Social Protection Support Project (RRP PHI 43407-01)

Project Number: 43407-01 Loan Number: tbd August 2010

Republic of the Philippines: Social Protection Support Project

Project Administration Manual

Contents ABBREVIATIONS I. PROJECT DESCRIPTION 1

A. Rationale 1 B. Impact and Outcome 3 C. Outputs 3

D. Sanctions for Non-Compliance on Program Conditionalities 6 E. Exit Strategy 7

II. IMPLEMENTATION PLANS 8 A. Project Readiness Activities 8 B. Overall Project Implementation Plan 9

III. PROJECT MANAGEMENT ARRANGEMENTS 11 A. Project Implementation Organizations – Roles and Responsibilities 11 B. Key Persons Involved in Implementation 12 C. Project Organization Structure 13

IV. COSTS AND FINANCING 15 A. Detailed Cost Estimates by Expenditure Category and Output 16 B. Detailed Cost Estimates by Financier 17 C. Detailed Cost Estimates by Year 18 D. Allocation and Withdrawal of Loan Proceeds 19 E. Contract and Disbursement S-curve 20

V. FINANCIAL MANAGEMENT 21 A. Financial Management Assessment 21 B. Disbursement 21 C. Accounting 26 D. Auditing 26

VI. PROCUREMENT AND CONSULTING SERVICES 27 A. Advance Contracting and Retroactive Financing 27 B. Procurement of Goods, Works and Consulting Services 27 C. Procurement Plan 28 D. Consultant's Terms of Reference 30

VII. SAFEGUARDS 36 VIII. GENDER AND SOCIAL DIMENSIONS 38 A. Implementation Arrangement 39

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION 40 A. Project Design and Monitoring Framework 40 B. Monitoring 42

1. Compliance monitoring 43 2. External Monitoring – Spot Checks 46 3. Institutional Arrangements for Project Performance Monitoring 46 4. Compliance Monitoring 47

C. Evaluation 47 D. Reporting 49

E. Stakeholder Communication Strategy 49 X. ANTICORRUPTION POLICY 51

XI. ACCOUNTABILITY MECHANISM 54 XII. RECORD OF PAM CHANGES 55 APPENDIXES 1. The Compliance Verification Process 56 2. The Update System Process 58 3. Risk Assessment and Risk Management Plan 63 4. List of Useful Links 66

Project Administration Manual Purpose and Process

The project administration manual (PAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with Government and Asian Development Bank (ADB) policies and procedures. The PAM should include references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM. The Department of Social Welfare and Development is wholly responsible for the implementation of ADB financed projects, as agreed jointly between the borrower and ADB, and in accordance with Government and ADB’s policies and procedures. ADB staff is responsible to support implementation including compliance by the Department of Social Welfare and Development of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures. At Loan Negotiations the borrower and ADB shall agree to the PAM and ensure consistency with the Loan agreement. Such agreement shall be reflected in the minutes of the Loan Negotiations. In the event of any discrepancy or contradiction between the PAM and the Loan Agreement, the provisions of the Loan Agreement shall prevail.

After ADB Board approval of the project's report and recommendations of the President (RRP) changes in implementation arrangements are subject to agreement and approval pursuant to relevant Government and ADB administrative procedures (including the Project Administration Instructions) and upon such approval they will be subsequently incorporated in the PAM.

Abbreviations

4Ps = Pantawid Pamilyang Pilipino Program (Building Bridges for the Filipino Family Program)

ADB = Asian Development Bank AusAID = Australian Agency for International Development CCT = conditional cash transfer CVS = compliance verification system DepEd = Department of Education DMF = design and monitoring framework DOH = Department of Health DPM = deputy project manager DSWD = Department of Social Welfare and Development FBS = fixed-budget selection GAD = gender and development GAP = gender action plan GOP = Government of the Philippines GRS = grievance redress system ICS = individual consultant system KALAHI-CIDSS

= Kapit Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services

LGU = local government unit M&E = monitoring and evaluation MIS = management information system MOA = memorandum of agreement NGO = nongovernment organization NHTS-PR = national household targeting system for poverty reduction NPMO = National Project Management Office PM = project manager QCBS = quality and cost based selection RPMO = Regional Project Management Office RRP = Report and Recommendation of the President TOR = terms of reference

1

I. PROJECT DESCRIPTION

1. The Project will support the Government of the Philippines (GOP) in implementing and expanding its social protection agenda, especially the conditional cash transfer (CCT) program Pantawid Pamilyang Pilipino Program (4Ps) and the national household targeting system for poverty reduction (NHTS-PR). A capacity development technical assistance (CDTA) will support capacity development and institutional strengthening of the Government for efficient implementation of the social protection agenda.1 A grant from the Gender and Development Cooperation Fund (GDCF) will support piloting and strengthening of gender activities under the 4Ps. The Project is included in the Country Operations Business Plan (COBP 2010–2012).2 A. Rationale 2. Despite high economic growth over the past 6 years, poverty incidence in the Philippines increased from 30% to 33% between 2003 and 2006. Key causes of poverty include high inequality and chronic underinvestment in physical and human capital, especially health and education. As a result, the Philippines is lagging on progress in the Millennium Development Goal targets for universal primary education, maternal mortality, and access to reproductive health services. Net enrollment in elementary school declined from 99.1% in 1990 to 83.2% in 2007. Only 70% of students that enter grade 1 make it to grade 6, and one in five children aged 6–11 are not in school. Universal immunization against measles is yet to be achieved and malnutrition remains a major concern, with only 64% of children meeting normal weight-for-age standards. Maternal mortality rates remain high at 162 per 100,000 live births in 2006. 3. Recent Government estimates indicate that about 45% of Filipinos are vulnerable to falling into poverty if confronted by external shocks such as family health problems and deaths, loss of employment, natural disasters, and increase in food and fuel prices.3 In 2007–2008, escalating food prices contributed to a 9.45% reduction in the average standard of living and an increase of more than 50%4 in the severity of poverty. In the absence of appropriate safety nets, households have developed coping mechanisms that tend to erode human capital and perpetuate poverty such as responding to income shocks by increasing working hours, changing eating patterns, and withdrawing children from school or foregoing critical health care. 4. Demand-side constraints such as financial barriers, indirect and opportunity costs of services, and lack of awareness of the importance of human capital investment, are key constraints to utilization of health and education services among the poor. Although many public health services are free, health facilities are often located in areas that are not easily accessible to poor families, leading to high transport costs. The average costs for travel to health facilities are P109 per visit while outpatient care treatment is P1,872 per person.5 Nearly half of the health care costs are paid out-of-pocket, and 79% of poor households have no insurance coverage. The poor are often unable to afford basic health care since out pocket payments are required at the point of services. For education, demand-side factors are the main determinants of enrollment and other education outcomes. Among girls aged 7–12 years old, the main reasons for being out of school high are costs of education and lack of interest. Between 2002 and 2007, the numbers of out-of-school youth rose markedly for children age 13–16, reaching

1 A project preparatory technical assistance to prepare the proposed project was approved on 21 December 2009. 2 ADB. 2009. Country Operations Business Plan (2010-2012): Philippines. Manila. 3 National Anti-Poverty Commission and National Statistical Coordination Board. 2005. Assessment of Vulnerability

to Poverty in the Philippines. Manila. 4 ADB. 2008. Economic Research Department, Working Paper No.112. Manila. 5 National Statistics Office. 2008. National Demographic and Health Survey 2008. Manila.

2

more than 20% in many regions.6 The leading causes were lack of personal interest (particularly for boys), high cost of education (particularly for girls), and working or looking for work.7 5. To date, Government efforts to address poverty and improve human development outcomes have been compromised by low spending on social sectors, particularly social assistance programs. In 2009, national government spending on social services was only 5.9% of gross domestic product. Spending on social protection was even lower at only 1.2%, though has increased from an average of 0.8% from 2005-2007. The budget of the Department of Social Welfare and Development (DSWD), which has the primary role in delivering social protection services, has increased recently, but in 2010 still accounts for only 1% of the national budget. There is also a lack of policy and institutional coordination in the social protection sector, with several departments undertaking uncoordinated, and sometimes ineffective, programs. Benefits have been further compromised by the lack of a proper targeting system to identify beneficiaries and high leakages to the non-poor coupled with under-coverage of the poor.

6. To respond to these challenges, the Government has recently increased its focus on reforming and reinforcing its social protection system. The social reform agenda led by DSWD includes (i) development and implementation of a social protection framework and a targeting system for the poor; (ii) improving programs, including refining existing delivery systems and expanding the CCT program; (iii) securing more predictable funding for core DSWD functions and more strategic budget allocation; and (iv) improving governance systems and monitoring and evaluation, and enhancing organizational capacity. 7. The cornerstone of the Government's social reform effort, was the launching of a CCT program (Pantawid Pamilyang Pilipino Program), commonly referred to as the 4Ps. The 4Ps program provides cash grants to poor households conditional on their fulfillment of health and education related conditionalities. The program pilot was launched in February 2008 with 6,000 beneficiary households in four pilot municipalities and two cities. Results from the pilot showed that school enrollments and attendance rates increased significantly and elementary school completion rates increased from 67.5% to 73%, the number of children who received deworming pills increased by 21.42%, the number of fully immunized children increased by 26.2% and the total number of women with complete pre-natal visits increased by 45.38%.8 The 4Ps program has gradually expanded to 340,000 households in 2008 (Set 1); 666,000 households in 2009 (Set 2); and aims to reach 1 million households in 2010 (Set 3).9 8. The 4Ps addresses poverty directly in the short term through the provision of the cash grants, while simultaneously reducing long-term poverty through increased investments in human capital, a key factor in addressing intergenerational poverty. Cash transfers help mitigate the direct and indirect costs of health care and schooling, as well as the decision to remove children from school to work. The program also promotes increased utilization of education and health services and other positive behavior changes through family development sessions focusing on responsible parenthood, health and nutrition, and education. 9. The evolving social welfare reform agenda was developed and is supported by multiple donors, including a $405 million loan from the World Bank. Australian Agency for International Development (AusAID) provided grant support for the development of the good governance and 6 Maligalig et al. 2007. Annual Poverty Indicator Survey 2007: Education Outcomes in the Philippines Manila. 7 Factors such as illness, distance from schools, and lack of transportation were cited far less frequently. 8 DSWD evaluation of 4Ps pilot. 9 Numbers are cumulative. Set 1: 340,992 households; Set 2: 324,620 households; Set 3: currently at 257,995

households. Sets were defined by poverty ranking (poorest municipalities phased in first).

3

anti-corruption aspects of the 4Ps, monitoring and evaluation and improved auditing.10 The Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA) provided support for the CCT program through the Development Policy Support Programs (2007, 2008 and 2009),11 and fiscal stimulus support under the Countercyclical Support Facility12 (2009) included further scaling up of the program.13 In addition, Korea and Japan provide TA for the program through the World Bank, United Nations Development Programme (UNDP) supports the policy agenda, and United Nations Children’s Fund (UNICEF) is in current discussions with DSWD to support 4Ps.14 10. The proposed Project will assist the Government in implementing its development strategy and social reform program by supporting the expansion and implementation of the NHTS-PR and the 4Ps. This is consistent with ADB's support for the Medium Term Philippines Development Plan and the mutual objectives of higher levels of pro-poor sustainable growth and MDG attainment as outlined in the Philippines Country Operations Business Plan 2010–2012. The support has significant potential for further leveraging key improvements in the Philippines' social protection portfolio, including improved targeting of beneficiaries, reduced leakage, and improved rationalization and consolidation of existing programs. The ADB assistance will also provide additional support to strengthen the gender and indigenous peoples aspects of the 4Ps. B. Impact and Outcome 11. The impact of the proposed Project will be reduced income poverty and non-income poverty. The expected outcome will be increased consumption and utilization of education and health services among poor households and women beneficiaries of 4Ps. C. Outputs 12. The proposed Project will support the implementation and expansion of 4Ps in Set 2 and Set 3 areas. It will cover a total of about 583,000 households in 436 municipalities and 37 cities in 53 provinces.15 13. Output 1: Efficient implementation of a national targeting system to select poor households. This output will support the implementation of the NHTS-PR as a standardized targeting mechanism for identifying and selecting poor households. The NHTS-PR targets poor households in two steps: (i) selection of poor provinces based on poverty incidence according to the family income and expenditure survey, and selection of municipalities based on poverty incidence according to small area estimates; and (ii) use of a proxy means test methodology to predict income of households on the basis of household composition, education, socio-economic

10 These include support for the targeting procedure, grievance redress, compliance verification, and monitoring

information systems; monitoring and spot-checks; improved audits; and institutional strengthening. 11 ADB. 2007. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the

Republic of the Philippines for the Development Policy Support Program: Subprogram 1. Manila; ADB. 2008. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Republic of the Philippines for the Development Policy Support Program: Subprogram 2. Manila; ADB. 2009. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Republic of the Philippines for the Development Policy Support Program: Subprogram 3. Manila.

12 There is no overlap between these programs and the proposed Project. DPSP 3 provided support to GOP's 2008 expenditures; a proportion of CSF funds supported half the 2009 budget for 4Ps.

13 ADB. 2009. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Republic of the Philippines for the Countercyclical Support. Manila.

14 In addition, AusAid is currently considering scaling up its TA support through the establishment of a TA facility to provide technical and analytical support for the CCT program.

15 The World Bank loan is financing 4Ps in Set 1 areas, covering 341,000 households.

4

characteristics, housing conditions, access to basic services, assets, tenure status, and regional variables. The information to calculate the proxy means test is collected through household assessments and encoded online at the regional level and transmitted to DSWD nationally. The lists of poor households are then validated through spot-checks and cross-checking with the family income and expenditure survey data. 14. DSWD is implementing the NHTS-PR nationwide and is planning to assess about 8.3 million households in total. Experience from the 4Ps pilot shows that the targeting system has performed well, with an inclusion error of less than 10%.16 When finalized, it will constitute a homogenous and transparent mechanism to identify poor households and a nationwide database that can be used by various social protection and poverty reduction programs at national and local levels. An Executive Order was issued in March 2010 that requires all government agencies to use the system for household targeting of poor households in their programs. 15. Output 2: Conditional health and education cash grants provided to poor households. This output will partially finance conditional health and education grants in selected poor provinces, municipalities and cities.17 Beneficiary households are selected using the NHTS-PR and validated for eligibility.18 The transfers are paid by DSWD to mothers and/or pregnant women of eligible households, who will receive the cash grants for up to 5 years subject to the eligibility criteria and compliance. Transfers are paid quarterly, directly into women beneficiaries' accounts19 established in the Land Bank of the Philippines.20 The 4Ps includes two types of transfers: one related to health and one related to education. Compliance with conditionalities will be verified using a computerized compliance verification system that is currently being established.21 16. Poor households with children 0–14 years old and/or pregnant women are eligible for a health grant currently set at P500 ($11) per household per month (for a period of 12 months/year). The health transfer requires that households fulfill the following conditionalities: (i) all children 0–5 years old attend the health center to get the services established by the Department of Health (DOH) according to their age, including immunizations; (ii) pregnant women attend the health centers according to DOH protocol, including delivery by skilled personnel and post-natal care; (iii) children 6–14 years old in primary school comply with de-worming protocol at schools; and (iv) the household grantee (mother) and/or spouse attend family development sessions at least once a month.

16 The percentage of non-poor households that is included in the program. 17 The ADB loan will finance 25% of grants in Set 2 and 95% of grants in Set 3. As outlined in the Loan Agreement,

only the education grant will be financed until the computerized CVS is established. The education grant will be financed based on manual verification until January 1, 2011, after which it will be financed based on computerized verification.

18 Eligible households are those included in the NHTS-PR database that have children 0-14 years old and/or a pregnant mother.

19 In households where there are no mothers/adult female, the grant is paid to another responsible adult in the family (father, grandparent).

20 In some cases, over-the-counter payments are done if there is a long distance to the nearest Land Bank branch and/or when issuance of cash is delayed.

21 This entails associating beneficiaries to schools and clinics, manually recording attendance at schools and clinics, developing and rolling out a computerized MIS, encoding attendance through the MIS, and then linking such data to the centralized payment system. Beneficiaries who repeatedly do not comply with the conditions will be suspended from the program following an established sanctions and suspension procedure.

5

17. Poor households with children 6–14 years old are eligible for the education grant.22 The education transfer is Php300 ($7) per child per month (for a period of 10 months/year), for up to a maximum of 3 children. Beneficiary households will receive the education transfer for each child between 6–14 years old as long as they are enrolled in primary and secondary school and maintain a class attendance rate of 85% every month. 18. Eligible household can receive both the health and education grants, subject to compliance with the conditionalities.23 The average transfer per household is estimated at 23% of average annual income of households This proportion is in the range of those used in other successful CCT programs in Latin America and have been proven to provide a sufficient incentive for families to utilize health services and send their children to school, while being low enough to avoid distorting labor market decisions.24 19. Meeting the supply side requirements and compliance monitoring are the responsibilities of DOH and the Department of Education (DepEd).25 The main role of local government units (LGUs) in the program is to support and ensure supply side requirements. A supply side assessment is done to assess health and education systems at the city and/or municipality and barangay levels, define the gaps and needs, if any, and their corresponding solutions and recommendations to enable the 4Ps beneficiaries to meet the conditionalities of the program.26 Anecdotal evidence suggests that several LGUs are increasing their investments in health and education services as a result of these supply-side pressures. 20. Output 3: Strengthened capacity for CCT program operations. This output will provide capacity development and support for all key management activities in the 4Ps at the national and local levels, including registration of families, verification of conditionalities, managing payments, and organizing assemblies of grantees. 21. Output 4: Improved systems for monitoring and evaluation of social protection programs. This output will support the implementation of a management information system that will cover all steps in the operation of the 4Ps program. It will also support monitoring and evaluation of 4Ps, including: (i) spot-checks to monitor 4Ps implementation on the ground; (ii) monitoring and evaluation studies27; (iii) an Independent Monitoring and Advisory Committee; and (iv) regular monitoring and reporting, including quarterly and annual reviews, and monitoring by internal audit services. It will also support the operation of a Grievance Redress System (GRS), featuring a publicly accessible grievance database to track and resolve complaints, including targeting errors, payment irregularities, fraud and corruption. 22 DSWD is also implementing cash grants to households with children 3-5 years old that regularly attend day care or

pre-school. The Mission will continue discussions with DSWD on whether these grants may also be included in the proposed Project.

