Document of

The World Bank FILE COPYFOR OFFICIAL USE ONLY

Report No. P-2658-PH

REPORT AND RECOMMENDATION

OF THE

PRESIDENT OF THE

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED LOAN

TO THE

REPUBLIC OF THE PHILIPPINES

FOR A

FISHERY TRAINING PROJECT

November 26, 1979

This document has a restrieted distribution and may be used by recipients only In the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS(July 1979)

US$1 - Pesos (P) 7.4P 1 - US$0.135

GLOSSARY

BFAR - Bureau of Fisheries and Aquatic ResourcesEDPITAF - Educational Development Projects Implementation Task ForceMEC - Ministry of Education and CulturePCARR - Philippine Council for Agriculture and Resources ResearchSEAFDEC - Southeast Asia Fisheries Development CouncilUPCF - University of the Philippines, College of FisheriesUPLB - University of the Philippines in Los BanosUPV - University of the Philippines in the VisayasUPVCF - University of the Philippines in the Visayas, College of Fisheries

FISCAL YEAR

January 1 - December 31

SCHOOL YEAR

July - April

FOR OFFICIAL USE ONLY

PHILIPPINES

FISHERY TRAINING PROJECT

Loan and Prolect Summary

Borrower: Republic of the Philippines

Amlount: $38.0 million

Terms: The loan would be for a term of 20 years, including5 years of grace, with interest at 7.95%.

Project The project seeks to support the Government's developmentDescription: strategy for the fishery sector by strengthening fishery

technology and human resources with particular emphasis onassistance to small-scale fishermen. The project wouldassist in establishing a national system of fisherytraining to supply appropriately trained professional andtechnical manpower, strengthen research, and improve theknowledge and skills of fishermen. It would develop theUniversity of the Philippines in the Visayas, College ofFisheries as a center of excellence for professionalfishery training and research, and would establish sevenRegional Institutes of Fishery Technology fortechnician-level training. These institutions would train30% of the professional and technical manpower neededbetween 1979 and 1990 to help develop the fishery sector.In addition, seven Regional Centers for Fishermen Trainingwould be established adjacent to the Institutes. Duringthe same period, these nonformal fishery training centerswould directly benefit about 10% of the country's existingsmall-scale fishermen and all the existing extiensionworkers through in-service training courses.

The success of the proposed fishery training projectdepends largely on the Government's budgetary andadministrative capabilities to implement concurrentlyother fishery development projects, several of which areat an advanced stage of development. Should theGovernment's other projects not proceed as envisaged,there would be a risk of an oversupply of trained fisherymanpower. However, without the trained manpower to beproduced by the proposed project, other fishery projectswould suffer. Other risks are related to the Government'sability to reorient fishery training from aquaculture tomarine fishery, the area with the greatest potential forgrowth. These risks have been reduced by features ofproject design including fellowships for marine fisheryfaculty and specialist services to assist with marinefishery curriculum development.

This document has a restricted distribution and may be used by recipients only in the performanceof their ofkial duties. Its contents may not otherwise be disekloed without World Bank authorization.

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Estimated Cost:Local Foreign Total /1------ ($ million) ------

Professional Manpower Training

University of the Philippines in the Visayas,

College of Fisheries (UPVCF) 9.9 7.7 17.6

Technical Manpower Training

Seven Reg4onal Institutes of Fishery Technology

(RIFTs) and Regional Centers for Fishermen

Training (RCFTs) 18.5 14.8 33.2

Project ManagementManagement support - 0.2 0.2

Evaluation 0.1 0.3 0.4

Studies 0.2 1.8 2.0

Base Cost 28.6 24.8 53.5

Contingencies (physical and price increase) 10.2 6.9 17.1

Total project cost 38.8 31.7 70.6

Less customs duties and taxes 6.8 - 6.8

Total net project cost 32.0 31.7 63.8

Financing Plan: IBRD Government Total

------- ($ million) …

38.0 32.6 70.6

EstimatedDisbursements: Bank FY FY81 FY82 FY83 FY84 FY85

------------ ($ million) ---------

Annual 0.1 5.4 10.0 12.0 10.5

Cumulative 0.1 5.5 15.5 27.5 38.0

Rate of Return: Not applicable

Staff AppraisalReport: No. 2628a-PH dated November 20, 1979.

/1 Figures may not add due to rounding.

REPORT AND RECOMMENDATION OF THE PRESIDENT

OF THE INTERNATIONAL BANK FORRECONSTRUCTION AND DEVELOPMENT

TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN

TO THE REPUBLIC OF THE PHILIPPINESFOR A FISHERY TRAINING PROJECT

1. I submit the following report and recommendation on a proposed

loan to the Republic of the Philippines for the equivalent of $38 million to

help finance a Fishery Training Project. The loan would have a term of 20

years, including 5 years of grace, with interest at 7.95% per annum.

PART I - THE ECONOMY /1

2. An economic mission visited the Philippines in July/August 1977

and its report, "The Philippines: Country Economic Memorandum" (No. 1765-PH

of October 26, 1977), was distributed to the Executive Directors tnder

PHL-77-2, dated October 27, 1977. An updating economic mission visited the

Philippines in May/June 1979, and its report, entitled "The Philippines -

Domestic and External Resources for Development" (No. 2674-PH), was

distributed to the Executive Directors under Sec M79-822 dated November 16,

1979.

Macroeconomic Performance

3. During the 1960s, the Philippine economy grew in real terms at an

annual rate of about 5-1/2%, but with more effective economic management the

rate of growth could have been higher. The pattern of growth was also

structurally unsatisfactory in a number of respects. The benefits of devel-

opment were distributed relatively unevenly, with respect to both regions

and income classes. While overall agricultural growth was reasonably

satisfactory, repeated foodgrain deficits were experienced. The growth of

productive employment opportunities failed to keep pace with the expansion

of the labor force. Low levels of taxation resulted in inadequate public

expenditure for necessary infrastructure and social services. Finally, poor

export performance combined with heavy import-dependence of domesi:ic

industry led to chronic weakness in the balance of payments.

4. During the 1970s there have been significant improvements in

economic management. Public revenues have been increased substantially,

/1 This section of the report is substantially the same as that of the

President's Report for the Samar Island Rural Development Project,

distributed under R 79-277, and scheduled for Board presentation on

December 4, 1979.

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public sector implementation capacity has been strengthened, and the ratioof public investment to GNP raised from 2% in the early 1970s to 5.5% in1976-78. Private investment also increased, and the ratio of total fixeainvestment to GNP rose from 16% in the early 1970s to 25% in 1976-78. As aconsequence of higher levels of investment, the construction industry boomed.Agriculture has performed well in response to the spread of irrigation andhigher yielding rice varieties, more favorable price policies, and someimprovements in supporting services. Selective steps were taken to promotenontraditional manufactured exports, which have grown rapidly. On the otherhand, the performance of that part of the manufacturing sector oriented tothe domestic market has remained only "fair" in a comparative sense and has

been inadequate in relation to the Philippines' need to generate productiveemployment opportunities. The net effect of the above developments has beenacceleration in the trend GNP growth rate by one percentage point to 6-1/2%.

5. An important constraint has been placed on Philippine developmentoptions by the sharp deterioration of its terms of trade since 1975,stemming from the increase in oil prices, acceleration of internationalinflation and depressed prices for some major Philippine commodity exports.As a result, real national income has been growing more slowly than realnational product, and, with the higher level of investment, the dependenceof the economy on foreign savings has increased. Although the terms oftrade have recently stabilized, the current account deficit is still about5.5% of GNP.

Development Strategy

6. The Government's development objectives and policies, which wereset out in a Five-Year Development Plan for the period 1978-82, call forfurther acceleration of economic growth, first to 7% and then to 8%. Thedevelopment strategy focuses on an expansion of productive employmentopportunities at a rate of 3.6% per annum, reduction of income disparities,greater self-sufficiency in food and energy, a strengthening of the balanceof payments and increased development of rural areas. In addition, the Planincludes growth strategies for each of the country's thirteen regions. Ingeneral, the Plan is an elaboration of the policy directions pursued by theGovernment in recent years. It is also broadly consistent with the Bank'sassessment of priorities, although Plan projections for investment, manu-facturing output, and exports are somewhat higher than Bank staff estimates.In due course, it should, however, be feasible to accelerate the overallgrowth rate to 7%, but more rapid expansion of manufacturing is necessary todo so, and the efficiency of investment also needs to be improved.

Agriculture and Rural Development

7. In recent years the trend growth rate of the agricultural sectorhas been about 5%, which by international standards is quite good. However,variations among subsectors have been considerable. Due to the spread of

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irrigation and high yielding varieties, irrigated rice production hasincreased rapidly. The Philippines, once a chronic importer of rice,actually exported 100,000 tons of rice in 1977/78. With the completion oflarge irrigation projects now under implementation, continued riceself-sufficiency appears assured for the 1980s. On the other hand, locally

adapted technologies for improving yields of rainfed grains, particularlycorn, are still under development, and rainfed agricultural areas have ahigh incidence of poverty. Productivity in the coconut sector is relatiPTelylow because of a large number of overaged trees, but a major replantingprogram is scheduled for the early 1980s when a sufficient number of highyielding variety seedlings will become available. Increasing pressure ofpopulation on the land and inadequately controlled, commercial logging haveled to soil erosion and deterioration of some forest areas. The Plan callsfor a major reforestation effort, but this will require substantialupgrading of Government administrative capabilities in this area,development of new hill cropping technologies, and resolution of difficultland tenure problems.

8. As well as providing greater support for agricultural production,the Government has substantially expanded programs such as water supply,electrification, and health in rural areas. An agrarian reform was alsoinstituted in 1972 which provides for transfer of tenanted holdings of riceand corn land in excess of seven hectares and enforcement of leaseholdinstead of sharecropping on remaining tenanted holdings. As of March 1978,about 60% of land transfer beneficiaries had received Certificates of LandTransfer (the initial step in the process establishing their claim to theland), but only about 10% had completed all formalities.

Industry

9. Manufacturing has grown at an average rate of about 6-1/2% duringthe 1970s. The greater part of the sector, oriented to the domestic market,has been promoted by high tariff protection and an incentive system which hasfavored the use of relatively capital-intensive production techniques.Relatively little employment has been generated in relation to Philippinefactor endowments. Macro statistics such as the incremental capital-outputratio suggest that the efficiency of investment has been low, and most manu-facturing plants have located in the Greater Manila area. Reforms of tariffsand other industrial incentives to bring these into line with developmentobjectives are presently being considered by the Government.

10. Beginning in 1970, selective measures have been introduced topromote nontraditional manufactured exports, including various arrangementsto permit firms in selected export industries to import needed gocods free ofduty. Entrepreneurs have responded to these opportunities, and receiptsfrom nontraditional manufactured exports increased from just over $100million in 1972 to an estimated $1.3 billion in 1979.

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Population Growth, Employment and Income Distribution

11. The 1979 population is estimated at 46.7 million. The populationgrowth rate fell from 3.0% in the intercensal period 1960-70 to 2.8% in theintercensal period 1970-75. The Philippines has an active family planningprogram registering approximately 650,000 new acceptors per year. Althoughthe number of new acceptors has reached a plateau as the program has faced

the increasingly difficult problem of reaching rural areas, the estimatedproportion of married women of reproductive age practicing family planningincreased from 15% in 1973 to 27% in 1978. However, by East Asian

standards, this index is still relatively low.

12. 71mployment increased by about 4.6% anually during 1973-78, a con-siderable improvement over the historical growth rate of 2.4%, and inrecent years has kept pace with the rapid growth of the labor force. Withthe exhaustion of most new land resources suitable for cultivation and theexploitation of the most easily irrigable areas, industry will have toprovide employment for about one half of the new entrants to the labor forcein the next decade. Employment in manufacturing essentially stagnatedduring 1970-74, but grew by 7% annually during 1975-77, resulting in partfrom the growth of labor-intensive production for export. However, becausemanufacturing's share of total employment is small, agriculture and servicesstill continue to function as residual sources of employment and accountedfor most of the increase in total employment.

13. For historical reasons, income distribution has been highly skewedin the Philippines, and there is a small elite which is conspicuouslywealthy. Owing to a structural improvement in agriculture's terms of trade,

the growth of agricultural production, the decline in urban real wagesfollowing the devaluation in 1970, and subsequent acceleration of interna-tional inflation and the stagnation of industrial employment until 1975, theratio of the average rural income to the average urban income rose from 0.48in 1971 to 0.57 in 1975. Real per capita consumption has increased by about2% annually. Hence, real incomes in rural areas, where most of the poorlive, have probably increased somewhat, while real urban incomes have notimproved substantially. Although accurate statistics are not available, theshare of family income received by the poorest 40% of families appears tohave increased somewhat; the income share of the top 20% has remained aboutthe same; and that of the middle-income families has declined correspondingly.Nevertheless, the incidence of poverty remains high, at 40-45%, in both ruraland urban areas, and malnutrition is widespread.

Public Finance

14. The public sector has historically claimed a much smaller shareof national resources in the Philippines than in many other developingcountries. In the early 1970s, general government expenditure averaged only

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12% of GNP; public investment was strikingly low at about 2% of GNP; and tax

revenues stood at 11% of GNP. Government expenditures were dominated by

general administration and social services, particularly education. This

situation had resulted from a variety of factors including difficulties in

raising tax revenue and weak implementation capacity in the public sector.

Since the early 1970s, the Government has taken steps to correct this

situation and has raised both the overall level of expenditures and the

shares going to economic services and public investment. By 1978, government

expenditures reached an estimated 16% of GNP, and public investment equaled

about 5.5% of GNP. This expansion of public expenditures has brought about

badly needed improvement in basic infrastructure particularly in transpor-

tation, power and irrigation, as well as the development of more effective

programs in the field of urban development, health and family planning.

