In March 2009, the Asian Development Bank (ADB) approved a loan of $50 million to the government-owned Development Bank of the Philippines (DBP) for the Credit for Better Health Project. The project was designed to help the country achieve its health-related Millennium Development Goals (MDGs) by leveraging private participation to increase investments toward these priorities and address the low and inefficient public expenditures in health.
The project’s anticipated impact was improved overall health status, especially in relation to reducing child mortality (MDG 4) and improving maternal health (MDG 5). Its intended outcome was increased use of basic health care and referral services generally by the poor and particularly by women and children in the project sites. Its planned outputs were (i) upgraded local government unit (LGU) health services, (ii) more efficient health delivery systems through public–private partnerships and innovative strategies, (iii) improved access to small-scale private providers, and (iv) enhanced capacity for health sector lending.
Aside from the loan, ADB also provided $1 million in technical assistance (TA) to support output 2 and a $400,000 grant from the Gender and Development Cooperation Fund to support output 3 with emphasis on supporting midwives wanting to establish their own birthing clinics. The DBP was to relend the ADB loan at market interest rates through retail and wholesale windows. Wholesale relending, originally allocated about $9.15 million, was targeted at DBP’s accredited financial intermediaries, including microfinance institutions, rural and thrift banks, cooperatives, and nongovernment organizations. Retail lending for collateralized subprojects from $100,000 to $5 million was meant for LGUs, larger private ventures such as health maintenance organizations and foundations, and eligible small-scale sub-borrowers.
The project targeted 96 subprojects nationwide through (i) retail loans to 72 LGUs under output 1 and 4 private sector providers under output 2, and (ii) wholesale loans to DBP-accredited financial intermediaries for onlending to 20 small-scale providers under output 3. By loan closing, no LGU used the credit facility under output 1; 7 subloans, all for the construction and/or expansion of hospitals or medical arts buildings and equipment provision, were approved for a total of $25.6 million under output 2; and as none of the DBP’s accredited financial intermediaries borrowed from the project, the DBP provided retail loans to 4 small-scale providers, all in Mindanao, under output 3.
Significant design deficiencies and unforeseen changes in the lending environment seriously affected the delivery of output targets. The project consequently only partially achieved its intended outcome. Data collected from the project hospitals indicated a rise in the number of in- and out-patients. Clearly, overall supply improved; but whether these investments specifically benefitted the poor cannot be established. Sex- and age-disaggregated data were also not available to facilitate a reliable assessment of the benefits provided by the project to women and children.
ADB’s Southeast Asia Department rated the project less than successful. The DBP was the executing agency. The Philippines Health Insurance Corporation and the Department of Health’s Bureau of International Health Cooperation were the implementing agencies for the TA.