23 The maximum transfer a household can receive is P15,000/year for 5 years. 24 In Mexico (Oportunidades), the transfer is about 21% of total annual household expenditures; in Colombia

(Familias en Accibn), it represents about 15% of minimum wage; and in Nicaragua (Red de Proteccion Social) it represents about 17% of total annual household expenditure. Impact evaluations o f these CCT programs have shown important positive impacts on family investments in children’s human capital. A very low transfer, such as that under the Honduras CCT program (PRAF) representing less than 5% of average per capita consumption, showed relatively less impact on families’ human capital.

25 Responsibilities of each department are described in a Joint Memorandum Circular, signed by the respective Departmental Secretaries. Coordination is governed by national, regional and municipal advisory committees and by a Memorandum of Understanding that clarify lines of authority and responsibility between DSWD and participating LGUs.

26 In the event that a barangay is not prepared to meet the supply-side requirements, the LGU will be given six months to address the problem/s before program implementation may start.

27 This will include an evaluation of the FDS, a women empowerment study, and impact evaluation.

6

D. Sanctions for Non-compliance on Program Conditionalities

1. By household beneficiaries

22. Failure to comply with any of the conditionalities will result in the following sanctions:

(i) First offense of non-compliance to any of the conditionalities on health and education: Beneficiaries will not receive the grant for that specific month and will be given a written warning to remind them of financial repercussions of their non-compliance.

(ii) Second offense of non-compliance: Beneficiaries will continue not to receive grant and will receive a warning to remind them of financial repercussions of their continued non-compliance. Cash grants will be withheld beginning the next payment period until the conditionalities are complied with and the beneficiary's record updated. They will then be referred to the municipal/city social welfare and development officer for counseling and other interventions.

(iii) Third offense of non-compliance: The beneficiary will not receive the grant and will be temporarily suspended from the program. An appeal for reconsideration may be filed through the Grievance Redress Committee within three months from the date of suspension. If the appeal has been accepted, the parents shall be required to attend a re-orientation on their roles as beneficiaries, sign a new Oath of Commitment, and attend any counseling sessions provided by the Municipal Social Welfare Office before the suspension is lifted and the household is reinstated in the payroll. Retroactive payment shall only apply to the month covered by the payroll. After three months of temporary suspension with no act of appeal, the household beneficiary will be terminated from the program.

(iv) Fourth offense of non-compliance: This shall lead to termination of the education or health grant. A written notice shall be issued to the household and appeals shall no longer be considered after termination.

(v) Non-compliance with any of the health conditionalities will result in proportionate deductions to the number of applicable conditions not met. The whole grant on health may only be restored upon the compliance of the beneficiary. The basis will be as follows: i. For pregnant women in household at the moment of the registration in the

4Ps program—conditions are to attend pre-natal and postnatal check-ups as required in DOH protocol and give birth assisted by trained health worker.

ii. For children 0–5 years of age-conditions are to attend regular health check-ups, controls and get vaccinations according to the DOH protocol.

iii. For children 6–14 years old will receive deworming pills twice a year; iv. For the household grantee or the spouse to attend family development

sessions or responsible parenthood sessions. (vi) In case of non-compliance, the specific month or period not complied with by the

household beneficiary will be applied as basis for non-payment. (vii) Suspension in the case of a household that does not comply with applicable

health conditions in any given month will not receive payments for the said month and will receive a written warning for temporary suspension of the program.

(viii) Suspension in the case of a household that does not comply with education grant in any given month of the quarter for two consecutive quarters will not receive payments for the said month of non-compliant children and will receive a written warning for temporary suspension.

7

(ix) Compliance with the education grant is treated on a per-child basis. As such, sanctions shall be applied only to the child not in compliance with any of the conditionalities.

(x) Other reasons for termination in the 4Ps program include: i. Giving false or misleading information at any part of data collection, including

information about compliance with program conditionalities and the fulfillment of other responsibilities

ii. The transfer of residence to another municipality or barangay outside the area of program coverage.

23. Any failure to collect the transfer of cash grant for two consecutive payment periods will be grounds for validation and investigation. Sanctions will be determined and applied based on the results of the investigation and the recommendations of the grievance and redress committee. 2. By Local Government Unit (LGU) 24. Municipalities that cannot comply with the supply-side requirements on both health and education will be given 6 months to 1 year in which to comply with the conditionalities. Continued non-compliance even after the prescribed period will result in the termination of all program activities in those areas as stipulated in the memorandum of agreement (MOA) signed between the LGU and DSWD following the supply side assessment. 25. Any reported LGU violations will be dealt with and due process will be undertaken in accordance with the MOA and existing laws. 26. The program will be suspended in municipalities/barangays where after the inception of the program, the supply of services ceases to be adequate as indicated by

(i) The failure to address any deficiencies in the barangay health and education services within 6 months of their detection.

(ii) Education and/or health complaints indicate that over 20% of households are unable to comply with program requirements due to the absence of teachers and and/or medical personnel.

(iii) The LGU ceases to collaborate with the program by then on-fulfillment of commitments made, including (but not limited to: (a) the non-designation of a focal person at the municipal level to assist the municipal link; and/or (b) not having office space in which to receive and process queries and updates from as well as complaints by program beneficiaries.

(iv) The misuse and misrepresentation of 4Ps, including (but not limited) to (a) obtaining the favor and patronage of household beneficiaries for purposes other than the program's; and (b) imposing other obligations and conditionalities outside those stipulated in the implementing guidelines.

E. Exit Strategy

27. Exit in the program is governed by rules to define the specific circumstances under which a household beneficiary or a local government unit will graduate or exit from the program.

8

1. Beneficiary Level 28. Exit of the beneficiary according to age. When the youngest child reaches the age of 15 at any time during the school year, he or she will continue to receive the education grant until the school year ends and/or when his or her household will cease to be a beneficiary of 4Ps. 29. Exit due to non-compliance of beneficiary. Non-compliance with program conditionalities three times in a year by a grant recipient will be subject for delisting in the program as specified in the previous paragraphs on sanctions for non-compliance on program conditionalities by household beneficiaries. 30. Exit due to misuse of grants. Misuse of grants by the grant recipients or members of the household will be subject for resolution at the grievance redress committee, and may lead to potential delisting in the program.

2. LGU Level 31. Non-compliant and/or violation of program rules. Beneficiaries and LGUs found to be non-compliant with the rules and regulations of the program such as adding of conditionalities to the beneficiaries or not addressing the supply-side concerns of the program as specified in the MOA will be sanctioned according to previous paragraph on sanctions for non-compliance on supply side. 32. Misuse and misrepresentation of the program. LGUs not in compliance or that are misusing or misrepresenting the program despite 2 written warnings and provision of technical assistance will be referred to the 4Ps national advisory committee for appropriate action or resolutions including potential suspension or termination of the program as well as endorsing/recommending other sanctions/penalties in accordance with appropriate provisions of existing laws and/or administrative orders.

II. IMPLEMENTATION PLANS A. Project Readiness Activities

Months Indicative Activities 1 2 3 4 5 6 Who Responsible

Advance contracting actions DSWD/ADB

Retroactive financing actions DSWD/ADB

Establish project implementation arrangements DSWD

ADB Board approval ADB

Loan signing ADB/DOF

Government legal opinion provided GOP

Government budget inclusion DSWD/DOF

Loan effectiveness ADB/GOP ADB = Asian Development Bank, DOF = Department of Finance, DSWD = Department of Social Welfare and Development, GOP = Government of the Philippines.

B. Overall Project Implementation Plan

2010 2011 2012 2013 2014 2015 Indicative Activities 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Outputs A. Output 1: Efficient Implementation of a National Targeting System (NHTS-PR) to select poor households Activities:

1.1: Updating of NHTS-PR database, including on demand application of

households not enumerated. 1.2: Completion of enumeration of households for 4Ps for all sets 1.3: Registration of poor households into the NHTS-PR database, and validation of complaints about inclusion and exclusion errors

1.4: Completion of list of potential 4Ps beneficiaries using NHTS-PR PMT for all Sets

1.5: NHTS-PR PMT targeting mechanism started to be applied in two other national programs B. Output 2: Health and education grants provided to poor households Activities: 2.1: Completing list of registered and validated HH beneficiaries for all Sets 2.2: Land bank enrollment of beneficiaries for all Sets 2.3: Distribution of beneficiary IDs for all 3 Sets 2.4: Distribution of initial batches of cash cards to beneficiaries of all 3 Sets 2.5: Distribution of additional batches of cash cards 2.6: Preparation of beneficiary payrolls for every quarter of 2010-2015

2.7: DSWD transmission of approved payrolls to Land Bank for every quarter of 2010-2015 2.8: Initial payment of 4Ps grants for all 3 Sets

2.9: Verification and certification of beneficiary compliance with grant conditions for every quarter of 2010-2015

2.10: Second and subsequent payments of 4Ps grants to beneficiaries compliant with grant conditions for every quarter 2010-2015a C. Output 3: Strengthened Capacity for CCT Program Operations Activities:

3.1: Hiring of additional staff to implement new staffing plan per approved reorganization, including additional MOA staff for • NPMO • RPMO 3.2: Training and capacity building • Design and Preparation

9

2010 2011 2012 2013 2014 2015

Indicative Activities 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 • Implementation • Evaluation

3.3: Information dissemination and Social Marketing including 4Ps advocacy, GRS, and institutional building

3.4: Facilitating development of institutional mechanisms in remote areas to

reduce cost in getting cash grants 3.5: Enhancement of family development sessions (FDS) including design

development, implementation, and evaluation 3.6: Gender actions: Additional gender-sensitivity activity and measures

such as gender-responsive trainings for 4Ps implementors and parent-leaders

3.7: IDP actions: Additional IP-sensitivity activities and measures such as sensitivity training for 4Ps IP areas and hiring of IP staffs D. Output 4: Improved Systems for Monitoring and Evaluation of Social Protection Programs Activities:

4.1: Establishment of a fully functioning integrated computer-based MIS applied to all Set 3 areas 4.2: Completion of computerization of the following specific MIS modules for: • household information • registration • CVS/verification • payments • updates • grievance redress system 4.3: Strengthening of GRS, including improved communication and creation of GRS Committee at the regional, provincial, and municipal levels 4.4: Development and testing of spot-checking methodology 4.5: Actual spot-checking and reporting twice a year 4.6: Civil society monitoring at the national and subnational levels

4.7: M&E studies including inter alia women's employment and FDS assessment/quality assurance E. Management Activities 1.1: Procurement plan key activities to procure contract packages 1.2: Consultant selection by ADB procedures individual consultancy

• Submission of TOR for 3 program coordinators, 1 MIS consultant, 17 gender/IP specialists, and 1 GRS regional focal • Canvassing, selection, and awarding 1.3: Annual/Midterm Review 1.4: Project completion report

10

a Payment of previous quarters grant. 4Ps = Pantawid Pamilyang Pilipino Program, ADB = Asian Development Bank, CCT = conditional cash transfer, DSWD = Department of Social Welfare and Development, FDS = family development session, GRS = grievance redress system, HH = head of household, IP = indigenous peoples, M&E = monitoring and evaluation, MIS = management information system, NHTS-PR = national household targeting system for poverty reduction, TOR = terms of reference.

11

III. PROJECT MANAGEMENT ARRANGEMENTS A. Project Implementation Organizations – Roles and Responsibilities

Project Implementation Organizations

Management Roles and Responsibilities

Department of Social Welfare and Development (DSWD). As lead agency, DSWD will

Directly manage and supervise the implementation of the program

Oversee and coordinate the implementation, monitoring and evaluation of the program

• Executing Agency

Chair the Advisory committee at the national level Conduct assessment of supplies for health and

education jointly and in partnership with concerned agencies

Forge agreements with the local government units to ensure availability on the supply side

Provide technical assistance to the overall operations of the program at the regional, provincial, city/municipal levels

Serve as repository of information and data about the program

Mobilize, manage, and account for all program funds and resources

Prepare the budget operations manual in coordination with the Departments of Budget and Management (DBM), Finance (DOF), Interior and Local Government (DILG), and the Commission on Audit (COA)

Coordinate and collaborate with different donor agencies to augment logistics in program implementation

Establish and oversee the 4Ps project management office

Responsible for submission of withdrawal applications, retention of supporting documents, and any reporting requirements including the bi-annual internal audit reports for the program, annual audit reports and financial statements.

• Asian Development Bank Provide support and supervise implementation, and

ensure compliance with the loan agreement Ensure project achieves expected outputs and outcomes

Ensure compliance with good governance, social safeguards, and anti-corruption measures

Technical assistance

4Ps = Pantawid Pamilyang Pilipino Program (Building Bridges for the Filipino Family Program).

33. The DSWD Executive Committee chaired by the Secretary will have oversight responsibility. Two implementation units will be supported by the Project: (i) the NHTS National Project Management Office; and (ii) the 4Ps National Project Management Office (NPMO), both of which are established and operational. A 4Ps National Advisory Committee ensures coordination among key government agencies for the 4Ps. The NPMO and 16 DSWD regional project management offices (RPMOs) will have overall responsibility for implementing the

12

program in 16 regions and ARMM.28 Municipal links are hired to work with beneficiary households and the LGUs are designating or hiring at least one full-time staff who serves as counterpart to the DSWD municipal link. The school principal and a health worker29 have been designated as the education and health focal persons respectively. B. Key Persons Involved in Implementation

Executing Agency Department of Social Welfare and Development

Corazon “Dinky” Juliano-Soliman Department Secretary Telephone: 931-8191; 931-8068; 931-8101 Fax: 931 8191 Email: dinky@dswd.gov.ph

Alicia R. Bala Undersecretary Policy and Programs Group Telephone: 951-2239 Fax: 931-9131 Email: arbala@dswd.gov.ph

Luwalhati Pablo Undersecretary General Administration and Support Services Group Telephone: 951-7121 Fax: 931-8138 Email: lfp@dswd.gov.ph

Asian Development Bank Division Director

Shireen Lateef Director Social Sectors Division Southeast Asia Department Telephone: 632-6904 Fax: 636-2228 Email: slateef@adb.org

Mission Team Leader Camilla Holmemo Poverty Reduction Specialist Social Sectors Division Southeast Asia Department Telephone: 632-6217 Fax: 636-2228 Email: cholmemo@adb.org

28 A Memorandum of Agreement between DSWD and ARMM outlines the procedures for program implementation in

ARMM. 29 This can be a doctor , nurse, or midwife.

13

C. Project Organization Structure

MIS Division(1) Division

Chief

Operations Division

(1) Division Chief

Planning, M & E Division

(1) Division Chief

Coordination with Partner Agencies Division (1) Division Chief

Updates Section

(3) 1 Leader 2 Staff

Client Services Section

(5) 1 Leader 4 Staff

CVS Section

(3) 1 Leader 2 Staff

GRS Section

(3) 1 Leader 2 Staff

System Development

and Analysis 1 Leader 4 Staff

Admin Network

1 Leader 2 Staff

OperationMIS

1 Leader 5 Staff

Education Section

(2)

Health Nutrition Section

(2)

LGUs Section

(2)

International Organizations

(1)

Deputy Project Director for Finance Assistant Secretary

Program ManagerDirector IV

Finance Unit Existing 1 National Financial Analysts (Consultant)

1 Project Accountant (SG 24) 1 Financial Analyst IV (SG 22) 3 Financial Analyst III (SG 18) 1 Senior Bookkeeper (SG 9) 3 Administrative Assistant II (SG 8) 2 Administrative Aide VI (SG6)

Proposed 2 Financial Analyst III (SG 18) 1 Senior Bookkeeper (SG 9) 1 Cash Clerk (SG 8)

Deputy Program ManagerAssistant Bureau Director

Support Services Administrative Support Social Marketing Capability Building

SecretaryDSWD

Deputy Project Director for OperationsAssistant Secretary

National Project DirectorPantawid Pamilyang Pilipino Program

(4Ps Undersecretary)

Director, Financial Management Service

Director IV

14

15

IV. COSTS AND FINANCING

34. The overall Government program has a total estimated cost of $1.29 billion30 from 2009–2014. One third is financed through a World Bank loan of $405 million approved in 2009, one third will be financed by the proposed ADB loan and one third is financed by the Government. 35. The project cost is estimated at $884 million. ADB will finance 45.2% of the Project cost and the Government will provide counterpart financing of 54.8% including taxes and duties, and financing changes. The Government requested a loan of $400 million from ADB’s ordinary capital resources (OCR) to finance the Project.31 The loan will have a 25-year term, including a grace period of 5 years, an annual interest rate determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility, and a commitment charge of 0.15% per annum.32 The Government will allocate the counterpart funds of $484 million mainly to cover a share of the household grants, capacity building, and administrative costs. The Financing Plan is in Table 1 and the Project investment plan is summarized in Table 2.

Table 1: Tentative Financing Plan ($ million)

Source Total % Asian Development Bank – Project Loan (OCR) 400.0 45.2 Government of the Philippines 484.2 54.8 Total 884.2 100.0

OCR = ordinary capital resources. Source: Asian Development Bank estimates.