15. Recognizing that a large increase in tax revenues would be required

to finance expansion of the public investment program, the Government has

undertaken a program of tax reform to raise the needed revenues equitably

and efficiently. The overall tax ratio was raised by more than two percent-

age points between 1975 and 1978 through a series of new tax measures and

vigorous efforts to improve taxpayer compliance and collection performance.

However, the recent rapid growth of the public investment program has made

the Government's budget position quite tight in 1978-79. Continuation of a

strong revenue effort, both by the Government and the government ccrporations,

is necessary to allow for further expansion in infrastructure and social

services.

Private Savings and the Financial Sector

16. Aggregate savings performance has improved during the last decade

and is comparable to that of other countries at a similar stage of economic

development. Gross domestic savings now finance about 85% of total. invest-

ment, with the balance coming from foreign savings. In order to increase

the efficiency of financial markets in intermediating between savers and

investors, the Government has made significant improvements in financial

policy. Organized banking institutions have been strengthened. Interest

rates were realigned in 1976 and, again, in 1977 to encourage a greater flow

of financial savings into time and savings deposits relative to short-term

deposit substitutes and to reduce the spread between borrowing and lending

rates. Further reforms are required to increase the availability of

long-term domestic currency resources. Special credit programs have beenadopted to expand lending to the credit-short agricultural sector and rural

areas and to serve the needs of medium- and small-scale industries.. A

deterioration of loan recovery rates was initially experienced by allgovernment financial institutions and credit programs. The Government has

taken a number of steps to improve collections; continued efforts in this

direction are necessary to improve financial discipline and ensure an

adequate flow of credit to the productive sectors without burdening thepublic finances.

External Trade and Capital Flows

17. In response to the large balance of payments deficit in 1975 (see

para. 5 above), the Government adopted a strategy of accelerating export

growth both to hold the current account deficit about constant in absolute

terms, while letting it decline gradually relative to GNP, and to meet the

debt service payments on the higher level of external borrowing.

18. The current account initially behaved as anticipated - averaging

$1.0 billion per year but declining from 6.2% of GNP in 1976 to 4.1% of GNP

in 1977. However, since then actual developments have deviated from the

original scenario. First, the volume of commodity exports, particularly

sugar, has increased less rapidly than expected. Second, real import growth

has, on the other hand, been more rapid than anticipated, partly as a result

of a recovery of private investment and partly because of speculative

importing in 1979. Third, although prices for some commodity exports(coconut products, copper) have increased substantially, the terms of trade

in 1979 were only marginally better than in 1976-77 due to the increasedprice of petroleum imports and the acceleration of inflation in the OECD

countries which supply most of the Philippines non-oil imports. The

combined effect has been a widening of the current account deficit to an

estimated $1.6 billion (5.7% of GNP) in 1979.

19. In order to maintain growth and investment rates in the face ofthe worsened external environment, major structural adjustment is necessary

to improve the balance of payments position. Initial steps have already

been taken with respect to export promotion, and major changes in trade,

industrial and financial policies are currently under consideration.

However, such adjustments will require a number of years to effect the

needed structural improvement in the balance of payments. The medium-term

outlook, therefore, is "or high current account deficits although falling as a

percentage of GNP from 5.8% in 1980 to 4.7% in 1982.

20. Net capital inflows doubled from the 1975 level of $580 million to

an estimated $1.2 billion in 1979, leaving an overall deficit of about $500

million. Most of the capital inflows came from medium- and long-term loans,

with about 40% from official sources. In 1980, a net capital inflow of at

least $1.8 billion will be required, increasing to $2.2 billion per year in

1981 and 1982. The ratio of debt service payments to exports of goods and

nonfactor services is expected to rise from an estimated 22% in 1979 to an

average level of 23% during the 1980-82 period, and to decline thereafter.

21. In order to ensure that debt service obligations remain within

reasonable limits, the Government will be seeking commitments of official

assistance of at least $1.0 billion in 1980 at the next meeting of the

Consultative Group for the Philippines, to be held In Washington, D. C. in

December 1979. In view of the tight budget situation and the fact that many

of the projects planned for financing from external sources have low foreign

exchange requirements, some local cost financing, either through increased

cost-sharing arrangements or, alternatively, through non-project lending, is

necessary to meet the Philippines' external financing requirements.

-7-

PART II - WORLD BANK OPERATIONS /1

22. As of September 30, 1979, the Philipp Le6 had received 63 Bankloans (of which two were on Third Window terms) amounting to $1,970.9million and six IDA credits amount ,ng to $122.2 million. At that date, IFCinvestments totalled $93.7 million. The share of the Bank Croup in totaldebt disbursed and outstanding is about 13% and its share in total debtservice is about 6%. These ratios are expected to be about 23% and 16%,respectively, by 1985. Annex II contains a summary of IDA credits, Bankloans and IFC investments as of September 30, 1979, as well as notes on theexecution of ongji.ng projects.

23. The Bank Group has financed projects in virtually all sectors ofthe economy with particular emphasis on agriculture and basicinfrastructure, which have each accounted for about one third of total BankGroup lending. In agriculture, emphasis has been given to expanding theirrigation system to increase food production and to credit programs tosupport foodgrain production and processing and livestock, fisheries andtree farming production. Support has also been provided for integratedrural development projects in low income areas. The Bank Group has alsoprovided large amounts of assistance in developing power and transportationto provide the basis for future growth of the productive sectors.Substantial improvement in basic infrastructure has been needed tocompensate for many years of past neglect due to low levels of publicexpenditure. In the industrial sector, the Bank's main thrust has been onstrengthening the capacity of public and private development financeinstitutions with increasing attention given to meeting the needs of smalland medium industries.

24. There has been a marked improvement in the execution of Bank-financed projects in the last five years compared with the experience in thelate 1960s, when there were serious problems caused by a shortage oE pesocounterpart funds and weak administration. Almost all ongoing projects arenow being implemented reasonably well and the supervision and project com-pletion reports indicate that the economic benefits for most projects arelikely to be in line with appraisal estinates.

25. As noted in Part I of this report, the Government's Five-YearDevelopment Plan highlights a strategy which focuses on the expansion ofproduction and employment in agriculture and industry, reduction in incomedisparities, greater self-sufficiency in food and energy, and increaseddevelopment in rural areas. The Bank's future lending program has 1beendesigned to assist the Government in achieving these objectives. Agricul-tural and rural development will account for the largest part oL future

/1 This section is substantially the same as that contained in thePresident's Report for the Samar Island Rural Development Project(R79-277) which is scheduled for Board presentation on T)ecember 4, 1q79.

lending with continued emphasis on food production and programs to increasethe productivity and incomes of small farmers. However, the programprovides for several needed new initiatives, including support forstrengthening the national agricultural extension service through Loan1626-PH (December 1978) and an upcoming first loan for developing multiplecropping systems in rainfed areas, where there is substantial rural poverty.Increased assistance will also be provided for integrated rural developmentprojects which will support the Government's objectives of redressingregional imbalances in income. Substantial assistance will also continue tobe given to industry with considerable attention given to policy reform andLO cxpaniing the. develoDment of labor-intensive, small and medium industriesoutside of the Metropolitan Manila area, The -harc of lencding for socialsector projects is expected to continue to increase primarily as a result ofgreater emphasis on construction of urban water supply and sewerage systemsand further assistance for slum upgrading and low-cost sites and servicesprojects. The Bank Group will continue to provide support for improving thequality of education and for expanding the Government's population programin rural areas. While the Bank Group will continue to provide support fortransportation and power infrastructure needed to support the Philippinedevelopment effort, the share of Bank lending for these sectors will declinesomewhat in the years ahead primarily because alternative sources offinancing are available to finance a large part of the power generationprogram.

26. This is the second loan to be presented to the Executive Directorsthis fiscal year. Loans for rainfed agriculture, irrigation, watershedmanagement, livestock/fisheries credit, sewerage and urban developmentprojects are in preparation, and are scheduled for presentation early in1980.

PART III - FISHERY TRAINING

The Fishery Industry

27. In the Philippines, which comprises over 7,000 islands and has over17,000 km of coastline, fish is an important resource. Fish production grewat an annual average of nearly 6% between 1973 and 1977, from 1.2 million to1.5 million tons, and in 1977 the fishery industry accounted for about 5% ofGNP. Currently, about 95% of fish production is consumed locally; fish is astaple of the Philippine diet and constitutes about half of the nationalintake of protein. The basic objectives set forth in the Government's Inte-grated Fisheries Development Plan for 1978-87 are to attain self-sufficiencyin fish/l and increase fishery exports by increasing output and productivity.

/1 About 10% of current consumption is imported.

28. The fishery industry in the Philippines consists of three subsec-tors: marine fishery, inland fishery and fishery processing. Marinefishery is further divided into municipal fishery (mostly subsistence-levelsmall-scale fishermen) and commercial f4shery. Of these subsectors, thecontribution of marine fishery, especially municipal, to the industry isimportant. Marine fishery accounted for about 90% of total production in1977, of which about 65% was in municipal fishery. In 1977 there werealmost one million workers engaged in the fishery sector, representing about5% of the total work force in the country. Over 90% of the fishery workforce were engaged in marine fishery, and, specifically, 65% in municipalfishery. The Government's fishery development strategy is to placeincreased emphasis on the development of municipal fishery.

29. Effective management of fishery resources will require further

studies on the extent of over- and under-fishing of marine waters. Fisherytechnology appropriate for the Philippines needs to be developed to improveyields. Although production could be increased by the use of alternativefishing gear, most municipal boats still use only one type. High priorityneeds to be given to boat construction and gear development. In the area ofmarketing, the recently-established Philippine Fish Marketing Authority hasprepared a ten-year program for establishing municipal and commercialfishing ports and markets throughout the country; implementation of thisprogram has already begun.

30. It will be necessary to transfer improved technology to small-scalefishermen in order to decrease the current rate of spoilage (20-30%). Aneffective extension service is also needed to help fishermen improve theirhandling and processing technology. The Bureau of Fisheries and AquaticResources (BFAR) of the Ministry of National Resources is the main extensionagency, employing about 500 agents to run over 50 demonstration stations.Its services are provided at a national average ratio of 1 agent to 1,000small-scale fishery workers, though by international standards, a ratio of 1

to 400 would be more appropriate. Additional ad hoc extension programs arerun by other government agencies, universities and colleges. Improvedcredit facilities to enable fishermen to finance new technology, e.g.,better boats and fishing gear, coupled with improved marketing facilities,should complement extension activities and accelerate adoption of newtechnology. Surveys of aquatic resources suggest that, given these increasedsupport services, production from marine and inland fisheries could be morethan doubled.

31. The Government's strategy in the fishery sector indicates a periodof gradual transition from traditional subsistence fishing to an efficientcommercial industry. The successful implementation of its programs will,however, depend on the availability of appropriately trained manpower. TheGovernment's fish production targets imply that fishery employment will reach1.4 million by 1990. The highest rate of increase (11% p.a.) will be neededat the professional and technical manpower levels to strengthen research,teaching, extension and the industry. This implies that the formal fishery

- 10 -

training program will have to produce 1,300 postsecondary graduates annuallyto fill professional and technical positions. The current quality of fishery

training does not adequately prepare graduates for the positions they will

fill. At the secondary education level and below, sufficient manpower isexpected to be available to join the fishery industry, but a nonformal fishery

training program will be needed to extend new technology and information toworking fishermen (over 90% of whom had a primary education or less in 1976)

and to upgrade the technical and administrative skills of extension workers.

Fit-cry Training and Research

32. Overview. Formal, postsecondary fishery training is providedat about 50 institutions through three-year diploma programs, 18 of which alsooffer four-year degree programs. All but six of these institutions are

administered .jby the Ministry of Education and Culture (MEC); the exceptionsare one private institution and five chartered institutions (the colleges of

fisherics at five universities) which are governed by their own board ofregents. Enrollments in fishery training institutions have grown rapidly,from 910 in 1971/72 to 5,400 in 1977/78, and they presently represent 5% of

tertiary agricultural enrollments. Expenditure on fishery training declined

by about 18% (at current prices) over the same period, but the 1979 budgetrose by about 50% over the 1977/78 budget, reflecting the Government's

decision to give higher priority to fishery training. Organized nonformaltraining is provided only in commercial fishery courses at the Fisherman'sTraining Center at Cavite City (which provided six-month courses to 170

fishermen in 1977). General agriculture-related research is coordinated bythe Philippine Council for Agriculture and Resources Research (PCARR), with

assistance for specific fishery-related research by the Fishery IndustryDevelopment Council. Studies are conducted by various agencies, includingBFAR, Central Luzon State University, University of the Philippines College ofFisheries (UPCF) and the Southeast Asia Fisheries Development Council

(SEAFDEC).

33. Principal Issues. Fishery training and research suffer from weakplanning and control. Fishery institutions have proliferated in responseto political factors at the local level and have resulted in the insufficientprovision of some types of training (e.g., in-service training in marinefishery). The uncoordinated development of training has, in turn, had an

adverse effect on research; since most students (about 70%) specialize in

inland fishery, few graduates can be recruited for marine fishery research,which has contributed to the limited development of indigenous marine tech-nology. These problems should be resolved through more effective planning.

