Working in development is often difficult, as even the best-planned projects can have different outcomes than expected. In this IEG Project Lessons series, we take a close look back at the World Bank Group’s projects to assess what has worked, what didn’t, and why, to better inform future projects and investments.
This brief captures the lessons from evaluating a World Bank project implemented in the Philippines—the Social Welfare and Development Reform Project (SWDRP). The evaluation focused on the first SWDRP, which was approved by the World Bank’s Board of Executive Directors on November 2009 and closed on December 2015.
Background: a global financial crisis leaves vulnerability and poverty in its wake
After several years of sustained growth, the Philippines felt the negative impact of the 2008 global financial crisis. Growth was only 3.7 percent in 2008 and decreased further in 2009. As growth was slowing down, the Philippines was also experiencing high rates of poverty, which increased from 30 percent in 2003 to 32.9 percent in 2006 – an indication of a low response of poverty reduction to growth. Vulnerability to shocks was also high: between 2003 and 2009, 44 percent of the population was poor at least once—and of that 44 percent, two out of three households moved in and out of poverty. Progress toward the Millennium Development Goals was slow, particularly in health and education. Between 1990 and 2007 there was barely any improvement in the primary education net enrollment rate, drop-out rates, the percentage of children immunized against measles, prevalence of stunting, and maternal mortality rates.
The socioeconomic and political conditions were ripe for introducing a large, nationwide social protection program. Apart from the Kapit-Bisig Laban sa Kahirapan– Comprehensive and Integrated Delivery of Social Services, introduced in 2003 to alleviate rural poverty, there were no sizable social programs and the very few existing ones (such as the rice subsidy) were very poorly targeted. Recognizing the fragmentation of social programs and the inefficient targeting system, the Arroyo administration decided to pilot a conditional cash transfer (CCT). The CCT was to fit squarely in the political manifesto “Social Contract with the Filipinos,” whose goals of ensuring inclusive growth and equitable access to quality basic social services, especially for the poor and vulnerable, provided the perfect framework for the Social Welfare and Development Reform Project (SWDRP).
Read more about the background and context of the SWDRP.
About the Project
The Social Welfare and Development Reform Project had two objectives:
- Strengthen the effectiveness of the Department of Social Welfare and Development (DSWD) to efficiently implement the Pantawid Pamilyang Pilipino Program (the Conditional Cash Transfer program, known as Pantawid); and
- Strengthen the effectiveness of the DSWD to expand an efficient and functional National Household Targeting System of social protection programs. These objectives were very consistently articulated across project documents and were reiterated unchanged when the project received additional financing.
More about the project design, components, and objectives.
The overall outcome rating is highly satisfactory.
The relevance of objectives is rated high. The program was and remained fundamentally relevant to the country conditions, the strategic objectives of the country, and the World Bank Group’s country strategies. The CCT program and, more generally, the expansion of social protection programs under the leadership of the DSWD, were recognized by subsequent Philippines Development Plans as critical to mitigating the negative impacts of the 2008 global financial crisis and helping the country reduce vulnerabilities. The centrality of Pantawid as an antipoverty program was reiterated in the FY10–12 Country Assistance Strategy and the FY15–18 Country Partnership Framework.
The relevance of design is rated high. The project design reflects a well-articulated logic linking project activities to output and outcomes and was consistent with the development objectives. The project components were designed to complement each other in attaining the project development outcomes and combined the creation of a household targeting system and a CCT program that were conceived as the main pillars of a coherent national social protection program. The project was firmly rooted in technical advisory activities conducted over the period 2006–10 that allowed a better definition of critical design elements and it also benefited from the World Bank’s global expertise in CCTs. The project development objective indicators opportunely focused on the targeting accuracy and on assessing progress in school enrollment and attendance and in the use of health services. Though poverty reduction was important as a rationale, it was not included as an objective—which was a fair decision considering the difficulties in assigning attribution.
The achievement of objective 1– strengthening the capacity of the DSWD to implement the CCT—is rated high. The project was able to help the DSWD to rapidly scale up the CCT into the third largest in the world and operate a complex set of interdependent systems (management information systems (MIS), compliance verification, a grievance redress system, payment, quality control) to regularly reach out to the right beneficiaries. Pantawid succeeded in increasing school attendance and visits to health clinics, beyond the original and revised targets. The impact evaluations documented positive impacts on children receiving Vitamin A and iron supplementation, as well as antenatal care, and having postnatal checkups by skilled professionals. Quite encouragingly, no negative impacts were found on alcohol, cigarettes and gambling expenses, and adult employment, and no positive impact on fertility. Disappointingly, no statistically significant impact was found on household income and poverty reduction (this was not a formal project development objective).
The achievement of objective 2—to help the DSWD as a social protection agency to expand an efficient and functional poverty registry—is rated high. The DSWD developed a poverty registry (Listahanan), which at project closing was used by 25 nationwide social protection programs, including Pantawid. At the end of the project, all 5.2 million households identified as poor by Listahanan were receiving benefits from at least one social program (4.4 million from Pantawid). The updated Listahanan, which was funded by the project around the time of its closing, was regrettably not used to update the list of Pantawid beneficiaries, however. Overall, the SWDRP played a critical role in strengthening the DSWD’s capacity to assume a leadership role in social protection.
Efficiency is rated high. Listahanan was found to have a better targeting performance than previous targeting systems and has also relatively low inclusion and exclusion errors in comparison with other CCT programs. The use of the updated Listahanan (a third round is scheduled for this year) to improve targeting is critical to increase efficiency further.