Table 2: Tentative Program Investment Plan ($ million)

Item AmountA. Base Costa,b 1. Efficient implementation of a national targeting system to select poor households 13.7 2. Health and education cash grants provided to poor households 798.5 3. Strengthened capacity for CCT program operations 38.3 4. Improved systems for monitoring and evaluation of social protection programs 5.2 Subtotal (A) 855.7B. Contingenciesc 7.7C. Financing Charges During Implementation 20.8 Total (A+B+C) 884.2

a In mid-2009 prices b Includes taxes and duties of $1.84 million financed from government resources. c Price contingencies calculated at 4.6% on local currency costs

Source: Asian Development Bank estimates.

30 Including financing charges. 31 Recurrent costs financed under the loan are for operating expenses and are only to be used for project costs. 32The Government has provided ADB with (i) the reasons for its decision to borrow under ADB’s LIBOR-based

lending facility based on these terms and conditions, and (ii) an undertaking that these choices were its own independent decision and not made in reliance on any communication or advice from ADB.

16 A. Detailed Cost Estimates by Expenditure Category and Output (‘000)

Item

Total Costa Amount % of Cost Category Amount % of Cost

Category Amount % of Cost Category Amount % of Cost

CategoryA. Investment Costsb

Targeted Cash Assistancec

Cash Grants (Set 1) 101,906 0 0% 101,906 100% 0 0% 0 0%Cash Grants (Set 2) 388,133 0 0% 388,133 100% 0 0% 0 0%Cash Grants (Set 3) 308,472 0 0% 308,472 100% 0 0% 0 0%Advocacy and IEC Materials 3,584 0 0% 0 0% 3,584 100% 0 0%Training, W orkshops and Meetings 19,857 2,255 11% 0 0% 17,486 88% 116 1%Consultants 2,290 0 0% 0 0% 1,575 69% 715 31%Research and Studies 966 0 0% 0 0% 0 0% 966 100%Project Administration, Monitoring and Management 13,561 10,476 77% 0 0% 3,085 23% 0 0%

Sub-Total (A) 838,769 12,731 798,511 25,730 1,797B. Recurrent Costs

Salaries 11,144 0 0% 0 0% 11,144 100% 0 0%Travel Expenses 4,560 931 20% 0 0% 180 4% 3,449 76%Operation and Maintenance 1,284 0 0% 0 0% 1,284 100% 0 0%

B. Recurrent Costs 16,988 931 5% 0 0% 12,608 74% 3,449 20%Total Base Cost 855,757 13,662 798,511 38,338 5,246

C. Contingenciesd 7,701 0 0% 0 0% 6,774 88% 927 12%D. Financing Charges During Project Implementation 20,755 331 19,367 930 127

Total Project Cost (A+B+C+D)e 884,213 13,993 817,878 46,042 6,300

a Includes taxes and duties of $1.84 million f inanced from government resources. b For the project administration, monitoring, and management including bank charges to LandBank for cash grant transfer.c Cash grants (set 1 beneficiaries) are financed by World Bank (75%) and GOP (25%); cash grants (set 2) by ADB (25%) and GOP(75%); and cash grants (set 3) by ADB (95%) and GOP(5%). ADB only finances education grants for October 2009 - January 2011 until the CVS is fully operationalized, resulting in lower overall % of ADB financing for cash grants. The financing percentage under disbursement will be 25% for Set 2 grants, and 95% for Set 3 grants.d Price contingencies calculated at 4.6% on local currency costs.e Total project costs includes ADB financing and full Government f inancing for the overall Government program.

Output 1 Output 2 Output 3 Output 4

17

B. Detailed Cost Estimates by Financier (‘000)

Item ADB Governmenta

Amount % of Cost Category Amount % of Cost Category

A. Investment Costsb

1. Targeted Cash Assistancec

Cash Grants (Set 1) 0 0% 101,906 100% 101,906 Cash Grants (Set 2) 91,635 24% 296,498 76% 388,133 Cash Grants (Set 3) 270,818 88% 37,655 12% 308,473

2. Advocacy and IEC Materials 2,860 80% 724 20% 3,584 3. Training, Workshops and Meetings 15,526 78% 4,331 22% 19,857 4. Consultants 1,772 77% 518 23% 2,290 5. Research and Studies 875 91% 91 9% 966 6. Project Administration, Monitoring and Management 3,757 28% 9,804 72% 13,561

Sub-Total (A) 387,243 46% 451,527 54% 838,770 B. Recurrent Costs 5,056 30% 11,932 70% 16,988

Total Base Cost 392,299 46% 463,459 54% 855,758 C. Contingenciesd 7,701 100% 0 0% 7,701 D. Financing Charges During Project Implementation 0 0% 20,755 100% 20,755

Total Project Cost (A+B+C+D)e 400,000 45% 484,214 55% 884,214 % Total Project Cost 45.2% 54.8%

a Includes taxes and duties of $1.84 million financed from government resources. b For the project administration, monitoring, and management including bank charges to LandBank for cash grant transfer.c Cash grants (set 1 beneficiaries) are financed by W orld Bank (75%) and GOP (25%); cash grants (set 2) by ADB (25%) and GOP(75%); and cash grants (set 3) by ADB (95%) and GOP(5%). ADB only finances education grants for October 2009 - January 2011 until the CVS is fully operationalized, resulting in lower overall % of ADB financing for cash grant The financing percentage under disbursement will be 25% for Set 2 grants, and 95% for Set 3 grants.d Price contingencies calculated at 4.6% on local currency costs.e Total project costs includes ADB financing and full Government financing for the overall Government program.

Total

18 C. Detailed Cost Estimates by Year (‘000)

A. Investment Costsb

1. Targeted Cash Assistancec

Cash Grants (Set 1) 101,905 20,381 20,381 20,381 20,381 20,381Cash Grants (Set 2) 388,135 77,627 77,627 77,627 77,627 77,627Cash Grants (Set 3) 308,470 61,694 61,694 61,694 61,694 61,694

2. Advocacy and IEC Materials 3,583 691 729 717 729 7173. Training, W orkshops and Meetings 19,855 5,888 3,397 3,776 3,397 3,3974. Consultants 2,290 106 573 573 519 5195. Research and Studies 967 34 287 36 287 3236. Project Administration, Monitoring and Management 13,561 11,093 617 617 617 617

Sub-Total (A) 838,766 177,514 165,305 165,421 165,251 165,275B. Recurrent Costs 16,989 4,385 3,151 3,151 3,151 3,151

Total Base Cost 855,755 181,899 168,456 168,572 168,402 168,426C. Contingenciesd 7,701 0 0 2,567 2,567 2,567D. Financing Charges During Project Implementation 20,756 0 5,189 5,189 5,189 5,189

Total Project Cost (A+B+C+D)e 884,212 181,899 173,645 176,328 176,158 176,182% Total Project Cost 21% 20% 20% 20% 20%

a Includes taxes and duties of $1.84 million financed from government resources. b For the project administration, monitoring, and management including bank charges to LandBank for cash grant transfer.c Cash grants (set 1 beneficiaries) are financed by World Bank (75%) and GOP (25%); cash grants (set 2) by ADB (25%) and GOP(75%); and cash grants (set 3) by ADB (95%) and GOP(5%). ADB only f inances education grants for October 2009 - January 2011 until the CVS is fully operationalized, resulting in lower overall % of ADB financing for cash grants. The financing percentage under disbursement will be 25% for Set 2 grants, and 95% for Set 3 grants.d Price contingencies calculated at 4.6% on local currency costs.e Total project costs includes ADB financing and full Government financing for the overall Government program.

2013 2014Total Costa 2010 2011 2012

19

D. Allocation and Withdrawal of Loan Proceeds

ALLOCATION AND WITHDRAWAL OF LOAN PROCEEDS (Social Protection Support Project)

CATEGORY ADB FINANCING Total Amount Allocated

for ADB Financing ($000)

Number

Item

Category Subcategory

Percentage and Basis for Withdrawal from the Loan

Account

1 Conditional Cash Grants33 362,453

1A Set 2 grants 91,635 25% of total expenditure claimed

1B Set 3 grants 270,818 95% of total expenditure claimed

2 Advocacy and IEC Materials 2,860 80% of total expenditure claimed

3 Training, Workshops and Meetings

15,526 78% of total expenditure claimed

4 Consulting Services 1,772 77% of total expenditure claimed

5 Research and Studies 875 91% of total expenditure claimed

6

Project Administration, Monitoring, and Management

3,757 28% of total expenditure claimed

7 Recurrent Costs 5,056 30% of total expenditure claimed

10 Unallocated 7,701

Total 400,000

33 The 24% financing of Set 2 and 88% financing of Set 3 in the detailed cost table) reflects full GOP financing of the

health grants for 15 months. The financing percentage under disbursement will be 25% for Set 2 grants, and 95% for Set 3 grants"

20

E. Contract and Disbursement S-curve

36. {Graph(s) show contract awards and disbursement over the life of the project, and annually based on the contract awards and disbursement projections.}

21

V. FINANCIAL MANAGEMENT

A. Financial Management Assessment

37. An assessment of the financial management system of the DSWD, the executing agency of the proposed Philippines Social Protection Support Project (PSPSP) was undertaken to ensure the Department’s readiness to implement the project. The review covered the DSWD’s financial management arrangements in the National Office, particularly the adequacy of budgeting, accounting, funds flow, financial reporting and internal control systems. A review was also made on the financial reporting of the DSWD Field Offices (Regional Offices) to the National Office. 38. The DSWD Financial Service has had extensive experience in handling large foreign-assisted projects such as the multi-funded and multi-agency implemented Early Childhood Development Project (ECDP), the KALAHI-CIDSS and a substantial number of foreign grants. It has well-placed permanent financial management personnel in the National and Field Offices in addition to project-based contractual staff (recruited under a MOA) dedicated specifically to handle the financial transactions of a particular project. All project-based financial staff are mainstreamed or integrated in the regular Financial Management Service of the DSWD under the supervision and management of the Finance Service Director. 39. On the whole, the financial management system of the DSWD meets the financial management requirements of the Project. Given the substantial amount of financial data and transactions the Project will entail, the DSWD, however, will have to ensure that the needed complementary staff and financial arrangements both in the National and Field Offices are adequately provided. One of the mandatory financial arrangements that DSWD shall institute is the decentralization to the Regional Project Management Office of the audit and verification of over-the-counter (OTC) grant payments to households. Presently, the DSWD has started laying down the groundwork for the delegation to the Field Offices of the OTC verification process. Complementary to this will be the hiring of additional finance project staff for the RPMOs. It is also necessary to strengthen the counter-validation of payrolls for the OTC payments at the payment site. Right now, only the municipal links conduct the validation during payments. As additional counter-check measure, the DSWD is hiring municipal roving bookkeepers (MRBs) to work closely with the municipal links during OTC payments to household beneficiaries. 40. The audit and verification of OTC payments will establish that all cash grant payments through OTC are valid claims which are properly documented/supported and authorized, and made to the compliant beneficiary households. The OTC payments made by the Land Bank branches will also preclude the existence of cash floats. Presently, the verification of the OTC payments at the DSWD head office has so far not resulted in any discrepancy or irregularity in the payment to beneficiaries, except for some discrepancies in the Land Bank claims for reimbursement of the bank service fee of PhP24 for every cash transactions. Additional financial controls at the DSWD field offices will be in place to prevent double payments to beneficiaries or payment to noncompliant beneficiaries, as well as to ensure prompt disbursements. Any irregularity or exceptions noted from the audit and verification by the RPMOs will be communicated immediately to the concerned Land Bank servicing branch and to the finance services at the DSWD central office for correction actions. B. Disbursement

41. The Loan proceeds will be disbursed in accordance with ADB’s Loan Disbursement

22

Handbook (2007, as amended from time to time),34 and detailed arrangements agreed upon between the Government and ADB. 42. Pursuant to ADB's Safeguard Policy Statement (2009) (SPS),35 ADB funds may not be applied to the activities described on the ADB Prohibited Investment Activities List set forth at Appendix 5 of the SPS. All financial institutions will ensure that their investments are in compliance with applicable national laws and regulations and will apply the prohibited investment activities list (Appendix 5) to subprojects financed by ADB. 43. The Project funds are composed of the loan proceeds and government counterpart fund. The funds from the loan proceeds will flow from the ADB to the Bureau of Treasury account at the Central Bank of the Philippines. After issuance of Notices of Cash Allocation (NCA) by DBM, the funds will be credited to the designated account of the project maintained at DSWD central office. 44. Conditions for Withdrawals from Loan Account. No withdrawals will be made from the loan account for conditional health grants under Part 2 until the compliance verification system (CVS) is fully operational for the project areas and used as the basis for the payments to participating beneficiaries. 45. No withdrawals will be made from the loan account for conditional education grants:

(i) for beneficiaries whose compliance is verified prior to 1 January 2011, unless manual checking and verification procedures as agreed with ADB are being complied with;

(ii) for beneficiaries whose compliance is verified after 1 January 2011 or such later date as ADB agrees, unless the CVS is fully operational for the project areas and used as the basis for the payments to participating beneficiaries.

46. Imprest Accounts. DSWD will establish and administer two imprest accounts for the Project in US dollars at a bank acceptable to ADB. Imprest Account 1 will cover allocation for cash grants ($362.5 million) to be opened at the Land Bank of the Philippines. The maximum ceiling of the Imprest Account 1 will not at any time exceed the estimated ADB financed expenditures to be paid from the imprest account for the next 6 months or $36.25 million (10% of the cash grant component), whichever is lower. Imprest Account 2 will provide for project management and operations cost ($29.8 million). The maximum ceiling of Imprest Account 2 will not at any time exceed the estimated ADB financed expenditures to be paid from the imprest account for the next 6 months or $2.98 million (10% of the project management and operations cost), whichever is lower. The request for initial advances to the imprest accounts should be accompanied by Estimates of Expenditure Sheet36 setting out the estimated expenditures to be funded through each imprest account for the next six (6) months of project implementation, and submission of evidence satisfactory to ADB that the imprest accounts have been duly opened. For every liquidation and replenishment request of the imprest accounts, DSWD will furnish to ADB (a) Statement of Account (Bank Statement) where the imprest account is maintained, and (b) the Imprest Account Reconciliation Statement (IARS) reconciling the above mentioned bank statement against the DSWD’s records. 47. For project management and operations costs to be funded by Imprest Account 2, sub-

34 Available at: http://www.adb.org/Documents/Handbooks/Loan_Disbursement/loan-disbursement-final.pdf 35 Available at: http://www.adb.org/Documents/Policies/Safeguards/Safeguard-Policy-Statement-June2009.pdf 36 Available in Appendix 29 of the Loan Disbursement Handbook.

23

accounts will be established and administered by the 16 RPMOs. The maximum ceiling of each sub-account will be equivalent to 3 months estimated expenditures, and will not exceed $29.8 million in the aggregate (i.e., the maximum ceiling of Imprest Account 2). These sub-accounts are strictly for project operations expenditures and consultancy requirements. Liquidation and replenishment of the sub-accounts will be based on submission of full supporting documentation to DSWD. 48. A MOA between DSWD and DSWD-ARMM exists for the implementation of the 4Ps, and will be used as basis for the transfer of funds. The MOA includes the provisions of Commission on Audit (COA) Circular No. 94-013 dated December 13, 1994 regarding the Rules and Regulations in the Grant, Utilization and Liquidation of Funds Transferred to Implementing Agencies. The operational expenses of DSWD-ARMM will be transferred in a quarterly basis subject to replenishment upon submission of Statement of Receipts and Disbursements (SORD) for at least 75% disbursement. The SORD shall be audited by COA Resident Auditor of DSWD ARMM. The succeeding release will be based on submission of audited SORD. 49. To facilitate payment for cash grants and for project management and operation costs, the DSWD will open and administer two peso current accounts as conduit for the two Imprest Accounts. Transfer of funds from the Imprest Accounts to the conduit peso current accounts will be made on written instructions from the DSWD. For the cash grants, transfers will be made directly from the conduit peso account to Land Bank to beneficiary accounts based on estimated written instructions from DSWD, based on the CVS statement of eligible households for payment. For the project operating costs, only upon request of DWSD, and based on estimated project management and operating costs and valid payables at the RPMOs, will the transfer be made from the conduit peso current account to the RPMOs sub-accounts. The effect of any foreign currency exchange gains or losses in the operation of conduit peso accounts or sub-accounts shall be borne by GOP. 50. Liquidation of Advances. Quarterly liquidation and replenishment of Imprest Account 1 for cash grants expenditures will be conducted. For every liquidation and replenishment request of the imprest account for cash grants expenditures, DSWD will furnish ADB with

(i) Imprest account reconciliation and the related bank statements of the imprest accounts verifying that funds have been transferred to compliant beneficiaries; and

(ii) Until computerized verification system (CVS) is operational: certification from DSWD that all beneficiaries of the cash grants have complied with the conditions set forth in the Loan Agreement;

(iii) After CVS is operational: certification from DSWD that all beneficiaries of the cash grants have complied with the conditions set forth in the Loan Agreement; and consolidated statements from the CVS payroll of beneficiaries that have complied with the conditions of the cash grants.

51. The regional department (SERD) will review and endorse the documentation before it is submitted to the Controller's department. 52. Statement of expenditures (SOEs) procedure will be used for reimbursement and liquidation and replenishment of imprest account 2. The maximum ceiling of $100,000 per payment will apply. SOE records should be maintained and made readily available for review by ADB's disbursement and review mission or upon ADB's request for submission of supporting

24

documents on a sampling basis, and for independent audit.37 53. Before the submission of the first withdrawal application, the borrower should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the borrower, together with the authenticated specimen signatures of each authorized person. The minimum value per withdrawal application is US$100,000, unless otherwise approved by ADB. DSWD is to consolidate claims to meet this limit for reimbursement and imprest account claims. Withdrawal applications and supporting documents will demonstrate, among other things that the goods, and/or services were produced in or from ADB members, and are eligible for ADB financing. 54. GOP funds shall be disbursed in accordance with the Philippine budgetary system and the New Government Accounting System (NGAS). All GOP disbursements shall be covered by allotments and Notice of Cash Allocation (NCA) issued by the Department of Budget and Management, and shall be always subject to existing budgetary, accounting and auditing rules and regulations. Funds flow arrangement is presented in Figure 1.

