPS is relevant and supportive of the objectives of the PDP, the WBG goals and the SDGs. Dialogue with government counterparts and a wide range of stakeholders strongly affirms the continued value-added of WBG partnership in the Philippines. WBG engagement in FY18- FY19 will build on the current program, address implementation weaknesses, emphasize strong collaboration with development partners and promote strong risk management and risk mitigation. A continued commitment to promoting private sector development and job creation will be reflected across the program. Lastly, the two-year timeframe for the remainder of the CPS period will allow for learning from the early experience of scaling-up support in Mindanao, introducing new instruments and deepening support for the PDP. 19 Annex 1. Philippines Updated CPS Results Matrix (FY15-19) CPS Outcomes and Indicators WBG Program (Ongoing and Indicative Milestones Indicative) Engagement Area 1: Transparent and Accountable Government Outcome 1.1 Increased public revenue 1.1.1: Comprehensive tax reform to improve equity in Financing: Ongoing/Closed mobilization (new) taxation and expansion of revenue base is submitted ✓ DPL 3 (closed) for legislative approval. (reformulated) Financing: Indicative Indicator 1: Percent increase in domestic ✓ Increasing Fiscal Space and revenue to GDP57 (new) 1.1.2: Bureau of Customs Modernization and Tariff Transparency DPL Baseline: 13.6% of GDP (2014) Act approved. (reformulated) ✓ Customs and Trade Target: 14.6% of GDP (One percentage point Modernization increase, 2019) 1.1.3: Annual Fiscal Risk Statement institutionalized ASA: and debt management strategy developed. (existing) Ongoing/Delivered/Indicative58: ✓ Just-in-Time Support for Tax Reform ✓ Programmatic Public Expenditure Review ✓ Review of Customs and Trade Modernization Challenges ✓ Economic Monitoring and Bi- annual Economic Reports Outcome 1.2: Improved quality and 1.2.1: Adoption of a uniform chart of accounts across Financing: Ongoing/Closed transparency of public financial reporting budget formulation, accounting and financial ✓ DPL 3 (closed) (new) reporting. (reformulated) Financing: Indicative ✓ Increasing Fiscal Space and Indicator 1: Quality and timeliness of annual 1.2.2: Roadmap for e-services rolled out and priority Transparency DPL financial reports (PEFA indictor P1 25)59 e-services applications identified and agreed in ✓ Customs and Trade (new) principle (existing) Modernization Baseline: C+ (2016) ✓ E-Government Transformation Target: B (2019) 1.2.3: Support a roadmap and implementation for ASA: Ongoing/Delivered/Indicative electronic Statement of Assets, Liabilities and Net ✓ Programmatic ASA on Indicator 2: Public access to key fiscal Worth (SALNS). (reformulated) governance information (PEFA indicator P1 10) (new) ✓ Support to PFM Reforms (RAS) Baseline: C60 (2014) ✓ Assessment of Capacity Building Target: A (2019) Needs in the Civil Service 57 Increasing Fiscal Space and Transparency DPL 58 Partial list of ASAs which are relevant to the outcomes. See Annex 5 for complete list. 59 Programmatic ASA on Governance and Support to PFM Reforms (RAS) 60 The 2016 status is A and the target is to maintain the status. 20 CPS Outcomes and Indicators WBG Program (Ongoing and Indicative Milestones Indicative) Engagement Area 2: Empowerment of the Poor and Vulnerable Outcome 2.1: Increased coverage and 2.1.1: All households identified as poor by NHTS are Financing: Ongoing/Closed utilization of health services (revised) fully covered by National Health Insurance Program ✓ Development Policy Lending (NHIP) (reformulated) (DPL-3) (Closed) Indicator 1: Percent of poor household (quintile 1) with PhilHealth Insurance 2.1.2: Share of households meeting health ASA: Ongoing/Delivered/Indicative Coverage (reformulated) conditionalities in CCT program reaches by 80% by ✓ Programmatic ASA for Health, Baseline: 61.6% (2012)61 2016. (existing) Nutrition and Population Target: 85% (2019) 2.1.3: Percent of municipalities and cities with at least one public health facility accredited by PhilHealth for maternity care, TB-DOTs and primary care benefit packages. (new) Baseline: 55% (2015)62 Target: 70% (2019) Outcome 2.2: Improved quality of basic 2.2.1: Early grade reading assessment (EGRA) and Financing: Ongoing/Closed education (revised) early grade math assessment (EGMA) tools developed ✓ Learning, Equity and in 5 mother tongue languages by 2016. (existing) Accountability Program Support Indicator 1: Decrease of students who have Project (LEAPS) zero scores in reading comprehension in 2.2.2: 11,000 Grade 1 &2 teachers trained to ✓ DPL-3 (closed) Early Grade Reading Assessment (EGRA) 63 effectively teach early grades in reading and math Financing: Indicative (existing with reformulated sentence) (existing) ✓ Basic Education with focus on Baseline: 79.1 percent (2015) Mindanao; Target: 65 percent (2019) ASA: Ongoing/Delivered/Indicative ✓ Programmatic ASA Indicator 2: Increase of students with at least ✓ PER in Education 60% scores in the Early Grade Math ✓ Skills Development Assessment (EGMA) 64(existing with reformulated sentence) Baseline: 36% (2015-2016) Target: 51% (15 percentage point increase, 2019) 61Data source: National Demographic and Health Survey (NDHS). This will also be monitored through ongoing ASA 62 Data source: PhilHealth database. 63 Learning, Equity and Accountability Program Support (LEAPS) 64 LEAPS 21 CPS Outcomes and Indicators Indicative Milestones WBG Program (Ongoing and Indicative) Outcome 2.3: Increased social protection 2.3.1: Share of children in poor CCT beneficiary Financing: Ongoing/Closed coverage (slightly revised) households transition from elementary to high school ✓ Social Welfare Development and Baseline: 41.5 %; Target: 55% (2019) (existing) Reform Indicator 1: Share of poor households ASA: Ongoing/Closed/Indicative receiving conditional cash transfer (slightly 2.3.2: Percent of CCT beneficiary received CCT ✓ Programmatic Analytic work on revised) grants through a bank cash card increased from 44% poverty and shared prosperity Baseline: 75% (2013) in 2015 to 60 % in 2019. (existing) (ongoing) Target: 90% (2019) ✓ Supporting the new Philippine 2.3.3: Modernized household data collection process65 Statistical Authority (TF) (new) (ongoing) Baseline: Paper based survey (2015) ✓ Programmatic ASA for Social Target: Electronic computer based personal assistance Protection (Delivered) interview (CAPI) system (2019) ✓ Programmatic ASA for Social Protection and Labor (Delivered) Outcome 2.4: Improved access to basic 2.4.1: Percent of targeted municipalities with Financing: Ongoing/Closed: services and local planning66(new) municipal poverty reduction plans prepared according ✓ Philippines National Community to the community participatory process (new) Driven Development Program Indicator 1: Percent increase in access to Baseline: 0% (2014) roads, education, health centers and water in Target: 85% (2019) targeted municipalities (new) Baseline: 53% (2014) Target: 63% (a total of 10 percentage points over the baseline) (2019) Indicator 2: Percent of households in targeted municipalities with at least one member attending regular Barangay Assemblies. (new) Baseline: 56% (2014) Target: 70% (2019) 65 This will help improve data collection in health, education and other key sectors. This will be monitored through Programmatic Poverty ASA and the new Philippine Statistical Authority TF. 66 Outcome and indicators relate to NCDDP supported by the WB. 22 Engagement Area 3: Rapid, Inclusive and Sustained Economic Growth Outcome 3.1 Improved transport connectivity 3.1.1: Farms to Market Roads identified based on Financing: Ongoing/Closed (new) provincial agricultural priorities69 (reformulated) ✓ Philippines Rural Development Project (PRDP) Indicator 1: Percent reduction in travel times 3.1.2: 680 kilometers of roads maintained 70 ✓ Cebu Bus Rapid Transport in targeted rural areas67 (reformulated) (reformulated) ✓ Metro Manila Bus Rapid Transit 1 Baseline: 0 % (2014) Financing: Indicative Target: 30% (2019) ✓ AF- PRDP ASA: Ongoing/Delivered/Indicative Indictor 2: National roads improved (km) 68 ✓ Transport Development Baseline: 280 (2014) Framework Plan TA Target: 295 (2016) ✓ Philippines National-Local Roads TA ✓ National and Provincial Road Program Outcome 3.2: Simplified business regulations 3.2.1: Rules and regulations in business registration Financing: Ongoing/Closed and trade logistics (existing/reformulated) and licensing, entry and exit, paying taxes, access to ✓ Programmatic Development Policy finance, labor relations and management simplified. Lending (DPL 3) (Closed) Indicator 1: Increase in private sector (existing) Financing: Indicative savings71 (new) ✓ Customs and Trade Modernization Baseline: US$0 mil (2014) 3.2.2: Philippines Business Registry (PBS) is ✓ Competitiveness DPL 1 Target: US$9 mil (2019) established and functional. (reformulated) ✓ Micro, Small and Medium Enterprise (MSME) Development Indicator 2: Increased new investment in 3.2.3: Reduced the number of permits and inspection Program for Results (PforR) shipping and logistic72 (new) for low risk agricultural products 73 (new) ASA: Ongoing/Closed/Indicative Baseline: US$0 mil (2014) Baseline: 6 permits and 100% inspection (2014) ✓ Agriculture and Trade Advisory Target: US$14 mil (2019) Target: 5 permits and 50% inspection (2019) Services ✓ Doing Business Advisory Services 3.2.4: Reduced time to issue a shipping license74 (new) Baseline: 100 days (2014) Target: 60 days (2019) 67 Philippines Rural Development Project (PRDP) and AF-PRDP 68 National Roads Improvement and Management Program. The project closed in December 2016. 69 PRDP 70 NRIMP 71 Private sector savings may include reduced trade expenses and start-up costs for business 72 Agri Trade and Doing Business Advisory Services 73 Agri Trade Advisory Services 74 By Maritime Authority (Agri Trade Advisory Service Project) 23 Outcome 3.3: Increased access to financial 3.3.1: Credit Information System operational Financing: Ongoing/Closed services(existing) (reformulated) ✓ Programmatic Development Policy Lending (DPL 3) (Closed) Indicator 1: Percent of population in lower 40 3.3.2: Improved regulations governing secured Financing: Indicative percent of income distribution with access to transaction. (reformulated) ✓ Competitiveness DPL 1 formal financial services75 (existing) ✓ Micro, Small and Medium Baseline: 10% (2012) 3.3.3: Number of additional enquires received by credit Enterprise (MSME) Development Target: 17% (2019) information system (reformulated) Program for Results (PforR) Baseline: 7.7 mil (2014) ASA: Ongoing/Closed/Indicative Indicator 2: Number of SMEs that are credits Target: 4 mil additional enquires (total 11.7 mil) ✓ Financial Inclusion Strategy secured by movable property (existing) (2019) (ongoing); Developing Micro- Baseline: 0 (2014) Insurance Reporting Framework; Target: 6,930 (2019) 3.3.4: IFC financial institution client’s loans to Financial modeling for deposit MSMEs to reach $3.65 billion and 359,531 number of insurance; IFC advisory services loans by FY16. (existing) on Secured Transaction; IFC advisory services on credit bureau, Agri finance, Gender finance, Agri insurance Outcome 3.4: Improved agriculture 3.4.1: Area provided with irrigation and drainage Financing: Ongoing/Closed productivity and incomes (reformulated) services (Ha)80 (reformulated) ✓ Philippines Rural Development Baseline: 0 (2014) Project (PRDP) Indicator 1: Percentage increase in value of Target: 118,950 (2019) ✓ Participatory Irrigation annual marketed output in targeted areas76 3.4.2: Percentage increase in cropping intensity81 Development (new) (existing) ✓ Inclusive Partnership for Baseline: 0%77 (2014) Baseline: 150% (2014) Agriculture Target: 30% (2019) Target: 170% (2019) Financing: Indicative ✓ AF-PRDP Indicator 2: Percentage increase in incomes 3.4.3. Number of farmers reached with agricultural ASA: Ongoing/Closed/Indicative of farmers and fisher folk in targeted assets or services (new) provinces78 (existing) Baseline: 0 households (2014) Baseline: 0% (2014) Target: 300,000 (2019) Target: 25%79 (2019) 75 Bank’s engagement through Financial Inclusion Strategy. The data is being collected through FINDEX where survey is being done every 3 years. 76 PRDP 77 Marketable output: PhP61,966 (avg/HH) for 2014. (Source PRDP) 78 PRDP 79 For 2014: Real hh incomes: PhP 134,275 (Avg/HH); Income Agri-Based Enterprises: PhP 69,228 (Avg/HH); (Source: PRDP) 79 PRDP 80 Participatory Irrigation Development Project 81 Participatory Irrigation Development Project 24 Engagement Area 4: Climate Change, Environment and Disaster Risk Management Outcome 4.1 Increased resilience to natural 4.1.1: Budget planning tools and regulations to Financing: Ongoing/Closed: disasters and climate change improve climate change programming is integrated ✓ Disaster Risk Management into national and local planning. (reformulated from Development Policy Loan-CAT Indicator 1: Number of provinces 4.1.1 and 4.1.7) DDO 1 (closed) mainstreamed climate change adaptation and ✓ Second Disaster Risk disaster risk reduction measures into their 4.1.2: National Disaster Risk Finance and Insurance Management Development Provincial Development and Physical Strategy adopted for comprehensive financial Policy Loan -CAT DDO 2 Framework plans82 (existing) protection from disaster. (existing and reformulated) ✓ Program for Climate Resilience Baseline: 10 (2014) (TA) Target: 60 (2016) 4.1.3: Flood Management interventions to reduce Financing: Indicative flood risks in Metro Manila developed followed by Indicator 2: Number of public facilities Flood Management Master Plan. (existing with slight ASA: Ongoing/Delivered/Indicative (schools, hospitals, heritage buildings) modification) ✓ Reducing Vulnerability to Natural assessed for vulnerability to natural disaster 83 Disasters (PAAA - ongoing) Baseline: Metro Manila less than 20 out of 3,500 4.1.4: Amendatory bill85 for National Building Code building stock (2015) of the Philippines completed. (new) Target: Vulnerability assessment for 10084 buildings completed (2019) Outcome 4.2: Reduction in pollution (new) 4.2.1: Increase in wastewater treatment capacities of Financing: Ongoing/Closed: Metropolitan Waterworks Sewerage Services ✓ Metro Manila Waste Water Indicator 1: Reduce the pollution in targeted (MWSS) in Metro Manila and surrounding (Cubic Management areas86 of Manila Bay(existing) Meter) (reformulated) ✓ LISCOP Baseline: 519 tons per year (2016) Baseline: 2 (2016) Financing: Indicative Target: 3556 tons per year (2019) Target: 7 (2019) ✓ Metro Manila Flood Management 4.2.2: At least five LISCOP micro watershed interventions result in measurable reductions in ASA: Ongoing/Delivered/Indicative environmental pressures, from 33 sub projects (2011) ✓ Programmatic Wealth to 50 subprojects (2016) (existing) Accounting and the Valuation of Ecosystem Services (WAVES) 4.2.3: Natural capital accounting implemented and (closed) first estimates of natural capital produced and used by ✓ Metro Manila Water Security NEDA (existing) Study ✓ Integrated POPs management 82 CAT DDO 1 project. 83 ASA “Reducing Vulnerability to Natural Disasters” 84 10 hospitals+16 heritage buildings+74 schools. 85 The law PD-1096. 86 Metro Manila Waste Water Management 25 4.2.4: System of environmental economic accounting modules produced for minerals and mangroves to inform policy analysis, planning and implementation. (existing) Outcome 4.3: Increased access to clean 4.3.1: Renewable energy market developed and Financing: Ongoing energy (new) implemented including the Renewable Energy ✓ Access to Sustainable Energy Indicator 1: Number of households provided Certificate (REC) (reformulated) Project (ASEP) with access to electricity (Off-grid)87 (new) ✓ Renewable Energy Development Baseline: 0 (2016) 4.3.2: Generation capacity of Renewable Energy Target: 40,50088 (2019) constructed (MW) (new) Baseline: 0 MW (2016) Baseline: 14 MW (2019) Engagement Area 5: Peace, Institution Building and Social and Economic Opportunities Outcome 5.1: Increased access to basic 5.1.1: National CDD program expands coverage and Financing: Ongoing/Closed: services in conflict affected areas (new) includes a special “conflict window” to adapt to socio ✓ MTF- Reconstruction & political context of ARMM (existing) Development Project Indicator 1: Number of people benefiting Financing: Indicative: from access to roads, water systems and post- 5.1.2: GPH-MILF “Sajahatra Bangsamoro” program ✓ Supporting Resilient Communities harvest facilities 89(new) supported and a joint development needs assessment and Responsive Local Governance Baseline: 0 (2014) and investment planning process for the Bangsamoro ASA: Ongoing/Delivered/Indicative: Target: Total 550,000 o/w female : 275,000 completed (existing) ✓ NCDDP: ARMM Component and (2019) Peace Lens Outcome 5.2: Improved community 5.2.2: Community meetings conducted for discussion Financing: Ongoing/Closed: participation in investment planning in of priority needs in villages increases from 324 (2012) ✓ MTF- Reconstruction & conflict affected areas to 454 annually (2013-2016) (existing) Development Project Financing: Indicative: Indicator 1: Percent of beneficiaries feel local 5.2.3: Policy and institutional reforms initiated to ✓ Supporting Resilient Communities investments reflected their needs(new) address land conflict in Mindanao to meet the land and Responsive Local Governance Baseline: 0% (2014) related commitments in the Framework Agreement on in Mindanao Target: 60% (2019) the Bangsamoro. (existing) ASA: Ongoing/Delivered/Indicative ✓ Land Conflict in Mindanao 5.2.4: Budgeting system in DepEd ARMM is more ✓ MILF Ex-Combatants Needs transparent and efficient. (existing) Assessments 87 Access to Sustainable Energy Project 88 It is 10% out of 400,000 population who are located in remote areas that don’t have access to electricity now and are unlikel y to be connected to the power grid in the future. 