34. The Philippines has not yet established a coherent fishery trainingsystem that provides the kinds of research and the levels and types oftraining needed by the fishery industry. This is due largely to ad hoc growth

of the fishery training sector. While the UPCF has developed as the apexinstitution in research and training, it has been unable to develop importantresearch programs in such fielas as marine fishery, fishery engineering and

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management, and fishing gear and boat development. Its inability to developin these fields as an apex institution results mainly from inadequate facili-ties and its congested location, without direct access to the sea. Degree anddiploma programs given at about 50 other institutions fail to produceappropriately trained manpower for the fishery industry because of inadequateteaching programs, staff, equipment and facilities. Nonformal training is notgiven on a routine basis except in commercial fishery courses. Informationand skills related to fishing technology, marketing, and credit need ito beextended to small-scale fishermen to help increase their production, and thetechnical and administrative skills of extension workers need to be upgraded.There is thus a need to establish a national system of fishery trainingcomprising a center of excellence for high level research and training, atechnician-level training program, and a continuous nonformal training programfor small-scale fishermen and extension staff.

35. Fishery training suffers from low quality. Both at the degree andthe diploma level, graduates are poorly trained due to weak teaching staff,inadequate teaching equipment and facilities, and the type of training given.The qualifications of staff are generally low and most staff have degrees onlyequal to those granted to their students. Limited equipment and faciLitieshave been provided for practical training; particularly serious for f[sherytraining is the unavailability of training vessels at most institutions.This contributes to training that is academic rather than practical. Withregard to employment opportunity, diploma students are at an added dis-advantage because most graduates seek government positions, which requireeither a diploma plus one year's job experience or a degree. This require-ment contributes to the present high proportion of diploma holders (albout 30%)who transfer to degree programs, despite the country's need for well-trainedtechnicians (diploma holders). This results in undesirable pressures to opendegree programs at diploma-granting institutions, which are usually introducedwithout a corresponding upgrading of staff and facilities. The quality offishery training therefore needs to be improved by staff upgrading andadditional recruitment of adequately trained staff; increased provision offacilities and equipment (particularly training vessels); and a diplomaprogram with a significant amount of practical training. The Government'srecruitment policy of extension agents also needs to be modified to facilitateappointment and career advancement of diploma holders.

36. Government Strategy. As part of its strategy for integrateidfishery development, the Government intends to improve fishery research andtraining to assist in developing fishery management, technology, market-ing and appropriate manpower. To achieve these goals, the Government intendsto strengthen planning of fishery programs, establish a coordinated nationalstrategy, and introduce measures to improve the quality and relevance offishery research and training.

- 12 -

37. Fishery training will continue to be managed as part of agricul-tural training, but the Government plans to establish a committee for eachagricultural training subsector under the Technical Panel for AgriculturalEducation, which was formed in 1977 as an advisory body in HEC. The firstof these, a Fishery Education Technical Committee, was created in 1979 andwill have responsibility for monitoring fishery manpower need and supplyinformation, as well as for issues related to quality improvements in thefishery training subsector.

38. The Government strategy for agricultural training involves consoli-dation within the framework of a national apex institution, leading institu-tions serving the three main geographic zones (i.e., Luzon, Visayas andMindanao), regional institutes of technology, and nonformal regionaltraining centers. A similar strategy is being adopted for fishery training.This entails developing a college of fisheries at the University of thePhilippines in the Visayas (UPVCF) as an apex national institution and also toserve as the leading fishery training institution in the Visayas. The UPCF atDiliman will be transferred to the Visayas (Uliagao) to form the core of thenew college of fisheries which in turn will serve as the nucleus of the newUniversity of the Philippines in the Visayas (UPV). The present Colleges ofFisheries of the Central Luzon State University and the Ifindanao StatetUniversity will continue to be developed as leading institutions serving Luzonand Ilindanao. Regional institutes of fishery technology will be establishedby improving existing institutions and, in areas without an institutionsuitable for upgrading, by establishing new institutes. The Government plansto develop nonformal fishery training centers adjacent to the regionalinstitutes of fishery technology. This system should provide a basicframework to produce an improved quality of fishery training for professionalmanpower (UPVCF, Luzon State University College of Fisheries, ?indanao StateUniversity College of Fisheries) and for technical manpower (regionalinstitutes of fishery technology and nonformal training centers).

39. The Government plans to effect quality improvements through theconsolidation and rationalization of fishery training and research. Theestablishment of the UPVCF as a leading institution in fishery training willbe pursued through staff development programs and the provision of more andbetter facilities at its new coastal location. Research will be streng-thened by improved quality of graduates remaining in research programs andby UPVCF's emphasis on narine fishery training. The Government's strategyalso entails similar improvements in staff, facilities, training vessels andcurricula at the regional institutions. Curricula will be revised toproduce graduates with specialization in one area of fishery study. Collegeswill no longer offer a diploma program. Instead, the regional institutes offishery technology will concentrate on the diploma program in fishery tech-nology. Students will receive the diploma after two years' study on campusand subsequent completion of a one-year apprenticeship program. Thisapprenticeship program will be introduced with the help of the FisheriesTraining Division and the Fisheries Extension Division of BFAR and theprivate fishery sector.

- 13 -

World Bank Participation

40. The World Bank Group has financed five education projects in thePhilippines for a total of $70.7 million. These had the objectives ofproviding specialized training for agricultural and technical manpowerdevelopment and of effecting improvements in general primary and sec:ondaryeducation (the latter objective was pursued under the Third and FifthProjects - Loan 1224T-PH and Loan S-8, respectively). Bank lending toimprove and expand agricultural training has supported the Government'snational agricultural training program. The First Education Project: (Loan393-PH, 1964), completed in 1973, assisted in developing the University ofthe Philippines College of Agriculture as a national center of excellence.The Second Education Project (Credit 349-PH, 1973), completed in December1978, began the aevelopment of regional agricultural colleges in Luzon andMindanao, established six barrio development schools adjacent to them, anddeveloped thirteen agricultural high schools. The Fourth Education Project(Loan 1374-PH, 1977) was designed to strengthen the disciplines of animalscience and veterinary medicine, forestry and crop sciences at theUniversity of the Philippines in Los Banos (UPLB); develop a regionalagricultural college in Visayas; and introduce organized nonformal trainingand extension services to farmers. During the preparation of the FourthEducation Project, the Government proposed a similar strategy for thefishery subsector as a possible target of future Bank assistance.

41. Previous education projects have generally been successfullyimplemented and have met their development impact targets. For example,Loan 393-PH was successful in assisting the UPLB to become a leadingagricultural institution in the Asia region. Loan 1374-PH is furthetrstrengthening this University. Good progress has also been made in Loan1224-PH towards developing an effective institutional system for the!production and distribution of textbooks to primary and secondary schools.Despite their general success, earlier projects have met with implementationconstraints, which have been taken into account in the design of theproposed project. A completion report and performance audit was issued forthe First Education Project (Report No. 820). The main lessons learned fromthat project relate to (a) assuring adequate operating budget, counterpartfunds, and incentives for retaining high quality staff, especially when therelocation of a campus is involved; (b) increasing the flexibility ofprocedures regarding procurement and disbursement; and (c) developing acampus plan at an early stage. Lessons learned from projects underimplementation relate to provisions for adequate staff/student ratios, and aneed for advanced project preparation prior to appraisal.

42. The Bank has financed two fishery credit projects (Loans 891-PH in1973 and 1270-PH in 1976) which provide credit support for commercial andinland fishery development. These projects are proving to be reasonably

- 14 -

successful and well implemented. A third such project is under consider-ation. Also included in the lending program is a national fisherydevelopment project, which is designed to provide infrastructure andinstitutional and financial support to small-scale municipal fishermen.

PART IV - THE PROJECT

43. The proposed project was prepared by the Government with FAOassistance. The project was preappraised in June/July 1978 and appraised inAugust/September 1979. Negotiations were held in Washington from November 5to November 9, 1979, with a Philippine delegation led by His ExcellencyEduardo Z. Romualdez, Philippine Ambassador to the United States. A StaffAppraisal Report (No. 2628a-PH, dated November 20, 1979) is being distrib-uted separately. Supplementary project data are provided in Annex III.

ObJectives

44. In support of the Government's development strategy for the fisherysector, the proposed project would help the Government to strengthen fisherytechnology and human resources through assistance to establish a nationalsystem of fishery training. The system would comprise programs and institu-tions that would (a) produce appropriately qualified professional andtechnical manpower for the fishery sector; (b) improve the knowledge andskills of small-scale fishermen; and (c) strengthen fishery research. Themain components of the project would thus consist of: (a) relocation of theUPCF to the Visayas region; and (b) establishment of seven regional fisherytechnician training institutes and adjacent fishermen training centers.

Professional Manpower Training (Proposed Outlay: $17.6 million)/l

45. University of the Philippines in the Visayas, College of FisheriesUPVCF. The proposed project would help the Government establish UPVCF as acenter of excellence for fishery research and training. The UPVCF wouldprovide necessary technology and professional manpower for the Government'sfishery development program, as well as teaching staff for postsecondaryfishery institutions. The UPVCF would be established by relocating UPCFfrom Metro Manila to Miagao in the Visayas; this coastal location wouldprovide it with natural sea laboratories and a harbor, and easy access toother important research institutions (such as SEAFDEC). The College'sresearch activities would focus on marine fishery, and the highestpercentage of enrollment would be in marine fishery programs. The Collegewould provide degree-level training, using a curriculum that develops astrong specialization in one area of fishery study. Total enrollment wouldbe increased from 740 in 1977/78 to 850 by 1985/86, and the annual number of

/1 Proposed outlays exclude contingencies.

- 15 -

graduates should increase from 140 to 180, assuming a lower wastage rate

after the move to Miagao. The College's staff would need to be increased

from 41 to 72 through recruitment of graduates from fishery colleges to

maintain a teaching staff/student ratio satisfactory to the Bank (Section

4.09 of the draft Loan Agreement). To ensure effective relocation of the

UPCF staff at Diliman to the new campus at Miagao, incentives including

housing/transportation allowances would be provided for relocating staff

(Section 4.04 of the draft Loan Agreement).

46. To assist in the development of the UPVCF, the project 1would

provide academic and communal facilities, equipment and accommodations. The

project would also provide 2.5 man-years of foreign specialist services to

develop training programs and, to strengthen UPVCF's staff, a total of 90

man-years of overseas fellowships, about two-thirds of which would, be at the

graduate level. The project would also include funds for research projects

at UPVCF or contracted by UPVCF to outside specialists or agencies. Higher

priority would be accorded to projects related to fishery engineering,

fishery economics and management, fishing gear development, and fishing boat

construction. Research proposals would be reviewed by a committee with

representatives of PCARR, UPVCF, the Fishery Education Technical Committee,

and the Educational Development Projects Implementation Task ForcE (EDPITAF)

of the MEC. The Government provided the Bank with acceptable selE!ction

criteria for research projects to be financed by the proposed pro 2ct and

agreed that: (a) a review committee with terms and composition satisfactory

to the Bank would be established by March 31, 1980; and (b) researc;

programs would be selected in accordance with those criteria (Section 4.10

of the draft Loan Agreement). All specialists provided under the proposed

loan would be appointed on terms and conditions satisfactory to the Bank,

and all fellows provided under the proposed loan would be selected according

to selection criteria and award procedures satisfactory to the Bank (Section

3.02 of the draft Loan Agreement).

Technical Manpower Training (Proposed Outlay $33.2 million)

47. Regional Institutes of Fishery Technology. Seven Institutes would

supply technicians needed by the fishery industry and the extension service.

The Institutes would be developed at six fishery training instituitions and

an agricultural college; these institutions are well distributed throughout

the country and have direct access to the sea. The Institutes would

concentrate on technician training of high quality, offering a three-year

program leading to a diploma with majors in marine fishery (which should

account for the largest percentage of enrollment), inland fishery, and fish

preservation and marketing. The Bachelor of Science Degree in Fishery

programs currently offered at six of the Institutes selected for project

assistance would be discontinued by 1984. The degree program will continue

at the Institute at Zamboanga, which provides good quality training and

constitutes an important source of potential teachers (Section 4.05(a) of

- 16 -

the draft Loan Agreement). Each Institute would have the capacity to enroll

450 students and should graduate about 110 students per annum by 1985/86.

Graduates from these Institutes and other postsecondary institutions should

meet fishery technician manpower requirements over the 1979-90 period. To

ensure that future resources are directed to improving the quality ofextension services, (a) no new postsecondary fishery institutions would be

established during project implementation unless recommended by the

Technical Panel for Agricultural Education (Section 4.06 of the draft Loan

Agreement), and (b) the Ministry of Natural Resources would facilitateappointment and career advancement of the Institutes' graduates (Section

4.05(b) of the draft Loan Agreement). The institutions' present staff of 52

would need to be increased to 210; most of the additional staff could be

recruited from graduates of UPCF/UPVCF. A teaching staff/student ratiosatisfactory to the Bank would be maintained (Section 4.09 of the draft Loan

Agreement).

48. To assist in establishing the Institutes, the project would

provide academic and communal facilities, equipment and accommodations. Itwould also provide eight man-years of specialist services in curriculum

development and, for staff development, 58.5 man-years of local and 70 man-years of overseas fellowships. The project would further provide fishingtraining vessels which would be used by the Institutes and for nonformaltraining. Sixteen vessels and 68 smaller boats such as bancas and skiffswould be provided to give adequate sea training.

49. Regional Centers for Fishermen Training. The Centers would help

the Government establish an organized nonformal training program. In-service training would be provided to improve the knowledge and skills of

fishermen and to help them increase their production and better their

standard of living. The Centers would be located adjacent to the

Institutes. The training programs would cover technology directly relatedto fish production (in marine fishery, inland fishery, and fish handling andpreservation), as well as general subjects that allow the fisherman to

develop some business skill. Twelve courses varying in duration from one totwo weeks would be provided annually in each area of training. The Centerwould train 100 fishermen per course, i.e., a total of 8,400 small-scalefishermen each year, half of whom would be municipal fishermen. In

addition, in-service training courses for extension workers would beconducted about twice a year at the Centers to upgrade their extension

skills. Each Center would require 10 technical staff and 5 administrative

staff.

