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1 Public Disclosure Authorized Document of The World Bank FOR OFFICIAL USE ONLY Report No: RES25306 Public Disclosure Authorized Public Disclosure Authorized RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF COMMUNITY ENTERPRISE DEVELOPMENT AS PATHWAY OUT OF POVERTY PROJECT GRANT September 24, 2012 TO THE REPUBLIC OF THE PHILIPPINES November 20, 2016 Public Disclosure Authorized Social, Urban, Rural and Resilience Global Practice EAST ASIA AND PACIFIC REGION This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

2 ABBREVIATIONS AND ACRONYMS CDED DSWD JSDF KC-NCDDP MCS PMO Community-Driven Enterprise Development Department of Social Welfare and Development Japan Social Development Fund Kapit-Bisig Laban sa Kahirapan - Comprehensive and Integrated Delivery of Social Services - National Community-Driven Development Program Market Chain Study Project Management Office Regional Vice President: Country Director: Senior Global Practice Director: Practice Manager/Manager: Task Team Leader: Victoria Kwakwa Mara K. Warwick Ede Jorge Ijjasz-Vasquez Bassam Ramadan Roberto B. Tordecilla 2

3 COUNTRY Community Enterprise Development as Pathway Out of Poverty (P132246) CONTENTS A. SUMMARY 5 B. PROJECT STATUS 5 C. PROPOSED CHANGES 6 ANNEX 1: RESULTS FRAMEWORK AND MONITORING 8 3

4 DATA SHEET Philippines Community Enterprise Development as Pathway Out of Poverty (P132246) EAST ASIA AND PACIFIC Social, Urban, Rural and Resilience Global Practice Report No: RES25306 Basic Information Project ID: P Lending Instrument: Specific Investment Loan Regional Vice President: Victoria Kwakwa Original EA Category: Not Required (C) Country Director: Mara K. Warwick Current EA Category: Not Required (C) Senior Global Practice Director: Practice Manager/Manager: Team Leader(s): Ede Jorge Ijjasz-Vasquez Original Approval Date: 24-Sep-2012 Bassam Ramadan Current Closing Date: 21-Nov-2016 Roberto B. Tordecilla Borrower: Responsible Agency: Department of Finance Department of Social Welfare and Development Restructuring Type Decision Authority: CD Decision Restructuring Level: Level 2 Financing ( as of 11-Oct-2016 ) Key Dates Project TF Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P TF Effective 24-Sep Nov Nov Nov Nov-2016 Disbursements (in Millions) Project TF Status Currency Original Revised Cancelle d Disburse d Undisbur sed % Disburse d P TF Effective USD Policy Waivers Does the project depart from the CPF in content or in other significant respects? Yes [ ] No [ X ] Does the project require any policy waiver(s)? Yes [ ] No [ X ] 4

5 A. Summary of Proposed Changes This restructuring proposes the following change: Extension of the original Grant Closing Date from November 21, 2016 to August 21, 2017 or a total of nine months to enable the Project to comply with the agreement to have the JSDF-CDED-funded facilities used by community beneficiaries for at least two cropping cycles and in the process improve development outcomes. Change in Implementing Agency Yes [ ] No [ X ] Change in Project's Development Objectives Yes [ ] No [ X ] Change in Results Framework Yes [ ] No [ X ] Change in Safeguard Policies Triggered Yes [ ] No [ X ] Change of EA category Yes [ ] No [ X ] Other Changes to Safeguards Yes [ ] No [ X ] Change in Legal Covenants Yes [ ] No [ X ] Change in Loan Closing Date(s) Yes [ X ] No [ ] Cancellations Proposed Yes [ ] No [ X ] Change to Financing Plan Yes [ ] No [ X ] Change in Disbursement Arrangements Yes [ ] No [ X ] Reallocation between Disbursement Categories Yes [ ] No [ X ] Change in Disbursement Estimates Yes [ X ] No [ ] Change to Components and Cost Yes [ ] No [ X ] Change in Institutional Arrangements Yes [ ] No [ X ] Change in Financial Management Yes [ ] No [ X ] Change in Procurement Yes [ ] No [ X ] Change in Implementation Schedule Yes [ X ] No [ ] Other Change(s) Yes [ ] No [ X ] B. Project Status Three months before project closing, the Project has so far been successful in building the capacity of the communities in identifying and developing enterprise development activities. Across the six pilot sites now are six vibrant community enterprise associations composed of 4,336 individuals (264 clusters) engaged in enterprises that they themselves have identified through a rigorous process of social preparation and capacity-building. These clusters have formed into one people s organization per municipality registered either in the Securities and Exchange Commission, Department of Labor and Employment or Cooperative Development Authority. The members have undergone training, coaching and learning-by-doing on various aspects of enterprise development like value chain analysis, product identification, business planning and operation, product scale up, procurement and financial management and other capacity building activities deemed necessary to have vibrant enterprise groups. To help improve outcomes and ensure compliance with World Bank policies, the groups have received training support from the KC- National CDD Program (KC-NCDDP) team on Procurement, Financial Management, Safeguards and Grievance Redress System. The concept of developing a system to consolidate produce to leverage a higher price has turned out to be promising and highly replicable. It responds to a core issue smaller 5