89 Baseline of zero indicates that there were no beneficiaries of the MTF Reconstruction Project prior to the start of the project. 26 Annex 2. Summary of Changes to the Philippines CPS Results Matrix Original Outcomes/Indicators and Milestones Change Justification and Revised Outcome, Indicator, Milestones Engagement Area 1: Transparent and Accountable Government Drooped Indicators/milestones: 37 Reformulated indicators/milestones: 4 New indicators/milestones: 1 Outcome 1.1: Strengthened Public Finances and Dropped. The objective of the original outcome was Fiscal Risk too broad to attribute to WBG’s intervention. The revised outcome reflects ongoing and future WBG engagements to improve revenue mobilization. New outcome: Increased public revenue mobilization 1.1 a: Revenue gaps* for specific commodities Dropped. No ongoing engagement linked to this estimated and mitigation plan developed and pursued indicator. Baseline: Revenue gaps for rice ad oil estimated; Target: Mitigation plan for rice and oil implemented and monitored (2015); mitigation plan finalized and monitoring implemented for at least two other commodities (2016) 1.1 b: Annual Tax Expenditure Statement (TES) Dropped. No ongoing engagement linked to this published on-line, with progressive coverage of all indicator. investment incentives Baseline: First statement published in 2014 (in advance of draft 2015 Budget NEP) Target: Statement continues to be updated and published yearly, with increased coverage: 100% coverage of all investment incentives (2016) 1.1 c: The Annual Fiscal Risk Statement (FRSs) Dropped. Lack of relevance to the ongoing program. published alongside TES, with forward looking risk scenarios (with reference to quantification of GOCCs, PPPs, natural calamities, and other exposures) Baseline: FRSs have been published three years in a row, with limited quantification of forward risk scenarios (2014) Target: Enhanced FRS institutionalized as part of annual Budget process (2016) 1.1.1: The Fiscal Incentives Law was passed, up to Reformulated. Revised indicator: Comprehensive tax good international standard, by the end of 2015. reform to improve equity in taxation and Additional reforms towards a comprehensive tax expansion of revenue base is submitted reform are being undertaken. for legislative approval. The indicator has been revised to be consistent with the ongoing program to align with CPS objectives of improving tax revenue. 1.1.2 Full implementation of the Bureau of Internal Dropped. The indicator is not on track. Revenue (BIR) strategic plan, including: 1) compulsory third party data sharing; 2) Public Posting of net worth of BIR officials; 3) external and 27 Original Outcomes/Indicators and Milestones Change Justification and Revised Outcome, Indicator, Milestones internal audit of BIR; 4) BIR key performance indicators are developed and monitored. 1.1.3 Bureau of Customs (BOC) delivers Targeted Reformulated. Revised indicator: Bureau of Customs and Credible Customs Reform Road Map, with Modernization and Tariff Act approved. improvement in BOC key performance indicators The indicator is being reformulated to align with WBG’s future intervention. The WBG is expected to support Philippines Customs and Trade Department on the modernization of customs roadmap. 1.1.4: Improved management of the government Dropped. While the program is on track, the indicator fiscal exposure to natural hazard is being dropped as there is no ongoing engagement. 1.1.5: Annual Fiscal Risk Statement/Review process Reformulated. Revised indicator: Annual Fiscal risk institutionalized and Budget and Debt Management statement institutionalized and debt strategy developed by end of 2014. Enhanced Fiscal management strategy developed Risk Statement for 2014 published at the end of 2013. Indicator is being reformulated to improve clarity and better align with the CPS program. 1.1.6: The government/GCG has developed action Dropped. The indicator is not on track and no plans to significantly reduce fiscal risks for 3 ongoing engagement. GOCCs. PPP contingent liabilities for legacy and new projects have been quantified and updated as part of the 2014 FRS. 1.1.7: Annual Tax Expenditure Statement system is Dropped. No ongoing engagement to support the refined and institutionalized by sector and region. milestone. 1.1.8: Fiscal decentralization framework Dropped. Not on track and there is no ongoing strengthened with expanded financing options for engagement. LGUs and strengthened capacity and policy framework for LGUs to mobilize own-source revenues and to increase fiscal autonomy New outcome New outcome indicator: Percent increase indicator in domestic revenue to GDP Baseline: 13.6% and Target: 1% increase over the baseline Outcome 1.2: Strengthened public sector Dropped. New outcome: Improved quality and institutions (national and sub-national) transparency of public financial reporting The original outcome objective was difficult to attribute. The revised outcome is more aligned with WBG’s ongoing engagements that focus on supporting government in improving public financial management to be more transparent and accountable for public resources. Indicator 1.2 a: PEFA scores Dropped. Revised indicator: Quality and timeliness Baseline: 2010 of annual financial reports (PEFA Target: At least five sub scores improved by one indictor P1 25) grade (2016) Original indicator was too broad. The revised indicator is aligned with the revised outcome which will be monitored through the Bank’s engagement. 28 Original Outcomes/Indicators and Milestones Change Justification and Revised Outcome, Indicator, Milestones Indicator 1.2 b: Number of agencies delivering on Dropped. No ongoing engagement to support this Social Contract priorities, by indicators developed indicator. for each agency/ program Revised indicator: Public access to key fiscal information (PEFA indicator P1 10) Indicator 1.2 c: Increased timeliness of public Dropped. No ongoing engagement to support this disclosure of Seal of Good Housekeeping recipients indicator. 1.2.1: More timely and accurate tracking/reporting Dropped. Not on track. of government finances through GFMIS & TSA Implementation and benchmarking. (GFMIS Implementation Benchmark at 30% by end of 2013, 70% by end of 2014, 100% by 2016) 1.2.2 Enhanced budget transparency through unified Reformulated. Revised indicator. Adoption of a uniform Account Code Structure (UACS), including the chart of accounts across budget Chart of Accounts, and timely publication of budget formulation, accounting and financial execution data, including biannual UACS reporting. reporting The indicator is being reformulated to align with ongoing engagement. 1.2.3: Enhanced Sectoral Budget Execution and Dropped. No ongoing engagement to support this improved quality of sectoral spending, program initiative. evaluation and medium-term expenditure frameworks (MTEFs). 1.2.4 Identify sectoral priority program results Dropped. Not on track. objectives, and monitoring indicators, including timely execution performance, and spatial targeting for key agencies: Agriculture, Education, Health, Public Works and Highways 1.2.5 DBM M&E group operational Dropped. Lack of relevance to the ongoing program. 1.2.6 Performance-Based Bonus (PBB) for civil Dropped. No ongoing engagement to support this servants implemented and refined in subsequent indicator. years 1.2.7 Department of Education (DepEd) implements: Dropped. Lack of relevance to the ongoing program. reliable performance monitoring system that measures achievement of targets and provides real- time information on target achievement and includes a grievance redress system 1.2.8. Reduced fragmentation of Metro Manila Dropped. Not on track. governance and strengthened leadership of MMDA (including Manila Bay oversight). 1.2.9 Reduced institutional fragmentation in water Dropped. No ongoing engagement in this area. and sanitation sector for service delivery outside Metro Manila 1.2.10 Rationalization of rural and agricultural Dropped. Lack of relevance to the program. institutions and agencies 1.2.11 Strengthened government capacity to conduct Dropped. No ongoing program to monitor this regular annual assessment and to implement timely indicator. public disclosure of the Seal of Good Housekeeping for LGUs 1.2.12 Integration of the Seal of Good Housekeeping Dropped. Lack of relevance and no ongoing program as a basic requirement for LGU participation in to achieve this. national government assistance programs, such as the Performance Challenge Fund, Grassroots 29 Original Outcomes/Indicators and Milestones Change Justification and Revised Outcome, Indicator, Milestones Participatory Budgeting program (GPBP), and National CDD Program Outcome 1.3: Strengthened pressure for Dropped. The outcome is too broad to attribute. Government accountability Indicator 1.3 a: % of households in NCDDP Moved under Moved under Engagement Area 5. municipalities with at least one member attending Engagement regular Barangay Assemblies Area 5. Indicator 1.3 b: Proportion of provinces, cities and Dropped. Lack of relevance to the program. municipalities fully complying with the Full Disclosure Policy Indicator 1.3 c: Open Budget Index score Dropped. No ongoing WBG engagement. 1.3.1 GPBP monitoring system set up and tracking Dropped. No ongoing WBG engagement. Local Poverty Reduction Plan implementation for all participating cities and municipalities by December 2014 1.3.2 DBM increases the number of sector agencies Dropped. No ongoing WBG engagement. open to CSO inputs to 12 departments and 6 GOCCs 1.3.3: Project selection and implementation for Dropped. No ongoing WBG engagement. GPBP updated quarterly; platform launched in 2014 and timeliness of quarterly reports improved to within two months on quarter closing. 1.3.5 ICTs developed for citizen feedback on service Dropped. No ongoing WBG engagement. delivery quality and expanded geo-tagging. 1.3.6 Income and asset declaration system converted Reformulated. Revised indicator: Support a roadmap and to IT-based system, backlog of digitization of implementation for electronic Statement Statement of Assets, Liabilities and Net (SALNS) of Assets, Liabilities and Net Worth Worth reduced to zero, all Ombudsmen offices able (SALNS). to use digital database system; annual SALN spot checks. The indicator is being revised to align with ongoing engagement. 1.3.7 PhilHealth Balanced Scorecard completed and Dropped. No ongoing WBG engagement. posted on PhilHealth website. 1.3.8 Improved social accountability of schools Dropped. No ongoing WBG engagement. through implementation of refined School Report Card, with 95 percent usage rate among schools in the 5 LEAPS Target Regions by end of 2016. 1.3.9 Districts and Local Governments more Dropped. Not on track and no WBG ongoing accountable for water & sanitation service through: engagement. improved data collection, development of KPIs and targets for water districts, and penalties if KPIs/targets not met. 1.3.10 Indicators and targets developed and Dropped. No ongoing WBG engagement. published to measure implementation progress on mainstreaming of climate actions at national and sectoral levels. 1.3.11 Monitoring system developed and used to Dropped. No ongoing WBG engagement. track disaster-related financing 1.3.12 Continued use of geotagging and geotagged Dropped. No ongoing WBG engagement. initiated in the agriculture sector to other sectors Engagement Area 2: Empowering the Poor and Vulnerable Dropped indicators/milestones: 16 Reformulated indicators/milestones: 3 Simplified indicators/milestones: 2 New indicators/milestones: 4 30 Original Outcomes/Indicators and Milestones Change Justification and Revised Outcome, Indicator, Milestones Outcome 2.1: Improved poverty measurement and Dropped. Lack of precision. strengthened socio-economic data systems Indicator 2.1 a: Increased frequency and timeliness Dropped. Revised indicator: Modernized household of national poverty statistics data collection process Baseline: Every 3 years with a lag of 12-18 months Baseline: Paper based survey (2015) Target: Yearly reporting with lag of < 10 months Target: Electronic computer based personal assistance interview (CAPI) system (2019 2.1.1: Pilot annual nationally- and provincially- Dropped. Dropped to streamline the Results Matrix representative household surveys, including using to reduce the number of indicators. redesigned data collection structures that are based on a coherent framework. Processing time of surveys is improved 2.1.2: Develop and implement Human Opportunity Dropped. Not on track. Index (HOI) 2.1.3: Poverty and Prosperity measurement initiative Dropped. Not on track. implemented with defined poverty/shared prosperity targets. 2.1.4: Improved health information systems of both Dropped. No ongoing WBG engagement. DOH and PhilHealth using scorecards (both the LGU scorecards and the PhilHealth scorecard currently under development) as instruments of accountability 2.1.5: DepEd develops an information system in Dropped. No ongoing WBG engagement. LEAPS project regions that can produce reliable and updated information on programs serving target disadvantaged groups and reviews three programs catering to disadvantaged groups in LEAPS project regions Outcome 2.2 Improved Health Status Dropped. The outcome was too broad to attribute ongoing engagement. Revised outcome: Increased coverage and utilization of health services Indicator 2.2 a: Increasing health insurance New New indicator: Percent of poor household effective enrolment for Listahanan-identified poor indicator. (quintile 1) with effective PhilHealth households under the Sponsored Program Insurance Coverage program Baseline: 55% (2013) Baseline: 61.6%; Target: 85% Target: 85% (2016) 2.2.2: The proportion of primary health care Dropped. Not on track and no ongoing engagement. facilities fully meeting the standards for delivering an essential preventive and curative health care services increased by 20% by 2015. 