37 Checklist for SOE procedures and formats are available at:

http://www.adb.org/documents/handbooks/loan_disbursement/chap-09.pdf http://www.adb.org/documents/handbooks/loan_disbursement/SOE-Contracts-100-Below.xls http://www.adb.org/documents/handbooks/loan_disbursement/SOE-Contracts-Over-100.xls http://www.adb.org/documents/handbooks/loan_disbursement/SOE-Operating-Costs.xls http://www.adb.org/documents/handbooks/loan_disbursement/SOE-Free-Format.xls

2525

Figure 1: FUNDS FLOW ARRANGEMENT

a Covering cash grant allocations. b For project management and operations cost. 4Ps = Pantawid Pamilyang Pilipino Program, DBM = Department of Budget and Management, DSWD = Department of Social Welfare and Development, GOP = Government of the Philippines, NCA = notice of cash allotment, OTC = over-the-counter.

ADBBangko

Sentral ng Pilipinas

Bureau of Treasury

DBMIssuance of

NCA

Imprest Dollar Account 2b

Imprest Dollar Account 1a

Peso Account 2b

LandBankPeso

Account 1a

DSWD-GOP Counterparts

(4Ps)

Over-the-Counter Withdrawal by Beneficiaries

(OTC)

Credit to Individual Bank Accounts of

Beneficiaries (Cash Card)

Field Offices/ Regional Offices

Project

Payment for Central Office

Creditors

Land Bank servicing branches

(Peso Account) 4Ps OTC Set 3

Statement of Expenditures

(SOE)

Withdrawal Application

Consolidated SOE

1 2 3

4

5.a

6.a

5.b

6.b

7. 7.b 7.c

7.e

7.d

7.f

8

9

26

C. Accounting

55. The DSWD, at all levels, including each of the RPMOs, will maintain separate project accounts and records for all project expenditures financed by the ADB loan. Project accounts will follow international accounting principles and practices and existing accounting and auditing rules and regulations. D. Auditing

56. The DSWD will cause the detailed consolidated project accounts to be audited in accordance with International Standards on Auditing and/or in accordance with the Government's audit regulations by the Commission on Audit or an independent auditor acceptable to ADB. The audited accounts will be submitted in the English language to ADB within 6 months of the end of the fiscal year by the executing agency. The annual audit report will include a separate audit opinion on the use of the imprest accounts and SOE procedures. The Government and the DSWD have been made aware of ADB’s policy on delayed submission, and the requirements for satisfactory and acceptable quality of the audited accounts. ADB reserves the right to verify the project's financial accounts to confirm that the share of ADB’s financing is used in accordance with ADB’s policies and procedures. A biannual internal audit of the program will be undertaken by the Internal Audit Services of the DSWD.

27

VI. PROCUREMENT AND CONSULTING SERVICES

A. Advance Contracting and Retroactive Financing

57. All advance contracting and retroactive financing will be undertaken in conformity with ADB’s Procurement Guidelines (April 2010, as amended from time to time) (ADB’s Procurement Guidelines)38 and ADB’s Guidelines on the Use of Consultants (April 2010, as amended from time to time) (ADB’s Guidelines on the Use of Consultants).39 The issuance of invitations to bid40 under advance contracting and retroactive financing will be subject to ADB approval. The borrower and DSWD have been advised that approval of advance contracting and retroactive financing does not commit ADB to finance the Project. 58. Retroactive Financing. The Government requested retroactive financing for expenses for the NHTS-PR and the conditional cash grants for education. Retroactive financing shall be allowed for all eligible disbursements for NHTS and 4Ps Grants made not earlier than 12 months before loan signing, and not later than date of loan effectivity. The Government was informed that as a general rule, retroactive financing is permitted only if (i) it is specifically agreed by ADB and the Borrower in the loan agreement; (ii) the goods, works, services, and consultants for which it is requested are procured in accordance with ADB’s Procurement Guidelines or Guidelines on the Use of Consultants by Asian Development Bank and Its Borrowers under arrangements acceptable to ADB; and (iii) the amount to be retroactively financed does not exceed 20% of the loan amount. 59. Advance Action for Recruitment of Consultants. The Government requested advance action for the recruitment of consultants for NPMO and RPMO project personnel. The Government has been advised that approval of the advance action does not in any way commit ADB to finance the Project, and that the action should be carried out in accordance with ADB’s Guidelines on the Use of Consultants. B. Procurement of Goods, Works and Consulting Services

60. All procurement of goods and works will be undertaken in accordance with ADB’s Procurement Guidelines. 61. No international and national competitive bidding envisaged for the Project. Shopping will be used for contracts for procurement of works and equipment worth less than $100,000. 62. Before the start of any procurement, ADB and the Government will review the public procurement laws of the national and local governments to ensure consistency with ADB’s Procurement Guidelines. 63. An 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages and national competitive bidding guidelines is in Section C. 64. All consultants will be recruited according to ADB’s Guidelines on the Use of

38 Available at: http://www.adb.org/Documents/Guidelines/Procurement/Guidelines-Procurement.pdf 39 Available at: http://www.adb.org/Documents/Guidelines/Consulting/Guidelines-Consultants.pdf 40 Guide on bid evaluation available at: http://www.adb.org/Procurement/guide-bid-apr06.pdf

28

Consultants.41 The terms of reference for all consulting services are detailed in Section D. 65. Consulting Services.42 To support the implementation of the Project, a total of 2,931 person-months (national) of consulting services will be required for assistance in project management at national and local level (2,907 person-months), and strengthening of the Management Information System (24 person-months). The Consultants will be engaged in accordance with the ADB’s Guidelines on the Use of Consultants (April 2010, as amended from time to time). All opportunities must be published through both ADB Consulting Services Recruitment Notices43 (CSRN) and Philippine Government Electronic Procurement System44 (PhilGEPS). Consulting services for project personnel in the NPMO and RPMOs constitute 6 consultants in the NPMO and 3 consultants in each of the 17 RPMOs. As it will be crucial to ensure local knowledge of the RPMO consultants, all NPMO and RPMO consultants will be recruited using Individual Consultant System45 (ICS) The MIS consultant will be recruited using ICS. Firms will be recruited to undertake monitoring and evaluation studies, including a Family Development Session study, and a women empowerment study, using fixed budget selection (FBS). The firm to undertake impact evaluation will be recruited using quality and cost based selection (QCBS). The firm to undertake the spot checks will be recruited using single source selection of the same firm recruited to undertake the spot checks under Set 1 of the 4Ps. Single source selection is justified on the basis of consistency of technical approach and continuity, which is important for this assignment. The firm to conduct spot checks in Set 1 areas were conducted competitively following World Bank guidelines. 66. Prior to starting the single source selection process, approval of ADB shall be secured in order to confirm the acceptability of the recruitment process for the original contract, and also to confirm that the firm to be invited has performed satisfactorily. C. Procurement Plan46 67. The procurement plan is prepared in accordance with COSO generic or country specific templates as appropriate.

Project Name: Social Protection Support Country: Philippines Executing Agency: Department of Social Welfare and

Development Loan Amount: $400 million Loan Number: tbd Date of First Procurement Plan: tbd Date of this Procurement Plan: August 2010

A. Process Thresholds, Review and 18-Month Procurement Plan

1. Project Procurement Thresholds47

68. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works.

41 Checklists for actions required to contract consultants by method available in e-Handbook on Project

Implementation at: http://www.adb.org/documents/handbooks/project-implementation 42 Consulting Services Operations Manual available at: http://www.adb.org/Documents/Manuals/Consulting-Services-

Operations-Manual/CSOM.pdf 43 Available at http://csrn.adb.org 44 Available at http://www.philgeps.net/ 45 A sample individual consultant contract is available at: http://www.adb.org/Consulting/ICS-Contract-Loan.pdf 46 Available at http://www.adb.org/Projects/reports.asp?key=reps&val=PP 47 Available at: http://www.adb.org/Documents/Manuals/PAI/default.asp

29

Procurement of Goods and Works Method Threshold Shopping for Works Below $100,000 Shopping for Goods Below $100,000

2. ADB Prior or Post Review 69. Except as ADB may otherwise agree, the following prior or post review requirements apply to the various procurement and consultant recruitment methods48 used for the project.

Procurement Method Prior or Post Comments Procurement of Goods and Works Shopping for Works Prior Shopping for Goods Prior Recruitment of Consulting Firms49 Quality- and Cost-Based Selection (QCBS) Prior One firm for FDS study, firms for evaluation

studies Single Source Selection (SSS) Prior One firm for spot checks Recruitment of Individual Consultants Individual Consultants Prior MIS consultant, NPMO and RPMO project

personnel MIS = management information system, NPMO = national project management office, RPMO = regional project management office.

3. Consulting Services Contracts Estimated to Cost More Than $100,000

70. The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

General Description

Contract Value

Recruitment Method1

Advertisement Date

(quarter/year)

International or National

Assignment Comments NPMO and RPMO project personnel

1,874,096 ICS National To be procured through advanced contracting; 2,931 person-months.

Evaluation studies (impact)

500,000 QCBS 80:20 National

FBS = fixed budget system, ICS = individual consultant system, NPMO = national project management office, QCBS = quality cost based selection, RPMO = regional project management office, SSS = single source selection.

4. Consulting Services Contracts Less than $100,000 71. The following table groups smaller-value goods, works and consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

General Description

Value of Contracts (cumulative) Number of Contracts

Procurement / Recruitment Method150 Comments

Management Information Specialist

87,000 1 ICS National assignment

Spot Checks 500,000 5 SSS Monitoring and Evaluation Studies (4)

100,000 4 FBS

FBS = fixed budget selection, FDS = family development session, ICS = individual consultant system, SSS = single source selection.

48 Available at http://www.adb.org/Consulting/all-methods-loan.asp 49 Templates for engagement of consultants, including submission templates, are available at:

http://www.adb.org/Consulting/loan-rfp.asp 50 Available at http://www.adb.org/Consulting/toolkit-template.asp

30

B. Indicative List of Packages Required Under the Project

72. The following table provides an indicative list of all procurement (goods, works and consulting services) over the life of the project. Contracts financed by the Borrower and others should also be indicated, with an appropriate notation in the comments section.

General Description

Estimated Value (cumulative)

Estimated Number of Contracts

Recruitment Method Type of Proposal Comments

Consulting Services – NPMO and RPMO consultants

1,874,096 57 ICS N/A Advanced contracting; 2,931person-months national

Consulting Services – Impact Evaluation

500,000 1 QCBS Full

Consulting Services – spot checks

500,000 5 SSS, national Simplified

Consulting services – Monitoring and Evaluation Studies

400,000 4 FBS, national Simplified

MIS consultant

87,000 1 ICS, national N/A

BTP = biodata technical proposals, FBS = fixed budget selection, FDS = family discussion session, ICS = individual consultant system, MIS = management information system, SSS = single source selection. D. Consultant's Terms of Reference

Expertise Terms of Reference International/

National Assignment

Duration of Services (person-month)

National Project Management Office (NPMO) Gender/IP Specialist (1) The Gender and IP Specialist will be based at the

NPMO and will be responsible for providing technical assistance and ensuring the effective and efficient implementation of the Gender Action Plan and the IPP. Training and Capacity Development: 4Ps staff: In collaboration with the HR and Gender unit

develop/adapt training programmes on gender/IP sensitivity and develop strategies to institutionalize this training within the training schedules for 4Ps staff.

Undertake a gender audit of the 4Ps training programme and integrate gender/IP issues within this programme. Provide inputs into the project capacity development plan – training/refreshers, on the job support, mentoring – to ensure that consistent support is provided to field staff to implement GAP and IPP.

Coordinate with regional DSWD Directors, regional GAD/IP focal point (FP) to consolidate the capacity

National

31

Expertise Terms of Reference International/

National Assignment

Duration of Services (person-month)

development needs of the municipal links (MLs) and parent leaders related to gender/IP and the 4Ps.

Undertake an intensive capacity development plan for IP municipal links to ensure appropriate skill development

Provide inputs into the training on Prevention of Sexual Exploitation and Abuse (PSEA) to ensure gender sensitivity and issues of confidentiality

4Ps beneficiaries: Provide inputs into the review of family development

sessions (FDS) to ensure that gender and IP issues are integrated within each of the existing training modules. Ensure that new modules and training/learning materials are developed as per suggestions provided the GAP.

Provide inputs to the HR unit on the institutional monitoring and reporting mechanism on PSEA related to DSWD staff as well as DSWD vis-à-vis beneficiaries, so that it takes account of the context of local women and IPs and minimizes their vulnerability.

HR/ Staffing and Budget: In collaboration with the HR unit: Develop HR strategy and capacity development

plan (as above) to recruit IP staff for municipal links and the 4Ps programme as a whole in order to meet the targets set in GAP and IPP.

Support the process of recruitment of regional Gender and IP focal points – assisting with terms of references, interviews and selection.

Project Implementation and Coordination: Support the NPMO to develop a plan for

strengthening coordination between national, regional and field level 4Ps staff to ensure effective implementation of GAP and IPP.

Consult with DSWD social welfare staff to streamline overlapping responsibilities and maximize linkage, coordination and synergy between the roles of field level social welfare and 4Ps staff.

Provide technical guidance to the regional GAD/IP FPs and MLs to undertake mapping of service providers and make linkages with key NGOs/CSOs related to collaboration on gender and IP issues and access to relevant services.

Guide the commission of a study on IPs to identify gender related cultural norms and practices to minimize exclusion of IP women and maximize access to project benefits.

Monitoring and Evaluation: Ensure that regular monitoring includes collection of

sex disaggregated data on key project indicators. Analyse the data to ensure that key achievements,

challenges and gaps are identified and these are

32

Expertise Terms of Reference International/

National Assignment

Duration of Services (person-month)

fed into the programme to support necessary course corrections.

Draft the gender and ethnicity sections of the yearly and mid-term reviews.

Collaborate with GAD FP/TWG to ensure 4Ps GAP is reflected in DSWD's GAD Plan and budget.

Implementation of the National Targeting System Collaborate with NHTS-NPMO to ensure that the

information dissemination strategy on the NHTS takes into account gender and IP specific needs and constraints and that the survey results are analysed to support appropriate strategies for inclusion of marginalized women and IP groups.

Other General Tasks: During the course of the project, manage

relationships with a wide range of stakeholders, including government officials/ agencies, NGOs, other civil society service providers, academicians, local communities to facilitate coordination and effective implementation of the GAP and IPP.

Regularly consult and update the 4Ps NPMO, NHTS-NPMO and other relevant government departments on gender/IP related progress of the programme, as required.

Undertake any other task related to gender and IPs as assigned by the Director, NPMO.

Program Coordinators (3)

Oversees, plans, directs and supervise the division and units in the provision of technical assistance, monitoring and evaluation in the implementation of Pantawid Pamilyang Pilipino Program in the regional offices

Recommends training programs, strategies/approaches for more effective implementation and does other related work.

Finalizes work program for the division; executes policies and program standards

Supervises section/unit/center heads on administrative and program concerns

Evaluates and submits report for the division Recommends policy for development and research;

renders technical assistance relative to program implementation

Performs other related tasks

Financial Analyst III (2) Bachelor of Science in Accountancy, preferably CPA, with at least 2 years experience in similar field; willing and able to engage in project-related work under contract; good team player; flexible; able to meet deadlines. Specific tasks include:

• Prepares, reviews, analyzes work and financial plan/budget estimates by PMOs under the SWDRP and consolidates work and financial plan and other required reports by Management and DBM;

• Regular monitoring of status of funds as to

33

Expertise Terms of Reference International/

National Assignment

Duration of Services (person-month)

availability versus funding requirements and manage the balances of MDS account;

• Reviews and process request for fund release; • Ensures the legality, propriety, accuracy and

completeness of and process payments for all project financial transactions involving NPMO;

• Studies and determines causes of delay in the utilization of funds, coordinates with concerned NPMO and RPMO regarding identified causes of delay of fund utilization of concerned implementation units;

• Coordinates with and renders technical assistance to Regional Financial Analyst on matters pertaining to finance implementation and reporting;

• Provides updates on the status of funds in the implementation of programs;

• Sees to it that internal control system designed and installed to safeguard resources of the Project is being maintained;

• Files and maintains records for the project; • Performs other functions as may be directed by the

Director of Financial Management Service.

Regional Project Management Office Financial Analyst BSC- Accounting graduate, with at least two (2) year

experience in Project Accounting. Specific tasks include: • Process all financial transaction of the Project at

the regional level. • Maintain books of accounts, general and

subsidiary ledgers, records and files of financial transactions in accordance with generally accepted accounting principles.

• Review documents supporting financial transactions undertaken to ensure legality, propriety, accuracy and completeness.

• Records all project transactions/expenditure and processes/facilitates liquidations of advances in accordance with accounting and auditing rules and regulations

• Prepares/submits monthly, quarterly and annual financial reports and monitoring to DSWD Central Office (CO) and other oversight agencies

• Coordinate with LBP servicing banks to ensure timely submission of Liquidation Report.

• Require the LBP servicing banks the submission of Liquidation Report for the review and verification.

• Verify the Liquidation Report/debit memos (copies only) submitted to LBP branch: • Check the validity of Order of Payments (OPs)

if duly approved by DSWD Field Director and validated by DSWD Municipal/City Link

• Check the validity of the acknowledgement Receipt if duly signed by the DSWD Regional

34

Expertise Terms of Reference International/

National Assignment

Duration of Services (person-month)

Focal Person, received by the beneficiary and stamped “PAID” by the LBP designated teller.