Risk to development outcome is rated substantial. Although Pantawid was legally recognized this year, which provided much needed institutionalization, the program has been going through a stagnation phase and risks of not evolving rapidly enough to meet the Philippines' socioeconomic challenges. The updated Listahanan has not been used to revise the list of beneficiaries. The cash transfer conditions have not been revisited either, after the extension of the education grant to children 14 to 18 years old. The benefit amount has never been adjusted in more than 10 years and has lost value in real terms, raising questions about its adequacy in fighting poverty. The program did contribute to changing behaviors, but the poor achievements in maternal mortality, stunting, and learning outcomes call for an assessment of how Pantawid may be modified to address these problems.
Bank performance is rated satisfactory. The World Bank complemented the project with several technical assistance activities to establish the foundations of the project before it launched and to work on critical issues such as anticorruption. Technical assistance continued during the life of the project to help the government develop its Social Protection Framework. The World Bank regularly conducted supervision missions in strict coordination with other development partners (such as the Asian Development Bank and Australia Aid), including field missions in different parts of the country, which allowed gathering firsthand information on project implementation and performance.
Borrower performance is rated satisfactory. The government was highly committed to the project, engaged in a deep and productive collaboration with the World Bank, and placed high stakes in the results. While waiting for SWDRP to become effective, the government funded the piloting of Pantawid and the setup of Listahanan with its own budget and continued to invest an increasing amount of resources in rapidly scaling up the CCT. The DSWD successfully designed and implemented the CCT program, institutionalized partnerships with other government agencies (especially the Department of Health and the Department of Education) and the local government units, and established the MIS and other program systems. During the life of the project, the DSWD grew from a small department to the leading agency in social protection, with enough capacity to manage a massive poverty registry, the third largest CCT program in the world, and several other social programs.
Read more about the implementation and performance of the SWDRP.
Below are some of the main lessons related to implementing a large, nationwide social protection program:
- The success of a large, nationwide social protection program like Pantawid lies in creating and strengthening the operational and institutional systems needed to support it. SWDRP supported not only the CCT (as in funding the grants), but first and foremost also the creation of the poverty registry—a critical tool for targeting and providing credibility to the program—and the capacity of the government to manage and sustain such a large program. Thanks to its solid institutional base, Pantawid expanded much faster than originally anticipated— faster than any other country in the world—and became the third largest CCT in the world (behind those of Brazil and Mexico) in population coverage. The adoption of a systemic approach was one of the keys to the project’s success.
- Strong government ownership is critical to establishing and sustaining ambitious programs like Pantawid. Pantawid is a very good example of many elements coming together in a successful way: country conditions conducive to introducing a major social protection program, the World Bank’s solid expertise in establishing CCTs, and the government’s strong buy-in. This last element, in particular, ensured that a new targeting mechanism could replace the traditional patronage system and has protected the program from the initial general skepticism. The government commitment was also manifested in the amount of human and financial resources mobilized to strengthen its capacity to absorb the new program and manage it according to best practice. The recent institutionalization of the program, which was recognized by law, is an indication that the current administration continues to assign Pantawid a central position in the Philippines’ social protection system.
- The World Bank’s ability to bring global knowledge to bear and skillfully deploy a full technical engagement was key to success. Notwithstanding the $500 million loan provided by the SWDRP, the critical contribution by the World Bank was not really the financial part. The government eventually brought to the table 10 times the amount it borrowed. The key World Bank contribution was the technical assistance—the expertise, the training, the know-how—that was mobilized through the project and through trust-funded activities before and after the start of the project and turned out to be crucial for preparatory work, and continued technical support throughout implementation. The World Bank’s support was especially critical in designing and implementing Listahanan, the proxy means testing, and the conditionalities, and in carrying out the impact evaluations. Moreover, complementing the project with smaller technical assistance operations allowed for bringing in ad hoc expertise for very specific but critical technical issues (such as addressing corruption).
- Continuous monitoring and evaluation are essential to maintaining CCT programs like Pantawid and ensuring their constant evolution. A fundamental contribution of the World Bank was the creation of a highly sophisticated MIS and the introduction of an evaluation culture to support the program. The MIS regularly ensures that Pantawid beneficiaries receive the appropriate grant based on their degree of compliance with conditionalities; it is constantly updated to regulate complex interdependent processes. At the same time, evaluation of processes and results are needed to inform the government of the necessary changes to keep the program effective.
- The quality of education and health, not just service use, is critical to achieve the expected gains in human capital. Like all CCTs, Pantawid acts on the demand side. The project’s conditionalities, such as the family development sessions have been fundamental in bringing about behavioral change. The program was indeed quite effective in changing attitudes and behaviors— increasing school attendance and supporting regular visits to health clinics. It has not been as effective in affecting development outcomes such as learning, stunting, or maternal mortality. These outcomes, however, crucially depend also on the quality of services provided. Supply-side conditions need to operate in conjunction with incentives on the demand side (such as Pantawid conditionalities) to achieve gains in human capital.
- As for all CCTs, a graduation strategy is essential to ensure that the program delivers on longer-term benefits and acts as a stepping-stone into more stable livelihoods. Pantawid had no significant impact on household expenditure. To the extent that poverty is one of the root causes of school drop-outs the grant amount needs to be adjusted for the income effect to continue to operate. This adjustment needs to go hand in hand with efforts to reduce exclusion errors and ensure that the right beneficiaries are served by the program. Eventually, the program will need to address more forcefully the issue of program graduation, which is about equipping individuals with a new mind-set and skills that facilitate a transition into productive activities so individuals may hope for a better future for themselves and their children.