2.2.4: At least 10% increase in the participation of Dropped. Not on track and no ongoing engagement. the private sector in delivering primary care services to the poor enrolled in NHIP. 2.2.5: Program implemented to increase NHIP Dropped. No ongoing WBG engagement. members’ awareness of benefits; 2.2.6: Improved PhilHealth benefits for financial Dropped. No ongoing WBG engagement. protection 2.2.7: Streamlined benefits management system Dropped. No ongoing WBG engagement. implemented 31 Original Outcomes/Indicators and Milestones Change Justification and Revised Outcome, Indicator, Milestones 2.2.8: Water and sanitation (WSS) sector Dropped. No ongoing WBG engagement. responsibilities clarified through the appointment of an agency that would have sector oversight 2.2.9: WSS Sector Financing Plan in Place and under Dropped. No ongoing WBG engagement. implementation (this will include institutional measures and improvement of services) by 2016. New milestone New milestone indicator: Percent of indicator municipalities and cities with at least one public health facility accredited by PhilHealth for maternity care, TB-DOTs and primary care benefit packages. Baseline: 55% and Target: 70% Outcome 2.3: Improved quality of Basic Education Reformulated. Revised outcome: Improved quality of and Improved Access for the Vulnerable basic education Indicator 2.3 a: Decrease of students (total and from Simplified Decrease of students who have zero scores disadvantaged groups) with scores of zero in the Indictor. in reading comprehension in Early Grade Comprehension domain subtest of the relevant Reading Assessment (EGRA) EGRA mother tongue tool (disaggregated for Baseline: 79.1 percent; Target: 65 percent gender) (2019) Baseline: Baseline TBD (School year 2014-2015) Target: SY 2015-16: 3% (total and disadvantaged groups) decrease from baseline (Grade 1 students) SY 2016-17: 5% total/3% disadvantaged decrease from previous year’s value (Grade 2 students) SY 2017-2018: 7% /3% disadvantaged decrease from previous year’s value (Grade 3 students) Indicator 2.3 b: Increase of students (total and from Simplified Increase of students with at least 60% disadvantaged groups) with at least 60% scores in Indicator. scores in the Early Grade Math Assessment the relevant EGMA-mother tongue tool (EGMA) Baseline: 36%; Target: 51% (disaggregated for gender) (15% increase) Baseline: TBD (School year 2014-2015) Target: SY 2015-16: 3% decrease from baseline for both total and disadvantaged groups (Grade 1 students) SY 2016-17: 5% decrease /3% disadvantaged groups from previous year’s value (Grade 2 students Outcome 2.4 Strengthened Social Protection System Reformulated. Increased social protection coverage Indicator 2.4 a: Share of poor households registered Reformulated. Revised indicator: Share of poor in the Listahanan database receiving benefits of households receiving conditional cash social programs transfer Baseline: 75 % (2013) Baseline: 75%; Target: 90% 3.9mn CCT beneficiaries viz 5.2mn poor households in Listahanan as of June 2013 Target: 90% (2016) Indicator 2.4 b: Percentage of poor households with Dropped. Closely resembles the 2.4 indicator. children covered by conditional cash transfer Baseline: 93% (2013); Target: 100% (2016) New milestone New milestone indicator: Modernized indicator household data collection process Baseline: Paper based survey; 32 Original Outcomes/Indicators and Milestones Change Justification and Revised Outcome, Indicator, Milestones Target: Electronic computer based personal assistance interview (CAPI) system. Community Driven Development (CDD)- Key New outcome New outcome 2.4: Improved access to Instrument for Supporting Vulnerable 2.4 basic services and local planning. % increase in access to and utilization of roads, education, health centers and water through NCDDP Revised Revised indicator: Percent increase in Baseline: TBD during CY2014 indicator access to roads, education, health centers NCDDP; and water in targeted municipalities Target: 5% (2015)/10% (2018) increased across Baseline: 53 %; Target: 63% (a 10% various sector. increase) New indicator: Percent of households in targeted municipalities with at least one member attending regular Barangay Assemblies. Baseline: 56% and Target: 70% New milestone New milestone indicator: Percent of indicator targeted municipalities with municipal poverty reduction plans prepared in according to the community participatory process. Engagement Area 3: Rapid, Inclusive and Sustained Economic Growth Dropped indicators/milestones: 29 Reformulated indicators/milestones: 9 New indicators and milestones: 7 Outcome 3.1: Strengthened Economic Policy Dropped. Outcome too broad for attribution. Indicator 3.1 a: Public investment in infrastructure, Dropped. No ongoing engagement. as a percentage of to GDP, increased Baseline: 2.5% (2013); Target: 5% (2016) Indicator 3.1 b: Urban corridors with Dropped. The ongoing projects are under early ongoing/completed improvement of public transit implementation; too early to show services substantial progress on this milestone. Indicator 3.1. c: Increase in public spending to Dropped. No ongoing WBG engagement. lagging regions. 3.1.1: Progress against the PDR Jobs – Policy Dropped. No ongoing WBG engagement. Matrix 3.1.2: Department of Public Works and Highways Dropped. No ongoing WBG engagement. (DPWH) has utilized and disbursed 90% of capital outlay allocation in annual budgets 3.1.3: Number and share of public investment Dropped. Not on track. programs evaluated for poverty reduction impacts – one review underway for Tourism Roads Infrastructure Program (TRIP), to be expanded to two additional per year (options include; FRM, irrigation, resilience) 3.1.4: Number of priority infrastructure sector Dropped. No ongoing WBG engagement. polices and laws undertaken, as outlined in the PDP 2011-2016 Midterm Update, Box 10.4. 3.1.5: Enhance competition in ports and shipping, Dropped. No ongoing WBG engagement. including reviewing mandate of PPA and relaxing cabotage provisions 3.1.6: Legislation enacted to enable private sector Dropped. No relevance to the CPS program. participation in Water Districts; reforms to enable Water Districts to access financing from GFIs and 33 Original Outcomes/Indicators and Milestones Change Justification and Revised Outcome, Indicator, Milestones private banks without needing a waiver from Local Water Utilities Administration. 3.1.7: Renewable Energy Market developed and Reformulated. Revised indicator: Renewable energy implemented, including the Renewable Energy market developed and implemented Certificate (REC) registry, so that the renewable including the Renewable Energy portfolio standard for utilities can be met through a Certificate (REC) See indicator 4.3.1 under combination of purchases of renewable energy EA 4. and/or RECs 3.1.8: Implementation by the National Electrification Dropped. Dropped in order to streamline. Administration (NEA) of new Key Performance Standard (KPS) system for electric cooperatives. The KPS system will serve both as a performance monitoring tool and as a credit risk rating system incorporating, as part of the credit score, governance factors; as a credit risk service, it will support the Department of Energy’s Electric Cooperative Partial Credit Guarantee (ECPCG) program. 3.1.9: Development of one LNG terminal via PPP to Dropped. Not on track gain access to global gas market 3.1.10: Road user satisfaction with DPWH Dropped. No ongoing tracking of this indicator. performance increased 3.1.11: At least 75 percent of paved national road Reformulated. Revised indicator: 680 kilometers of roads system (NRS) in fair condition or better by 2014. maintained. (see indicator 3.1.2) Improved road asset management of NRS by DPWH with at least 80 % of the annual road program of DPWH evaluated by technical and economic criteria through the use of DPWH planning applications. 3.1.12: # of PPPs in transport sector under Dropped. Not on track. implementation 3.1.13: Cebu Bus Rapid Transit (BRT) project and Dropped. Dropped in order to streamline. Metro Manila Corridor Improvements being implemented to strengthen urban connectivity and mobility 3.1.14: Implementation of a sustainable Dropped. No ongoing engagement. infrastructure maintenance and management framework and transport Infrastructure development framework plan with a prioritization of projects 3.1.15: Increased budget allocations for transport Dropped. No ongoing engagement infrastructure are sustained throughout the CPS period 3.1.16: National master network plan implemented Dropped. No ongoing engagement. and publicly disclosed, covering both national and local roads. 3.1.17: Rural transport agenda advanced through Reformulated. Revised indicator: Farms to Market Roads development of farm-to-market roads strategy that identified based on provincial agricultural includes identification of roads in selected networks, priorities (see indicator 3.1.1) and strengthening Inter-agency coordination for joint transport planning and implementation in rural areas among DPWH-DA-LGUs New Outcome New Outcome 3.1: Improved access to 3.1 transport connectivity Reformulated Reformulated outcome indicator: Percent outcome reduction in travel times in targeted rural indicator areas Baseline: 0%; Target: 30% 34 Original Outcomes/Indicators and Milestones Change Justification and Revised Outcome, Indicator, Milestones New outcome New outcome indicator: National roads indicator improved (km) Baseline: 280 (2014); Target: 295 (2016) Outcome 3.2: Improved investment climate, Reformulated. Revised outcomes: outcome 3.2: including greater access to finance for micro and Streamlined business registration and small enterprises. trade logistics. Outcome 3.3: Increased access to financial services. Indicator 3.2 a: Dropped. New indicator: Increase in private sector Number of days to start a business savings Baseline: 36 (2013) Baseline: US$0 mil (2014) Target: 15 (Oct 2016 Target: US$9 mil (2019) Indicator 3.2 b: Moved. Moved to milestone indicators 3.3.3. Number of enquiries received by credit information system and value of financing Baseline: 7.7 m (2014) Target: 4 m additional enquires (total 11.7 m) by 2018; value of financing $160M Indicator 3.2 d: Reformulated. Target has been revised from 15 percent to Share of population in lower 40% of income 17 percent. According to FINDEX the distribution with access to formal financial services current status is 17 percent and the goal is Baseline: 10% (2012) maintaining this target of 17 percent. The Target: 15% (2016) survey is undertaken every three years. New indicator Increased new investment in shipping and logistics Baseline: US$0 mil Target: US$14 mil 3.2.1: Policy coordination through the PDF-GIC, Dropped. Not on track. which focuses on the investment climate. 3.2.2: Work with NCC on the Doing Business Dropped. Dropped to streamline milestones. agenda to enhance the competitiveness of the Philippines 3.2.4: Department of Trade and Industry establishes Reformulated. Revised indicator 3.2.2: Philippines functional Philippine Business Registry (PBR) Business Registry (PBS) is established and system that requires no human interaction to register functional. sole proprietorship with respect to National level registration requirements. 3.2.5: BPLS attributes are adopted in the Seal of Dropped. No ongoing engagement. Good Housekeeping/ Seal of Competitiveness New indicator New indicator 3.2.3: Reduced the number 3.2.3: of permits and inspection for low risk agricultural products Baseline: 6 permits and 100% inspection Target: 5 permits and 50% inspection New indicator New indicator: Reduced time to issue a shipping license 3.2.6: Credit information system functioning: Reformulated. Revised indicator 3.3.1: Credit Credit Information Corporation is operational. Information System operational Infrastructure for credit information and secured transactions is improved. Creditor rights are strengthened 35 Original Outcomes/Indicators and Milestones Change Justification and Revised Outcome, Indicator, Milestones 3.2.8: Improved legal framework for financial Reformulated. Revised indicator 3.3.2: Improved supervision including legal protection for supervisors regulations governing secured of financial institutions and enhanced resolution transaction. framework. Improved/simplified legal framework and enforcement for credit rights, secured transactions, collateral holding period, and contract enforcement 3.2.9: Cooperatives role in providing access to Dropped. No ongoing engagement. finance is strengthened by improving the regulatory capacity of the Cooperative Development Authority and through the simplification of procedures and requirements for cooperatives 3.2.10: Financial services (e.g. savings and micro- Dropped. Moved to under milestone indicator 2.4.2 insurance) are linked with the CCT program to increase financial inclusion and empower beneficiaries Outcome 3.3: Improved economic growth, Reformulated. Revised outcome 3.4: Improved productivity and employment in agricultural and agriculture productivity and incomes rural areas. Indicator 3.3 a: Public and private sector Dropped. No ongoing WBG engagement. investments in agriculture and agribusiness sector in program areas. Indicator 3.3 b: Reformulated. Revised outcome indicator: Percentage Increase in real household incomes (on-, off- and increase in value of annual marketed non-farm) of farmer and fisher beneficiaries output in targeted areas Baseline: 0; Target: 5% increase per year (for Baseline: 0 percent (2014); Target: 30 farmers) percent (2019) 10% increase by 2017 for enterprise development New outcome New outcome indictor: Percentage indictor increase in incomes of farmers and fisher folk in targeted provinces Baseline: 0% ; Target: 25% Indicator 3.3 c: Access to financial services by agri Dropped. Not on track. firms Baseline: 0 (2013); Target: $20 million agri-finance loans outstanding by 2015 Number/value of loans disbursed to women 720/$360,000 3.3.1: AAA delivered on options to reduce Dropped. Dropped to streamline milestones. regulatory constraints to agribusiness investment and trade, including the domestic shipping industry. 3.3.2: Risk based SPS, quarantine and inspections Dropped. No ongoing WBG engagement. system and improved border clearance procedures for agriculture-products engaged by Department of Agriculture (DA) 3.3.3: ARC cluster plans made operational and Dropped. No ongoing WBG engagement. business plans are designed and implemented for selected value chains Engagement Area 4: Climate Change, Environment and Disaster Risk Management Dropped indicators and milestones: 9 Reformulated indicators and milestones: 7 New indicators and milestones: 1 36 Original Outcomes/Indicators and Milestones Change Justification and Revised Outcome, Indicator, Milestones Indicator 4.1 b: Increase in number of public Reformulated. The target has been revised from 200 most facilities (schools and hospitals) upgraded to become vulnerable buildings to 100 most safer and more resilient vulnerable buildings in order to be Baseline: Metro Manila < 20 out of 4000 building consistent with the ongoing stock implementation of the program. Target: Most vulnerable schools and hospitals upgraded, equivalent to around 200 structures (2017) 4.1.1: Clear and consistent set of climate outcomes Reformulated. Reformulated from indicator 4.1.1 and and targets developed and used in national and local 4.1.7. planning through mainstreaming and harmonization Revised indicator 4.1.1: Budget planning of a Government climate change typology tools and regulations to improve climate change programming is integrated into national and local planning. 4.1.2: National Disaster Risk Finance and Insurance Reformulated. (DRFI) strategy prepared. Catastrophe Risk Revised indicator 4.1.2: National Disaster Modeling conducted and informing the design of a Risk Finance and Insurance Strategy potential disaster risk financing facility adopted for comprehensive financial protection from disaster. 4.1.3: Building retrofitting and construction Dropped. Milestone lacks precision. guidelines developed 4.1.4: Prioritization of methodology established for Dropped. Milestone lacks precision. retrofitting of critical public facilities and applied in Metropolitan Manila 4.1.5: DPWH retrofits and/or reconstructs Reformulated. Revised indicator 4.1.3: Flood infrastructure in Metro Manila and/or other areas, Management interventions to reduce flood based on the results of structural audits. Flood risks in Metro Manila developed followed management interventions to reduce flood risks in by Flood Management Master Plan Metro Manila developed as follow-up to Flood Management Master Plan 4.1.6: Integrated climate vulnerability and climate Dropped. disaster risk reduction tools developed and used to inform Comprehensive Land Use and Development Plans 4.1.7: More systematic use of budget planning tools Reformulated See 4.1.1. and regulations to improve climate change and merged programming with 4.1.1. 