6 farmers face; achieving the economies of scale. The project develops a tailored market strategy for each municipality through an area specific Market Chain Study (MCS) and a series of test-marketing exercises. With this positive progress, the Project is rated as Moderately Satisfactory for both IP and DO in the last ISR. The Project faced operational challenges due to start-up and implementation delays of more than a year. Factors contributed to the delays include three months delay in the opening of Designated Account, seven months delays in the selection and approval of the pilot municipalities and one year delay in the signing of memorandums of agreement with pilot municipalities and the procurement of project specialists and municipal project management teams. Notwithstanding the delays, the six community enterprise associations are now in their final stage to complete the envisaged project cycle. For each pilot municipality, the community enterprise association has developed a common product that is linked to the market (institutional buyer) and supported by the local economic development program of the municipality. The community enterprise associations have developed proposals for scale up operations together with their proposed common service facilities that are envisaged to support their product consolidation. Efforts are underway to also improve project performance on beneficiaries access to microfinance. Through the Department of Finance, DSWD requested a project closing date extension of six months. The PMO provided a revised Project Implementation Plan. Based on the Task Team s assessment, the requested extension period will provide sufficient time, although tight, for the community enterprise associations to complete the full cycle of the project in their respective areas and in the process significantly contribute to the achievement of the project development objectives. The Task Team suggests to extend it to a total of nine months, or up to August 21, 2017, to provide space for possible contingencies in case some expected activities go beyond target completion dates. The DSWD JSDF-CDED team agrees with this suggestion with the understanding that they will still follow the six-month project implementation plan and that the additional three months will serve only as a buffer. C. Proposed Changes Project Development Objectives Original PDO Development Objectives/Results The Project aims to improve the livelihood and quality of life of poor households in the Target Municipalities through increased income and access to financial services, development of communitydriven enterprises linked to markets, and local economic development support. Change in Project's Development Objectives Change in Loan Closing Date(s) Explanation: Financing Extension of the original Grant Closing Date from November 21, 2016 to August 21, 2017 or a total of nine months to enable the Project to comply with the agreement to have the JSDF-CDED-funded facilities used by community beneficiaries for at least two cropping cycles and in the process improve development outcomes. TF TF Status Original Closing Date Current Closing Date Proposed Closing Date Previous Closing Date(s) Proposed Application Deadline Date Effective 21-Nov Nov Aug Nov Dec

7 Disbursement Estimates Change in Disbursement Estimates Explanation: Estimates changed reflecting actual disbursements up to 2015 and the estimates for the extension period. Fiscal Year Current (USD) Proposed (USD) , , ,536, , , , , ,077, , Change in Implementation Schedule Explanation: Total 2,929, ,929, Other Change(s) The JSDF-CDED PMO has submitted a revised Project Implementation Plan with an extension of six months or up to May 21, They target to complete the remaining activities within the six-month period with the understanding that the three more months suggested by the task team will only serve as a buffer. If need be, the Project Implementation Plan will be updated again later. Remaining activities range from knowledge sharing sessions like the Field Implementers Workshop and Stakeholders Forum to Business Planning and Operations for scale up activities like training on product development and other specialized training for the community enterprise associations. 7

8 Project Name: Team Leader(s) : Product Line: Community Enterprise Development as Pathway Out of Poverty (P132246) Roberto B. Tordecilla Recipient Executed Activities ANNEX 1: RESULTS FRAMEWORK AND MONITORING Requesting Unit: Responsible Unit: Country: Philippines Approval FY: 2013 Region: EAST ASIA AND PACIFIC Project Development Objectives Original Project Development Objective: Lending Instrument: Project Stage: Restructuring Status: DRAFT EACPF Created by: Roberto B. Tordecilla on 29-Sep-2016 GSU02 Modified by: Yolanda J. Azarcon on 16-Nov-2016 Specific Investment Loan The Project aims to improve the livelihood and quality of life of poor households in the Target Municipalities through increased income and access to financial services, development of community-driven enterprises linked to markets, and local economic development support. Results Core sector indicators are considered: Yes Project Development Objective Indicators Results reporting level: Project Level Indicator Name Core Unit of Measure Baseline Actual(Current) End Target Percentage Increase in access to financial services of poor household Percentage Value Date 21-Nov Oct Nov-2016

9 Number of products of community enterprise linked to an institutional market Local economic plan improved/ revised/ enhanced reflecting support to community enterprises Intermediate Results Indicators Number Value Date 21-Nov Sep Nov-2016 Number Value Date 21-Nov Sep Nov-2016 Indicator Name Core Unit of Measure Baseline Actual(Current) End Target Number of community enterprises provided with capacity building/start-up grants (per municipality) Number of partnership forged with MFIs for the provision of financial services to project participants Number of project participants (small producers ) trained on production consolidation to meet market requirements Business plans approved for financing by microfinance/lending Number Value Date 21-Nov Sep Jan-2015 Number Value Date 21-Nov Sep Dec-2015 Number Value Date 21-Nov Sep Jun-2015 Number Value Date 21-Nov Sep Jun-2015 Community members trained on financial literacy Number Value Date 21-Nov Sep Jan

10 Number and types of partnership forged with LED and CDED Stakeholders Number Value Date 21-Nov Sep Dec

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