• Validate the “List of beneficiaries” paid during the day with the Ops issued and paid by LBP Servicing bank

• Tally the total amount disbursed vis-à-vis with the Debit Advices issued LBP Servicing banks

• Prepare the summary of amounts disbursed/debited per Debit advice issued per LBP Servicing bank

• Consolidate the total of amounts disbursed/debited by all LBP Servicing banks of the Region

• Prepare and submit Liquidation Report of OTC payment to DSWD Central Office-FMS

• Perform other functions as may be directed by the Field Accountant.

Grievance focal person (17)

Bachelor's degree in social work or allied social science, preferably with 2 years of relevant experience, 8 hours of relevant training and computer literate. Specific tasks include: Provides program manuals and materials (forms

and instructions) to municipal and city links on the filing and processing of grievances and complaints, according to the Operations Manual (as stated in the draft PAM).

Review filed complaints and grievances at the regional and provincial levels

Facilitates organization and operation of GRS at the regional level and monitors operation of Provincial Grievance Committee to facilitate acceptance and processing of grievances and complaints

Consolidates and prepares regular reports and updates for the Regional Grievance Committee and National Grievance Unit

Maintains and updates regularly the regional GRS database (including immediate encoding of GRS form once received

Provides technical assistance to the Provincial Grievance Committee and local grievance monitors

Provides analysis and trends in grievance reporting at the regional level

Reviews submitted grievances and complaints and provides appropriate recommendations for approval/disapproval by the Regional Director and final approval of the Program Manager of the NPMO (as stated in the draft PAM)

Keeps track of GRS resolved and other actions undertaken and provides feedback to the local GRS focal and municipal/city links (as stated in the draft PAM)

Performs other related tasks (as stated in the draft PAM)

National

Gender focal person

Bachelors degree in Social Work or related social

35

Expertise Terms of Reference International/

National Assignment

Duration of Services (person-month)

(17) science, 2 years relevant experience, computer literate and at least 8 hours of relevant training General: Facilitates and monitors the implementation of the GAD and the IP Measures. Specific: • Coordinates with the NPMO GAD and IP Focal

persons regarding matters relevant to the implementation of the GAP and IP measures;

• Maintains databank on resources in the area which can be tapped for assistance with respect to GAD and IP concerns (i.e. GAD Resource Centers, research units, crisis centers, etc.)

• Provides technical inputs to the Operations Unit to respond to gender and IP issues and concerns;

• Facilitates gathering of relevant sex-disaggregated data for monitoring and planning purposes;

• Monitors and prepares reports on the implementation of 4Ps policies and plans regarding GAD and IPs;

• Prepares the regional 4Ps Annual GAD Plan and Budget and the Accomplishment Report for submission to the NPMO;

• Coordinates and establishes linkages with relevant LGU units (i.e. LGU GAD Focal Point, if established; Women’s Desk, etc.) and NGOs/academe for delivery of services and capacity building of beneficiaries and 4Ps regional staff and MLs.

MIS consultant to be determined 4Ps = Pantawid Pamilyang Pilipino Program (Building Bridges for the Filipino Family Program), BSC = Bachelor or Science in Commerce, CPA = Certified Public Accountant, DSWD = Department of Social Welfare and Development, FP = focal person , GAD = gender and development, GAP = Gender Action Plan, GRS = grievance redress system, HR = human resource, IP = indigenous people, IPP = Indigenous People Plan, LBP = Land Bank of the Philippines, LGU = local government unit, MDS = MIS = management information system, ML = municipal link, NGO = nongovernment organization, NHTS = national household targeting system, OTC = over-the-counter, PAM = project administration manual, PMO = project management office, PSEA = Prevention of Sexual Exploitation and Abuse, SWDRP, TWG = technical working group.

36

VII. SAFEGUARDS 73. The project includes around 9,000 indigenous peoples' (IP's) households in three selected regions as its beneficiaries. IP households are among the poorest and most marginalized in the Philippines. The purpose of the IP assessment and measures is to outline the potential impacts of the project on IPs; specify actions to address the impacts; and help improve the distribution of project benefits to IP groups. 74. The below actions will support integration of IPs needs and interests into each of the project outputs, and ensure effective participation and access to the benefits of the project. Where impacts on IPs are positive, measures will be identified to enhance and ensure equitable sharing of benefits. Where impacts are potentially negative, appropriate mitigation measures will be identified. The below table outlines anticipated positive and negative effects and recommendations to enhance/mitigate impacts.

Project Output Anticipated Positive Effect

Anticipated Negative Effect Proposed measures to mitigate impact

Output 1: Efficient implementation of a national targeting system to select poor households

• Poor IP HHs benefits from 4Ps

• Inclusion of poor IP households in the NHTSPR database and selected as prospective poor beneficiaries of social protection programs by other national development programs.

• Possible exclusion of poor IP HHs residing in remote/ hard to reach areas due to lack of information and absence from locality during survey

• IP tribal leaders to be identified and oriented on the NHTS-PR

• Disseminate information in IP language and through local media and channels accessed by IPs.

• Coordinate with NGOs working in IP communities to disseminate information and schedule assessments at dates and times convenient for IP women/community.

• Provide orientation to assessment staff on IP situation and issues.

• Ensure assessments include data on remote and hard-to-reach areas, migrants, IPs, those in stigmatized occupations, etc.

• Ensure that assessment results are analyzed and included in the database to provide a nuanced and comprehensive understanding of the vulnerabilities of the above groups. This information in the database to be available for other social protection and poverty reduction programs (so as to facilitate availability of information on extreme poor and marginalized groups and development of appropriate strategies to reach these groups)

Output 2: Conditional health and education cash grants are provided to poor households

• Reduced maternal mortality and infant morbidity and mortality

• Improved school attendance rates

• Perpetuation of traditional gender roles

• Increased workload for women

• Some members of HHs of polygamous unions may be excluded.

• Disseminate information on 4Ps program through local channels and media accessed by IPs and in IP language

• Ensure bank accounts opened are in the name of women IPs (except when male single HHs are targeted)

• Support referrals to service providers for literacy and numeracy training

• Provide intensive training on use of ATM and cash cards

• Explore provision of transport assistance through LGU or NGOs/CS organizations to IP HHs who have to travel long distances to get their grants

• Mobilize IP tribal leaders to advocate compliance to conditionalities and promotion of joint home care responsibilities.

• Develop language and culturally appropriate family development sessions.

• Ensure that training materials for illiterate IPs include pictorial and other forms which they are able to understand.

37

Project Output Anticipated Positive Effect

Anticipated Negative Effect Proposed measures to mitigate impact

• Through monthly meetings, support organization of IP HHs around their rights and familial/community issues.

• Develop guidance on how to support polygamous HHs with cash grants.

• In remote areas, undertake assessment of and coordination with local NGOs and other non-state health and education service providers so as to fill gaps in government service provision and support inclusion of IPs living in these areas.

• Consult KALAHI-CIDSS and NGO service providers in engaging IP communities in the development process.

Output 3. Strengthened capacity for CCT Program operations

• Program implementers able to effectively engage IP communities

• No foreseen negative effects

• Target recruitment of 10% women and 12% total IP MLs in IP areas or ensure that IP are hired for ML positions in proportion to the IP beneficiaries

• Provide intensive training and coaching to IP staff to ensure skills development

• Provide orientation on IP situation and issues and effective ways of dealing with IPs to all existing and new staff at various levels in 4Ps.

Output 4. Improved systems for monitoring and evaluation of social protection programs

• Better tracking of program outcomes and impacts

• Lessons learned on effective ways of engaging IP women and men

• No foreseen negative effects

• Conduct study on IP situation to identify gender related cultural norms and practices to minimize exclusion of IP women and better respond to their needs.

• IP specific equality indicators to be included in M&E system.

• Collect sex-disaggregated data regularly and analyze it to inform policy and program planning for IPs.

• Yearly and mid-term reviews will consider gender and ethnicity specific challenges and concerns

• Documentation of best practices in gender sensitive interventions for IP communities will be undertaken.

• Lessons learned will be shared with other programs and agencies working with IP communities.

4P = Pantawid Pamilyang Pilipino Program (Building Bridges for the Filipino Family Program), ATM = automated teller machine, CCT = conditional cash transfer, CS = civil society, IP = indigenous peoples, KALAHI-CIDSS = Kapit Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services, LGU = local government unit, M&E = monitoring and evaluation, ML = municipal link, NGO = non-government organization, NHTS = national household targeting system. Source: Asian Development Bank. 75. Implementation Arrangements. The implementation arrangements and estimated costs of the actions are integrated into the overall arrangements and total budget of the Project. A national and regional gender and development and IP focal persons will be recruited to ensure the implementation of the actions. The actions will be monitored as part of the overall system of the project and data collected will be disaggregated by sex and ethnicity. Progress reports will provide updates on the benefits and challenges related to IPs. Yearly and mid-term reviews will undertake course corrections based on updates, as necessary.

38

VIII. GENDER AND SOCIAL DIMENSIONS

Project Output Actions Proposed Output 1: Efficient implementation of a national targeting system to select poor households

• Disseminate information on objective and dates of survey through a range of appropriate local media and channels accessed by women (including posting information in areas frequented by women such as markets, mobile microphones, inter-personal communication through social welfare, health, education, non-government organization (NGO) officials.

• Ensure that survey schedules take into consideration women's work schedules.

Output 2: Conditional health and education cash grants provided to poor households

• Ensure pregnant women are required to attend health centre or rural health unit according to the Department of Health protocol.

• Disseminate information through local media and channels to women on the Pantawid Pamilyang Pilipino Program (Building Bridges for the Filipino Family Program) [4Ps] program, cash entitlements, and conditionalities, to ensure that they have sufficient knowledge of their rights related to 4Ps.

• Hold consultations with women in each municipality so that the distribution of cash transfers take place on convenient days and hours and under culturally acceptable conditions.

• Ensure that bank accounts opened are in the name of women beneficiaries (except where cash grants are being provided to single male headed households)

• Ensure that marriage certificate is not used as a pre-requisite for validation and opening of bank accounts

• Explore options for providing transport assistance to households who have to travel long distances to get their grants through local government units (LGUs) and/or NGOs/civil society organizations.

• Provide briefing to beneficiaries on prevention of exploitation and abuse, any acts committed against women by implementers, the grievance redress system and its reporting channels and punitive measures.

Family Development Sessions • Ensure family development sessions (FDS) promote joint home care

management and gender-fair child rearing practices. • Identify gender and development (GAD) core messages for all the modules of

the FDS and review and revise learning materials to carry these messages. • Develop new FDS training materials (or adapt from existing training materials)

on citizenship and rights, politics, leadership and teamwork skills as well as violence against women and building non-violent, healthy intra-familial relationships.

• Encourage 70% male attendance for specially designed sessions on gender and development, violence against women and building non-violent, healthy intra-familial relationships, joint home care management and gender-fair child rearing practices. Males/fathers will be consulted on the times that this session will be held so as not to interfere with their work schedule.

• Ensure that monthly meetings support and facilitate women's organization and mobilization around their entitlements, individual, familial and community issues (e.g., crèches for children so that women may travel away from home to collect cash grants, to markets and undertake other out of home chores; issues of domestic violence; alcoholism of men, etc)

• Develop language specific, culture and gender sensitive training materials for trainers and handouts for participants. Ensure that training materials for illiterate beneficiaries includes pictorial and other forms which they are able to understand.

• Develop training curriculum for parent leaders on the FDS to support them to co-facilitate FDS.

• Provide information to and support beneficiaries to access the support and services provided by NGOs and other service providers, e.g. livelihood and income generating training and opportunities, adult literacy classes, alternative/crisis centers for women and children victims of abuse, legal aid, etc.

39

Project Output Actions Proposed Output 3: Strengthened capacity for CCT Program operations

• Provide training and 6-monthly refresher courses on gender and prevention of sexual exploitation, abuse and harassment and anti-corruption and reporting mechanisms to all existing and new 4Ps staff at the various levels.

• Undertake increased coordination with the Department of Social Welfare and Development GAD Focal Person and GAD Technical Working Group and ensure inclusion of GAD mainstreaming initiatives for the 4Ps Program in the GAD Plan and Budget of the agency.

Output 4: Improved systems for monitoring and evaluation of social protection programs

• Integrate gender equality outputs and outcome indicators into the monitoring and evaluation system

• Ensure that sex-disaggregated data is collected, analyzed and included in the reporting on program coverage, income of women, nutritional status, access to health and education as well as data on out-of-school children to help identify ways to strengthen conditional cash transfer programs and referrals.

• Ensure that yearly and mid-term reviews consider gender and ethnicity specific challenges and concerns.

• Ensure indicators are linked with the National Commission on the Role of Filipino Women-National Economic Development Authority harmonized GAD guidelines for project design, implementation and monitoring

Source: Asian Development Bank. A. Implementation Arrangements 76. The implementation of the gender action plan (GAP) will be overseen by the national project management office. A national gender and development/indigenous people (GAD/IP) Focal Person (FP) and GAD/IP focal persons in the regional project management offices (RPMO) will be recruited. The national GAD/IP FP will advise and assist the project manager and deputy project manager (PM/DPM) on GAP implementation. The national FP will advise and support regional GAD/IP FPs on GAP implementation, training and coaching. The national FP will act as the coordinating link between the regional GAD/IP FPs and the PM/DPM. The national FP will coordinate with the DSWD Human Resources Management and Development Services (HRMDS) for meeting capacity development needs of the Pantawid Pamilyang Pilipino Program51 (4Ps) staff related to gender and IPs and support the institutionalization and roll out of training. The national and regional FPs will identify a core team of training and monitoring task force to roll out and oversee training, mentoring and monitoring support. The national FP will also coordinate with the DSWD GAD Technical Working Group to achieve synergy with other GAD-related initiatives of the agency. Coordination mechanism will be established to collaborate with and learn from Kapit Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services52 on gender-related interventions. 77. The regional FP will coordinate with the RPMO in providing technical assistance in the field implementation of the GAP and provide direct support to municipal links and regional staff. The monitoring and evaluation unit will ensure generation of sex-disaggregated data for planning and evaluation. The capacity building unit will be responsible for review and revision of family development session modules to ensure integration of GAD core messages. The terms of reference of all consultants contracted for this program will specify responsibilities for looking at GAD concerns in their particular assignments.  

51 Building Bridges for the Filipino Family Program. 52 KALAHI-CIDSS.

40

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION

A. Project Design and Monitoring Framework

Design Summary Performance Targets/

Indicators with Baseline Data Sources/ Reporting

Mechanisms Assumptions and Risks Impact Reduced income poverty and non-income poverty

By 2018:

Accelerated progress towards the following national MDG targets:

MDG 1: Proportion of population below national poverty threshold less than 25% (2006 baseline: 33%)

MDG 2: Primary net enrollment more than 90% (2008–2009 baseline: 85.1%)

MDG 3: Achieved

MDG 4: Achieved

MDG 5: Maternal mortality less than 100 per 100,000 live births (2006 baseline: 162)

Data published by NSCB

4Ps evaluations and MIS data (DSWD)

Assumptions Beneficiary households continue investments in human capital after exit from the 4Ps.

Political and financial support for the 4Ps and social protection reform is maintained.

Risk Other determinants of income, consumption, and human capital investments are not present (e.g., political and economic stability).

Outcome Increased consumption and utilization of education and health services among poor households and women beneficiaries of the 4Ps

By 2015:

At least 10% increase in average per capita consumption of beneficiaries in target communities.

At least 90% each of boys and girls 6–14 years old in poor beneficiary households attend school (baseline 2008-2009: 85.1%)

At least 70% of pregnant women deliver in a health facility (2008 baseline: 44.5%)

At least 80% of births are delivered by skilled health personnel (2008 baseline: 62.2%)

At least 85% of children are fully immunized before 1 year old (2008 baseline: 70%)

Decrease in the share of children 6–14 years old who are working in project areas (2008 baseline: 4.6%).

NSCB small area estimates of poverty

Impact evaluation survey (DSWD)

MIS (DSWD)

Proxy means test (DSWD)

Data published by NSCB

National demographic and health survey (NSO)

Field health service information system

Risks Cash transfer a disincentive to work (dependency)

Poor quality of social services

Outputs

1. National targeting system to select poor households implemented efficiently

By 2015:

20% of poor households nationwide registered in the NHTS-PR

The NHTS-PR has less than 10% inclusion and/or exclusion error

At least three national programs

Database of NHTS-PR (DSWD)

Impact evaluation of the 4Ps (DSWD)

NHTS-PR annual report (DSWD)

Risk Transitory movements of households in and out of poverty not captured by targeting system

41

Design Summary Performance Targets/

Indicators with Baseline Data Sources/ Reporting

Mechanisms Assumptions and Risks use the NHTS-PR as targeting mechanism

At least 60% of poor households registered in the database receive benefits of social protection programs

2. Conditional health and education cash grants provided to poor households

By 2015:

At least 580,000 poor households receive cash grants, in which at least 90% of grant recipients are women

At least 80% of mothers in beneficiary households receive 4Ps grants regularly and on time

At least 80% of households meet education conditions regularly

At least 80% of households meet health conditions regularly

At least 80% of women and men attend monthly family development sessions

Local area maps are produced showing locations of (i) target households; (ii) health facilities, day-care centers, schools; (iii) payment “windows;” and (iv) location and quality of roads

NHTS-PR database (DSWD)

MIS (DSWD)

Attendance monitoring sheets

Spot-check reports

Risk Payment windows geographically inaccessible to target households

3. Strengthened capacity for CCT program operations

By 2011:

Central and local project management structures established.