4.1.8: 25% Increase in the no of farmers and fishers Dropped. Not on track. adopting climate smart technologies New indicator New indicator 4.1.4: Amendatory bill for 4.1.4: National Building Code of the Philippines completed. Outcome 4.2 Improved natural resource management Reformulated. Revised outcome 4.2: Improved pollution and sustainable development reduction 4.2.1: Cebu Bus Rapid Transit (BRT) and Metro Dropped. Lack of relevance to ongoing program. Manila BRT developed 4.2.2: Improved targeting, design and monitoring of Dropped. No ongoing WBG engagement. labor intensive programs on reforestation and land stabilization programs 4.2.5: Increase in waste water treatment capacities Reformulated. Revised indicator 4.2.1: Increase in among LGUs and water districts in the Manila Bay wastewater treatment capacities of River Basin. Metropolitan Waterworks Sewerage Services (MWSS) in Metro Manila and surrounding (cubic meter) Baseline: 2; Target: 7 37 Original Outcomes/Indicators and Milestones Change Justification and Revised Outcome, Indicator, Milestones 4.2.9: Green building regulations at the national and Dropped. Not on track. sub-national level set (Higher mandatory standards for new building construction and operation) supported by the Green Building Regulations project 4.2.10: Biodiversity conservation and coastal Dropped. No ongoing WBG engagement. resources co-management features incorporated in the Provincial Commodity Investment Plans (PCIPs) 4.2.11: Establishment of a state-of-the-art system for Dropped. Not on track water quality monitoring for Manila Bay and tributaries 4.2.12: Institutional capacity building undertaken for Dropped. Not on track. institutions involved in Manila Bay River Basin Management Engagement Area 5: Peace, Institution Building and Social and Economic Opportunity Dropped indictors/milestones: 11 Reformulated indicators/milestones: 1 New indicators/milestones: 1 Outcome 5.1 Increased trust within communities, Dropped; The objective is too broad to attribute. and between citizens and the state in conflict areas Reformulated. Revised outcome 5.1: Increased access to basic services in conflict affected areas New indicator: Number of people have access to roads, water systems and post- harvest facilities Baseline: 0; Target: 550,000 of/w female: 275,000 Indicator 5.1 a: Total number of people benefiting Dropped. Not aligned with ongoing program. from improved access to basic services in conflict- New indicator: Percent increase in access affected areas to roads, education, health centers and water in targeted municipalities. Indicator 5.1 b: Trainees in livelihood program Dropped. The ongoing program is not supporting this secure wage employment or start new small activity. enterprises 5.1.2: Inclusive peace process and transition from Dropped. No active engagement. ARMM to the Bangsamoro assisted through support to the Transition Commission. 5.1.5: Increase of 5% in number of people who feel Dropped. Not on track. they can personally influence development decisions taken in their community Outcome 5.2 Implementation of Peace-Promoting Dropped. Objectives is too broad. New outcome is Catch Up Socio-economic development in conflict being proposed. affected areas New outcome 5.2: Improved community participation in investment planning in conflict affected areas New indicator New indicator: Percent of beneficiaries feel local investments reflected their needs Baseline: 0%; Target: 60% 5.2.1: Joint MILF-Government “Sajahatra Dropped. No ongoing engagement. Bangsamoro” program provides quick impact assistance to identified conflict-affected communities. 5.2.2: Technical advice provided on combatant Dropped. Dropped to streamline milestones. transition 38 Original Outcomes/Indicators and Milestones Change Justification and Revised Outcome, Indicator, Milestones 5.2.4: Expanded national CDD program, covering at Dropped. The indicator is being revised. least 60 municipalities and up to 1.5 million people in the Bangsamoro by 2016. 5.2.5: Budgeting system in DepEd ARMM is Dropped. Streamlined indicator to be consistent with generally more transparent and efficient due to ongoing objective. reforms in management of Teacher Wage Bill and presentation of Results Oriented Budget for 2014. 5.2.6: Under a grant to the ILO form the MTF, at Dropped. Streamlined indicator to be consistent with least 60% of beneficiaries of entrepreneurship ongoing objective. training will establish a small business and increase their income by 20%. 5.2.7: Implementation of approved farm-to-market Dropped. Streamlined indicator to be consistent with road MDRP subprojects in target municipalities by ongoing objective. FY14 and continuing implementation of NRIMP2 road improvement components in Mindanao 5.2.8: Forging of collaboration between private Dropped. Lack of relevance to the program. sector agribusiness firms, LGUs, ARMM/Bangsamoro Regional Governments and the DA forged in synchronizing public and private investments in Bangsamoro areas for generation of jobs and livelihood opportunities. 5.2.9: Farm-to-market roads toolkit developed and Dropped. Lack of relevance to the program. food logistics study undertaken 39 Annex 3. Philippines Country Partnership Strategy (CPS) FY15-18 Original Results Matrix - Status Update Engagement Area 1: Transparent and Accountable Government CPS Outcome and Indicators Indicative Milestones Status of Milestone Comments Milestone Outcome 1.1: Strengthened public finances and fiscal risk Strengthened Public Finances: Indicator 1.1 a: Revenue gaps* for 1.1.1: The Fiscal Incentives Law was passed, up to Partially ✓ The draft Fiscal Incentives specific commodities estimated and good international standard, by the end of 2015. Achieved Rationalization Act prepared under mitigation plan developed and Additional reforms towards a comprehensive tax Aquino Administration expired at the end pursued reform are being undertaken. of the administration in 2016. The provisions of the Act have been rolled Baseline: Revenue gaps for rice ad into the new administration’s oil estimated comprehensive tax reform package. Target: Mitigation plan for rice and oil implemented and monitored 1.1.2 Full implementation of the Bureau of Not on ✓ BIR strategic plan under the Aquino (2015); mitigation plan finalized and Internal Revenue (BIR) strategic plan, including: track administration is no longer active; a new monitoring implemented for at least 1) compulsory third party data sharing; 2) Public strategic plan for BIR will be formulated two other commodities (2016) Posting of net worth of BIR officials; 3) external after legislative approval of current tax and internal audit of BIR; 4) BIR key performance reform. The Bank has not provided direct Update: Not on track. The Bank did indicators are developed and monitored. support in this area. not monitor this indicator through its 1.1.3 Bureau of Customs (BOC) delivers Targeted Partially ✓ BOC Customs modernization and Tariff program. and Credible Customs Reform Road Map, with achieved Act signed into law in May 2016. The improvement in BOC key performance indicators and on Act aims to modernize Customs rules and track procedures, reduce opportunities for Indicator 1.1 b: Annual Tax corruption, improve Customs service Expenditure Statement (TES) delivery and improve supply chain. The published on-line, with progressive WBG is expected to support the coverage of all investment incentives Philippines Customs and Trade department to provide further recommendations and update previously completed Custom reform roadmap and modernization work plan. 40 Baseline: First statement published in 1.1.4: Improved management of the government On track ✓ Implementation of the Catastrophe- 2014 (in advance of draft 2015 fiscal exposure to natural hazard Deferred Drawdown Option (CAT- Budget NEP) DDO) is ongoing. The WBG Disaster Risk Financing and insurance TA is Target: Statement continues to be supporting analysis of fiscal risks and updated and published yearly, with design of risk mitigation instruments increased coverage: 100% coverage of all investment incentives (2016) Fiscal Transparency and fiscal accountability: Achieved ✓ Fiscal Risk statement was produced in 2013,2014, 2015 and 2016. A debt Update: No information available. 1.1.5: Annual Fiscal Risk Statement/Review management strategy was developed and process institutionalized and Budget and Debt published in February 2017. Indicator 1.1 c: Management strategy developed by end of 2014. The Annual Fiscal Risk Statement Enhanced Fiscal Risk Statement for 2014 (FRSs) published alongside TES, published at the end of 2013. with forward looking risk scenarios 1.1.6: The government/GCG has developed action Not on ✓ While the DPL series supported a (with reference to quantification of plans to significantly reduce fiscal risks for 3 track reduction of GOCCs contribution to GOCCs, PPPs, natural calamities, GOCCs. PPP contingent liabilities for legacy and public sector debt, the Bank did not have and other exposures) new projects have been quantified and updated as direct engagement on development of Baseline: FRSs have been published part of the 2014 FRS. action plans in this area. three years in a row, with limited quantification of forward risk 1.1.7: Annual Tax Expenditure Statement system Not on ✓ The Investment Promotion Agency now scenarios (2014) is refined and institutionalized by sector and track prepares tax expenditure statement Target: Enhanced FRS region. annually, however not yet by sector and institutionalized as part of annual region. No direct Bank engagement Budget process (2016) ongoing or planned in this area. 1.1.8: Fiscal decentralization framework Not on ✓ The Bank does not have ongoing support Update: On track. Annual fiscal risk strengthened with expanded financing options for track in this area and the milestone has not statement was published in 2015, LGUs and strengthened capacity and policy been monitored. 2016. framework for LGUs to mobilize own-source revenues and to increase fiscal autonomy. 41 Outcome 1.2. Strengthened public sector institutions (national and sub-national) Indicator 1.2 a: PFM and Public Expenditure Management: Not on ✓ Implementation of these reforms has been track delayed. No direct ongoing Bank PEFA scores 1.2.1: More timely and accurate engagement. Baseline: 2010 tracking/reporting of government finances through Target: At least five sub scores GFMIS & TSA Implementation and improved by one grade (2016) benchmarking. (GFMIS Implementation Benchmark at 30% by end of 2013, 70% by end of Update: Indicator is not specific 2014, 100% by 2016) enough to provide update. 1.2.2 Enhanced budget transparency through Partially ✓ Adoption of UACS for enhancing Indicator 1.2 b: unified Account Code Structure (UACS), Achieved transparency and improving monitoring Number of agencies delivering on including the Chart of Accounts, and timely of budget execution was achieved under Social Contract priorities, by publication of budget execution data, including the DPL series. Going forward, indicators developed for each biannual UACS reporting transparency may be further enhanced in agency/ program context of ongoing PFM reforms. Baseline: 0 1.2.3: Enhanced Sectoral Budget Execution and Partially ✓ Gains on this milestone are evident in the Target: 4 (2016) improved quality of sectoral spending, program Achieved Philippine Statistical Authority (PSA). evaluation and medium-term expenditure The agency’s budget execution and Update: The Bank did not have any frameworks (MTEFs). sectoral spending has improved, engagement in this area. monitored through MTEF and program evaluation. Indicator 1.2 c: 1.2.4 Identify sectoral priority program results Not on ✓ Priority program results are supported Increased timeliness of public objectives, and monitoring indicators, including track through WBG engagement with the key disclosure of Seal of Good timely execution performance, and spatial agencies. However, milestone not tracked Housekeeping recipients targeting for key agencies: Agriculture, Education, to date. Baseline: 1-year lag (for year end Health, Public Works and Highways 2013) Target: Annual public disclosure of 1.2.5 DBM M&E group operational Achieved ✓ While M&E Unit in DBM is in place and Seal of Good Housekeeping remains operational after change in recipients by Q3 of current year. administration, the Bank does not have (2016) ongoing or planned engaged in this area. Update: On track. Department of 1.2.6 Performance-Based Bonus (PBB) for civil Achieved ✓ PBB was approved for public servants in Interior and Local Government servants implemented and refined in subsequent 2013, and survey recommendations from published the 2016 passers and years the PBB are being incorporated with passser’s of after assessment amended criteria. However, the Bank compliance in May 2017. does not have planned engagement in this area with the exception of ongoing engagement with the Department of 42 Education (DepEd). For DepEd, a revised PBB policy was issued in July 2016 via DepEd Order No. 56, establishing guidelines for linking organizational and individual performance to personal incentives. The PBB spells out procedures and computation formulae for agency and individual eligibility. 1.2.7 Department of Education (DepEd) Partially ✓ The milestone is on track. DepEd has implements: reliable performance monitoring Achieved instituted a Results-Based Performance system that measures achievement of targets and Management System (RPMS), with provides real-time information on target guidelines issued in February 2015. The achievement and includes a grievance redress RPMS is aligned with the Civil Service system Commissions “Strategic Performance Management System”. RPMS provides evaluation against key results areas for office and individuals. 1.2.8. Reduced fragmentation of Metro Manila Not on ✓ A roadmap for Metro Manila governance and strengthened leadership of track development was developed but has not MMDA (including Manila Bay oversight). been implemented. 1.2.9 Reduced institutional fragmentation in water Partially ✓ In order to improve the fragmented and sanitation sector for service delivery outside achieved structure of the water sector, an Executive Metro Manila order is being drafted by NEDA infrastructure committee for the creation of an apex body (Department of Water Resources) and a national economic regulator (Water Regulatory Commission- WRC). In addition, parallel bills for WRC and department of water resources are being drafted. 1.2.10 Rationalization of rural and agricultural Partially ✓ Institutionalization of reforms across institutions and agencies Achieved Department of Agriculture (DA) agencies and units is proceeding with (i) issuance of harmonized manual for Infrastructure Development; (ii) Issuance of Planning and Budgeting Guidelines that require plans of all DA agencies and units from 2017. 43 1.2.11 Strengthened government capacity to On track ✓ Bank has been engaged in comprehensive conduct regular annual assessment and to review on local service delivery to implement timely public disclosure of the Seal of identify key bottlenecks in the areas of Good Housekeeping for LGUs financing, planning and implementation more broadly and how they can be tackled. 1.2.12 Integration of the Seal of Good Achieved ✓ Seal of Good Housekeeping is being used Housekeeping as a basic requirement for LGU for the eligibility criteria for key anti- participation in national government assistance poverty programs, including GPBP; the programs, such as the Performance Challenge Bottom-Up Budgeting (BUB) program; Fund, Grassroots Participatory Budgeting program the follow-on Assistance for (GPBP), and National CDD Program. Disadvantaged Municipalities (ADM) program; and National Community Driven-Development Program (NCDDP). Outcome 1.3 Strengthened pressure for Government accountability Indicator 1.3 a: 1.3.1 GPBP monitoring system set up and tracking Partially ✓ OpenBUB portal functional since August % of households in NCDDP Local Poverty Reduction Plan implementation for Achieved 2015 and used to track the municipalities with at least one all participating cities and municipalities by implementation of over 54,000 BUB member attending regular Barangay December 2014. funded projects. The portal will be Assemblies updated by DILG to cater to the BUB Baseline: 56 (2014) follow-on program called the ADM Target: 60% (2015), 70% (2018) program. However, linkage to tracking Local Poverty Reduction Plan (LPRP) Update: Achieved. The current implementation is still work in progress. status is 71 percent which exceeded 1.3.2 DBM increases the number of sector Partially ✓ 15 departments are open to CSO inputs the target. agencies open to CSO inputs to 12 departments Achieved under Bottom Up Budgeting. and 6 GOCCs Indicator 1.3 b: Proportion of provinces, cities and 1.3.3: Project selection and implementation for Partially ✓ The data is being regularly updated municipalities fully complying with GPBP updated quarterly; platform launched in Achieved through the OpenBUB portal. the Full Disclosure Policy 2014 and timeliness of quarterly reports improved Baseline: 55% (2013) to within two months on quarter closing. Excluding ARMM 95% (2013) Target: 75% (2015) 1.3.4: Roadmap for e-services rolled out and Partially ✓ The work on roadmap and identification Excluding ARMM 99% (2015) priority e-services applications identified and Achieved of priority e-services is underway. Digital agreed in principle. e-Transformation Project in the pipeline for FY18. 44 Update: On track. As of 2016 1193 1.3.5 ICTs developed for citizen feedback on Not on ✓ The Bank did not have any engagement in LGUs are fully complying with the service delivery quality and expanded geo-tagging. track this area. Full Disclosure Policy. 