1. Philippines Second Social Expenditure Management Project Textbook Component Good News on the Procurement of Textbooks

2. Key Policy Changes Introduced in textbook procurement, 2000-2003 More public biddings made more competitive and transparent through the introduction of International Competitive Bidding (ICB). International procurement practices were the basis for the new Procurement Reform Act (RA 9184). Strengthened Procurement System broadly aligned and harmonized with ODA partners. Result: Leveled playing field, more bidders participate The World Bank supported all these reforms and we continue to do so through projects, policy dialogue, and grants.

3. Cheaper by at least 50% (i.e., from an average of P90- 100 to P40 per book) from SEMP-1 in 2000 As a result, significant savings of at least P2.63 billion or approximately $52.5 million Better content (implementation of rigorous 4-level content evaluation procedure by different specialists) Positive Impact of Procurement Reforms for textbooks = Before 1999 = In 2000-2006

4. Better quality of printing, more durable binding, thicker paper (from 54 gsm to 70 gsm), longer book life (from just 2 years before 1999 to 4-5 years now); testing done by Industrial Technology Development Institute of DOST Significantly reduced duration of textbook procurement from bid opening to award (from 24 mos. before SEMP down to 2-3 months) Positive Impact of Procurement Reforms for textbooks

5. Greater transparency through strong engagement of civil society groups in textbook procurement, delivery and inspection (36 CSOs) Mainstreaming of procurement reforms in DepEd, making it possible to have more efficient use of government funds to meet the needs of schoolchildren Positive Impact of Procurement Reforms for textbooks

6. Who have benefited from Procurement Reforms 1999-2006 1 textbook = P40 average 1 child = 1 textbook (for English, Math, Filipino, Science) 1 textbook = P90-100 average 5 children = 1 textbook Before 1999

7. The Procurement Process: Role of Government & The World Bank Procurement arrangements are discussed and agreed between the Government and the WB and are specified in the Loan Agreement. The Government is responsible for implementation, including all procurement (bidding, evaluation, and award of contracts) in projects financed by WB loans. WBs fiduciary responsibility is to review implementation, including procurement to ensure that funds are used for the intended purpose and that the agreed procurement procedures are strictly followed. In carrying out this responsibility, the WB reviews certain procurement decisions which the Government makes and provides a no objection. In doing this, it is obliged to act with complete impartiality.

8. For large and complex textbook procurement: Tenders are conducted under International Competitive Bidding, so the WBs Procurement Guidelines apply. A number of WB sector specialists, senior procurement specialists, legal department, under the oversight of WB management review and formulate the advice and responses to the Government; hence any advice or letter issued by WB is an institutional advice to government. Checks and balances are built into the WB procurement advice to Government to ensure that the advice is consistent, and that procurement guidelines are strictly followed. The final selection decision is made by the responsible Government entity.

9. Role of a bidder Study the bidding documents carefully as it provides the rules to be followed. During the clarification/bid preparation process, critically review the bidding document and send written comments to the agency for any ambiguity, omission or internal contradictions or conditions that are unclear, discriminatory or restrictive. After bid submission and opening, bidders are free to send copies of their communication on issues and questions to the agency and/or to the Bank directly. After notification of award, a losing bidder may request for debriefing from the agency. If he is not satisfied with the explanation of the agency, he may seek a meeting with the Bank but only his bid will be discussed and not the bids of competitors.

10. Allegations/Complaints Regarding 2006 Bidding While competition is good, it is not uncommon to receive complaints from losing bidders. WB reviewed the recent award of Social Studies textbook contracts and according to all information available to the WB, these awards were made in accordance with the applicable guidelines for procurement under World Bank financing and with the provisions of the legal agreement for the SEMP-2 Project, signed between the Philippines and the World Bank.

11. Basic Information Total SEMP-2 Project Cost:$115 Million World Bank Financing:$100 million Project Start:September 2002 Project Closing Date:December 31, 2006 Executing Agency:Department of Budget and Management Implementing Agencies: Department of Education Department of Health Department of Social Welfare & Development Department of Public Works & Highways Project Objectives:Provision of quality inputs to social services (education, health and social welfare) and enhancing performance and governance through systems improvement and reforms (procurement, financial management and information technology reforms)

12. Project Components A.Strengthening Key Budgetary Programs Schoolbuilding Program Repair and Maintenance of Schoolbuildings Textbooks Purchase of Vaccines Implementation of Comprehensive and Integrated Delivery of Social Services Program B.Systems Improvement and Reform Financial Management Procurement Management Information Systems and Information Technology Improvement Human Resources Management Improvement (Teacher Deployment) Strengthening of the Bureau of Food and Drugs C.Transparency and Accountability Mechanisms

13. Breakdown of Loan Proceeds Civil Works (Schoolbuildings)$ 9.45 million Goods$ 79.42 million Textbooks* TB Vaccines EPI Vaccines Rabies Vaccines School Repair and Maintenance$ 2.94 million CIDSS$ 4.15 million Operating Cost$ 3.04 million Fee$ 1.00 million TOTAL$ 100.00 million *As of October 2006, $32M has been disbursed for textbooks out of $40M allocation