50. The project would support the establishment of the Centers byproviding academic and communal facilities, equipment and accommodations;

training vessels and major equipment and laboratories would be shared withthe Institutes. The Government has drafted an acceptable memorandum of

agreement between the NEC and the Ministry of Natural Resources on mutualsharing of specified facilities, and on ownership of and responsibility for

maintenance and repair of shared facilities. Staff support would be

- 17 -

provided by the same local and foreign specialists who would assist theInstitutes, and by 40.5 man-years of local and overseas fellowships toenable them to develop training programs.

51. Institutional Arrangements. Although they would share trainingvessels and some facilities, these institutions would come under differentministries (the Institutes under the MEC and the Centers under the Ministryof Natural Resources) and each would have its own head and budgeted funds.A Regional Fishery Training Development Committee, with terms of referencesatisfactory to the Bank, would be established to coordinate jointactivities. Such a Committee would be set up by June 30, 1980 in each ofthe seven regions where the Institutes and Centers would be located (Section4.07 of the draft Loan Agreement). The Institutes and Centers would beallocated sufficient budgets for full utilization and maintenance of theirfacilities, equipment and vessels (Section 4.03(a) of the draft LoanAgreement).

Project Management (Proposed Outlay: $2.6 million)

52. Management Support. The EDPITAF of the NEC is charged withplanning education development strategy, identifying priority projects,project preparation, evaluation and monitoring, and implementing alleducation development projects. To supplement the capabilities of theEDPITAF, about 1.5 man-years of specialist services would be required incampus planning, naval architecture, equipment specification writing, andeducation planning. EDPITAF's staff would be strengthened in these andother areas through the provision of 8 man-years of fellowships.

53. Evaluation. Project achievements would he monitored anel evaluatedduring implementation, and the development of a local evaluation capabilitywould ensure continuing evaluation after project completion. Evaluationwould measure qualitative improvements in training, employability and jobeffectiveness of graduates, and would estimate the success of fisherytraining as a national system, particularly the effectiveness of f'ishermentraining. The IMonitoring, Review and Pesearch Division and the FisheryEducation Division within EDPITAF would be responsible for monitoring andevaluation. Assistance would be provided by a Fishery Education ProjectAdvisory Group, created in 1979, to advise EDPITAF on policy mattersconcerning the establishment and operation of fishery institutions under theproject. The project would assist EDPITAF by providing 12 man-years oflocal and foreign specialist services and 2 man-years of fellowships todevelop a local evaluation capability. The Government would: (a) developthe monitoring and evaluation system for the project institutions by June30, 1980; (b) complete the collection of baseline data by March 31, 1981;and (c) furnish an annual report to the Bank for its review each June from1982 through 1985 (Section 4.08(a) of the draft Loan Agreement).

- 18 -

54. Future Prolects. The proposed project would also include assis-tance to the Government in conducting feasibility and engineering studiesfor future projects in the education sector. Selection of such studieswould be made in consultation with the Bank (Section 4.08(b) of the draftLoan Agreement).

Prolect Cost

55. The total cost of the project is estimated at $70.6 million equiv-lent (including $6.8 million duties and taxes). The contingency allowanceof $17.1 million comprises (a) physical contingencies estimated at 5% ofbase cost, or $2.6 million, and (b) price contingencies estimated at 26% ofbase cost plus physical contingencies, or $14.5 million. The price contin-gencies for civil works and locally produced goods assume an inflation rateof 16% in 1980, 10% in 1981 and 7% thereafter, and for imported equipmentand technical assistance an inflation rate of 9% in 1980, 8% in 1981 and 7%thereafter. Project costs are based on unit prices of December 1979.Technical assistance costs (13% of project total) have been estimated atabout $15,000/man-year for training and $80,000/man-year for specialistservices. The proposed Bank loan of $38.0 million (60% of total cost net ofduties and taxes) would finance 100% of the foreign exchange cost and $6.0million equivalent of local costs; the Government would finance theremaining cost of $32.6 million. The justification for local cost financingis set out in paragraph 21 of this report. The project costs and financingplan do not, however, include $1.6 million of the costs for design serviceswhich are being financed from the proceeds of Loan 1374-PH. The additionalannual recurrent expenditure generated by the project (excluding RCFTs) in1984 would be about $3.6 million equivalent (at 1979 prices). This wouldrepresent about 0.4% of the recurrent expenditure of MEC. The recurrentcost required for seven RCFTs in full operation in 1984 is estimated atabout $0.9 million equivalent (at 1979 prices). This accounts for 6% of thetotal recurrent expenditure of the BFAR. The budget required for fulloperation of the Centers would be allocated to BFAR (Section 4.03(a) of thedraft Loan Agreement).

Implementation

56. EDPITAF would be responsible for implementing the physical aspectsof the proposed project, exercising financial control during implementationand maintaining liaison with the Bank. Upon completion of the physicalfacilities EDPITAF would hand over control of the project institutions to:(a) the University of the Philippines system for the Fishery College; (b)the Ministry of Education (MEC) for regional institutes; and (c) the Ministryof Natural Resources (MNR) for fishery training centers. Master Plans forthe UPVCF have been prepared by local consultants with experience in campusplanning, who were assisted by a short-term foreign consultant. Localconsultants have been appointed for all project work; sketch plans have beencompleted; and working drawings are expected to be ready by April 1980.Supervision would be carried out by the same consultants. Designs andspecifications for project vessels have been prepared with the assistance ofFAO and foreign consultants. Supervision of the boat-building activities

would be carried out by local consultants.

- 19 -

57. Sites. In Miagao, 1,200 ha of land has been allocated for theUniversity of the Philippines in the Visayas. Sufficient land is availableat six of the seven Institute/Center sites, and additional land has beenearmarked for acquisition at the remaining site. All sites necessary forproject institutions would be legally acquired by May 31, 1980 (Section 3.05of the draft Loan Agreement).

58. Schedule. Master planners and consultant architects have beenrecruited and working drawings are expected to be fully developed by April1980. Tender documents for the first phase of equipment and vessel procure-ment are expected to be completed by June 1980. Construction is expected tostart in January 1981 and to be completed by the end of 1983 and the fellow-ship program by the end of 1984. The completion date would be December 31,1984.

Procurement

59. Contracts for civil works, furniture, equipment and fishingtraining vessels ranging from 10 to 40 tons would be grouped, to th,e extentpossible, to form attractive bid packages and all major contracts would beawarded on the basis of international competitive bidding in accordance withthe Bank Group Guidelines. Small contracts for dissimilar items, smallerfishing training boats, or works at scattered locations would be unlikely toattract foreign bidders and could, therefore, be awarded on the basis oflocal competitive bidding procedures in accordance with Governmentprocurement practices which are acceptable to the Bank. These would includecivil works contracts (total value less than $2.0 million), estimated tocost less than $500,000 equivalent each, and furniture/equipment/vesselsbid packages (total value about $2.0 million), estimated to cost less than$100,000 each. Local bidders for furniture, equipment and vessels would beallowed a 15% preferential margin or the existing rate of import duties,whichever is the lower, over the c.i.f. price of competing foreignsuppliers. Miscellaneous items in contracts not exceeding $25,000equivalent and subject to an aggregate total of $500,000 equivalent, couldbe purchased on the basis of a minimum of three price quotations. Bookswould be procured directly from authorized distributors.

Disbursements

60. The proposed loan of $38.0 million would be disbursed to meet: 40%of the cost of civil works and furniture; 100% of foreign expenditure fordirectly imported vessels, books, equipment and materials; 100% of the ex-factory price of locally manufactured books, equipment and materials;65% of the cost of locally procured equipment, books and materials andvessels; 100% of the cost of specialist services and overseas training; and65% of the cost of local fellowships. Disbursements are expected t:o becompleted by June 30, 1985.

- 20 -

Benefits and Risks

61. Benefits. The proposed project would help the Government imple-ment its Integrated Fishery Development Plan by (a) rationalizing fisherytraining programs and institutions, (b) providing manpower necessary for thesector's development, and (c) improving research programs and capability.The project would assist the Government in establishing a national fisherytraining program comprising the UPVCF as the apex institution, seventechnician training institutions and seven fishermen training centers. TheUPVCF would contribute 30% of the 2,500 trained professionals needed overthe 1979-90 period and the seven Regional Institutes of Fishery Technology,over 30% of the 12,500 technical manpower needed. The seven RegionalCenters for Fishermen Train'ing would reach over 65,000 fishermen during thisperiod, i.e., about 10% of the country's existing small-scale fishermen.The Centers would also upgrade the quality of the extension force. Thenonformal courses in particular should lead to increased fishery output andproductivity. The project would assist in strengthening the fisheryresearch program and staff of UPVCF, mainly through the provision oftechnical assistance. Research programs would be instituted to producetechnology and management methods suited to the Philippine fishery industry.UPVCF's concentration on marine fishery should correct the past bias infavor of aquaculture technology.

62. Risks. The Government has begun physical and financial infrastruc-ture programs especially designed to help small-scale fishermen. The pro-posed project is designed to assist these government programs with well-trained professional and technical fishery manpower. Should the governmentprograms not proceed as envisaged, there would be a risk that an oversupplyof such manpower would be created. However, without the trained manpower tobe produced by the proposed project, the government programs would suffer.

63. The largest potential for growth of fishery production has beenidentified as marine fishery resources. However, there is a risk thatthe present bias of research and training toward inland fishery couldcontinue, especially since most fishery research and teaching staff havebeen primarily trained in fish biology or aquaculture. To establish marinefishery as a sector priority, the project would: (a) finance fellowshipsfor teaching staff in marine fishery disciplines; (b) provide specialists'services to develop curricula in these areas; and (c) establish a monitoringand evaluation system to measure progress against desired results.

64. Other risks are related to the effective operation of projectinstitutions. UPVCF might suffer from being unable to attract sufficientlyqualified staff during initial years of its operation. To reduce this risk,the Government has developed a program of incentives. There could also bea risk that social and political pressures would prevent the Government fromphasing out degree programs at the proposed Regional Institutes for FisheryTechnology. The Government therefore provided assurances that theseprograms would be discontinued by 1984. Problems of coordination and

- 21 -

implementation could arise because two ministries (incXuding a weak exten-sion service agency, BFAR) have responsibility for the Institutes andCenters, and would share some facilities and large equipment items. Tominimize this risk, the Government would (a) establish a Regional F7ishery TrainingDevelopment Committee to be responsible for coordinating joint activitiesbetween the Institutes and Centers, and (b) provide in-service training

programs for BFAR staff. Another risk is that project facilities, particularlythe 16 fishing training vessels and those facilities operated by BFAR, mightnot be fully utilized and well maintained due to insufficient allocation ofoperating funds. To reduce this risk, the Government has provided assurancesthat sufficient budget funds would be allocated to utilize fully and maintainproject facilities.

PART V - LEGAL INSTRUMENTS AND AUTHORITY

65. The draft Loan Agreement between the Republic of the Philippinesand the Bank and the Report of the Committee provided for in Article III,Section 4 (iii) of the Articles of Agreement of the Bank are beingdistributed to the Executive Directors separately. Special conditions ofthe project are listed in Section III of Annex III.

66. I am satisfied that the proposed loan would comply with theArticles of Agreement of the Bank.

PART VI - RECOMMENDATION

67. I recommend that the Executive Directors approve the proposed loan.

Robert S. McNamaraPresident

AttachmentsWashington, D.C.November 26, 1979

-9 2 2 -ANNEX IPage 1 of 5

TABUe 34pILIPPINES - SOCIAL INDICABS DATA S?U

REUUcc GROUPtS tADJUSSID AVEIIAGESLAND AlE (THOUSAND SO. p MEILIPPII -RK St GUCLD UTIABST

TOTAL 300.0 SAKS SAE NM TIG3CAGRICULTURAL 6. 7 UT u Cir C CGRAOCIC nCOME iNCOmi

1960 / 1970 Z STI2I&TE n RN j GROUP G GROUP ~

GNP PU CAPITA (US8) 140.0 230.0 510.0 5S28.9 467.5 1097.7

ENER COES0PSION PER CAPITA(KILOGRAMS OP COAL EQDIVYALrr) 147.0 301.0 329.0 371.1 262.1 730.7

POPULATION AND VITAL SUTAISTICSPOPULATION, MIl-TEAR (MILLIONS) 27.4 36.9 44.5UBA POPULATION (PUCUT 01 TOTAL) 30.1 31.8 34.0 27.4 24.6 49.0

POPULATION PRO3CTIONSPOPULATION IN TUR 2000 (MLIONS) 76.0STATIONARY POPULATION (MILLIONS) 128.0TEAR STATIONARY POPULATION is R 2075

POPULATION DLUSt?!PER SQ. DC. 91.0 123.0 148.0 154.8 45.3 44.6m SQ. EN. AGRICULTURAL LAND 360.0 472.0 513.0 566.7 149.0 140.7

POPULATION AGE STRUCTURE (PZRCREN)0-14 TnS. 44.7 45.5 46.0 41.3 45.2 41.3

15-64 Ys. 52.3 53.6 51.0 54.9 51.9 55.365 YnS. AIM ABOVE 3.0 2.9 3.0 3.3 2.8 3.5

POPULATION GRONrE RTE (PECUNT)TOTAL 2.7 3.0 2.7 2.4 2.7 2.4

NRAI 4.0 3.8 3.5 4.3 4.3 4.5

CRUDC 3IT BATE (PE TEUSASD) 45.0 43.0 35.0 30.2 39.4 31.1CRUDE DVATE RATE (PU ThOUSND) 15.0 11.0 9.0 8.3 11.7 9.2GROSS REPRDDUCTION RATS 3. Lf 3.3 2.4 2.1 2.7 2.2FAkmILY PLANNING