1.3.6 Income and asset declaration system Partially ✓ The IT based system called e-SALN16 Indicator 1.3 c: Open Budget Index converted to IT-based system, backlog of Achieved was developed and is expected to be score digitization of Statement of Assets, Liabilities and piloted in 2017. Net (SALNS) Worth reduced to zero, all Ombudsmen offices able to use digital database Baseline: 48 (2012) Target: 60 (2016) system; annual SALN spot checks. Update: Achieved. As of 2015 Open 1.3.7 PhilHealth Balanced Scorecard completed Achieved ✓ The PhilHealth balanced scorecard is Budget Survey Philippines score 64 and posted on PhilHealth website completed and published in 2013 ,2014 out 100. and 2015. 1.3.8 Improved social accountability of schools On track ✓ DepEd Order No. 44 was issued in Sept. through implementation of refined School Report 2015 on the "enhanced school Card, with 95% percent usage rate among schools improvement plan and school report in the 5 LEAPS Target Regions by end of 2016. cards." As part of the LEAPS DLI process, the 3rd party agent is verifying whether or not all LEAPS schools have been trained and are using the revised/enhanced SRC. 1.3.9 Districts and Local Governments more Not on ✓ World Bank currently does not have accountable for water & sanitation service track current or planned engagement related to through: improved data collection, development of this activity. KPIs and targets for water districts, and penalties if KPIs/targets not met. 1.3.10 Indicators and targets developed and Partially ✓ Climate Resiliency indicators have been published to measure implementation progress on Achieved incorporated into the results framework of mainstreaming of climate actions at national and the government’s Philippine Development sectoral levels. Plan 2017-2022. The Bank’s ongoing program will further support government in mainstreaming resilience indicators in the M&E systems of relevant government agencies. 1.3.11 Monitoring system developed and used to Achieved ✓ The government has used the climate track disaster-related financing budgeting system regularly since the 2015 budget year in identifying and classifying climate change public expenditure. 45 System is embedded in budget preparation, enabling online submission of Climate Change expenditure and automated updating for the National Expenditure Program (NEP) and General Appropriations Act (GAA) levels. 1.3.12 Continued use of geotagging and geotagged Partially ✓ Applied Geo-Tagging is fully operational initiated in the agriculture sector to other sectors. Achieved in the Philippine Rural Development Project (PRDP) and is being used for sub- project identification, validation, monitoring and supervision. IT uses Google Earth-based mapping system for identification of PRDP subprojects to promote transparency and public disclosure. Engagement Area 2: Empowering the Poor and the Vulnerable CPS Outcome and Indicators Indicative Milestones Status of Milestone Comments Milestone Outcome 2.1: Improved poverty measurement and strengthened socio-economic data systems Indicator 2.1 a: Increased 2.1.1: Pilot annual nationally- and provincially- Partially ✓ The Bank assisted the Philippine frequency and timeliness of national representative household surveys, including Achieved Statistical Authority (PSA) to conduct poverty statistics using redesigned data collection structures that household surveys for the 2015 Family Baseline: Every 3 years with a lag are based on a coherent framework. Processing Income and Expenditure Survey (FIES). of 12-18 months time of surveys is improved The PSA intends to streamline the process Target: Yearly reporting with lag of by improving techniques and reducing the < 10 months number of surveys. Qualitative and Update: Not on track. The 2015 quantitative assessment of the 2015 FIES Family Income Expenditure Survey is being conducted to further improve released the poverty statistics in end management, implementation and of 2016. The lag is still there and timeliness of the survey. the Bank is working through 2.1.2: Develop and implement Human Not on track ✓ During CPS period, the focus has shifted technical assistance to move from Opportunity Index (HOI) from HOI to a Multi-Dimensional Poverty paper based to electronic system. Index. Good progress is underway on the latter. 46 2.1.3: Poverty and Prosperity measurement Not on track ✓ The milestone does not correspond to initiative implemented with defined specific Bank’s activity. However, a poverty/shared prosperity targets. comprehensive Poverty Assessment is under preparation and is expected to be completed in FY17. 2.1.4: Improved health information systems of Partially ✓ PhilHealth scorecard has been developed both DOH and PhilHealth using scorecards Achieved and Balanced Scorecard is being cascaded (both the LGU scorecards and the PhilHealth down to regional scorecard level; scorecard currently under development) as performance of the scorecard is being instruments of accountability reflected in the performance metrics of PhilHealth business units. 2.1.5: DepEd develops an information system in Partially ✓ DepEd has completed a comprehensive LEAPS project regions that can produce reliable Achieved review of the first four programs (i.e. and updated information on programs serving Open High School Program). DedEd is target disadvantaged groups and reviews three finalizing a strategy for the development programs catering to disadvantaged groups in of the information system that would LEAPS project regions track information on disadvantaged children. Outcome 2.2 Improved Health Status Indicator 2.2 a: 2.2.1: All households identified as poor by Achieved ✓ By mid-2014 all households identified as NHTS are fully covered by NHIP (~100%) poor by NHTS-PR were covered, Increasing health insurance effectively increasing the number of poor effective enrolment for Listahanan- covered by national subsidies from 5.2 identified poor households under million to 14.7 million. the Sponsored Program Baseline: 55% (2013) 2.2.2: The proportion of primary health care Not achieved ✓ The indicator is ambiguous and is Target: 85% (2016) facilities fully meeting the standards for difficult report on percentage without delivering an essential preventive and curative knowing the baseline. However, Update: Achieved. 92 percent of health care services increased by 20% by 2015 according to PhilHealth data from 2016 the identified household are covered (i) Number of accredited outpatient by health insurance according to clinics of which 2,474 are Primary Care the administrative data from Benefit Package (3% less than the PhilHealth. baseline); 2,777 Maternity Care Package (34% more than the baseline) and 1,804 DOTS package (24% more than baseline). Although this shows improvement, without an increase in primary care benefit accreditation, it is not possible to verify that facilities fully meet the standards. 47 2.2.3: Share of households meeting health Achieved ✓ More than 90 percent households meeting Indicator 2.2 b: Zero-Open conditionalities in CCT program reaches 80% by health conditionalities as of December Defecation Policy developed and 2014 2016. implemented 2.2.4: At least 10% increase in the participation Not achieved ✓ Difficult to quantify with an absence of a of the private sector in delivering primary care baseline. PhilHealth has only engaged Baseline: 0 provinces (2012) services to the poor enrolled in NHIP. private sector for maternity care package Target: 6 provinces (2014) (MCP) and TB DOTS. As of December 10 provinces (2016) 2016, 1,465 private sector are engaged in MCP and 92 are engaged in TB DOTS. Update: Achieved. 2.2.5: Program implemented to increase NHIP Achieved ✓ Alaga Ka program to promote awareness As of February 2017, 75 Provinces members’ awareness of benefits; at the barangay level was implemented in have participated in the Zero Open 2014. While this was achieved this Defecation campaign. indicator has no linkages to ongoing program. 2.2.6: Improved PhilHealth benefits for Partially ✓ PhilHealth launched a new primary financial protection Achieved benefit package in February 12, 2015 called Tsekap which includes only MCH services but also NCDs and is paid via capitation. SDN admin order is expected to include a definition of services as a “Primary Health Care Guarantee” the PCN reform is designed to increase its utilization. 2.2.7: Streamlined benefits management system Partially ✓ This indicator is a repeat of the above implemented Achieved indicator of 2.2.6. 2.2.8: Water and sanitation (WSS) sector On track ✓ A National Water Policy is being drafted responsibilities clarified through the by NEDA Infrastructure Committee-Sub appointment of an agency that would have Committee on Water Resources which sector oversight includes the creation of an apex body. 2.2.9: WSS Sector Financing Plan in Place and On track ✓ Water Supply and Sanitation (WSS) under implementation (this will include Sector Financing Plan will be in place institutional measures and improvement of and under implementation in 2018. It will services) by 2016. include institutional measures and improvement of services. Outcome 2.3: Improved quality of Basic Education and Improved Access for the Vulnerable Indicator 2.3 a: Decrease of 2.3.1: Early grade reading assessment (EGRA) ✓ Achieved ✓ DepEd carried out its second EGRA and students (total and from and early grade math assessment (EGMA) tools EGMA assessment in December 2016 disadvantaged groups) with scores developed in 5 mother tongues by 2016. and results are being analyzed. DepEd of zero in the Comprehension has developed 25 EGRA and 25 EGMA domain subtest of the relevant tools in selected Mother tongue. 48 EGRA mother tongue tool (disaggregated for gender) Baseline: Baseline TBD (School year 2014-2015) Target: SY 2015-16: 3% (total and 2.3.2: DepED enacts an official policy on the Partially ✓ DepEd has defined the utilization of disadvantaged groups) decrease utilization of the EGRA and EGMA tools, with achieved & on EGRA and EGMA tools, however the from baseline (Grade 1 students) ~11,000 schools administering EGRA and track official policy will be broadened to SY 2016-17: 5% total/3% EGMA twice a year. ~11,000 Grade 1 & 2 include DepEd’s National Assessment disadvantaged decrease from teachers trained to effectively teach early grades Framework. previous year’s value (Grade 2 reading and math. ✓ A comprehensive Early Language, students) Literacy and Numeracy teacher training SY 2017-2018: 7% /3% program has been developed and the disadvantaged decrease from training has been delivered to all School previous year’s value (Grade 3 Principals and at least one teacher in all students) elementary school in target regions. As of Feb 2017, 11,655 teachers were trained to Update: Achieved. The share of effectively teach grades 1 through 3 students who have zero scores in reading and math. In addition, 8,692 reading comprehension (EGRA) school leads were trained. decreased from 79.12 percent (2015-16 school year) to 48.19 percent (2016-17) school year. It has surpassed the target of 64 percent (which is a decrease of 15 percent). Indicator 2.3 b: Increase of students (total and from disadvantaged groups) with at least 60% scores in the relevant EGMA- mother tongue tool (disaggregated for gender) Baseline: TBD (School year 2014- 2015) Target: SY 2015-16: 3% decrease from baseline for both total and 49 disadvantaged groups (Grade 1 students) SY 2016-17: 5% decrease /3% disadvantaged groups from previous year’s value (Grade 2 students Update: Achieved. Students with at least 60 percent scores in the math assessment tool (EGMA) increased from 36 percent (2015) to 79.8% (2016-17 school year). It is more than the increase of 15% (actual target of 51%) Outcome 2.4 Strengthened Social Protection System Indicator 2.4 a: 2.4.1: Interventions to reach marginalized Partially ✓ The GoP has extended CCT to street groups such as street children and indigenous Achieved children and indigenous people through a Share of poor households registered peoples are piloted. modified CCT program. The Bank in the Listahanan database receiving program has supported only the benefits of social programs expansion of the regular CCT program to Baseline: 75 % (2013) cover poor children in secondary 3.9mn CCT beneficiaries viz 5.2mn education, amounting to 2.5 million low- poor households in Listahanan as of income youth by end-2016. June 2013 Target: 90% (2016) 2.4.2: Global knowledge exchange on social Not on track ✓ The Bank does not monitor this indicator assistance strategies in other countries to deliver through its program. Update: On track. housing/shelter to homeless families and on As of now 4.4 mil households build-up and modernization of poverty registered in the Listahanan alleviation strategies. database are covered by CCT program (84 percent). 2.4.3: Financial services are linked (e.g. savings Partially ✓ 45 percent of CCT beneficiary household and micro-insurance) with CCT to increase Achieved received CCT grants through a bank cash financial inclusion and empower beneficiaries card in 2016. The coverage is expected to increase further. Training of financial Indicator 2.4 b: Percentage of poor literacy among the CCT beneficiaries has households with children covered been provided. by conditional cash transfer Baseline: 93% (2013) Target: 100% (2016) 50 Update: On track. About 91 percent of households with children are now covered by conditional cash transfer. The original baseline of 93% is quite high to begin with. Community Driven Development (CDD)- Key Instrument for Supporting Vulnerable Indicator 2.4 c: % increase in access to and utilization of roads, education, health centers and water through NCDDP Baseline: TBD during CY2014 NCDDP Target: 5% (2015)/10% (2018) increased across various sector. Update: On track. Access to and utilization of roads, education, health centers and water increased from 53% in 2014 to 61% in 2016 (2016). It is an 8% increases. 51 Engagement Area 3: Rapid, Inclusive and Sustained Economic Growth CPS Outcome and Indicators Indicative Milestones Status of Milestone Comments Milestone Outcome 3.1: Strengthened Economic Policy Indicator 3.1 a: 3.1.1: Progress against the PDR Jobs – Policy Partially ✓ Republic Act No. 10668 enacted in July Public investment in infrastructure, Matrix Achieved 2015, allowing foreign vessels to as a percentage of to GDP, transport and co-load foreign cargo for increased domestic transshipment and for other Baseline: 2.5% (2013) purposes. Target: 5% (2016) ✓ Continued improvement of risk management processes for quarantines Update: Achieved. 5.1 % as of and biosecurity protection; Philippine 2016. Crop Protection Act filed in October 2016. Indicator 3.1 b: ✓ Mindanao Jobs Report to be finalized by Urban corridors with end-FY17. ongoing/completed improvement of ✓ Philippines Development Report on Jobs public transit services presented to Philippine Development Baseline: 0 corridor Forum in 2015. Target: 1-2 corridors (2016) Target to be confirmed by time of progress report 3.1.2: Department of Public Works and Not on track ✓ The software to use for data-gathering Highways (DPWH) has utilized and disbursed was upgraded but still encountering Update: Not on track. The ongoing 90% of capital outlay allocation in annual glitches to monitor capital budgets. transports projects are in budgets. implementation stage but results will not be achieved during within 3.1.3: Number and share of public investment Not on Track ✓ The National Economic and Development the CPS period. programs evaluated for poverty reduction Authority (NEDA) is developing a impacts – one review underway for Tourism methodology for risk informed planning Indicator 3.1. c: Roads Infrastructure Program (TRIP), to be and public investment programming. Increase in public spending to expanded to two additional per year (options However, no direct WBG engagement lagging regions include; FRM, irrigation, resilience) related to this milestone. Baseline and targets to be added at time of CPS Progress report Update: Information not available. 52 3.1.4: Number of priority infrastructure sector Partially Among the wide range of policies and laws polices and laws undertaken, as outlined in the Achieved covered by this milestone, two key pieces of PDP 2011-2016 Midterm Update, Box 10.4. legislation have been passed: ✓ Philippine Competition Act was passed in July 2015. ✓ Republic Act (RA) No. 10863, otherwise known as the Customs Modernization and Tariff Act (CMTA), was signed into law in May 2016. 3.1.5: Enhance competition in ports and Achieved ✓ Republic Act No. 10668 enacted in July shipping, including reviewing mandate of PPA 2015, allowing foreign vessels to and relaxing cabotage provisions transport and co-load foreign cargo for domestic transshipment and for other purposes. ✓ Terminal Management regulations passed in July 2015. ✓ Report on domestic shipping and ports completed. 