At least 200 central and local staff acquire knowledge on gender analysis, indigenous people sensitivity, and prevention of sexual harassment

Gender action plan implemented

Participatory gender audits and community-driven gender action plans piloted in 12 municipalities

Detailed work schedule and budget plans (DSWD)

Training and workshop records (DSWD)

Project management meeting minutes (DSWD)

Audit reports

MIS (DSWD)

Risks Lack of implementation capacity

Political interference in compliance verification

4. Improved systems for monitoring and evaluation of social protection programs

MIS is established and functioning to support payments, verification, updates, and grievance system

90% of grievances received are resolved within established time protocol

At least two rounds of spot checks (for the 4Ps) of schools, clinics, municipal links, and beneficiary households carried

Spot-check surveys

MIS (DSWD)

Impact evaluation of the 4Ps (DSWD)

Records of grievance redress system (DSWD)

Risks Difficult to find control sites for impact evaluation

Political interference in grievance redress system

42

Design Summary Performance Targets/

Indicators with Baseline Data Sources/ Reporting

Mechanisms Assumptions and Risks out annually

Impact evaluation report based on first follow-up survey

Activities with Milestones Inputs ADB: $400 million Item Amount

($ million) Output 1 3.7 Output 2 362.5 Output 3 21.6 Output 4 4.5 Contingencies 7.7 Government: $484 million Item Amount

($ million) Output 1 10.0 Output 2 436.1 Output 3 16.7 Output 4 0.7 Financing charges 20.7

1. NHTS-PR to select poor households implemented and functioning efficiently 1.1 Household assessment in set 3 areas, and registration of poor households into the

NHTS-PR database (Q3 2010; updates through Q2 2015) 1.2 Completion of list of potential beneficiaries of the 4Ps, using the NHTS-PR PMT,

for all sets (Q3 2010) 1.3 NHTS-PR PMT targeting mechanism applied in two other national programs (by

Q2 2015) 2. Conditional health and education grants provided to poor households 2.1 Set 2 and set 3 beneficiary household validation, Land Bank enrollment, and

identification card distribution (by Q3 2010) 2.2 Distribution of cash cards to beneficiaries (initiated in Q3 2010, completed by Q4

2011) 2.3 Preparation and DSWD transmission to Land Bank of beneficiary payrolls for every

quarter of 2010–2015 2.4 Payments of 4Ps grants to Set 2 and set 3 beneficiaries (quarterly) 2.5 Computerized compliance verification system operating for set 3 by Q1 2011 and

used as basis for all subsequent grant payments 3. Strengthened capacity for CCT program operations 3.1 Mobilization of additional staff as per new staffing plan under approved

reorganization, including hiring of contractual staff for the national project management office and regional project management office (by Q4 2010)

3.2 Completion of supply-side assessment and analysis (by Q2 2011) 3.3 Training and capacity building (periodic, during Q3 2010–Q4 2015) 3.4 Information dissemination (periodic; Q3 2010–Q4 2015) 3.5 More efficient institutional mechanisms for providing grants to remote beneficiaries

in place by Q4 2012 3.6 Piloting of participatory gender audits and community-driven gender action plans

(Q3 2010–Q4 2012) 4. Improved systems for monitoring and evaluation of social protection programs 4.1 By Q4 2010, launch of core modules for computerized MIS: (i) household

information, (ii) registration, (iii) verification, (iv) payments, (v) updates, and (vi) grievance redress system

4.2 Fully integrated computer-based MIS operating by Q2 2011 4.3 Development and testing of spot-checking methodology (Q3 2010) 4.4 Actual spot checking and reporting twice a year (Q3 2010–Q4 2015) 4.5 Monitoring and evaluation studies (Q4 2010–Q3 2015); final reports by Q3 2015

Capacity Development TA: $1,000,000 ADB: $800,000 Government: $200,000 Gender TA: Gender and Cooperation Development Fund: $300,000 Government: $125,000

4Ps = Pantawid Pamilyang Pilipino Program (Building Bridges for the Filipino Family Program), ADB = Asian Development Bank, CCT = conditional cash transfer, DSWD = Department of Social Welfare and Development, M&E = monitoring and evaluation, MDG = Millennium Development Goal, MIS = management information system, NHTS-PR = national household targeting system for poverty reduction, NSCB = National Statistical Coordination Board, Q = quarter, TA = technical assistance.

B. Monitoring

78. Project performance monitoring. The 4Ps Monitoring and Evaluation (M&E) system consists of three components (see Figure 2):

(i) an Internal Monitoring System to track the main activities that constitute each step of the 4Ps program cycle;

(ii) an External Monitoring component, consisting of periodic spot checks in the field (initially semi-annually, then eventually annually) to determine quality, effectiveness and efficiency of the program and detect short-term issues and trends in outcomes; and

43

Figure 2. The 4Ps Monitoring and Evaluation System

(iii) Impact Evaluation – both qualitative and quantitative – to review and measure achievements of the program vis-à-vis its intended outcomes and long-term impact (Figure 2 below).

(Source: DSWD slide presentation on “4Ps Monitoring and Evaluation, 7 January 2010)

1. Compliance monitoring

79. Internal Monitoring System. The Internal Monitoring System (IMS) covers all aspects of 4Ps implementation: (i) registration of beneficiaries; (ii) verification of compliance with conditionalities (Compliance Verification System or CVS); (iii) payments of cash grants to households; (iv) Grievance Redress System (GRS); (v) updates of beneficiary information; (vi) supply-side assessments for health and education; (vii) budget execution; (viii) social marketing; and (ix) capacity building. Each of these modules corresponds to a stage of the 4Ps implementation cycle and has been developed in accordance with specifications laid out in the 4Ps Operations Manual. 80. To facilitate these tasks a computerized Management Information System (MIS) has been established. The MIS maintains the corresponding databases for each module of the IMS, generates reporting forms for distribution to the regions and, through them, to the Municipal Links who are responsible for data collection, updates databases as necessary, and generates periodic reports for use by 4Ps management in program oversight and policy development. Though developed as separate applications, a number of these modules are linked electronically, as for example in the case of the payment system, which requires inputs from the benefit registration and CVS modules, or the beneficiary register, which is updated quarterly based on inputs from the updating module.

81. Because of the intensified effort required for accelerated expansion of 4Ps in 2008 and 2009, development and implementation of the MIS had been delayed, with formal establishment of the system occurring only in 2009, after operations had already started. This has resulted in late start up of implementation of the CVS module in all 4Ps areas and other delays in Set 2 and Set 3 areas. The delays notwithstanding, 4Ps IMS/MIS development and implementation is quite advanced in comparison with MIS activities in most other large scale social programs, and is generally well-designed and rigorously implemented. 82. Beneficiary Registration. Data for beneficiary registration originate from the household targeting database of the NHTS-PR, which are then processed by 4Ps in accordance with eligibility and other selection criteria for participation in 4Ps. For each municipality selected, NHTS-PR oversees enumeration and encoding of the 2-page household questionnaire on which

Monitoring

Internal Monitoring System Spot Checks

Evaluation Qualitative

Quantitative

44

the PMT is based. The data are encoded by the regions then transferred electronically to the national targeting database, where the PMT estimates of income are produced for individual households and compared with the poverty threshold to identify poor households. Household ranking is also performed.53 The list of poor households is then transferred to the 4Ps MIS, along with the household data required to determine 4Ps eligibility (presence of children, pregnant women, etc.). The 4Ps MIS then applies eligibility criteria to produce a list of eligible poor households. If a second round of geographic selection is applied (as in Set 3 areas where barangays with the largest number of eligible poor households are selected, up to the limit of the allocated funding for the specific municipality), then a new, shorter list is produced.

83. The list of selected eligible poor households is sent to the regions for posting in barangays and for use in organizing community assemblies. At the community assemblies, beneficiary eligibility is validated and the final list of beneficiary families is entered into the beneficiary registry of the MIS. 84. Verification of Compliance with Conditionalities (Compliance Verification System or CVS). A complete, accurate and timely compliance verification system is essential to the operation of 4Ps. Data collection for the CVS starts at the level of the teachers and health workers at schools and health centers to which individual beneficiary children and pregnant women were assigned during beneficiary registration. Four quarterly reporting forms have been designed for this purpose: (i) The Master List (CVS-F1) containing basic information on currently listed beneficiary households; (ii) Education (CVS-F2); (iii) Health (CVS-F3); and Family Development (CVS-F4). The forms, which are updated and generated by the MIS in each reporting period, list the names of all beneficiary household members in the specific barangay/municipality who are expected to comply with the specific conditionality. At the end of the quarter, the school Principal/Health Officer/Municipal Link completes the forms (marking those beneficiaries who are non-compliant) and signs them. These are collected by the Municipal Links who submit them to the regional offices for encoding into the MIS.54 A detailed information on CVS is in Appendix 1. 85. However, because of the intensified effort required for the accelerated expansion of 4Ps in the first two years of the program (2008 and 2009), development of the CVS has been delayed, with computerized implementation of verification having started only in the first quarter of 2010 (for benefit payments in June 2010) and only for Set 1 areas. Set 2 CVS implementation is expected to start in the 3rd quarter of 2010 (for payments in December 2010) and Set 3 implementation is planned for the 1st quarter of 2011 (for payments in June 2011). 86. This delay may have some impact on program quality, although all stakeholders and especially beneficiaries are fully informed of the program conditionalities and manual tracking of compliance is ongoing. In addition, initial observations in the field have indicated that beneficiaries are behaving in large part in compliance with conditionalities. 87. Payment of cash grants to households. Together with the list of eligible poor households sent to the regions in advance of the community assemblies (at the beneficiary registration stage) the NPMO sends pre-generated Land Bank forms to be filled out with beneficiary information for use in opening individual Land Bank accounts and for issuing of cash cards. The forms are sent back after registration through the regional offices for encoding by the 53 Responsibility for field enumeration and application of the PMT initially rested with 4Ps, but was transferred to

NHTS-PR after the PMT was adopted as the official targeting tool for all national pro-poor programs. The NHTS-PR has started producing PMT income estimates for non-4Ps areas as well, in anticipation of this broader application. In the case of 4Ps, this arrangement started with Set 2 areas.

54 Note that it is the teacher/health worker who certifies compliance, not the Municipal Link.

45

NPMO. The encoded information is then transmitted to the Land Bank and entered into the MIS payroll system to serve as the database for the quarterly payment cycle. 88. The first quarterly payment to beneficiaries is done automatically, with no verification of compliance with conditionalities. From the second payment onward, though, information from the CVS is used to determine the amount of the grant to be paid (or if payments are suspended) for each beneficiary. As of mid-April 2010, the link with the CVS had just been introduced for Set 1 beneficiaries, but not for Sets 2 and 3. Hence, two types of payment applications were in use at that time—one based on compliance (for Set 1), one based on age, i.e., only on eligibility (sets 2 and 3). The switch to compliance-based payments will occur for Sets 2 and 3 as soon as the respective CVSs are operational. 89. Grievance Redress System (GRS). The design and form of the GRS had just been completed as of mid-April 2010 and the MIS application was under development at that time. The module is expected to be completed and ready for introduction (training of field personnel) by August 2010. Among its main features, the GRS will enable tracking of follow-up action on grievances reported as well as recording of the time taken to resolve issues. Like the CVS, encoding of the GRS database will be done at the regional level. 90. Updates of beneficiary information. This module is designed for the updating of demographic (family composition, status, etc.) and administrative (change in residence, etc.) information on individual beneficiaries. It is the household’s responsibility to report any relevant changes to parent leaders during the monthly meetings; parent leaders then report the changes to the Municipal Link. A reporting form has been in use since December 2009. Encoding is done at the regional level and the information is then transmitted to the MIS and linked to the payment system. Beneficiary updates are done quarterly. A detailed information on how the update system works is in Appendix 2. 91. Graduation indicators are currently being developed by the NPMO. Once these are available, they will be integrated into the updating application. 92. The updating module of the MIS is designed only for updating administrative information on beneficiaries, not for updating income information (and hence poverty status) of the beneficiary household. This latter activity is considered to be part of the targeting process, and hence the responsibility of NHTS-PR. At the time of the fact-finding mission (mid-April 2010), there were plans to carry out a round of household re-assessments in 2013 (and possibly every 3 years in the future) It is estimated that one round of re-assessment for the entire country would cost PhP1.7 billion. 93. Supply-side assessments for health and education. The database will store information from supply-side assessments done at the start of 4Ps implementation in each municipality, and track progress on compliance with commitments made by each municipality in their respective MOAs. Actual monitoring in the field will be done by the Municipal Links. 94. As of mid-April 2010, data from assessments in all three 4Ps areas had been collected, and the MIS team was awaiting advice on the methods for interpretation of the data and enforcement of MOA commitments. 95. Budget execution. 4Ps will follow the usual DSWD-wide procedures for financial tracking. Hence, no special MIS is needed for this purpose.

46

96. Social marketing. Each region has a social marketing plan that is monitored by the social marketing unit of the NPMO. In addition, the Social Marketing Unit of the NPMO has established a website that is accessible through the DSWD’s home page. No separate MIS module is needed for monitoring this activity. 97. Capacity building. Capacity building activities, focused mainly on skills enhancement (training), are implemented and monitored by the Capacity Building Unit of the NPMO. They are not tracked separately by the main 4Ps MIS.

2. External Monitoring – Spot Checks

98. Spot checks are rapid evaluation instruments to assess the quality, effectiveness and efficiency of 4Ps with respect to design, management, institutional, monitoring and evaluation and other aspects of the program. Interviews will be conducted with different stakeholders, including household beneficiaries, parent leaders, schools and health facilities, Municipal Links, Land Bank officials, LGU representatives and regional office personnel. Spot checks analysis will cover assessment of the following aspects of operations: targeting, registration, compliance verification, payments, social marketing, training, updates, and the grievance redress system. 99. Spot checks will be conducted twice per year in Set 1 areas, for the first two years, then once a year thereafter. Pilot testing of the spot check questionnaires had just been concluded (under contract with Social Weather Stations) as of the fact-finding mission. Awarding of the contract for the first full-scale spot check is scheduled for July 2010. Data collection for this spot check is expected to be completed by end-March 2011 and a report by May. Field work for the second round of spot checks is scheduled for January 2011. 100. For Sets 2 and 3 areas, spot checks will be conducted twice a year, starting in the first year of project implementation. To facilitate implementation and ensure consistency in methods and quality, spot checks to be funded under the ADB loan will be awarded on a sole source basis to the same contractor as for Set 1 evaluation funded through the World Bank loan, but under separate contract.

3. Institutional Arrangements for Project Performance Monitoring

101. The Monitoring and Evaluation Unit of the NPMO is responsible for development and implementation of both Internal and External Monitoring systems. They liaise with focus persons in the NPMO responsible for technical aspects of the program to ensure that the monitoring system accurately reflects 4Ps policies, selects appropriate indicators, and provides an efficient information base and set of monitoring tools for program management and policy development. 102. The Management Information System (MIS) Unit of the NPMO is primarily responsible for promoting the effective use of Information and Communication Technology (ICT) throughout the implementation of 4Ps. It maintains the 4Ps database to facilitate payment and reflect verification of compliance, updates, and the resolution of grievances. The MIS Unit plays a key role given the very large number of program beneficiaries.

103. DSWD regional offices and Municipal Links contribute to populating and maintaining the various MIS databases. A large part of their responsibilities will be the maintenance of the monitoring systems, including both the IMS and the spot checks. Municipal Links are particularly critical to monitoring, as they perform the bulk of primary data collection tasks (using the forms created by the M&E and MIS Units). The regional offices in turn supervise data collection, consolidate and transmit data to the national MIS and, in some cases (CVS, GRS, updating)

47

encode the data before they are transmitted. With the rapidly expanding coverage of 4Ps, staffs at the regional level and particularly at the level of the Municipal Links are rapidly being stretched to their limits. Hence it has become necessary to increase the number of Municipal Links by 174 individuals Additional staff at the regional level assigned specifically to MIS functions will also be contracted. 104. In addition, staff at the national level M&E and MIS Units continue to need technical assistance to reinforce their technical capacities, and eventually allow them to carry out their responsibilities with diminishing assistance from external consultants. Workshops and specialized training programs in monitoring and evaluation methods, management of very large databases, etc. will help strengthen DSWD’s institutional capacity in these areas. A Capacity Development Technical Assistance attached to the loan project will provide some support in strengthening M&E.

4. Compliance Monitoring

105. Safeguards monitoring. The Indigenous Peoples Plan will be monitored as described in Section VII. 106. Poverty and Social action plans. The Gender Action Plan will be monitored as described in Section VIII. C. Evaluation

107. Two types of evaluation activities are planned for 4Ps during its initial years of operation. These are:

(i) A qualitative evaluation to document the processes that lead to current indicators, and assess the short-term outcomes and impact of the program; and

(ii) A rigorously designed quantitative impact evaluation to estimate the project’s impact on the long and short-term target indicators.

(iii) Monitoring and evaluation studies of key project processes.

1. Qualitative Evaluation

108. The main objective of the 4Ps qualitative assessment is to evaluate the processes and outcomes of 4Ps project implementation in beneficiary communities, households and services providers in the area. Using qualitative research methods (based on similar studies done in Latin America), the evaluation will aim to provide detailed explanations of:

(i) progress on project implementation; (ii) changes in behaviors, practices and beliefs among beneficiary communities; (iii) the hows and whys that lie behind the indicators; (iv) any unexpected spillovers effects; and (v) initial program impacts on education and health, as well as changes in household

levels of living, vulnerability and service provision. 109. The multi-wave assessment will be conducted in two municipalities in each of three provinces (Nueva Ecija, Northern Samar, Agusan Sur). A total of 36 case studies of beneficiary households, will be done. Focus group methods will be applied. Data collection for the first wave of qualitative assessments had just been completed at the time of fact-finding, with a report expected by June 2010. The researchers will return to same households for the second round.

48

The contract for the qualitative evaluation was awarded to The Ateneo University Institute of Philippine Culture.

