The Philippines has sought to restructure disbursement estimates and project targets for a World Bank loan aimed at enhancing teachers’ competencies, as its implementation stalled due to late budget releases and procurement issues.

In a Sept. 28 restructuring paper, the World Bank said that since the $110-million, or over ₱6.3-billion, investment project financing (IPF) for the Teacher Effectiveness and Competencies Enhancement Project (TEACEP) was approved in June 2023, only $7.99 million, or 7.26 percent of the loan, has been disbursed so far.

This project loan, being implemented by the Department of Education (DepEd) in regions 9, 12, and the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), will close on June 30, 2028, the last day of the Marcos Jr. administration.

Aimed at improving the quality and equity of instruction in kindergarten to grade 6 (K-6) in the three selected regions, the project was delayed by the lack of budget cover and its inclusion in unprogrammed appropriations (UAs) in previous years’ national budgets, the World Bank said in earlier implementation reports last May and in October last year, as reported by Manila Bulletin.

“The start of implementation of the project was delayed by over a year. This was a result of financial challenges, including delays in the release of the 2024 special allotment release order (SARO) and notice of cash allocation (NCA), which were only issued in August and November 2024, respectively. These delays have resulted in the rescheduling of key activities to 2025,” the World Bank said in the loan restructuring proposal.

“Moreover, procurement-related difficulties, such as unsuccessful bidding due to inadequate budget allocations and a limited pool of applicants—especially for individual consultant roles—have made it challenging to secure qualified personnel for the project’s execution,” it added.

As such, the Department of Finance (DOF) last Sept. 4 requested the World Bank to amend the loan agreement. In particular, the proposed amendment sought flexibility in the loan financing’s performance-based conditions (PBCs).

The document showed that, as the Philippine government asked the World Bank to move disbursements later in the project period due to initial implementation delays, the proposed restructuring would allow PBC targets to no longer be strictly time-bound. This means the project’s targets may be achieved and disbursed against anytime up to the loan closing date.

Under the original plan approved by the Washington-based lender’s board in June 2023, disbursements were scheduled at $19 million in fiscal year (FY) 2024, $34.1 million in FY 2025, $29.7 million in FY 2026, $22.4 million in FY 2027, and $4.8 million in FY 2028.

Once the World Bank approves the project restructuring, the revised schedule will set disbursements at $5.49 million in FY 2024, $2.5 million in FY 2025, $45 million in FY 2026, $32.2 million in FY 2027, and $24.8 million in FY 2028.

The restructuring document also noted the need to revise the IPF’s second component, which focuses on providing adequate and effective teaching and learning materials, including radio-based instruction (RBI) and television-based instruction (TBI) programs.

The World Bank said a needs assessment revealed that most schools prefer alternative devices like tablets, laptops, TVs, and two-way radios instead of RBI and TBI.

To accommodate this preference, the DepEd plans to propose changes during a midterm review in November this year, pending approval by the Cabinet-level Investment Coordination Committee (ICC), the World Bank said.

Tablet procurement is projected to be finished by October, while the DepEd is finalizing guidelines to download funds for learning and teaching materials to regions 9 and 12, the World Bank added.

Last August, Budget Secretary Amenah F. Pangandaman assured that big-ticket foreign-assisted programs and projects will no longer suffer setbacks, given the budget cover included in the proposed ₱6.793-trillion 2026 national budget.

“Loan proceeds and the Philippine government’s counterpart financing are already incorporated in the respective budgets of the implementing agencies,” Pangandaman told Manila Bulletin.

Based on 2026 budget documents, a total of ₱283.3 billion in foreign-assisted projects will be funded under next year’s spending plan.

Of this amount, over ₱82 billion in counterpart government funds will support ₱201.3 billion in loan proceeds.

Next year’s allocation for foreign-assisted projects is more than four times larger than this year’s ₱66 billion, which consists of ₱30.7 billion in counterpart public funds and ₱35.3 billion in loan proceeds.

It also helps that UAs in the 2026 budget proposal dropped to ₱249.9 billion, from ₱363.4 billion this year and ₱531.4 billion last year.

Since UAs are not covered by regular budget financing, they can only be funded by excess or new tax and non-tax revenues, as well as foreign loans for specific projects and programs.