3.1.6: Legislation enacted to enable private Not on track ✓ No information available. sector participation in Water Districts; reforms to enable Water Districts to access financing from GFIs and private banks without needing a waiver from Local Water Utilities Administration. Energy: Partially ✓ Renewable Energy market being Achieved developed through revisions of the 3.1.7: Renewable Energy Market developed and distribution code in May 2016 and implemented, including the Renewable Energy revisions of the Philippines Grid Code. Certificate (REC) registry, so that the renewable RPS rules are pending implementation. portfolio standard for utilities can be met through a combination of purchases of renewable energy and/or RECs 3.1.8: Implementation by the National On track ✓ WB technical advice supported the Electrification Administration (NEA) of new development of the Key Performance and Key Performance Standard (KPS) system for Governance Standards (KPGS) system in electric cooperatives. The KPS system will NEA. Implementation of the KPGS is serve both as a performance monitoring tool and expected in parallel to the rollout of the as a credit risk rating system incorporating, as Business Intelligence work at NEA. part of the credit score, governance factors; as a credit risk service, it will support the 53 Department of Energy’s Electric Cooperative Partial Credit Guarantee (ECPCG) program. 3.1.9: Development of one LNG terminal via Not on track ✓ Achievement of this milestone within the PPP to gain access to global gas market CPS period is unlikely. Transport: Not Achieved ✓ No recent data available to show progress. 3.1.10: Road user satisfaction with DPWH Recent SWS Surveys have different survey performance increased question regarding DPWH performance. 3.1.11: At least 75 percent of paved national Partially ✓ The program has been restructured. As a road system (NRS) in fair condition or better by Achieved result, difficult to attribute result directly. 2014. Improved road asset management of NRS But under the restructure program 680 km by DPWH with at least 80 % of the annual road of roads maintained and 1200 non rural program of DPWH evaluated by technical and roads rehabilitated under the NRIMP economic criteria through the use of DPWH project. planning applications. 3.1.12: # of PPPs in transport sector under Partially ✓ Five transport PPP contracts awarded. In implementation achieved addition, three PPPs were developed: Metro Manila BRT Technical Study, Bus Transit Rationalization study and Transport Infrastructure development framework. 3.1.13: Cebu Bus Rapid Transit (BRT) project On track ✓ The detailed engineering design Cebu and Metro Manila Corridor Improvements being BRT project is under preparation. Metro implemented to strengthen urban connectivity Manila BRT Line 1 approved by the WB and mobility Board in March 2017. 3.1.14: Implementation of a sustainable On track ✓ The study on the transport infrastructure infrastructure maintenance and management development framework plan was framework and transport Infrastructure completed and presented to the development framework plan with a infrastructure Committee under the prioritization of projects previous government. 3.1.15: Increased budget allocations for Achieved ✓ Transportation budget in Billion Pesos: transport infrastructure are sustained throughout 2014: 138 billion the CPS period 2015: 225 billion 2016: 295 billion 3.1.16: National master network plan Partially ✓ For Local Roads Department of Local implemented and publicly disclosed, covering Achieved Government (DILG) launched a local both national and local roads. roads program, called KALSADA in 2016 and expanded it in 2017 under a modified 54 program, Conditional Matching Grant for Provinces. 3.1.17: Rural transport agenda advanced On track ✓ Support for Farm-to-Market roads is through development of farm-to-market roads ongoing through the Philippine Rural strategy that includes identification of roads in Development Program (PRDP). selected networks, and strengthening Inter- agency coordination for joint transport planning and implementation in rural areas among DPWH-DA-LGUs Outcome 3.2: Improved investment climate, including greater access to finance, especially for micro and small enterprises Indicator 3.2 a: Ease of Doing Business/Investment Climate: Not on track ✓ Milestone is no longer relevant; PDF-GIC Number of days to start a business has not met since 2012. 3.2.1: Policy coordination through the PDF-GIC, Baseline: 36 (2013) which focuses on the investment climate. Target: 15 (Oct 2016) Update: Not on track. 3.2.2: Work with NCC on the Doing Business On track ✓ Coordination with NCC is ongoing. Local According to DB2017 it takes 28 agenda to enhance the competitiveness of the governments have introduced tools to days to start a business. Philippines. facilitate trade- including single windows, risk based inspections and electronic data Indicator 3.2 b: interchange systems. These changes will Number of enquiries received by help improve the trading environment and credit information system and value boost firms international competitiveness. of financing Baseline: 7.7 m (2014) 3.2.3: Simplified rules and regulations in On track ✓ The “Go Negosyo Act” (signed into law in Target: 4 m additional enquires business registration and licensing, entry and July 2014 and effective as of January (total 11.7 m) by 2018; value of exit, paying taxes, access to finance, labor 2015) promotes the ease of doing business financing $160M relations and management. and aims to facilitate access to business- related services for MSMEs. The Act Update: On track. establishes the Philippine Business Registry Databank under the Department of Trade and Industry (DTI). PH ranking in 2017 “Doing Business” reflects some areas of improvements, including paying taxes. 55 3.2.4: Department of Trade and Industry Achieved ✓ PBR is now online. establishes functional Philippine Business Registry (PBR) system that requires no human interaction to register sole proprietorship with respect to National level registration requirements. 3.2.5: BPLS attributes are adopted in the Seal On track ✓ DILG adopted a resolution in 2016 to of Good Housekeeping/ Seal of Competitiveness incorporate BPLS in Seal of Competitiveness. Indicator 3.2 c: Access to Finance: Not on track ✓ Credit Information System was opened Number of SMEs that are granted as a pilot for submission of data from credits secured by moveable 3.2.6: Credit information system functioning: financial institutions, though there were property (and value of financing Credit Information Corporation is operational. significant delays in soft launch and full secured) Infrastructure for credit information and secured operationalization. IFC conducted an transactions is improved. Creditor rights are operational review of CICs operations in Baseline: 0 strengthened November 2016 and found significant Target: 6,930 by 2018 implementation bottlenecks. Value $60M by 2018 3.2.7: Secured transactions: Improved On track ✓ Secured Transaction bill was filed in regulations governing the operations of the Land July 2016 in Senate and Congress. First Update: On track. Secured Registration Authority (LRA) on non-real meeting on the committee on Banks at Transaction Bill is being progressed property mortgages; launch of the centralized, Senate and Congress took place which in Senate and Congress. It is a electronic web-based registry; enhanced explicitly identified as a priority bill in priority bill for 17th Congress. Once capacity of FIs to extend moveable asset the 17th Congress. the Bill is being operationalized the financing. target will be achieved. 3.2.8: Improved legal framework for financial Partially ✓ Bank resolution framework enhanced supervision including legal protection for Achieved through PIDS charter amendments, supervisors of financial institutions and which were enacted in 2016. Central enhanced resolution framework. Bank amendments seeking legal Indicator 3.2 d: Improved/simplified legal framework and protection are pending Senate/Congress Share of population in lower 40% of enforcement for credit rights, secured approval. Secured transactions bill income distribution with access to transactions, collateral holding period, and lodged in Senate and Congress will formal financial services contract enforcement broaden utilization of movable assets as Baseline: 10% (2012) collateral, balancing debtor and creditor Target: 15% (2016) interests. 56 Update: Achieved. 17% as of 2014 according to FINDEX report. The survey is being done every three years. 3.2.9: Cooperatives role in providing access to Not on track. ✓ The Bank has completed an assessment finance is strengthened by improving the focused on improving capacity of the regulatory capacity of the Cooperative Cooperative. However, policy direction Development Authority and through the is uncertain. No ongoing direct WBG simplification of procedures and requirements engagement in this area. for cooperatives 3.2.10: Financial services (e.g. savings and Partially ✓ 45 percent of CCT beneficiary micro-insurance) are linked with the CCT achieved households received CCT grants program to increase financial inclusion and through a bank cash card in 2016. The empower beneficiaries coverage is expected to increase further. Training of financial literacy among the CCT beneficiaries has been provided. Nonetheless, the policy direction on delivery mechanisms in the CCT is uncertain. 3.2.11: IFC financial institution clients’ loans to Not on track. ✓ As of December 2016, only US$2.63 MSMEs to reach $3.65 billion and 359,531 million loans have been disbursed. number of loans by FY16 Outcome 3.3: Increased economic growth, productivity and employment in agricultural and rural areas Indicator 3.3 a: 3.3.1: AAA delivered on options to reduce Partially ✓ The Bank delivered and shared with regulatory constraints to agribusiness investment Achieved client counterparts diagnostic work on Public and private sector and trade, including the domestic shipping domestic shipping, cabotage and port investments in agriculture and industry. reform in 2015. 57 agribusiness sector in program 3.3.2: Risk based SPS, quarantine and Partially ✓ Risk management committees have been areas. inspections system and improved border Achieved created in DA. The following activities Baseline: 0 clearance procedures for agriculture-products have also been completed: automation Target: 135 million private sector engaged by Department of Agriculture (DA) request for inspection process investment in Bangsamoro by 2016 completed; data transfer consolidated; (from PRDP) risk assessment report of three disease pathways completed; all product Update: Information not available. categories and country clusters classified The PRDP program did not monitor according to perceived quarantine risk. this. DA is expected to restructure quarantine procedures and implementation of the Indicator 3.3 b: program is expected to begin Increase in real household incomes 3.3.3: ARC cluster plans made operational and Partially ✓ Agrarian Reform Community (ARC) (on-, off- and non-farm) of farmer business plans are designed and implemented for achieved cluster plans being updated and and fisher beneficiaries selected value chains finalized, business plans on selected Baseline: 0 commodities to be prepared, economic Target: 5% increase per year (for and financial viability. farmers) 10% increase by 2017 for enterprise 3.3.4: Increasing number of hectares irrigated Achieved ✓ 106,083 ha (out of target of 118,950 ha) development area provided with irrigation and drainage services in the targeted areas Update: On track. The data is still under the Bank’s engagement. not available as various sub- projects have yet to be 3.3.5: Increasing cropping intensity Achieved ✓ Cropping intensity increased from 159% implemented/completed. in 2015 to 163% in 2016. The 2015 cropping intensity affected by series of Indicator 3.3 c: typhoons and the El-Nino phenomenon. Access to financial services by agri firms 3.3.6: Travel time reduced by 10% due to Achieved ✓ 69% reduction in travel time reduced by Baseline: 0 (2013) improved all-weather road networks linking MRDP project completion. A rapid Target: $20 million agri-finance production areas with markets in project areas impact assessment study conducted on loans outstanding by 2015 by year 3 of PRDP the fully completed roads under PRDP Number/value of loans disbursed to (57.3 km as of October 2016) assessed women 720/$360,000 an overall reduction in travel time of 67% among other associated benefits. Update: Information not available to monitor progress. 3.3.7 Jobs created via rural agriculture- and On track ✓ 5,700 temporary jobs created through fisheries-based livelihood enterprises project’s infrastructure activity (farm to market road). In addition, Php450 58 million of enterprise sub-projects have been approved under the Bank supported program with 57,000 beneficiaries. 3.3.8: # of PPPs developed in post-harvest Not on track ✓ Information not available. facilities (i.e. 11 existing NABCOR post-harvest facilities to be modernized through PSP), and ports (i.e. Davao Sasa Port) (IFC) 3.3.9: Expanding access to basic financial Not on track ✓ As of December 2016, total loan services for agriculture MSMEs (US$10M total disbursements from Rizal Microbank amount loans disbursed to agriculture MSMEs and CARD SME Bank disbursed by June 2016) US$2.63 million. 3.3.10: Expanding access to basic financial Not on track ✓ As of December 2016 only 533 entities services. Number of entities (Agriculture (Rizal Bank 10 SME, CARD SME 173 MSMEs) accessing investment / financing by micro and SME loans and 350 micro 2016 – 3,100 loans to farmers. 3.3.1: 1-2 opportunities in key agri-business Partially ✓ Value chain analysis (VCSs) completed areas identified and developed using results of achieved. for all major agricultural and fishery value chain studies by end of FY2014 commodities and used as the technical basis for prioritizing investment. VCAs completed and validated. The Central Bank has adopted the Agriculture Value Chain Financing Framework as the basis for supporting government’s future interventions. 3.3.12: 20% increase in no of farmers and Achieved ✓ 87 percent of the Bank supported fishers reporting improved to agricultural and program beneficiaries reported fisheries support services satisfaction with Local Government Unit (LGU) service delivery at project completion (by 80% in non-program areas), a substantial increase over a baseline of 37 percent. 59 Engagement Area 4: Climate Change, Environment and Disaster Risk Management CPS Outcome and Indicators Indicative Milestones Status of Milestone Comments Milestone Outcome 4.1 Increased resilience to natural disasters and climate change Indicator 4.1 a: 4.1.1: Clear and consistent set of climate Partially ✓ The Cabinet Cluster on Climate Change # of Provinces that have outcomes and targets developed and used in Achieved Adaptation-Disaster Risk Management mainstreamed climate change national and local planning through (CCA-DRM), chaired by the Department adaptation and disaster risk mainstreaming and harmonization of a of Environment and Natural Resources, reduction measures into their Government climate change typology has convened the first Cluster Meeting Provincial Development and with the Climate Change Commission Physical Framework Plans and other sector agencies. The meeting Baseline: 10 seeks to construct a Roadmap containing Target: 30 (2014) the country’s past achievements, future 60 (2016) engagements and objectives for promoting CCA and DRM strategies. Update: Achieved. 72 provinces ✓ Good progress made on climate have been mainstreamed. budgeting, which began implementation Indicator 4.1 b: in 2015. A total of 258 LGUs integrated Increase in number of public climate change expenditures against facilities (schools and hospitals) NCCAP strategic priorities in their upgraded to become safer and more Annual Investment Plan in 2016, while 45 resilient NGAs submitted a climate changed Baseline: Metro Manila < 20 out of expenditure program in the same year. 4000 building stock ✓ Public climate expenditure data for the Target: Most vulnerable schools last two years (2015 and 2016) was and hospitals upgraded, equivalent publicly disseminated through the DBM’s to around 200 structures (2017) Open Data Initiative. Update: On track 4.1.2: National Disaster Risk Finance and Achieved ✓ DRFI Strategy developed for two Insurance (DRFI) strategy prepared. Catastrophe agencies. Risk Modeling conducted and informing the ✓ IFC working on development of a design of a potential disaster risk financing parametric insurance model for Electric facility Cooperatives, among others, and other transactions are being explored in relation to the third pillar of the DRFI Strategy (households, SMEs). 