:CEPTOBS. ANNUAL (TEODSAMS) .. 191.7 643.0EUSEtS (PERCENT o0 MARD OM) .. 2.0 22.0 34.1 3.2 34.7

FOOD AND ITITIONINDEX OF PWD PRODUCTION

PIR CAPITA (1969-71-100) 100.1 101.0 111.0 106.2 99.6 104.4

PER CAPITA SUPPLT OFCALORIES (PGRCZS 0O

REQUIREMENTS) 83.0 86.0 87.0 104.1 94.7 105.0PROTSINS (GRACSIR DAT) 44.0 45.0 50.0 57.4 54.3 64.4

OF WEICH ANIMtL AND PULSE 19.0oLs 22.0 19.2 16.9 17.4 23.5

CHI (AGES 1-4) )OTALITT RATE 16.0 10.0 7.0 4.8 11.4 8.6

HEALTHLIFE EIPECMANCY AT BIRTH (TEARS) 51.0 57.0 60.0 61.1 54.7 60.2INFANT RORTALITY RATE (PEUTMOUSAND) 98.0 SQ. 0 65 . 0 46.6 68.1 46.7

ACCESS TO SAFE WATER (PERCENT 0OPOPULATION)

TOTAL .. .. 39.0 21.9 34.4 60.8URBA2N .. .. 51.0 46.2 57.9 75.7aURAL .. .. 33.0 12.8 21.2 40.0

ACCESS 10 EXCRLETA DISPOSAL (PERCENTOF POPULATION)

TOTAL .. .. 56.0 28.4 40.8 46.0URBAN .. .. 76.0 65.0 71.3 46.0RURAL .. .. 44.0 14.7 27.7 22.5

POPULATION PER PHYSICIAN .. .. 3150.0 3790.5 6799.4 2262.4POPULATION PE YURS7Ji PISON .. 340.0 4990.0 1107.4 1522.1 1195.4POPULATION PE HOSPITAL BED

TOTAL 1180.0 850.0 880.0 613.3 726.5 453.4TJRBN .. .. .. 203.6 272.7 253.1RUORL .. .. .. 1110.3 1404.4 2732.4

ADMISSIONS PEtI HOSPITAL IED .. .. .. 23.9 27.5 22.1

EOUSINCAVERAGE SIZE OF HOUSEIOLD

TOTAL 5.8 5.9 .. 5.2 5.4 5.3URAN .. 6.2 .. .. 5.1 5.2RURAL *- 5.8 .. .. 5.5 5.4

AVERAGE VOMBER OF PERlSONS PE ROOMTOTAL - 2.3 * - * 1. 9

MBAN .. 2.1 .. .. .. 1.6RURAL .. 2.4 .. .. .. 2.5

ACCESS -0 ELECTRICrT! (PERCENTOF l.ELL!INGS)

TOTAL 16.5 22.9/h 31.0 .. 28.1 50.0URBAN .. 62.8h .. .. .5.i 71.7ARL1AL .. 5.8h 10.0 . 9. .9 17.3

-23- ANNEX IPage 2 of 5

TABLE 3APHILIPPINS - SOCIAL INDICATORS DATA SHEET

REFERENCE GROUPS (ADJUSTED AAylLES- OST RECENT ESTIMATE) -

SAME SAltE SEXT HIi3ENOST RECENT ZOGRAUPIC INCOIME INCOME

1960 Lb 1970 Lb ESTIAE /b REGION /c GROUP /d GROIUP LEDUCATION

AJUSTED MROLLMENT RATIOSMIuART: TOTAL 95.0 114.0 105.0 97.9 82.7 102.5

MALE 98.0 115.0 102.0 98.7 87.3 108.6FEKALE 93.0 113.0 109.0 97.4 75.8 97.1

SECDNDARY: TOTAL 26.0 50.0 56.0 42.2 21.4 33.5MALE 28.0 59.0 65.0' 46.7 33.0 38.4FEMALE 25.0 42.O 47.0 40.9 15.5 30.7

VOCATIONAL EIROL. (Z O SECONDUIY) 15.0 6.0 .. 12.5 9.8 11.5

PUPIL-TEACKER RATIOn.-Kw11_ 36.0 29.0 29.0 32.5 34.1 35.8

SECONL-.. 27.0 33.0 31.0 25.8 23.4 22.9

ADULT LIcA.LY RATE (PERCENT) 71.9 82.6 87.0 84.1 54.0 64.D

CCSSUMPIlu IASSENSGa CAMS PER TEOIJSAD

POFP..Arias 3.0 8.0 8.9 6.1 9.3 13.5XADIO RECEIVERS PER TP5'SAND

POPULATION 22.0 39.0 44.0 84.4 76.9 122.7TV RECEIVERS PER THOUSAND

POPULATIOI 1.4 10.0 17.0 22.4 13.5 38.3NEWSPAPER ("DAILY ",UER&LINTEREST-) CIRiCULA?ION ETHOUSAND POPULATION 17.0 14.0 18.0 24.2 18.3 40.0CINEMA ANNUAL ATTFNDANCE PIR aAPITA 0.6 .. 7.6 3.6 2.5 3.7

LABOR FORCEETALLAWR FOCE (TEDUSANDS) 10100.0 12400.0 16244.0

FSMALE (PERCENr) 34.4 33.1 35.3 36.7 29.2 25.0ACRICULTURE (PERCENT) 61.0 55.0 50.9 54.6 62.7 43.5L,DiISTRY (PERCENT) 15.2 15.8 16.8 16.3 11.9 21.5

PARTICIPATION RATE (PERCENT)TOTAL 39.8 36.6 35.3 40.7 37.1 33.5MALE 52.1- 48.6 47.1 49.9 48.8 48.0FEAIUE 27.4 24.4 23.3 31.0 20.4 11.8

ECONOMIC DEPENDENCY RATIO 1.3 1.4 1.3 1.1 1.1 1.4

INCOME DISTRIBUTIONPERCENT OF PRIATE INCOMERECEIVED BY

HIGHEST 5 PERCENT oF HOUSEHOLDS 28.8 .. .. 14.9 15.2 20.8HIGHEST 20 PnCENT OF HOUSEHOLDS 56.2 53.9 53.3 46.8 48.2 52.1LOWEST 20 PERCENT OF HOUSEHOLDS 4.2 3.7 5.5 6.2 6.3 3.9LOWEST 40 PERCENT OF HOUSEHOLDS 11.9 11.9 14.7 16.8 16.3 12.6

POVERTY TARGET GROUPSESTIMATED ABSOLUTE POVERET INCOMELEVEL (US$ PER CAPITA)

URBAN .. .. 250.0 193.1 241.3 270.0RURAL .. .. 190.0 128.7 136.6 183.3

ESTIMATED RELATIVE POVER1Y INCOMELEVEL (US$ PER CAPITA)

URBAN .. .. 132.0 136.8 179.7 282.5RURAL .. .. 87.0 96.8 103.7 248.9

ESTIMATED POPULATION BELOW ABSOLUTEPOVERTY INCOME LEVEL (PERCENT)

URBAN .. .. 39.0 32.0 24.8 20.5RURAL *- *- 44.0 52.5 37.5 35.3

Not availableNot applicable.

NOTES

/a The adjusted group averages for each indicator are population-weighted geometric means, excludinig the extremevalues of the indicator and the most populated country in each group. Coverage of countries among theindicators depends on availability of data and is not uniform.

/b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, becweeni 1969and 1971; and for Most Recent Estimate, between 1974 and 1977.

/c East Asia & Pacific; /d Lower Middle Income (S281-550 per capita, 1976); .e Intermediate Middle Income(5551-1135 per capita, 1976); If 1950-55; !g Av. 1960-62; /h 1967, households.

Most Recent Estimate of GNP per capita is fcr 1978.

August. 1979

- 24 A-

PULP==_____CT_____A _ Page 3 of 5ote.j: Altheng ob. 'rio o demO trom -n.oo g.nw.1-aU lodged tine _.t antho-it.tir. and -eliobl., it ho.aId ol.n b. ntd thet thy a-p not be iote.-.

tionolly compar.bl. booto of the Lack f ots-'ordl,.d defoinitno sad eon.apt. 'nod by dif forest no-tri.. in oo..letins the date. Th. data ore, nonothl.ios,ojelu to Ge-cit. nod-? of moeitu.", iudlot. 'rondo, ood ohor.toize oortl±o eior differane.. b.t.oaa cow-trio.m

Th. Wvt3j edro. e -ofr ah indicator woe popw.t.to-eei9ht.d gecetric aaac., exliuddg theors. - value.aof the i.4d-totr and tie -. t Ppoolatdcoonr, t eoo gen-b t.e 1o-ak of do.-, dop -e,u-. of .11 i.djeatore fr Capital urpl... Oil E.M.20tr od of indi.atOrv of An.e.. no Vato and focreta

Oipn "i iJAtlG, Toon. Distrihutio: endPO -stfor other otntry von,,s org-.itonw1gide tric aanno oith-et oooloi- of the entrene. v,..odth. mat pe.oatod oenotry. Slot. t.oe,. f onAtrios mmo the iniaiodnod ooola.bility of dat. end I. ot ufor. footio mot he enm..eod

1 I'ticoorat ieon h cater tnd rwfhatno aTh- aMr.

Af Pdth . . and qc.k..) A-oce to E.orata Di.now pret fpno.tie o. -Ilho. end rura70101- Toal. utfee are oomriwl led -are end i0land oatr.- kbite of peol (total, .Ined onm]. sevdb nrta ipoai

AartcoItwa.re. - Meaot r-et estimate of ogooiltoura1 o-e .d teaporwrily per_etwa. of their r-opcti- pwnlatiOoo.. trEt. dl,poo.J, noy Indldeor p.rm-etir for -rpe, ventur., -krht .. d uitobn g.rd-n or to the onflontion ed di.posel, with -f niti0-t tr"tesio, of h-m no-rt.lie. fellow no wete-nat.r by -tanr-horn ypet-m or the -u of pit prioi.. nod coilar

GNP 8! CA (US$) -NP Par .&it. .. tim.. at -rat -rk".net.ll.tiono.ca.i."t.. by -am I .= 5r*i tOdi -ootito 0an AtWOmO 5.00G- peiwo. Mww-M~im lei~ Popoition dieddd by womor of precti.ing physiotanaOe.iCon.hy om nnomyano sothd en 5054 lee hObo i76-78jhni.); onhool at eniw-wityr temi.

1960, 1970, end i9P78 data. fnw.io o fosag esn-Pelto ide b iC fprcti ei- Aea.l oeeumptio of ooeiol enee nod f m. Parana -OO Ppnectiol dlde.,ed bynoi.sao pracn.. g-1

the.i iwerioty)in khilogres of ooal oq.irolt per npit.; 1960, en w. iie b hi mpoiv ro eptaL hnenilabie L.in:, ... 1976 dt.0. phllo end private anara.l end Vwoiahined beotpit.L end rhhl l..act-r..

Hoopitol.. aro oobi esparameS otffod by at 1-mt -o p'Wi.io.POFVJATION v s11 s g~~~~~~~~~~~~~to.hieeetelsbW prw-wd]eg pri..ipallys noutodial 00r0 ar* wto iolndsd. Morel

Total A of Jo.4. 1; 1960, 1970, end ho.pito..o, hoea-.,, twciood heelth end MieaL -ater not gaahmanntly otffod1977 data, bY . P.loii- (hbt by .aaftdial oieteet. o... eid'if., st..) which off.,

Urhn Prw.o.aiOn(ocn oftt R atio of u0b- to totai PePl.Itino; i.-petient ano-.dtiino d pw-rid a listed rena of aadit.i foelitie..difewtdfntion. of -ure -- w aay effet -oeperahility of d.t. ~ oAL flo"e of ddx.ia.o to or diooboe.o f-n-eng -- tunre; 1960, 1970, end 1973 ILta. i1t1r of hod..

%vulatir~ ~~ Curret psattoproletions are holed on OUtlIG1973 ttepoetiwby age end won ed their antoAity end fertility Ae..Snofioohd nro h0se bd otl re edsoecanoe. PrVJetion porw.etwr. for nertality rate. v-wrto of thrw.. A to..ohod -usiete o apsow-p o_f inlhnl h Horuin q,ster end1Maci no.oeiog lfe enpeotono ai birth loor-a,ing 00th o-tnryl. their .al. e1.o. A boarder or loger -y or my not ho L-]--d- in tn.per -Pito oon. 10001, end feaalo life eopbt-ny wtsilialwg at to....hold for otti.tihal p.rpe.-..77.5 year. The poramt... for fe-tiiity int. ome h-rn thre I.-I.0 Ar-'.e number of ron pe- n. otlure end rorel A-rage mashr

-ie.9nn dooIine in fertility -oording to lon- 1-01 end punt of Pr,-n Per, oeinal -- In ndooe nenpT1.1 eoioe desollge,fenilY n1iomo Perforaa.o. 0.01 onotly 1i0.. fh e igned one of th... r-peotiewly. teo1i.ig -oeInd. n-porm.omat ot-t-o.re end -ewupid part..

tie i-istion. of mortality .0d f-rtility trend. for pr.jentlo or.t Iethiy(oreto we.ime tta.- obno. and rnra -coo-perpoe..vnioldnieo0teleroy in liri quertor. e- perwotoge If

Stato t in:M - lo aotaionm7 PePolotion th-r iw no growth total, mnbe, end ru-LI dwLling. uspaetioly.iNiiho hblrthite. eolto the d-ath rate, end 01.0 tho eg.

etroot`onreai. ow TetOhio in nohiO"-eo.SS -ft.r fertility rates EtXt5ATIONd-lino tthe P rpea-It 10001 of unit te reprndnotion rate, noonrll t .eeoh .gnrto f w-an -ePI--o itoelf -owtLy. Th. etetIony pe.P.- Prinary n.ohonl -to e i. odfema.1 Green itel., eeLe end foe.]. en1ol-Intion... 000 eatime on the bui.i of the ponoted oh--.ro ri.tine eat of all 0g.. at thepor ise-l P-antenate- of r!e.Pcti-e pri-aryof the popoltion i. the Ye- 2000, nod tne rtr of doolino of fertility nooiopop.n.ation.; eeraally Linlde. ohildren .ged -il. yea. btnra-te to reploom.t leve. - dinted for dlffnret length. of prisary eduation; for -Outrie. with

Goar otaiio= nonaltion Is reoched - 'The year' when stationary popsetion .. i-reral wd-.otioo -011aa.et eqy wneud 1OD pertot wince wo- pLpil.nin hb e.Oeo ,arehlen or ehov the offiola oohnol Wg.