2. Quantitative Impact Evaluation

110. Two types of impact evaluation methodologies are planned for Set 1 areas under 4Ps – randomized control trial (RCT); and regression discontinuity (RD). While both are technically rigorous and allow for credible estimates of causal effects (rather than just correlation), RCT provides a more direct measure of the impact and outcomes of 4Ps interventions on affected communities. However, the phased RCT strategy rests on being able to create a counter-factual by identifying a good-quality control sample to be studied before any program interventions are introduced in these areas. This has been possible for a limited number of barangays in Set 1, however, the RCT approach is largely limited to providing evidence on relatively quickly responding indicators (e.g., current enrolment), since the control sample will cease to exist when 4Ps is introduced in those barangays following the first survey round in roughly October 2010. Moreover, RCT will not be possible for Sets 2 and 3 areas, where the intervention was started before plans for any further evaluation could be made. 111. The RD estimator method provides an alternative quasi-experimental evaluation method that can be employed on a wider group of barangays. It can be utilized with non-experimentally designated barangays, and in addition to providing a cross-check to findings from the RCT at the time of the first impact evaluation survey, it can continue to provide credible evidence on impacts after the RCT method is no longer feasible because the “control” group has been incorporated into the program. This RD method estimates causal inference when units of analysis are ordered along a quantifiable dimension that systematically determines the assignment of treatment (i.e., inclusion in the program). An important subtlety is that RD can only estimate the impact of the program for sample units lying very near the cutoff value for program eligibility (i.e. the “discontinuity”). The proxy means test (PMT) criterion for selection of households for eligibility in the 4Ps suggests the applicability of an RD evaluation design55 in particular, RD can generate evidence on the impact of 4Ps on households lying just below the poverty line calculated based on the PMT. Assuming the RD method is validated when compared with the RCT method following the first survey, RD can then serve as an evaluative tool going forward with the 4Ps program.56 112. Both the RCT and RD analyses for Set 1 are being designed and implemented with technical assistance from the World Bank. The World Bank research team will lead the study overall and DSWD will execute the survey (select the consultant, etc.). ADB is in current dialogue with the World Bank and DSWD on collaboration on the impact evaluation. The study will be conducted in 8 municipalities in 4 provinces, randomized at the barangay level within the same municipalities in Set 1 Batch 4 areas. The plan is to cover two survey rounds:

(i) a first round in September-October 2010, which will include both (i) a sample of 4,020 households to be used in the RCT study, and (ii) a second sample of another 4,500 households under the RD design; and

(ii) a second round roughly a year later, which would only cover the RD sample, since the RCT's control sample will have disappeared.

55 Non-eligible households with proxy means test scores just above the proxy means cut-off can be used as controls;

households in the same barangays as the controls with proxy means test scores below the cut-off score for eligibility will be the treatment households.

56 See Filmer, D. et al “Concept Note: Pantawid Pamilyang Pilipino Program(4Ps) Quantitative Impact Evaluation”, World Bank March 16, 2010 for a further description and comparison of these two assessment methods.

49

3. Monitoring and evaluation studies

113. A number of Monitoring and Evaluation studies will be financed, including a study on the family development sessions (FDS) and a women's empowerment study. 114. Project Completion Report. Within 6 months of physical completion of the Project DSWD will submit a project completion report to ADB.57

D. Reporting

115. The DSWD will provide ADB with (i) quarterly progress reports in a format consistent with ADB's project performance reporting system; (ii) consolidated annual reports including (a) progress achieved by output as measured through the indicator's performance targets, (b) key implementation issues and solutions; (c) updated procurement plan and (d) updated implementation plan for next 12 months; and (iii) a project completion report within 6 months of physical completion of the Project. To ensure projects continue to be both viable and sustainable, project accounts and the executing agency AFSs, together with the associated auditor's report, should be adequately reviewed.

E. Stakeholder Communication Strategy

116. 4Ps faces many challenges in the area of communication. First, there has been many misconceptions about the program. These misconceptions are rooted in the lack of awareness and knowledge of what 4Ps is all about and how it is being implemented. For example, some critics look at 4Ps as simply a dole-out, a political ploy of the current Administration to raise its popular support. Second, it is critical for the targeting and selection process to be seen by the people and community leaders as fair, objective and not susceptible to personal and political favoritism. Third, in general, popular and technical recognition of the soundness of technical design and rules of 4Ps is important in inspiring and empowering reform minded bureaucrats to resist political pressures that could corrupt 4Ps. Fourth, there is a need to mobilize coordinated support from LGUs, DOH and DepEd to ensure timely responses to supply-side problems as well as effective resolution of grievances. In this regard, better dissemination of information about the GRS remains a challenge. For this and other 4Ps challenges, a good communication strategy is critical for the success and sustainability of the program. 117. For this reason, the 4Ps has an Advocacy and Social Marketing component, whose task is to bring about the appropriate flow of information about 4Ps, its development value, and the soundness of its design. Its objective is to bring about not only program awareness and knowledge but also the right attitude and behavior of the beneficiaries, the providers, civic leaders and politicians, and the general public. Specifically, the Advocacy and Social Marketing unit will work to

(i) Build up trust in and acceptance of the selection process by facilitating community-wide awareness of its fairness and soundness;

(ii) Strengthen commitment of partner agencies from the central to the municipal level in actively supporting 4Ps and participating in the delivery of health and education services as part of their overall mandate;

(iii) Create understanding among all government partners as to the roles and responsibilities of each agency;

57 Project completion report format is available at: http://www.adb.org/Consulting/consultants-toolkits/PCR-Public-

Sector-Landscape.rar

50

(iv) Develop understanding among household beneficiaries as to the grant conditions, their responsibilities and the consequences of non-compliance;

(v) Identify local mechanisms and/or community champions to promote compliance with the program conditionalities; and

(vi) Ensure that all stakeholders are aware of the Grievance Redress System and the various means by which they can lodge a complaint.

51

X. ANTICORRUPTION POLICY

118. ADB reserves the right to investigate, directly or through its agents, any violations of the Anticorruption Policy relating to the Project.58 All contracts financed by ADB shall include provisions specifying the right of ADB to audit and examine the records and accounts of the executing agency and all Project contractors, suppliers, consultants and other service providers. Individuals/entities on ADB’s anticorruption debarment list are ineligible to participate in ADB-financed activity and may not be awarded any contracts under the Project.59 To support these efforts, relevant provisions are included in the loan agreement and the bidding documents for the Project. 119. Overall country risk of corruption is considered significant. There is limited public accountability; lacks effective sanctions; and political interference is widespread. Consequently, several assessments and discussions has been undertaken with the Government and other stakeholders to identify the vulnerabilities of 4Ps to corruption and to ensure that the program has robust systems for corruption prevention and that they are aware of the anti-corruption challenges facing 4Ps. 120. Country Overview. According to the latest World Bank's Governance Matters report60 the Philippines is the worst ranked country in the region on the 'control of corruption' indicator. This is despite the existence of a comprehensive legal framework for anticorruption which emanates from Article III of the 1987 Philippine constitution. Several anticorruption laws are in effect, the latest being Republic Act No. 9485, known as the Anti-Red Tape Law approved in 2007. The law seeks to improve efficiency in the delivery of government service to the public by reducing bureaucratic red tape, preventing graft and corruption, and providing penalties. The United Nations Convention against Corruption was ratified by the Senate in 2006. It seeks to promote and strengthen measures to prevent and combat corruption more efficiently and effectively; promote, facilitate and support international cooperation and technical assistance in the prevention of and fight against corruption. Public officers or employees appointed to their positions by the President may be subject to disciplinary proceedings by their agency, the Office of the Ombudsman (OMB), and the Presidential Anti-Graft Commission (PAGC). The overlapping authorities impact negatively on transparency and accountability. Parallel investigations may result in different findings, casting doubt on the credibility of each agency’s findings and make it difficult for the public to determine where a complaint or grievance against public officials can, or should be filed.61 121. The Public Expenditure and Financial Accountability (PEFA) report62 identifies weaknesses in the Philippine PFM system, specifically on budget execution and financial management reporting. The system is fragmented and responsibility is shared among different oversight agencies. Addressing them will require concerted efforts of several agencies, including independent constitutional bodies such as the Commission on Audit (COA) and executive agencies such as the Department of Budget and Management (DBM) and the Department of Finance (DOF). The report also highlights that certain features of the Philippine PFM system are at odds with the international standards behind the PEFA framework, such as

58 Available at: http://www.adb.org/Documents/Policies/Anticorruption-Integrity/Policies-Strategies.pdf 59 ADB's Integrity Office web site is available at: http://www.adb.org/integrity/unit.asp. How to report fraud and

corruption available at: http://www.adb.org/Integrity/howto.asp 60 World Bank. 2009. Governance Matters VIII: Governance Indicators for 1996-2008. Washington. 61 For further reading: De Dios, Emmanuel. 2007. Governance, Institutions and Political Economy: Abridged Version.

Manila. Background document prepared for the ADB. 2007. Philippines. Critical Development Constraints. Manila. 62 World Bank. 2008. Public Expenditure and Financial Accountability. Manila.

52

the constitutionally assigned dual role of COA of being an independent, external audit body and an agency in charge of setting the Government's accounting standards and rules. 122. The following mitigating measures are being undertaken to address the above-mentioned country level risks: (i) strengthening of internal audit functions in all government agencies, including the DSWD; (ii) passage of the new procurement law and implementation rules and regulations; and (iii) standard bidding documents issued for mandatory use and Generic Procurement Manual approved and rolled out. 123. Department Level View. An Integrity Development Review (IDR) of DSWD was conducted in 2009 with technical assistance from AusAID and the World Bank. The IDR gave DSWD high scores, particularly in financial management. The report indicated that overall the Department has several control mechanisms in place to minimize corruption risks and that a majority of agency employees are aware of the appropriate procedures/relevant laws and follow good governance practices. Department senior management is well regarded by staff as providing strong leadership to build integrity systems. DSWD has a good reputation as an anti-corruption champion. The Social Weather Station survey rates DSWD as one of the cleanest agencies in the Government. Moreover, it has consistently topped the list of “clean agencies” under the Presidential Commission Against Graft and Corruption. 124. However, the IDR has identified gaps in control mechanisms, policies and procedures, and negative staff perceptions in a number of key areas, which the agency needs to address to improve governance, mitigate risks, and minimize the risk of corruption. Areas that need to be addressed include: (i) adherence to budgeting, accounting and auditing rules; (ii) weak institutional capacity at DSWD and local government level, including financial management; and (iii) internal audit unit not functioning in accordance with international standards. A risk management plan is included in Appendix 3. 125. DSWD has taken the following actions to mitigate department level risks. In regard to institutional capacity, the following are being done: (i) significant capacity building attached to 4Ps and supported by development partners; (ii) augmentation of FM staff through 4Ps to review each release of funds to beneficiaries; and (iii) a dedicated FM group established for the project with further increases in the number of staff during project implementation based on continuous assessment of capacity and work load. Regarding the internal audit weaknesses, these actions have been or are being taken: (i) vacancy of Operations Audit Head filled; (ii) DSWD currently implementing time-bound plan to address deficiencies reported by COA in its 2007 report; and (iii) through AusAID TA, independent reputable audit consultants are recruited to provide capacity building and oversight. 126. Program/Project Vulnerabilities. Conditional cash transfers are an innovative approach to social assistance and keep opportunities for corruption and leakages low, operations transparent and accountable, and program credibility high. Specific design features include: (i) beneficiary targeting based on explicit objective poverty-based criteria; (ii) use of cash transfers, which means few procurement activities; (iii) direct channeling of cash benefits to eligible beneficiaries via a bank; (iv) robust monitoring and audit systems, including rigorous spot checks and civil society monitoring; and (v) transparency and accountability through rule-based operations, a strong focus on public information campaigns and a grievance redress system. 127. Despite its strengths, there have been concerns about certain corruption vulnerability issues due to high country risk of corruption. It has been argued that if not effectively addressed,

53

these issues could undermine the ability of 4Ps to reach the target population and maintain program credibility, which is critical for sustained political and financial sustainability. Among these issues are: (i) leakage of benefits away from the deserving poor beneficiaries due to exclusion and inclusion errors arising from technical and data deficiencies of the targeting system, political capture and fraud such as failure of beneficiaries to report change of status that excludes them from 4Ps benefits; (ii) benefits payment despite non-compliance with grant conditions due to delays in the installation of a functioning compliance monitoring system, work overload of schools and health centers, and fraud in the completion of compliance forms; (iii) reduced program effectiveness due to institutional weaknesses arising from failure of DSWD, DOH, DepEd and LGUs to closely coordinate compliance monitoring and timely and adequate provision of health and education services; (iv) loss of program reputation/goodwill due financial management and fiduciary issues, including payment delays, substantial expenses by beneficiaries in remote areas to get their cash transfers, inadequate audit and accounting procedures, misappropriation of funds, and cash card fraud; (v) insufficient DSWD capacity for rapid scaling up of 4Ps; and (vi) weaknesses in the grievance redress processes. 128. Field visits and discussions with stakeholders at all levels reveal that while there have been attempts by politicians to influence the selection of areas and households, the DSWD has maintained and defended the use of a rule-based and objective criteria/process for the selection of beneficiaries. Furthermore, although there have been complaints of delayed payments, reports of corruption have been rare; when they occurred, they were investigated and resolved. Regarding implementation capacity, additional staff is being hired and training activities strengthened at all levels and for various aspects of the program. The installation of computer-based systems has been speeded up without sacrificing their quality through technical assistance (TA). Additional TA is proposed to ensure effective data collection and inputting is also enhanced. All these measures combined are expected to improve project execution, M&E, enforcement of grant conditions, and strengthen the grievance redress system (GRS). The GRS is continuously being strengthened not only through measures such the computerization of the GRS but also through additional and better trained staff. These will facilitate improved public information about the GRS and the tracking and follow-up of complaints and their resolution. Further on the financial management, separate book of accounts for the project, annual audits and bi-annual spot-checks will be done for 4Ps. In regard to the issue of misappropriation of funds and cash card fraud, verification procedures prior to issuance of IDs and cash cards are in place and operational. Finally, DSWD has signed MOAs with DepEd, DOH and participating LGUs to strengthen inter-agency coordination and to ensure that timely and adequate education and health services are provided to 4Ps beneficiaries.

54

XI. ACCOUNTABILITY MECHANISM

129. People who are, or may in the future be, adversely affected by the project may address complaints to ADB, or request the review of ADB's compliance under the Accountability Mechanism.63

63 For further information see: http://compliance.adb.org/.

55

XII. RECORD OF PAM CHANGES

Appendix 1 56

THE COMPLIANCE VERIFICATION PROCESS 1. Objective. The 4Ps has established a process for verifying, recording and linking (to grant payments) non-compliance by beneficiaries with the conditions of the education and health grants. The following describes the 4Ps Compliance Verification (CV) process. 2. The Six Steps. The Compliance Verification System (CVS) is a six-step cyclical process that cuts through all levels (National (PMO), Regional (RPMO), and Municipality/City), involving the following steps:

(i) Generation of Compliance Verification (CV) Forms. The NPMO/MIS generates the CV Forms (see below) based on the database of beneficiaries and makes them available over the internet to RPMOs and cities/municipalities. The NPMO then sends a soft copy (in PDF format) to the RPMOs within 15 days of the first month in the reporting quarter.

(ii) Distribution to the health centers or units and schools and day-care centers (by the RPMO). The CV forms are printed by the RPMOs and sent to the cities and municipalities within seven (7) days from receipt of soft copies. [Note: in a fully developed computerized system, the RPMOs is able to access the main database and verification module online and download forms over a wide area network with the NPMO.] The city/municipal links will distribute the printed forms to the health centers and schools in their respective areas in the last week of the first month of the reporting quarter.

(iii) Monitoring of non-compliance by beneficiaries. The school principal and health center officer act as focal persons on education and health, respectively, for the monthly monitoring and recording of non-compliance incidences on the corresponding CV Forms (see below). The focal persons must submit accomplished CV Forms to the city/municipal link with 15 days of the month immediately after the reported quarter.

(iv) Collection of non-compliance reports. The municipal/city link collects the accomplished CV Forms from the health centers/units and schools/day-care centers within 15 days of the month immediately after the reported quarter. The link collects CV Forms 2, 3 and 4 (see below). The city/municipal link then encodes the non-compliance reports into the CVS program developed by the NPMO/MIS, and forwards both the electronic and hard copies to the RPMO. [Note: in a fully developed computerized system,, municipalities and cities with internet facilities can access the database online to process the forms directly. Those without have the option of processing the database off-line, and sending the forms to the RPMO for processing online.]

(v) Processing of payments based on compliance. The RPMOs reviews the non-compliance data and submits it to the NPMO/MIS to serve as the basis for preparing the payroll for that quarter. This is accomplished by the end of the month immediately following the reporting quarter. The RPMOs, upon receipt of the CV Forms from municipalities that are off-line, will input non-attendance records into the program for the reporting period. Payments shall be made by the middle of the second month after the report quarter.

(vi) Updating of the data base prior to the generation of CV Forms for the next reporting quarter. See below.

3. CV Forms. The content of the various forms to be accomplished for compliance verification and updating of the database is as follows:

Appendix 1

57

(i) Form 1-Master List of Beneficiaries. This is the roster of the current

beneficiaries of the program. This form, which is continuously being updated as needed, serves as the master list of beneficiaries and is generated by the NPMO. A master list is printed out per barangay and distributed to the city/municipal link by the RPMO.

(ii) Form 2-Verification of Compliance for Education. This form provides the household ID numbers and names of the children aged 0-5 and 6-14 who are beneficiaries of the educational grant. It reports incidences of non-compliance with the required 85% school attendance rate and the administration of de-worming pills to children 6-14 years old. The form will be filled out by the school head or focal person on education.

(iii) Form 3-Verification of Compliance for Health. This provides the household ID numbers, names of pregnant women, names of children 0-5 years old, records of non-compliance with the conditionalities on health, and any history of miscarriage. The form is filled out by the health midwife.