60 4.1.3: Building retrofitting and construction Achieved ✓ Building and retrofitting guidelines were guidelines developed developed and adopted in relation to the "building-back better scheme" of the government in 2015. 4.1.4: Prioritization of methodology established Achieved ✓ Methodology for prioritization was for retrofitting of critical public facilities and published and applied for school applied in Metropolitan Manila buildings in Metro Manila in 2014. 4.1.5: DPWH retrofits and/or reconstructs Partially ✓ The DPWH completed retrofitting/ infrastructure in Metro Manila and/or other Achieved reconstruction of 10 bridges in Metro Manila areas, based on the results of structural audits. ✓ The Metro Manila Flood Management Flood management interventions to reduce flood Project is under preparation. Studies to risks in Metro Manila developed as follow-up to design additional flood management Flood Management Master Plan. interventions are ongoing. 4.1.6: Integrated climate vulnerability and Achieved ✓ Vulnerability and Sustainability climate disaster risk reduction tools developed assessment (VSA) tools are being used in and used to inform Comprehensive Land Use 30 Philippine Rural Development and Development Plans Program (PRDP) LGUs. ✓ 82 Provincial Commodity Investment Plans (PCIPs) developed using the expanded Vulnerability and Suitability Assessment (eVSA) tool approved by the Department of Agriculture. 4.1.7: More systematic use of budget planning On track ✓ Development of adaptation tools and regulations to improve climate change methodologies, strategies, and technologies is programming complete. ✓ Institutional frameworks for monitoring and evaluating climate-related risks, and developing and promoting appropriate adaptation measures has been strengthened through better climate information systems and new weather stations. 4.1.8: 25% Increase in the no of farmers and Partially ✓ While a baseline is not available for fishers adopting climate smart technologies achieved this milestone, the data show good progress: 35% of households surveyed in the targeted areas (Regions, 2 and 6) adopted coping 61 strategies, new technologies or improved farming practices to better cope with climate variability and change. Current data is from the final project survey completed in February 2017. 45% of stakeholders surveyed in the targeted areas who have participated in or are knowledgeable of activities demonstrated by the project to reduce vulnerability or improve adaptive capacity. Outcome 4.2 Improved natural resource management and sustainable development Indicator 4.2 a. 4.2.1: Cebu Bus Rapid Transit (BRT) and Partially ✓ Cebu BRT approved and Detailed Enhanced, Integrated Water Metro Manila BRT developed Achieved Engineering completed in 2015. Resources Management ✓ Detailed Engineering for Manila Improvement Corridor completed under Baseline: No river basin Master Cebu BRT in 2017. Plan in place (2013) Target: Capacity building 4.2.2: Improved targeting, design and Partially ✓ Study on PBA for River Basin and completed for river basin monitoring of labor intensive programs on Achieved reforestation program ongoing. management and 2 pilot river basin reforestation and land stabilization programs planning initiated (2016) 4.2.3: Increase in wastewater treatment capacity Not on track ✓ This milestone is not being monitored Update: Not on track. Only 519 in project areas (MMWW) by 352.5 m3 per day through the Bank supported program. No tons/per year have been completed. (2018) direct Bank-supported programs that will address this milestone. Indicator 4.2 b. Reduce the pollution in Manila Bay in project areas (Reduction of BOD 4.2.4: Establishment of state-of-the art system Not on track ✓ Procurement of consultant firm to carry in the collected wastewater) for Manila Bay Water Quality Monitoring out the institutional strengthening and establishment of hydrodynamic Baseline: 0 (2012) contaminant model/simulation may start Target: 3556 tons per year (2018) in FY 18. 62 Source: MMWW 4.2.5: Increase in wastewater treatment On track ✓ Wastewater treatment capacity will be capacities among LGUs and water districts in (Watch) determined when process-proving of Update: On track. the Manila Bay River Basin wastewater treatment facilities is completed, estimated in FY19. The project is on-going, currently at procurement stage so there are no numbers yet. 4.2.6: At least five (5) LISCOP micro-watershed Achieved ✓ All 61 LGUs participated in the interventions result in measurable reductions in initial Lake Environmental Action Planning environmental pressures, from 33 subprojects (LEAP) activity. 26 of these LGUs (2011) to 50 subprojects (2016) eventually succeeded in obtaining LISCOP financing for subprojects. ✓ LISCOP project is complete. 4.2.7: Natural capital accounting implemented Achieved ✓ Phil-WAVES completed the and first estimates of natural capital produced development of nine ecosystem accounts or and used by NEDA Southern Palawan and Laguna De Bay. 4.2.8: System of Environmental-Economic Achieved ✓ National mineral accounts completed Accounting modules produced for minerals and ✓ The production of the mangroves mangroves to inform policy analysis, planning accounts completed. and implementation ✓ The national asset accounts is being used to produce macroeconomic indicators. ✓ Following the integration of the mineral data in the National Accounts, the National Policy and Planning Staff (NPPS) of the NEDA is leading the policy analysis for macroeconomic growth and sustainability 4.2.9: Green building regulations at the national Partially ✓ Green Building Regulations at the and sub-national level set (Higher mandatory Achieved national level completed and approved in standards for new building construction and June 2015. operation) supported by the Green Building Regulations project 4.2.10: Biodiversity conservation and coastal Achieved ✓ The Provincial Development Councils resources co-management features incorporated (PDCs) have currently approved PCIPs in the Provincial Commodity Investment Plans for some 57 Provinces. (PCIPs) 63 ✓ 57 LGUs have so far prepared PCIPs that have been endorsed by Provincial Development (57 out of 80 LGUs). 4.2.11: Establishment of a state-of-the-art Not on track system for water quality monitoring for Manila Bay and tributaries 4.2.12: Institutional capacity building Not on track ✓ Included in GEF grant that will undertaken for institutions involved in Manila accompany the Metro Manila Flood Bay River Basin Management Management Project in FY18. Engagement Area 5: Peace, Institution Building, and Social and Economic Opportunity CPS Outcome and Indicators Indicative Milestones Status of Milestone Comments Milestone Outcome 5.1 Increased trust within communities, and between citizens and the state in conflict areas Indicator 5.1 a: Total number of 5.1.1: National CDD Program expands Partially ✓ DSWD adopted the "peace lens" to people benefiting from improved coverage and includes a special “conflict achieved guide implementation of the US$1 billion access to basic services in conflict- window” to adapt to the socio-political context National Community Driven Development affected areas in ARMM and other conflict-affected areas. Program in conflict-affected areas across the country. A special set of procedures for the Baseline (2012): Total 301,428 NCDDP in conflict-affected areas, Female: 155,634 developed with Bank support, was completed and endorsed by DSWD in 2015. Target (2015): 437,008 This important policy advance constitutes Female: 223,424 partial achievement of this milestone. Update: No data available to monitor progress. Indicator 5.1 b: Trainees in 5.1.2: Inclusive peace process and transition Partially ✓ The Bank provided extensive livelihood program secure wage from ARMM to the Bangsamoro assisted Achieved technical assistance to the Bangsamoro employment or start new small through support to the Transition Commission. Transition Commission on economic enterprises development aspects of the Bangsamoro Basic Law; transition of combatants to Baseline: 0 peaceful and productive civilians through a needs assessment of MILF ex-combatants; Target: 50% of program and exposure to international experience participants secure wage and assistance for inclusive community 64 employment or start a new outreach. Progress in strengthening the enterprise (2015) technical capacity of the Bangsamoro Transition Commission through the above Update: Not on track. This activities reflects partial achievement of this program is not being developed milestone. under the ARMM. ✓ While the transition to the Bangsamoro did not take place during the last Administration, the Bangsamoro Transition Commission has been reconvened and is scheduled to submit a new draft enabling law for the Bangsamoro to Congress in 2017. 5.1.3: GPH-MILF “Sajahatra Bangsamoro” Achieved ✓ Operational support and technical program supported and a joint development assistance for the Sajahatra Bangsamoro needs assessment and investment planning Project Management Team was extended process for the Bangsamoro completed from September 2013 until June 2015. A joint development needs assessment and planning process for the Bangsamoro, namely the Bangsamoro Development Plan, was also completed. 5.1.4: Community meetings conducted for Achieved ✓ The number of meetings surpassed discussion of priority needs in villages increases the target, equaling over 530 per year by from 324 (2012) to 454 annually (2013-2016) 2016. These community meetings bring together people from different ethnic and religious groups to discuss development needs. 5.1.5: Increase of 5% in number of people who Partially ✓ While this milestone is no longer feel they can personally influence development Achieved/Drop tracked, data from the ARMM Social Fund decisions taken in their community Project which closed in FY14 (just before the CPS period) found a 3 percent increase in treatment over comparison areas. Outcome 5.2 Implementation of Peace-Promoting Catch Up Socio-economic development in conflict affected areas 5.2.1: Joint MILF-Government “Sajahatra Achieved ✓ The following results were achieved by Bangsamoro” program provides quick impact end-November 2015: assistance to identified conflict-affected •11,000 beneficiaries received cash-for- communities. work assistance •16,194 children from 3-to-5 benefitted from a supplementary feeding program; 11,000 PhilHealth cards provided. •639 students received financial aid for 65 tertiary education. •1,000 individuals received technical- vocational training. •50 Madaris in Bangsamoro received Financial Assistance. •10-day care centers constructed in priority sites. •1,000 hectares covered in the National Greening Program 5.2.2: Technical advice provided on combatant On track ✓ Comprehensive MILF Ex- transition Combatants Needs, Skills and Aspirations Assessment completed in 2017 at the request of the Joint Normalization Committee. The analysis from the assessment will inform the design of appropriate packages of assistance to support their expected transition to civilian life. ✓ Multiple knowledge sessions conducted for government and MILF personnel on international experience in combatant transition, including a major workshop in September 2015. ✓ Four senior government and MILF officials sent on international training course on Community-Based Reintegration and Security in 2015. The Bank also worked with UNDP to prepare a draft Terms of Reference for the Bangsamoro Normalization Trust Fund. 5.2.3: Policy and institutional reforms enacted to Partially ✓ The report, a collaboration with the address land conflict in Mindanao and to meet Achieved IOM in support of the Land Study Group of the land-related commitments in the Framework the Transitional Justice and Reconciliation Agreement on the Bangsamoro. Commission (TJRC), was completed and peer reviewed in March 2015. Launched by the Government and MILF in February 2017. Ongoing dissemination will continue through 2017. ✓ Key recommendations have been adopted by the TJRC and incorporated in 66 their overall report, which was released in March 2016. ✓ The indicator calls for policy and institutional reforms to be enacted but this has not happened yet. Policy space will likely open up should the Bangsamoro autonomous entity be established, as this will create the opportunity to address long- standing problems with the institutional and legal framework for land administration and management. 5.2.4: Expanded national CDD program, Partially ✓ The design of the ARMM component covering at least 60 municipalities and up to 1.5 Achieved of the NCDDP was completed in 2015 and million people in the Bangsamoro by 2016. endorsed by the national and ARMM Regional Governments. However, national government financing for the project was to be drawn from the Disbursement Acceleration Program (DAP), which was declared unconstitutional in 2015. Subsequently the ARMM-BRIDGE program was implemented in 2015 and 2016, though more recently it has been re- designed to become a social protection program rather than CDD. It remains unclear if ARMM will revive a major CDD operation in the future. 5.2.5: Budgeting system in DepEd ARMM is Achieved ✓ On the budget side, the 2014-2015 generally more transparent and efficient due to GAA saw the introduction of targeted reforms in management of Teacher Wage Bill MFOs, including in education, as part of the and presentation of Results Oriented Budget for successful/achieved introduction of a results 2014. oriented budget. DepEd ARMM also did a number of validations of the teacher wage budget, and various rounds of validation of the wage bill. ✓ The Public Expenditure and Institutional Review of Basic Education in ARMM and associated TA were successful in cleaning up the payroll to reduce the number of "ghost teachers" in ARMM. 67 ✓ TA and facilitation with the national Department of Budget and Management and national Department of Education helped ARMM to secure a significantly increased budget for basic education over the last three years. 5.2.6: Under a grant to the ILO form the MTF, Partially ✓ This indicator relates to a community- at least 60% of beneficiaries of entrepreneurship Achieved enterprise development component training will establish a small business and implemented through a grant to the ILO increase their income by 20%. under the Mindanao Trust Fund. The Grant closed in December 2016, with 91% of those trained having established a small business, exceeding the target. The indicator for increased income is being reduced to 20% based on experience in the field. Data against this indicator will be available later in 2017 once an ongoing impact assessment is completed and ILO's Completion Report is submitted. 5.2.7:. Implementation of approved farm-to- Achieved ✓ MRDP 2 closed in Dec 2014. A total of market road MDRP subprojects in target 111 km of new rural roads were municipalities by FY14 and continuing constructed & 1,203km of rural roads implementation of NRIMP2 road improvement rehabilitated under MRDP2. components in Mindanao ✓ The length of time needed to reach the market has been reduced by 69% after the implementation of the MRDP2 FMR subprojects compared to before the project started. 5.2.8: Forging of collaboration between private On track ✓ Facilitation of meetings between PRDP and sector agribusiness firms, LGUs, agribusiness investors has been able to link ARMM/Bangsamoro Regional Governments government infra projects with job-creating and the DA forged in synchronizing public and private investments in agribusiness. Bank private investments in Bangsamoro areas for TA to the Electrical Cooperative in generation of jobs and livelihood opportunities Maguindanao is also linking to agribusiness investors to support the investment and strengthen the liquidity and financial viability of the EC. 5.2.9: Farm-to-market roads toolkit developed Not on track. ✓ No engagement in this area. and food logistics study undertaken 68 5.5.10: MTF supports MILF Project Achieved This milestone repeats 5.2.1. The following Management Team for joint government-MILF results were achieved by end-November Sajahatra Bangsamoro program delivers 2015: livelihood support to at least 11,000 people in •11,000 beneficiaries received cash-for-work conflict-affected areas assistance •16,194 children from 3-to-5 benefitted from a supplementary feeding program; 11,000 PhilHealth cards provided. •639 students received financial aid for tertiary education. •1,000 individuals received technical- vocational training. •50 Madaris in Bangsamoro received Financial Assistance. •10-day care centers constructed in priority sites. •1,000 hectares covered in the National Greening Program 69 Annex 4. IBRD Commitments and Tentative Pipeline, FY15-19 CPS Engagement Commitment Area Project (US$, million) FY15 1 Third Development Policy Loan 300 3 Philippine Rural Development Program (PRDP) 501.3 3 Cebu Bus Rapid Transit (BRT) Project 116 Total 917.3 FY16 2 Philippines Social Welfare Development Project 2 450 Second Disaster Risk Management Development Policy Loan with a CAT- 500 4 DDO Total 950 FY17 3 Metro Manila Bus Rapid Transit (BRT) Line 1 Project 40.7 3 Inclusive Partnerships for Agriculture Competitiveness (IPAC) 99.3 Total 140 FY18 1 Increasing Fiscal Space and Transparency DPL 300 3, 4 Metro Manila Flood Management 210 3 Philippine Rural Development Project Additional Financing (Tranche 1) 150 Supporting Resilient Communities and Responsive Local Governance in 5 0 Mindanao (Grant-funded) Total 660 FY19 1, 5 Customs and Trade Modernization Project 200 1 E-Government Transformation 50 3 Competitiveness DPL1 300 3, 5 Mindanao Inclusive Agriculture 100 2, 5 Basic Education with Focus on Mindanao 100 5 Promoting Citizen Security & Justice in Mindanao (Grant-funded) 0 Total 750 Standby for FY19 1 Scholarship Project for Strengthening Institutional Capacity 100 Micro, Small and Medium Enterprise (MSME) Development Program for 3 125 Results (PforR) Notes: The table provides estimated project sizes, which may include co-financing by other development partners. The pipeline as presented is subject to further adjustments as needed based on ongoing programming discussions with Government and eventual project identification/preparation. 