Peren It. -id-yw Ppoeition Per q-u-r- kIl t.etr (tnt hattar..) of ed-..tioO reqire a le oryawof opproe-d prienry inetrution;total ore. p-eid-e genral owctiowl or t-onher training inatrutiOn- for pupol.

Perno . orOi=l100-Compted en bhor for grioultorei 1.04 u.o.ly of 125 W 17 Yeor of .g; -nrepnnd-ne o-ome are g-wrliyonly. . eld.d.

P.Meo ation Ade StMot.' -Oernt) - Children (0_1 -lfe ), -oring-ege Voational eor1llt (Fre.. f ncae ocatin... I ientitoti.n. in-lud.(15-hiY.. fee,t and Meired (65 Y-o' end -00) en p-entzge of did-yew, teoheial, edorl,or othe prwgr. .o h perein independently or en

pepoIntino; 1960, 1970, dOd 1977 dt.0. d.pnrtentw of wetntdor ientitotin.-tn i.io Growth ete -eeti - Aotl -00-n ortoh rain. of total nId- P.pi-. 1errti :-oie4 .ed en .o - Total otd.nte rei'olld in

Yew.e- itir foI900,in-0 e 970-77. prion-Yno eodr le-i inae ny w-eh.r of t-eher. 00 the -orre-,ow-ultion Growth Rat pe-et - trbo- An.M..] 9-wth rote. of -.rhe ponding lwe

peplotoo fo 190-o, pI -70, no 1970-775. - 800ltrn ae(eoni-lltrnt. ndnlt. oable tn rend end -rit,)nC-d4. Bir9oth ,iAfor 9nd( - AnnoeL thee birth, Per thotnod of aid- ad pe1_lrnen yg of total edult pepell.ti Mgan 1.5 Yea-ndo-r

yew, P--i " Inod 1977 8t.0cr". D-th .tw r ll -oloooo dnt thoper abono ot Kidye, CUMfI

pope 197 ote PoeogM Care (par thnnwed oono.ltion(-Pn.ornr -ompis aotororGros Rere-dutiot Rate A- hvr. tunb.r of doughterw: ot.n oii hew, wetie e then ought _eeno nolde enhl-.oon h-uoe end ei1itnry

it her oral reProd-cti-e perid if nh. -roeieee Prueno wge- -ehiolee.openifin fertility rote.; -eai.iy flo-year eerwg.w endiog in 1960, OwrdIn Reir.ro oe huen n-itinn( All type, of reei-r 'Or r.di.l9O'S nod 1975.- rodoeot to geerl ehinpr1th--.nd of pepeotion; ... ud.. uli-ennd

Family Kneeing - Aoo-Stor Annua (thusedo in- doa neirof reoirr-oin ttrie4 end in Y-ar -h.. -egi.trtion of -di.ii neos ne nOoeptr. of blri-ho-tro de-io une o ie f tationl fOinly effet; data for r-nt yeare -nY not he -pr.rble wino. na t oontiee1plonoi`g Psogee. oboti.hd li-enig.

PwiyPlooi.g - Uner (P.--et of envied -owet . Perontoge of naried fT teoirre pe thon~an-e o I ..n - TV -eci-e for broadcst t. generaloa of ohild-booring are (tO15 paw 1... onbirth-ootro d-vi-r oho e huodpp.sin include. -onl.....ed TV r-i-rer in -outrien

to Il rind momn in e.- .wge s R 000 in year. whe r-giwtration of TV net. wn inffent.FOOD AND MMITIOR N-W11,11;~~~~~~~t.ee.pe ticn.io (ner tinu-od n tOsn - Sheno, the -rerge Oilrn tion

00d0 ofP SiRIIO of8iygnrlItro eaoe eie nopriodical pehliootionInde 00 000 O Otionper O~P.ito (.1969-.71-100) -tlode of Pe tptt droted priewily tn retordig general tenow. rt ie o,idwr.d to be "daily'

oona Proution ofeI.f ood _dtire. Pnutiow -nldr nee..d ndIf It tpp.". ot teet fou tle-.e -Afl.feed end in on o-1enhe por ba,iO. Cninditie. ooenr pri-'Y goodet Cine.. Annua Attend-oosoher Cant.tnor Gea B- Od the tuehbr If t icketo(e.g. eugartn inoteod of ugar) h ich ore edible nod _otnin tutr,et coddrn h e, nldingseehn odiwAnvn., n oi

e..cffee end ten or wonluded). Agbreg.te predntion of ea-h -noory -i.In huned n- -atl.la nergepnnnrpic nihe OhPer canit. sto-ly of caoiLlereto ecieetl- optdfrO1020Rnc

enema eoirslen of or food Frpin o oiei notypr siothouenods - &-sniclS.15 ati- pereon, 1soindig. tintdprdyp. Ow-a ilaie opplirn -neri.e d-rti. produtIon, Leprt. les forn- end u_eplIi&hb,t Ieclding hb. . .ive, student. et. D.Mft-ito

e-Pert, end ohengeo in stoi. Met oppiiee -oelde en-Le feed, tende, Ic vrin ... o-tri.. are wot onwper.ble.

net.nee.tinntrd by fAG he..ed on phy.ioigia ned. for normol I lbo ore n amigfrer,hutgooo tt n heath .... siderlg e-iroeeeote,l tmeatr,boy ighto f ~ _M !'iij'i'i9n.onf total labor fore..-

gr end son dietributino of popuLation, nod .1l.ioig 10 pecet for 1.d..ty (p-anpt) - Laior- for- to eIaig onercin, ofooturng nodnente at housebid leve. eI-lier.itY, -ter ed gen .an .eeetwgo of total labor fnree.

Per -nnitn anni of rot'o.n o,rwe Par dwr( - rt7-Otn Oae etnnninnt ecet) -ot.tl. -I.. end r-1al - Perticip.tien onoio etepyly of food Per ds. let ouPPIYofod P: wne en ntivi_tyrte1.&tare ompotod en total, ei.1e, nod fewair labor force en Per-

nho.. Reqoirnet. ffr all vn-tr,eo. eseii d by USD20 prwide fo.rf a stegeo o toalei end f-male pe;alativo of .1.1 ages reepentioniy;oaimo eliwne nO o ro.of toa etei Per d1W nod S0 grw o i96, 197, end I975 da. Th.se -r LLO'. partioupotion raet. rflectingnieal nod m.Ice prnte,o dhheh 10 gr-. ohotld he enima protein. ng-e trcur f the Peelotion, end 10.5 tIe. treod. A few ewtieatee

Thss. standar-doso loeno then tienen of 7-5 ge..a nf total protein WAor frentional wor,ewo.25 jew.. nf enimo Protein en no h-neg for the -Ird, prepee.d by PAO k9p -iL..Daj pqgOr Ratiog.Ri o.f pnsl.tiw under 15 end 65 end ortin the Third World Food Survy, in gw_ etpo 1-1paePe nnta nenteiw sely fro oniwa ond pnoise - Protein otnply of fondderied (&,14 frot eitaeen le Ha110 rwe pe r day.

Cidl e. ih Itotlt aenrthnuand~ - Ah-1al death, per thonoend "eeotag, or Private Som- (otph in ono en kood) - Coochied by rioheetIn ege grou 1-I yer, to ChIldren in thi. og o-p; for moot deewi- 9 pereant --oeO 20 pereni per.t M0po , and pooret h0 percntopiNg vetrie. dota derird fro Iitf tabew of h-nshld..

HEALTH POVPWT TAOli GRtOUPSLife E:= teo 00hrt Wrr A -Arerge -oeh- of p- of life oiao hnriePerrlo. lorel~~ (La e Iapita(- ome end enrl

ro,Sein atbirt; 150,197, nd1977. dtna. Ahe-int penrty lecomle'rl0 htiom1ww e whihaln llofent lertaiyRt lethoed -Onalrtbnf inxtent ndr-n ... otrititnnallY aeq-ntn diet PIu . .... ntial .0-fun _otarnoot: Ts so

Year of age per tho-and li-e birth.. affrdable.ho-eo .to Safe Vter (Dercet of to tei-n - totalohs o url- RtetdReoieR;-t mn.lei(20 e aO)-uro n na

tneropnirtotal, urbuo, endartra with Fftnhl vre oRral r;itr peew_ rty in. ee ie- I ne-t ir of ane e rpt

.so. eter eupl lonld:. t-ente urfeo c- ater. or untreated hut Personal ien of the -netry. Urown lev1 in d.rlnsd fro the rura leveuoonttelaie.td eater env.n that fec Protetd boeoe prings 00th "dietmont for higher onot nf living he urhe ar-a.,nod ee-itor o (a preeentegew of thei r-enPw -y pct.Piatinne - In Retinoted Pweulation kI. Ahb.sito-vet len ows (rrcet) - bure end

200 ntere ree ow-o mayhe tonodporeda heog withi ron- nahir"-'

a oe r o that house Rnrral- area.. .... ennable W-ne -Iud iiVythat tho h-.-eeif. nr esehes of the houshold dn not hare to .Pned atoon ic anod Sonial Data Dioieindi.ne_pertLosate port of the dsp in fetohing the fniiy. e ot.r nead. ft.nanmi Aa.Lysie ed Penientinne Depar~te.t

AogteOt 1979

ANNEX I

-25 - Page 4 of 5

ECONOMIC DEVELOPMENT DATA SHEET

Annual average 1979Actual Est. Projected growth rates (%) share

1972 1975 1976 1977 1978 1979 1980 1981 1985 1972-78 1978-80 1980-85 of GDP

National Accounts (millionsof US$ at 1975 prices andexchange rates)

GDP 12,929 15,769 16,822 17,865 18,928 20,077 21,298 22,594 29,392 6.5 6.1 6.6 100.0

Terms of trade adjustment 168 0 -456 -613 -70 -70 -387 -465 -262 - - - -

GDY 13,097 15,769 16,366 17,251 18,695 20,006 20,910 22,129 29,129 6.1 5.8 6.9 99.6

Imports - constant prices 3,304 4,116 4,460 4,799 5,489 5,865 6,068 6,484 8,271 8.8 5.2 6.4 29.2

Exports - constant prices 3,020 3,000 3,784 4,644 4,592 4,425 4,852 5,362 8,022 7.2 2.8 10.6 22.0

Exports - adjusted for termsof trade 3,189 3,000 3,327 4,030 4,359 4,355 4,464 4,897 7,760 5.4 1.2 11.6 21.1

Resource gap 115 1,116 1,133 768 1,129 1,510 1,604 1,586 511 - - - 7.5

Consumption 10,221 11,977 12,270 12,756 13,861 15,646 16,393 17,262 21,421 5.2 8.8 5.5 77.9

Investment (incl. stocks) 2,991 4,907 5,228 5,264 5,963 5,822 6,176 6,552 8,524 12.2 1.8 6.6 29.0

National savings 3,016 3,983 4,098 4,435 4,743 4,718 4,948 5,360 8,410 7.9 2.1 11.2 23.5

fnesLii savings 2;°76 3,791 4,095 4,495 4,833 4,537 4,807 5,227 7,328 9.0 -0.3 8.8 22.6

Sector Output (millions ofUS$ at 1975 prices)

Agriculture 3,993 4,535 4,897 5,140 5,385 5,417 5,688 5,972 7,259 5.1 2.7 5.0 27.0

Industry /a 4,087 5,314 5,836 6,285 6,690 7,043 7,536 8,064 11,061 8.6 6.2 8.0 35.1

Services 4,849 5,920 6,089 6,440 6,853 7,617 8,074 8,558 11,072 6.0 8.5 6.5 37.9

Prices (1975 - 100)

Export price index 47.4 100.0 86.2 86.6 99.2 117.6 123.2 131.6 180.3 13.1 11.4 7.9 -

Import price index 44.9 100.0 98.0 99.8 104.5 119.5 133.9 144.1 186.4 15.1 13.2 6.8 -

Terms of trade index 105.6 100.0 87.9 86.8 94.9 98.4 92.0 91.3 96.7 -1.7 -1.6 1.0 -

Selected Indicators

ICOR /b 4.5 3.4 3.4 3.6 3.6 4.4 4.0 3.9 3.3

Import elasticity 0.93 0.59 1.24 1.22 2.32 1.13 1.12 1.12 2.08

Average savings rate 19.5 24.7 24.4 25.0 25.3 23.1 22.9 23.4 26.8

Imports/GDP 25.5 26.1 26.5 26.9 29.0 29.2 28.5 28.7 28.1

Investment (incl. stocks)/GDP 23.1 31.1 31.1 29.5 31.5 29.0 29.0 29.0 29.0

Resource gap/GQr 0.9 7.1 6.7 4.3 6.0 7.5 7.5 7.2 1.7

Public Finance 1972 1975 1976 1977 1978(Central Government) --- (% of GDP in current prices) --- Labor Force in 127 - H'L''_' -

Current revenue 12.2 15.0 13.9 13.2 14.0 Agriculture

Tax Tevenue 9.7 12.0 11.6 11.2 11.9 Industry 2.7 ls.2

Current expenditure 13.0 13.2 12.3 11.6 11.3 Services 5.6 3'.0

Current surplus 0.8 1.8 1.6 1.6 2.7 Unemployed 1.i 0.4

Capital expenditures 1.9 3.0 3.5 3.4 4.1Total Labor ,t.e 11.1 !00.0

/a Includes mining, manufacturing, construction, and utilities.