(iv) Form 4-Family Development Session. Form 4 provides verification of the attendance of household grantees in family development sessions. It indicates the household ID number of the beneficiaries and the names of the health grantees not in compliance with the health grant requirements. The primary user of the form is the city/municipal link or the LGU link with the assistance of parent/mother leaders.

Appendix 2 58

THE UPDATE SYSTEM PROCESS

1. Updating the 4Ps data base is an important component of program implementation. The primary purpose of the System on Update is to gather, validate, report and record the changes that have occurred on the status or condition of any member of the beneficiary household while under the program. 2. It helps to monitor the amount of cash grant that was originally given to a beneficiary household based on certain criteria exacted during the household survey, followed by the proxy means test which the potential beneficiaries have hurdled. 3. The update also determines the amount of money the beneficiary household will receive from time to time and serves as one of the basis whether to continue, suspend or terminate the grant. 4. The continuity of the cash grant is dependent on two dimensions as follows:

(i) How the beneficiaries abide by the conditionalities as would be monitored through the Compliance and Verification System (CVS).

(ii) The change/s on the status/condition of each beneficiary household which would

be reflected in the Update Report. A. Types of Updates 5. All updates must be accompanied by the appropriate supporting documents. The information and documents provided by the household grantee must be true and genuine. Any false declaration and/or documentation submitted in support of an update will be sufficient ground for the removal of the update and/or suspension of the grant. 6. Beneficiary households must report any and all changes in the status and/or household composition resulting from a number of different circumstances as follows:

Type of Update Short Description Supporting Documents

(Most Recent)

1. Newborn Baby

Mother was pregnant at the time of assessment, and has since given birth.

Birth Certificate (National Statistics Office)

2. Change of Address

The household moves to another residence within the barangay.

Certification from Barangay Captain

3. Change of Barangay/City/Municipality

The household moves to another barangay/city/municipality within the area of program coverage.

Certification from previous Parent leaders and Municipal Link Certification from receiving barangay captain

Appendix 2

59

Type of Update Short Description Supporting Documents

(Most Recent)

4. Change of Servicing Health Unit (Health Center, Rural Health Unit, or Barangay Health Station)

The household decides to go to a different health unit or station

Enrollment Certificate from the new health center/unit or station signed by the MHO

5. Change of School

The household decides to send their child/children to other school/s

Proof of Enrollment from receiving school signed by the principal or head teacher

6. New Enrollment

The household decides to enroll a child aged 6-14 years old as new student

Proof of Enrollment from receiving school signed by the principal or head teacher

7. Change of Beneficiary/ Household Grantee

The household decides to change their grantee due to her demise, long absence from home, poor health, advanced age, etc.

Certification or Letter of Authorization from Parent Leader and Barangay Captain, and/or other relevant documents

8. Death of a Household Member

The death of a beneficiary, whether a pregnant woman or child aged 0-14 years old

Death Certificate

9. Departure or Return of Children

Legitimate children aged 0-14 years old of a household grantee either leave or join the household

Birth Certificate; Certificate of Enrollment (if aged 6-14 years old); Certification of Enrollment at Health Center (if aged 0-5 years old)

10. Correction of Basic Information, i.e., Name, Sex, Date of Birth, etc.

Typographical errors in the names, sex, date of birth, etc.

Birth Certificate (National Statistics Office)

11. Qualified Beneficiary Excluded from CVS Form for Health and/or Education

The names of children aged 0-14 old are not in the compliance forms distributed to health centers and/or schools

Certificates of Enrollment from the health center and/or school signed by Department Head or School Principal

C. How the Update System Works

7. The updates system works with the participation of household grantees themselves, parent leaders, city/municipal links, the program staff, and through the use of computer program that was developed for this purpose. 8. To facilitate the update system, the following people shall be involved with specific responsibilities:

Appendix 2 60

Person/s Responsible

Main Responsibilities

(See Presentation of Updates)

Turn-Around Time After Presentation

(In Number of Working Days)

1. Household Grantee (HG)

• Report any change in circumstances as applicable in the

types of updates • Fills out Form 5 with the assistance of Parent Leader • Keeps log sheets signed by City/Municipal Link after

transaction

Two (2)

2. Parent Leader (PL)

• Helps HG fill out Form 5 • Verifies information and documents submitted • Signs Form 5 and Log Sheet (LS)

Two (2)

3. Municipal Link (ML)

• Receives updates, reviews supporting documentation,

and if complete, signs the Log Sheet (LS) • If database is accessible online at the municipal level,

enters update and generates a tracking number

• If database is not accessible online, sends all documents to RPMO for processing

Five (5)

4. Regional Focal Person (RFP)

• Receives and reviews updates and their supporting

documentation and makes recommendations to the NPMO

• Enters any update/s into database not done at the

municipal level and obtains its tracking number

Five (5)

5. NPMO Focal Person on Updates (FPU)

• Reviews proposed updates and recommendations by

RFP, and cross-checks them against the database and other available information

• Endorses updates to the Project Manager for

recommendation to MIS

Five (5)

6. NPMO Project Manager (PM)

• Decides if update/s is/are acceptable or not • Makes the appropriate recommendations to MIS

Three (3)

7. NPMO Management Information System (NPMO/MIS)

• Records approved updates into the system • Updates that influence payments will be reflected in the

payroll

Three (3)

8. NPMO Focal Person (FPU)

• Instructs RFPs and MLs to transmit decision to HGs and

PLs • If an HG does not agree with the decision, he or she can

appeal it through the Grievance Redress System (GRS)

Two (2) Following a Decision by the PMO Manager

Appendix 2

61

C. The Updating Process

1. Sources/Availability of Update Forms

9. An e-copy of Update Form 5 and the Log Sheet will be sent to all 4Ps areas together with other CVS Forms printing at the RPMOs. Update Form 5 and Log Sheets should always be available at the city/municipal link’s office for parent leaders and/or household grantees.

2. Gathering, Reporting, and Recording an Update

10. Updates shall be reported by the household grantee to the parent leader during the regular group meetings of beneficiaries, held twice-monthly. This will be done under the supervision of the city/municipal link.

11. The household grantees are expected to fill out the Form 5 personally. They may be assisted by the parent leader should they have difficulty reading and writing on their own. In the event that they are unable to do it completely, they will be interviewed by the parent leader who will fill out their forms on their behalf. 12. Updates that require supporting documentation must be submitted with proper attachments as basis for updating the database.

13. After all information has been provided, the household grantee and parent leader should sign on top of their printed names on the spaces provided (on the lower half of the form) as a proof of that to the best of their knowledge, all information is accurate and all supporting documentation, complete. 14. The completed form (with all supporting documentation) will then be submitted to the city/municipal link, and correspondingly the C/ML will be required to fill out and sign the Log Sheet (LS) as proof that the updates were received. The LS will serve as a record of the transaction, and will be given to the household grantee to refer to when following up with 4Ps personnel.

4. Monitoring and Updating the Family Roster

15. Only the first reported pregnancy (i.e. reported during registration) shall be monitored for compliance. Subsequent pregnancies will no longer be covered by the grant and therefore, be excluded in the updating of the master list 16. Other than for the registration of a newborn baby, insertion of additional household member/s to the original roster or database is prohibited 17. For Education, all children aged 6-14 years old shall be monitored for compliance with the 85% school attendance rate. The education grant of PhP900.00 shall cover assistance to a maximum of three (3) aged 6-14 years old 18. Beneficiaries who transfer to other 4Ps municipality must be endorsed by the RPMO to the NPMO for updating. The NPMO shall then endorse the beneficiaries to the receiving RPMO and MCSWDO

Appendix 2 62

19. A child program beneficiary who exceeded the maximum number of absences allowed due to sickness, accident, or injury will be required to submit a medical certificate from the Municipal Health Office or school clinic 20. A child program beneficiary who missed classes for other reasons shall be subject to validation and assessment by the city/municipal link, to be decided on by the Provincial Grievance Committee.

5. Inter-Agency Collaboration and Other Related Policies

21. Policies involving collaboration with other agencies must first be concurred with by the NAC prior to their implementation.

22. Food for School Program. Children program beneficiaries will no longer be eligible for the rice subsidy under the Food for School Program, However, they may still avail of the center-based supplemental feeding

23. Family Access Card. Program beneficiaries in areas where there are Tindahan Natin Outlet (TNO) may avail of Family Access Cards

Appendix 3 63

RISK ASSESSMENT AND RISK MANAGEMENT PLAN1 1. Overall, country risk of corruption is considered significant. Limited financial management capacity, slow procurement reforms, and weaknesses in the sanctions and redress systems are key issues that require robust systems for corruption prevention and redress. 2. A recent integrity development review2 of the Department of Social Welfare and Development (DSWD) showed that DSWD has several control mechanisms in place to minimize corruption risks and that a majority of agency employees are aware of appropriate procedures and relevant laws, and follow good governance practices. Senior management is well regarded by staff as providing strong leadership to build integrity systems. Significant progress has been made in addressing gaps in accounting and auditing. However, the review identifies gaps in control mechanisms, policies, and procedures, which the agency needs to address to improve governance, mitigate risks, and minimize corruption, including improving risk assessment and mitigation measures; and addressing corruption risk management through partnership with anticorruption nongovernment organizations. 3. A project governance and risk assessment undertaken during project preparation indicates two types of vulnerabilities for the proposed Social Protection Support Project: (i) macro risks; and (ii) project risks common to conditional cash transfer programs. Macro or country risks identified are (i) sustainability and ownership concerns related to change in political leadership due to the 2010 elections; (ii) a deteriorating revenue position of the government; and (iii) weaknesses in the supply side of health and education provision. Project risks include (i) targeting and selection risks, given the large scope of close to 1 million beneficiaries; (ii) payment and transfer risks given the high volume of financial transactions; and (iii) implementation capacity risks typical for projects with multiple national and subnational government participants and numerous project locations in remote and inaccessible areas. Targeting risks include manipulation of the household master list, political interference in beneficiary selection, and errors in selection of beneficiaries. Payment risks include fiduciary issues of misallocation or loss of grant resources through falsification of identification cards or unauthorized withholding of identification cards and cash cards. Capacity risks pertain to insufficient capacity to cope with increased workload and transactions, ineffective procedures and systems for financial monitoring, incapacity or failure to validate identities, ineffective compliance verifications systems, or manipulation of conditionality compliance monitoring. 4. Several measures and mechanisms are in place to counter and mitigate these risks, including the consistently good reputation3 of DSWD as an anticorruption champion; inclusion of the program in the government's medium-term expenditure program; the very small amount of procurement in the project; and inclusion of several strong anticorruption mitigation measures in the project design, including: (i) an interagency governance structure ranging from national to municipal levels to coordinate supply-side and compliance monitoring; (ii) beneficiary targeting 1 This analysis is in accordance with the Asian Development Bank (ADB) Governance and Anticorruption Action

Plan II and draws on a review of available governance risk assessments of ADB and the World Bank, including ADB's country procurement and public financial management risk assessment, the road sector risk assessment, the 2009 Governance and Anticorruption Action Plan for the Social Welfare and Development Reform Program, and the 2009 integrity development review of DSWD (with Australian Agency for International Development financing). Further stakeholder consultations with project implementers and beneficiaries, as well as partner agencies and local officials informed the preparation of the assessment and the management plan.

2 Financed by the Australian Agency for International Development and conducted in 2009. 3 DSWD is considered one of the cleanest agencies in the government in surveys conducted by the Social Weather

Station and has consistently topped the list of "clean agencies" under the Presidential Commission Against Graft and Corruption.

64 Appendix 3

based on objective, poverty-based criteria that mitigate against intervention and manipulation; (iii) channeling payments directly to beneficiaries; (iv) robust monitoring and audit systems, including rigorous spot checks and civil society oversight and monitoring; and (v) transparency and accountability through a strong focus on public information campaigns and a grievance redress system. 5. DSWD has a well-functioning financial management regime, with sufficient controls and systems for budget execution, monitoring, and accounting. The integrity development review positively assessed the agency’s financial controls. In addition, the design features of the project militate against many of the risks. These are included in the risk assessment and risk management plan.

Risk Assessment and Risk Management Plan

Risks

Assessment without

Mitigation Management Plan Assessment

with MitigationCountry Political and financial support for the 4Ps and social protection reform not maintained

medium Revised medium-term expenditure plan and multiyear financing plan prepared for the program; 5-year commitment given to program beneficiaries; program features in economic agenda and platform of the new President.

medium

Insufficient financing due to small fiscal space

medium Total program cost only 0.2% of GDP; policy advisory TA will help rationalize and focus social protection programs to minimize wastage and ensure allocative efficiency.

low

Poor quality and inadequate supply of services

medium Supply assessments undertaken prior to project implementation in all target areas; national to municipal governance structures coordinate supply-side and compliance monitoring; MOU between DSWD and local governments.

low

Program Political interference high Strong public information campaign and orientation sessions to

build support for targeting system; prohibition of collection of fees by LGUs; sanctions for abuse clearly identified; monitoring and spot checks; grievance redress system.

medium

Lack of institutional clarity between agencies

medium National joint memorandum circular; MOU between DSWD and LGUs; multiagency advisory committees at all levels; partners' handbook describing the roles of all partners; regional focal persons and municipal links oversee the program locally.

low

Delays or corruption in procurement

medium Minimal packages for procurement; only at central and regional levels; tracked through electronic procurement tracking system; ADB prior review.

low

Low financial management capacity; inadequate audit and accounting policies and procedures

medium Training and deployment of additional financial management staff and roving bookkeepers; semiannual audits (covenanted); spot checks; separate books of accounts for the project required; capacity building of internal audit service through AusAID TA; submission of quarterly financial reports.

low

Interference in selection of target areas

high Clear criteria for selection established; project areas selected on the basis of poverty ranking of the national statistics agency; all target areas selected prior to the election period to avoid political interference; need to update small area estimates and ensure objectivity of the selection of pockets of poverty.

medium

Errors or interference in the selection of beneficiary households

medium Target households selected through objective poverty criteria; proxy means test verified and processed in a central databank that issues a centrally generated list of beneficiaries and payroll; public validation of beneficiaries; grievance redress system; close supervision of surveyors and enumerators; cross-checking and regular updating of databases; monitoring and spot-checks; nondisclosure of proxy means test model variables

low

Appendix 3 65

Risks

Assessment without

Mitigation Management Plan Assessment

with MitigationErrors in compliance verification

high Simple forms established; significant TA for compliance verification system and MIS; well-staffed national and regional MIS units; increased staffing in high population LGUs; monitoring and spot-checks; project will finance only the education portion of grant until the compliance verification system is operating.

medium

Misappropriation of funds and cash card fraud

medium Payments channeled directly to beneficiaries; higher staff to beneficiary ratio in highly populated areas to support monitoring and handle complaints; verification procedures prior to issuance of identification and cash cards; spot checks; monitoring of reports of lost or stolen cash cards; support on how to use ATM and discourage use of intermediaries; grievance redress system; semiannual audits.

low

Payment windows geographically inaccessible or result in additional expenditure for target households

medium Discussions with Land Bank and rural banks will be continuously undertaken to increase number of outlets and ATMs for beneficiary use; collaboration with NGOs and LGUs on transport assistance.

medium

Limited transparency, accountability, and public oversight of the program

medium Communication policy operating; monitoring and advisory committee at all levels; spot checks by independent parties; grievance redress system; social accountability through parent meetings and community assemblies.

low

Capacity of DSWD insufficient for the scaling up

medium Additional national and field staff and cluster supervision arrangements supported by the project; integrity check of all new staff; training curriculum for staff and beneficiaries undergoing review for strengthening; dedicated management (including financial management) group established for the project; memorandum of agreement between DSWD and LGUs will be refined to ensure timely and adequate support from municipal staff; capacity development TA to address key gaps.

low

Weak and ineffective grievance redress processes

medium Additional personnel and TA (including training and information materials) for grievance redress will be provided.

low

Overall risk category high medium

4Ps = Pantawid Pamilyang Pilipino Program (Building Bridges for the Filipino Family Program), ADB = Asian Development Bank, ATM = automated teller machine, AusAID = Australian Agency for International Development, DSWD = Department of Social Welfare and Development, LGU = local government unit, MIS = management information system, MOU = memorandum of understanding, NGO = nongovernment organization, TA = technical assistance. Source: Asian Development Bank.

Appendix 4 66

LIST OF USEFUL LINKS

1. Procurement Guidelines http://www.adb.org/Documents/Guidelines/Procurement/default.asp

2. Consulting Services Recruitment Notice

http://csrn.adb.org

http://csrn.adb.org:8080/csrn/login.jsp

3. Guidelines on Use of Consultants by ADB and Its Borrowers

http://www.adb.org/Documents/Guidelines/Consulting/default.asp

4. Templates for engagement of consultants: (including submission templates)

http://www.adb.org/Consulting/loan-rfp.asp

5. Harmonized RFP (Loans) http://www.adb.org/Consulting/all-methods-loan.asp

6. Sample Individual consultant contract

http://www.adb.org/Consulting/ICS-Contract-Loan.pdf

7. Consulting Services Operations Manual

http://www.adb.org/Documents/Manuals/Consulting-Services-Operations-Manual/CSOM.pdf

8. Toolkits and Templates for Consultants:

http://www.adb.org/Consulting/toolkit-template.asp

9. Guide on Bid Evaluation www.adb.org/Procurement/guide-bid-apr06.pdf

10. Procurement Plans http://www.adb.org/Projects/reports.asp?key=reps&val=PP

11. PhilGEPS http://www.philgeps.net/

12. Project Administration Instructions http://www.adb.org/Documents/Manuals/PAI/default.asp

13. E-Handbook on Project Implementation

http://www.adb.org/Documents/handbooks/project-implementation/default.asp?p=proj

14. Anticorruption and Integrity http://www.adb.org/Integrity/default.asp

15. How to report fraud and corruption

http://www.adb.org/Integrity/howto.asp