70 Annex 5. IBRD Advisory Services and Analytics (FY15-17) Advisory Services and Analytics: Task Names Lead Global Practice EA1: TRANSPARENT AND ACCOUNTABLE GOVERNMENT Improving Bureaucratic Performance Governance ARMM Public Expenditure and Institutional Review Governance Tax Policy and Admin. Reform Support Governance PFM Strategy Implementation Support Governance PSG Demand Side Implementation Note Governance Strengthening Oversight Governance Open Government Phase II Governance Philippines Program for Good Governance Governance Strengthening Public Finances 2 Governance "Sulong:" CSO Consultative Workshop Other Philippines Sub-national Debt Policy Technical Assistance Social, Urban, Rural and Resilience Global (TA) Practice PDF-WG and DIALOG TF Supervision Social, Urban, Rural and Resilience Global Practice Strengthening Grassroots Participatory Budgeting Monitoring Social, Urban, Rural and Resilience Global & Evaluation Systems Practice Participatory Local Government Unit (LGU) Planning and Social, Urban, Rural and Resilience Global Budgeting Practice Programmatic Analytical and Advisory Assistance (AAA) on Social, Urban, Rural and Resilience Global Decentralization & Local Government Practice EA2: EMPOWERMENT OF THE POOR AND VULNERABLE Basic Education: Public Education Expenditure Tracking and Education Quantitative Service Delivery Study Alternative Learning System Study Education Improving Education Service Delivery Education Programmatic AAA for Education Education Strengthening Primary Care Delivery Health, Nutrition & Population Measuring Equity in Progress Toward Universal Health Health, Nutrition & Population Coverage Enhancing Health Insurance Coverage Health, Nutrition & Population Policy Dialogue and on-demand TA Health, Nutrition & Population HIV Prevention in Big Cities Health, Nutrition & Population Programmatic AAA for Universal Health Care Health, Nutrition & Population Poverty analysis, policies, and programs Poverty and Equity Strengthening Household Surveys Poverty and Equity Improving Poverty Measurement Methodology Poverty and Equity Conditional Cash Transfer (CCT) expansion to secondary Social Protection & Labor education Updating and improving the National Household Targeting Social Protection & Labor System SP and disaster preparedness Social Protection & Labor Social insurance issues note Social Protection & Labor Labor market review Social Protection & Labor 71 CCT business processes, Grievance Redress System and Social Protection & Labor Management Information System CCT Impact Evaluation Social Protection & Labor Programmatic AAA on Social Protection Social Protection & Labor Programmatic AAA for Social Protection and Labor Social Protection & Labor Philippines Scaling Up Rural Sanitation Water TA-Philippines Small Water Utilities Water EA3: RAPID, INCLUSIVE AND SUSTAINED ECONOMIC GROWTH Philippines Programmatic AAA on Agriculture and Agriculture Agribusiness Philippines Power Sector Strategy Advice Energy & Extractives Strengthening Deposit Insurance Finance & Markets Philippines Financial. Education &Consumer Protection Finance & Markets Philippines #A019 Crisis Preparedness Framework Finance & Markets Islamic Finance and Financial Inclusion Finance & Markets The Philippines National Risk Assessment Finance & Markets Financial Sector Development Finance & Markets Philippine Economic Update Macro Economics & Fiscal Management Supporting the Philippine Statistics Authority and Securities Macro Economics & Fiscal Management and Exchange Commission Inclusive Economic Institutions Macro Economics & Fiscal Management Philippines Agriculture and Fisheries Situation Analysis Other Metro Manila Green Print for Addressing Slum Challenges Social, Urban, Rural and Resilience Global Practice Sustainable Housing Solutions for Informal Settler Families Social, Urban, Rural and Resilience Global Practice Housing and Urban Development Summit Social, Urban, Rural and Resilience Global Practice Programmatic AAA Metro Manila Development Social, Urban, Rural and Resilience Global Practice Metro Manila Citywide Slum Upgrading Social, Urban, Rural and Resilience Global Practice Philippines Urbanization Review Social, Urban, Rural and Resilience Global Practice Transport Development Framework Plan TA Transport & ICT Philippines National-Local Roads TA Transport & ICT Supporting Business Innovations in DPWH Transport & ICT TA Support to PPP Program Transport & ICT PH: Building Blocks for E-Services Transport & ICT PAAA Transport Transport & ICT Integrated Water Resource Management Planning Tools and Water Guidelines Water Sector Financing Framework Water National Water Resources Board (NWRB) Permit Water Management Process Programmatic AAA for Water and Sanitation Water 72 EA4: CLIMATE CHANGE, ENVIRONMENT AND DISASTER RISK MANAGEMENT Philippines Yolanda Recovery Case Study Climate Change Mainstreaming Climate Change (CC) in Budget Process Environment & Natural Resources Align Plans & Strengthen Implementation of CC Programs, Environment & Natural Resources Activities and Projects (PAPs) Support to Address Climate Change Environment & Natural Resources Building Resilience to Climate Change Environment & Natural Resources Metro Manila Bay Initiative Social, Urban, Rural and Resilience Global Practice Disaster Risk Management Programmatic AAA Social, Urban, Rural and Resilience Global Practice Support to Post Typhoon Reconstruction Social, Urban, Rural and Resilience Global Practice Owner-driven Housing Reconstruction Social, Urban, Rural and Resilience Global Practice Flood Management Master Plan for Metro Manila Water EA5: PEACE, INSTITUTION BUILDING, AND SOCIAL AND ECONOMIC OPPORTUNITY NCDDP: ARMM Component & Peace Lens Other ARMM/Bangsamoro Open Data Initiative Social, Urban, Rural and Resilience Global Practice MILF Ex-Combatants Needs Assessment Social, Urban, Rural and Resilience Global Practice Land Conflict in Mindanao Social, Urban, Rural and Resilience Global Practice Philippines: Supporting Inclusive Peace Social, Urban, Rural and Resilience Global Practice 73 Annex 6. IBRD Advisory Services and Analytics Work Program for FY18-20 CPS Engagement Topics Area 1 Support to PFM Reforms (Reimbursable Advisory Services, RAS) 1 Assessment of Capacity Building Needs in the Civil Service 1 Programmatic Public Expenditure Review 1 Just-in-Time Support for Tax Reform 1 Review of Customs and Trade Modernization Challenges 1 Economic Monitoring and Bi-annual Economic Reports 2 Statistics TA 2 Skills Development 2 Health Service Delivery and Finance 2 Poverty Analytical Work 2 Multi-sector Nutrition 2 Social Protection 3 National and Provincial Road Program 3 Water Supply and Sanitation 3 Local Infrastructure for Tourism 3 MSME Development 3 Competition Policy Support 3 Rural Development and Agriculture 3 Agriculture Finance 4 Risk Resiliency and Sustainability Program 4 Disaster Risk Management and Financing 4 Following the Carbon for Clean Energy in Asia 4 Agrifood Resilience to El Niño Southern Oscillation (ENSO) in East Asia 4 Emergency Cash Transfer 4 Integration Water Resource Management 74 Annex 7. IFC Commitments, FY15-FY17 Original Commitment Industry Commitment Mobilization Project Short Name Sector Activity Date Group US$, millions US$, millions 2015 Cravings Equity MAS Education Services 16.2 RCBC Short Term FM Finance & Insurance 30 DARP - Altus FM Finance & Insurance 40 2016 DCM RCBC Bond FM Finance & Insurance 75 CARD SME Loan FM Finance & Insurance 3.4 Cravings Equity MAS Education Services 3.8 BPI SEF III FM Finance & Insurance 37.3 CARD Banks' Loan FM Finance & Insurance 11.4 Collective Investment 2017 Sierra Madre I CTT 15 Vehicles Thomas Lloyd RE Infra Electric Power 64 96.9 75 Annex 8. IFC Advisory Services Portfolio, FY15-FY17 76 Annex 9. Philippines PLR Regional Consultations – Highlights I. Background: The Philippines PLR provided a platform for dialogue, learning and adaptation at the midpoint of the Country Partnership Strategy (CPS) period. To ensure an inclusive process and to complement discussions with central government counterparts and other partners in Manila, the WBG held the following half-day regional consultations: • May 19, 2017: Central Philippine University in Iloilo (Western Visayas) • May 22, 2017: St. Paul University Philippines in Tuguegarao (Luzon) • May 24, 2017: Notre Dame University in Cotabato (Mindanao) II. Participation: The roundtable discussions sought views on key themes of the PLR, including alignment between the CPS priorities and the new Philippines Development Plan (2017-2012), emerging results, lessons learned and evolving risks. Held in collaboration with Knowledge for Development Community (KDC) partners,90 the discussions included 20-25 participants each and brought together representatives of government agencies at the regional and local levels, including NEDA; DILG; DSWD; DepEd; Department of Agrarian Reform; Department of Labor and Employment; local government unit (LGU) officials; community leaders, farmer organizations and CSOs; youth representatives; project partners and members of the academic community, including both private and public universities. III. Main Takeaways 1. Across the consultations, participants highlighted the acute challenges faced by poor communities in geographically remote areas, including small islands, uplands and outlying conflict- affected areas. Discussants held that communities in remote areas include the poorest of the poor. Several noted that geographic isolation undercuts access to basic services – from health care and education to rescue services following natural disasters – while also reducing incomes and fostering dependence. Speakers noted that limited access to education in remote areas is a key challenge for conflict-affected communities, which need involvement in the broader education system. Several speakers urged enhanced geographic balance in poverty reduction interventions, also highlighting the need for more inclusive dialogue, including with participation of Indigenous People. • Speakers called for focus on the basic needs of the poor in isolated communities – particularly basic infrastructure such as feeder roads – to improve health outcomes, facilitate agriculture-based livelihoods and promote effective disaster response. The latter was particularly emphasized in Tuguegarao, noting the susceptibility to natural hazards in Region 2. 2. Speakers highlighted that participatory processes have been integral to promoting ownership, building confidence and promoting peace through WBG support. Several speakers in Cotabato affirmed the Mindanao Trust Fund’s (MTF) role in supporting the peace process through participatory processes and related confidence building. In addition to highlighting that the MTF had helped to increase participation by women in community planning, discussants highlighted the MTF’s direct intervention in the six major camps of the Moro Islamic Liberation Front (MILF) in relation to: (i) socioeconomic infrastructure such as water systems and farm to market roads; (ii) livelihood projects, primarily a confidence building factor; and (iii) alternative learning systems. • Commenters in Cotabato held that strong community participation in early needs assessment promoted ownership and served as a peace-building mechanism by helping to allay concerns about the potential for elite capture. At the same time, speakers highlighted the need to 90 The WBG team grateful acknowledges the partnership the Presidents, KDC Coordinators and event teams of the Central Philippine University; St Paul University Philippines; and Notre Dame University for their strong collaboration on these consultations. 77 strengthen the sustainability of the outputs of Community Driven Development (CDD) support, including through effective engagement with barangay officials over time. In this connection, it was also noted that dialogue between the community and the business sector should be sustained and strengthened to promote collaboration in the peace process. 3. Participants broadly affirmed that alignment between the CPS and the new Philippines Development Plan (PDP) was strong, also noting opportunities to deepen action in key areas. Speakers affirmed the relevance of the CPS Engagement Areas and urged strong support for: (i) job creation, entrepreneurship, and access to finance for micro and small entrepreneurs; (ii) support for rural infrastructure, fisheries, rural livelihoods and increased access to climate resilient crops; (iii) strengthening LGU capacity; (iv) support for education, youth entrepreneurship including agribusiness, and strengthening the quality of higher education; and (v) environmental stewardship, including addressing the needs of watershed communities, promoting integrated river basin management and incorporating training for youth in resilience. Speakers in Iloilo and Tuguegarao encouraged evaluation of the sustainability and livelihood impacts of the Conditional Cash Transfer program. Participants in Cotabato highlighted scope to expand WBG support for Islamic finance for communities in the Bangsamoro and engagement in the Halal industry in relation to support for entrepreneurship. IV. Feedback on Risks: Participants highlighted four main categories of risk to the achievement of CPS objectives. • Speakers across the three consultations highlighted technical design risks, such as a mismatch between beneficiary needs and proposed development activities or the lack of relevant data at the local level. They emphasized the importance of anchoring programs and projects in a strong evidence base and encouraged the use of inclusive approaches (such as family vulnerability risk assessments) for assessing community priorities. Participants also highlighted a range of implementation risks, including project implementation involving multiple agencies with overlapping mandates. Speakers highlighted that inter-government relations are multilayered and complex, particularly in ARMM. In addition, commenters proposed that limited absorptive capacity of LGUs can sometimes be a critical bottleneck, also noting the challenge of uneven LGU enforcement of policies that exist on paper. • Discussants noted that political interference in the identification of beneficiaries for various programs poses important political and governance risks. The role of Listahanan as an objective platform for identifying beneficiaries was noted in this connection. At the national level, uncertainty about the sustainability of the main anti-poverty programs was noted along with uncertainty about the potential implications of federalism. Speakers noted that fiduciary risks also require active mitigation. They proposed that implementing partnerships should be based on trust and that the participation of citizens in the design, monitoring and audit of projects can help to promote accountability. The Citizens Participatory Audit was noted for promoting ownership. V. Adjustments to the PLR in Response to the Consultations 1) Further highlight links between geographic isolation and extreme poverty; highlight the PDP’s focus on addressing spatial inequality through the NSS. 2) Expand discussion of lessons learned on the value of participatory processes, including in relation to CDD approaches and the MTF. 3) Amplify the discussion of key risks in line with consultation feedback above. 78