/b The ICOR is defined as the ratio of fixed capital formation in the previousperiod to the current increase in GDP over the previous period.

/c Estimate based on second quarter, 1978.

East Asia and Pacific RegionNcember 1979

2 6 - ~~~~~~~AIIIZX I- 2 6 pa.- of 5

BALANCE OP PAYMENTS AND EXTERNAL ASSISTANCE(US$ million)

Actual ~~~~~~Est. Prolented1972 1973 1976 1977 1978 1979 1980 1981 1985

Somary of Balance of Payments

E.ports (0NFS) 1,432 3,000 3,330 4,021 4,555 5,230 6,040 7,030 14,475Imports (GNFS) 1,484 4,116 4,383 4,780 5,735 6,960 8,060 9,245 15,820Resource balance -52 -1,116 -1,053 -767 -1,180 -1,730 -2,020 -2,215 -1.345

Net factor service income Ia -125 -126 -323 -320 -406 -190 -280 -365 -655Interest (net) -93 -65 -185 .240 -261 -315 -405 -475 -725Direct i-vets.ent Income (net) -32 -61 -138 -80 -145 125 125 110 70

8alunce on goods & services -177 -1,242 -1,376 -1,087 -1,586 -1,920 -2,300 -2,580 -2,000

Trausfers (net) 188 318 269 260 312 340 370 400 600

Corrent Account Balance 11 -924 -1,107 -827 -1,274 -1,580 -1.930 -2.180 -1.400

Direct investment (net) -22 125 144 216 163 150 150 170 250

Pubilc liLT lose disbursements 235 349 869 903 1,035 1,175 1.549 1,782 2,224Repayments -78 -118 -165 -163 -419 -465 -531 -507 -1,130Net disborsementn 157 231 704 740 616 710 1,018 1,275 1,094

Other MLT loan disbursneentn 137 331 538 326 740 349 685 778 1,156Repayments -154 -205 -202 -381 -522 -295 -333 -363 -870Net disbursements -17 126 336 -55 218 54 352 415 286

Total MLT m.ar disburse.ents 372 680 1,407 1,229 1,775 1,524 2,234 2,560 3,380Repayments -232 -323 -369 -544 -941 -760 -864 -870 -2,000Net dinburnenents 140 357 1,040 685 834 764 1,370 1,690 1,380

Net dra-i.g on IMF Lb 7 110 214 79 24 98 - - -

Short-t-rn capital (net) 56 102 -96 312 146 100 110 120 170

Capital tra-sucti.nn, n.e.i./b -98 292 -35 -300 53 -32 - - -

Change in net reserves (- - incruo) -94 521 160 -164 54 500 300 200 -400

loternationa. reserves (end-year) /c 551 1,358 1,640 1,525 1,883 1,383 1,083 883 2,183

Grants and Loan Cosaitments

Official grants 0.0 0.0 0.0 0.0 0.0Total pebilc l.ane 422.0 769.4 1,577.4 1,372.7 2,417.0

IFRD 29.5 114.0 226.0 317.5 533.0IDA 10.0 0.0 0.0 0.0 26.0Other nultilateral 43.3 106.0 64.2 207.3 189.2Gnver..ents 275.5 182.3 391.6 122.3 370.4

of ehibh CPE 0.0 13.2 5.9 0.0 0.0Suppli-ra 2.0 52.5 52.0 194.2 76.7Finenciul institutioun 61.7 314.6 476.4 341.7 1,000.5Bondu 0.0 0.0 367.2 129.7 219.2

Other MLT I.ann 130.0 283.0 603.6 134.8 914.0

Memorandum Items

Grunt elosent of cositsents 28.0 16.4 8.8 14.7 16.8Average interest (Z) 5.4 7.4 8.3 7.9 7.4Average maturity (ye-rs) 17.3 16.7 13.1 15.3 15.9

Medium & Long-Term Debt (dinburand only)

Total debt oututandiog (eud ofperiod) 1,890.0 2,965.0 4,383.0 5,554.0 6,839.0

Iocluding undinbursed 2,638.0 4,520.0 6,817.0 8,155.0 10,856.0Public debt service -149.6 -225.3 -239.2 - -441.9 -468.1

of ,hicb: interest -51.6 -73.0 -97.9 -215.2 -167.1Other KLT debt service -167.6 -232.7 -283.5 -357.1 -441.9Total debt service -317.2 -358.0 -522.7 -799.0 -910.0

Debt Burden

OutstandingDebt service ratio 22.1 14.9 15.7 18.0 20.0 Guebe 31. 1978Debt -ecvice ratio Id 22.7 15.6 16.4 19.5 20.6 Anunt PercentDebt servIce/GDP 3.8 3.0 2.9 3.7 4.0 Eaternal Debt (US1 mis)Public debt sevice/go- .neent (dinbursed only)

revenum 17.0 9.1 9.9 12.0 20.1 IBRD 546 13.0Back Grcup 576 13.8

Terns Other multI-lateral 277 6.6

Interest on total DOD/totul DOD 6.1 5.4 4.1 6.4 4.0 Governments 1,039 24.8Total debt servic/total 0D0 17.7 16.9 10.5 15.8 13.3 Supp7iers 271 6.5

Dependency Ratios institution- 1,254 29.9Bno,ds 771 18.4

Gross dibsursementslImportn (GNFS) 30.2 21.4 37.9 28.7 34.3 Total pubIlcNet transfer/importu (GNFS) 12.7 7.7 6.1 5.4 5.4 MLT debt 4,188 100.0Net transfer/gross dlnbursements 41.9 36.2 16.2 18.9 23.2 Other MLT debt 2,651 63.3

Other MLT debtcano...re (fou. o--

dib.ursed) 3,293 78.6I8RD disb./gross total disb. 4.7 9.8 5.5 7.4 8.3 Total publicBank Group dlb./gr... total disb. 4.8 10.7 6.2 7.5 8.3 debt (incl.IBRD DOD/total WDO 7.8 8.0 7.2 7.3 8.0 undisbursed) 7,563 180.6Bank Growp DO/tutal DOD 7.8 8.6 7.8 7.8 8.4 Total MLT debt18RD debt service/total debt service 4.4 5.5 6.6 5.6 6.9 finc. un-Bsnk Group debt erv./tot-l debt. mccv. 4.4 5.6 6.7 5.6 7.0 disbursed) 10.856 259.2

Is Remittances of Filipinos employed broad are Included for 1972-78 in 'Transfers" ad 1979-85 in 'Direct Invetmest Inn-e.2b For projectlon parpeses "Net drn gings on IMF" ad "Capital tre.sac tions n.e.i." are assum.ed to cannel nut each other./c Gross reserves of the Central Bsan ("International reserves", IFS).d Includes net direct investment Income.

East Asia and Psoific RegionNovember 1979

ANNEX II-27 - Page 1 of 17

THE STATUS OF BANK GROUP OPERATIONS IN THE PHILIPPINES

A. STATEMENT OF BANK LOANS AND IDA CREDITSAs of September 30, 1979

Loan orCredit Amounts ($ million)Number FY Borrower Purpose Bank IDA Undislbursed

Seventeen Loans and two credits fully disbursed 271.0 19.5720-PH 1971 " Rice Processing & Storage 14.3 1.4809-PH 1972 National Power Corp. Power 22.0 1.2349-PH 1973 Rep. of the Philip. Education II 12.7 0.5939-PH 1973 " Ports 6.1 0.3950-PH 1973 " Second Highways 68.0 1.7984-PH 1974 " Aurora-Penaranda Irrigation 9.5 2.8998-PH 1974 " DFC-DBP I 50.0 4.1

1034-PH 1974 National Power Corp. Power 61.0 4.51035-PH 1974 Rep. of the Philip. Population 25.0 13.31048-PH 1974 " Shipping 20.0 11.21052-PH 1974 Philip. National Bank DFC 30.0 7.01080-PH 1975 Rep. of the Philip. Tarlac Irrigation 17.0 7.61102-PH 1975 " Rural Development 25.0 14.61120-PH 1975 " Small & Medium Industries 30.0 2.61154-PH 1976 " Magat Irrigation 42.0 22.51190-PH 1976 " DFC-DPB II 75.0 12.71224-T-PH 1976 Education III 25.0 16.41225-PH 1976 Livestock II 20.5 8.21227-PH 1976 Chico Irrigation 50.0 39.11272-T-PH 1976 Manila Urban 10.0 6.71282-PH 1976 Manila Urban 22.0 14.71269-PH 1976 Second Grain Processing 11.5 10.81270-PH 1976 Second Fisheries 12.0 6.91353-PH 1977 Third Highways 95.0 76.41367-PH 1977 Jalaur Irrigation 15.0 10.21374-PH 1977 Fourth Education 25.0 18.01399-PH 1977 Central Bank of the Fourth Rural Credit

Philippines 36.5 23.61414-PH 1977 Rep. of the Philip. National Irrg. Sys. Improv. 50.0 41.51415-PH 1977 Provincial Cities Water Sup. 23.0 18.81421-PH 1977 2nd Rural Dev. Land Stlmt. 15.0 13.91460-PH 1977 National Power Corp. Seventh Power 58.0 56.91506-PH 1978 Rep. of the Philip. Smallholder Tree Farming 8.0 7.91514-PH 1978 Philp. National Bank DFC (PDCP) 30.0 28.11526-PH 1978 Rep. of the Philip. 2nd Natnl. Irrg. Sys. Improv. 65.0 58.1790-PH 1978 Rural Infrastructure 28.0 27.9S.8-PH 1978 Education 2.0 1.91547-PH 1978 Rural Electrification 60.0 57.31555-PH 1978 Philip. National Bank DFC-PISO 15.0 7.21567-PH 1978 Rep. of the Philip. MAGAT II 150.0 108.71572-PH 1978 " Industrial Investment III 80.0 68.21615-PH 1978 Manila Water Supply II 88.0 88.01626-PH 1979 " National Extension 35.0 35.01639-PH 1979 Magat River Multipurpose 21.0 20.91646-PH 1979 Small Farmer Dev. Land Bank 16.5 16.21647-PH 1979 Second Urban Development 32.0 31.41661-PH 1979 Highways IV 100.0 100.01710-PH* 1979 Water Supply II 16.0 16.0920-PH* 1979 Water Supply II 22.0 22.01727-PH* 1979 Small & Medium Industry II 25.0 25.0923-PH** 1979 Population II 40.0 40.0

Total 1,970.9 122.2 1,229.9of which has been repaid(Bank and third parties) 145.8

Total now outstanding 1,825.1 122.2Amount sold 23.9

of which has been repaid(third parties) 15.2 8.7 -

Total now held by Bank and IDA(prior to exchange rate adjustments) 1,816.4 122.2

Total undisbursed 1.139.5 90.4 1,229.9

* Not yet effective.** Effective October 15, 1979.

- 28 -ANNEX IIPage 2 of 17

B. STATEMENT OF IFC INVESTMENTS

As of September 30, 1979

Fiscal Amounts ($ million)Year Company Loan Equity Total

1963 & 1973 Private Development Corporation of the 15.0 4.4 19.4Philippines

1967 Manila Electric Company 8.0 - 8.0

1967 Meralco Securities Corporation - 4.0 4.0

1970 Philippine Long Distance Telephone 4.5 - 4.5Company

1970 & 1972 Mariwasa Manufacturing, Inc. 0.8 0.4 1.2

1970 Paper Industries Corporation of the - 2.2 2.2Philippines

1971 & 1977 Philippine Petroleum Corporation 6.2 2.1 8.3

1972 Marinduque Mining and Industrial 15.0 - 15.0Corporation

1973 Victorias Chemical Corporation 1.9 0.3 2.2

1974 Filipinas Synthetic Fiber Corporation 1.5 - 1.5

1974/1979 Maria Christina Chemical Industries, Inc. 1.5 0.7 2.2

1974 Republic Flour Mills Corporation 1.2 - 1.2

1975 Philippine Polyamide Industrial 7.0 - 7.0Corporation

1976 Philagro Edible Oils, Inc. 2.6 0.2 2.8

1977 Acoje Mining Company, Inc. 2.3 1.2 3.5

1977 Sarmiento Industries, Inc. 3.5 - 3.5

1978 Cebu Shipyard and Engineering Works, Inc. 2.1 - 2.1

1979 General Milling Corporation 4.0 1.1 5.1

Total gross commitments 77.1 16.6 93.7

Less sold, acquired by others, 31.9 12.1 44.0repaid or cancelled

Total commitments now held by IFC 45.2 4.5 49.7

Undisbursed 7.6 1.1 8.7

- 29 -ANNEX IIPage 3 of 17

C. PROJECTS IN EXECUTION /1

Agricultural Sector

Loan No. 720 Rice Processing and Storage; $14.3 Million Loan ofFebruary 4, 1971; Date of Effectiveness: May 10, 1971;Closing Date: September 30, 1980

The original project concept of constructing integrated large

capacity rice mills was amended in 1972 and the emphasis shifted to rehabili-

tation of existing rice milling facilities. A further amendment in 1974

included corn in addition to rice, enabled local governments and the National

Grains Authority to borrow funds under the project, and streamlined

procurement procedures. The project is now progressing satisfactorily and

most mills are working to near capacity. Arrears are still a cause for

concern, and DBP has been asked to step up its supervision and technical and

management assistance to help deal with this problem. Bank funds have been

fully committed; however, because of the long construction period for some of

the larger subprojects, the Closing Date has been postponed to September 30,

1980.

Credit No. 472 Aurora-Penaranda Irrigation; $9.5 Million Credit and

Loan No. 984 $9.5 Million Loan of May 14, 1974; Date of Effectiveness:August 22, 1974; Closing Date: June 30, 1980

Overall progress of the project is satisfactory. Work on the dams

and transbasin diversion channels has been completed. Diversion from one

of the two dams started in July 1975, about one year ahead of schedule.There were initial delays in the award of contracts for the service area

improvement works and, following award, some additional delays were

experienced due to an extended period for irrigation water delivery in 1977.

These setbacks have caused a two-year delay in project completion which is

now scheduled for June 30, 1980.

/1 These notes are designed to inform the Executive Directors regarding the

progress of projects in execution, and in particular to report: anyproblems which are being encountered, and the action being taken to

remedy them. They should be read in this sense, and with theunderstanding that they do not purport to present a balanced evaluation

of strengths and weaknesses in project execution.

- 30 - ANNEX IIPage 4 of 17

Loan No. 1080 Tarlac Irrigation; $17.0 Million Loan of January 27, 1975;Date of Effectiveness: April 27, 1975; Closing Date:December 31, 1980

All major civil works contracts are in progress and the remainingwork is under way. Progress continues to be slow, with about 60% of projectworks completed against the appraisal target of 75%. Due to initial delaysand recent shortages of fuel and cement, the project is likely to be com-pleted in June 1981. The total project area is likely to be reduced byabout 3,500 ha due to flooding from the Chico, Camiling and Agno rivers.Project cost has increased from $34 million at appraisal to about $36.5million, with the result that the economic rate of return will be reducedfrom 15% at appraisal to about 12%.

Loan No. 1102 Rural Development; $25.0 Million Loan of April 16. 1975;Date of Effectiveness: July 28. 1975;Closing Date: June 30, 1981

As of March 1979, physical implementation of the irrigation anddrainage components was about 62% of the appraisal estimate. Due to delaysin contract award and recent shortages of fuel and construction supplies,construction has slowed down. However, now that the Pula river irrigationsystem contract has been awarded, progress is expected to improve. Theroad subprolect is about 66% complete. Disbursements are slow, with only25% of the loan amount allocated for road works so far disbursed. Physicalprogress has been slow, and shortages in fuel and cement have prevented anyimprovement in the construction rate. Implementation of the roadssubproject is expected to be completed in June 1980.

Loan No. 1154 Magat Multipurpose Project; $42.0 Million Loan ofAugust 7, 1975; Date of Effectiveness: November 4, 1975;Closing Date: June 30, 1982

Consultants' work on engineering and economic evaluation studiesof the proposed Magat dam and reservoir has been completed. Civil works bylocal contract and force acount for rehabilitation and new construction ofcanals, drains and access roads are progressing well. The water managementtraining is continuing satisfactorily. A delay in the contract award forimprovements to the project diversion dam will mean about a year's delay inthe completion of the project.

-31 -ANNEX IIPage! 5 of 17

Loan No. 1225 Second Livestock; $20.5 Million Loan of April 8, 1976;Date of Effectiveness: September 13, 1976;Closing Date: June 30, 1982

Investments in pig and poultry subloans continue to dominate theDevelopment Bank of the Philippines (DBP) livestock project lendingactivities, with subloans for beef production development lagging wvellbehind appraisal estimates. As a consequence, the project's list of goodshas been amended to allow for this fact. Disbursements are in line withappraisal projections but subloan commitments are running ahead of schedule.Project funds will probably be fully-committed either in late 1979 or inearly 1980. Repayments of principal of the majority of DBP's borrowersunder the project are still under grace but a build-up of interest arrearsis beginning to emerge. As of June 30, 1979, principal and interestarrears under the first phase project had reached about 25% of the portfolio.We have assisted DBP with the development of an intensive action-orientedcollection program which is now under implementation. Thanks to governmentapproval of increased salary scales, DBP has significantly improved itsstaffing position. Various improvements to DBP's organizational structurehave been instituted and other organizational developments are underconsideration. The Bank is involved in a continuing dialogue with DBP onvarious institutional issues.

Loan No. 1227 Chico River Irrigation Project; $50.0 Million Loanof April 8. 1976; Date of Effectiveness: July 19, 1976;Closing Date: June 30, 1981

The project had a slow start due to delays in procuring construc-tion equpment for force account works. Changes in the design of the Chicodiversion weir, the main diversion dam and the main canal siphon resulted incontracts being awarded behind schedule. Since the contracts were awarded,however, progress has been satisfactory.

Loan No. 1269 Second Livestock; $20.5 Million Loan of April 8, 1976;Second Grain Processing Project; $11.5 Million Loanof July 2, 1976; Date of Effectiveness: October 4,1976; Closing Date: June 30, 1981

Due to delays in implementing the first phase project, handling ofapplications for the project only started about 2 years after effectiveness.After three years of bumper rice crops, medium and large millers are makinggood profits. DBP has undertaken to assist the smaller millers with limitedtechnical and management assistance, which should result in better repayments.Demand for subloans has, however, been slowed down by what is perceived byprospective applicants as slow processing of subloans by DBP. To assist DBPimprove their operations, the Bank has provided them with a list of detailedrecommendations on actions to be taken.

- 32 - ANNEX IIPage 6 of 17

Loan No. 1270 Second Fisheries Project; $12.0 Million Loan ofJuly 2, 1976; Date of Effectiveniess: November 12, 1976;Closing Date: June 30, 1981

Due to problems related to procurement procedures for fishingvessels and increasod deployment of staff on loan recovery work, theDevelopment Bank of the Philippines slowed down the processing of subloanapprovals in the second half of 1977. However, loan approvals had picked upconsiderably during 1978 and the loan should be fully committed by mid-1979,over 18 months ah-ad of schedule.

Loan No. 1367 Jalaur Irrigation Project; $15.0 Million Loan ofFebruary 14, 1977; Date of Effectiveness: May 12, 1977;Closing Date: December 31, 1982

NIA's force account operations on access roads and drains hasimproved following delivery of construction equipment in December 1978. Thedetail design for a major part of the works has been completed and manycontracts have been awarded. The overall progress of the project is satis-factory.

Loan No. 1399 Fourth Rural Credit Project; $36.5 Million Loan ofApril 11. 1977; Date of Effectiveness: June 2, 1977;Closing Date: December 31. 1980

Investments under the project are generally performing well,although the commitment rate is slow and will decline even further with therecent termination of large tractor financing. To help accelerate commit-ments, the Central Bank, supported by the Bank, has made a number ofrecommendations, including: the expansion of lending categories to includeadditional agricultural investments; assignment of authority to the CentralBank to evaluate and finance agricultural projects not specifically identi-fied in the Rules and Regulations; the addition of private development banksto the eligible financial intermediaries; expansion of training provisionsto include funds for domestic and foreign training of Central Bank staff.Repayment performance continues to be unsatisfactory; however, causes are ofa long-term sectoral nature and will be addressed in that context. Vehiclesfor Central Bank field staff have been procured, and contracts awarded forthe construction of the Agricultural 2Iachinery Testing and Evaluation Centerand for the Farm Mechanization Study. Completion of the project is nowexpected to be delayed by about 18 months.

ANNEX II- 33 - Page 7 of 17

Loan No. 1414 National Irrigation Systems Improvement Project;$50 Million Loan of May 13, 1977; Date of Effectiveness:August 9, 1977; Closing Date: December 31, 1981

Progress in project implementation has been slow due to staffingand design problems. Contracts for drainage works in Leyte are to beawarded shortly, and those for the Abulog works have already been awarded.Progress is now expected to proceed satisfactorily.

Loan No. 1421 Second Rural Development (Land Settlement) Project;$15.0 Million Loan of June 10, 1977; Date of Effectiveness:October 27, 1977; Closing Date: December 31, 1982

Satisfactory overall progress is being maintained, particularlywith infrastructure and in work towards appropriate technical packages inagriculture. Population of settlements is growing, more land is beingcultivated, and crop standards have improved. Problems associated withlegalizing land holdings are still of concern, and some difficult policydecisions will have to be made before they can be resolved. Feasibilitystudies towards a forward program have been initiated, indirectly focussingattention on the need for policy studies relating to the future use of, ordevelopments within, unalienated lands in general.

Loan No. 1506 Smallholder Tree Farming and Forestry Project; $8.0 MillionLoan of January 23, 1978; Date of Effectiveness: May 11,1978; Closing Date: December 31, 1982

Operations have started in all project components except research,but progress has been lagging behind schedule; the DBP smallholder treefarming component has met with a slow rate of farmer enrollment due toproblems with legal requirements, land availability and farmers' reluctantattitude arising from lack of previous experience. However, DBP remainscommitted to the project and is working on ways in which to stimulateprogress. In the Abra pine plantation component insufficiency of Governmentfunds has caused the program of vehicle acquisition and buildingconstruction to fall a year behind schedule, but it is expected that thedelay will be made up to a large extent during 1979. Disbursements have notyet begun, due to the early stage of the project and the initial delays.

Loan No. 1526 Second National Irrigation Systems Improvement Project:$65 Million Loan of March 15, 1978; Date of Effectiveness:June 20, 1978; Closing Date: December 31, 1984

Project equipment has been procured ahead of schedule.Topographic surveys and mapping have been completed for about 80% of theproject area and design of project works is under way. The construction workstarted recently is primarily devoted to service roads and structures alongmain and secondary canals. Overall progress of the project is satisfactory.

-34 - ANNEX II

Page 8 of 17

Credit No. 790 Rural Infrastructure; $28 Million Credit of April 21,1978; Date of Effectiveness: July 21, 1978; Closing Date:December 31, 1983

Construction work on communal irrigation systems, village watersupply, health stations and ports is proceeding well. However, progress onthe design of village roads is slow. Overall progress of the project issatisfactory.

Loan No. 1567-PH The Magat River Multipurpose Project - Stage II;$150 Million Loan of May 23, 1978; Date of Effectiveness;August 24, 1978; Closing Date: December 31, 1983

Preconstruction works have been completed and works on dam founda-tion, grouting, drainage gallery tunneling and river diversion tunnels areunder way and expected to be completed this year. The civil works contractfor the main dam has been awarded and the contractor has completed themobilization of staff and equipment.

Loan No. 1626-PH National Extension Proiect; $32.0 ?Yil lion Loan ofDecember 21, 1978; Date of Effectiveness: March 27. 1979;Closing Date: December 31, 1982

A firm commitment to the project is evident. Management andExecutive Committees have been established, and previously withheldbudgetary allocations are now gradually being released, except for vehiclepurchase. Field implementation is expected to begin within the next fewmonths when it is hoped that budgetary releases for motorcycles andcommunications equipment will be approved. Main problems at the moment restwith the management of the Bureau of Agricultural Extension, where there issome confusion as to responsibilities by division heads. The Minister ofAgriculture is aware of the problem, and is working on ways to strengthenthe Bureau's management.

Loan No. 1639-PH Magat River Multipurpose Project; Stage II Irrigation;$21.0 Million Loan of January 26, 1979;Date of Effectiveness: April 25, 1979;Closing Date: December 31, 1983

The design for the Baligatan diversion dam and main canals hasbeen completed, and NIA expects to start construction work soon. Overallprogress is satisfactory.

- 35 -ANNEX IIPage 9 of 17

Loan No. 1646-PH Small Farmer Development Project through the Land Bank ofthe Philippines; $16.5 Million Loan of January 26, 1979;Date of Effectiveness: April 25, 1979;Closing Date: June 30, 1982

The project has been slow in its lending operations, reflectingexpected initial low demand for loans on the part of the farmers. The LandBank is continuing its efforts to strengthen its field services and to estab-lish closer contacts with the farmers. It is expected that the lendingprogram will gain momentum as these efforts result in more effective presenceof the Land Bank among farmers. The Land Bank is also actively consideringalternative ways of speeding up implementation of the project.

Transportation Sector

Loan No. 939 Second Ports Project; $6.1 Million Loan of October 24,1973; Date of Effecet eness: December 19, 1973;Closing Date: July 1 r 1980

Project civil works at General Santos were completed and turnedover to the Philippine Ports Authority (PPA) on December 7, 1978. AtCagayan de Oro, 94% of the project is complete, and PPA is already using thenew quay extension. Progress has recently been delayed by fuel shortages andlate contractual payments to contractors by the Government. The Closing Dateof the loan has recently been extended to July 15, 1980 to cover civil workscontract guarantee retention monies and the next ports project feasibilitystudy costs. The latest project cost estimate is $20.2 million compared to$12 million at appraisal.

Loan No. 950 Second Highway; $68.0 Million Loan of December 12, 1973;Date of Effectiveness: February 27, 1974;Closing Date: June 30, 1980

Overall, the project is about 98% complete. Substantial problemshave been encountered at various times during implementation, which havelargely been overcome but which have resulted in cost increases and timedelays. Further major problems are not anticipated, and the project isexpected to be completed by March 1980, a delay of 3 years, with a new ClosingDate of June 30, 1980. Total project cost is now estimated at about $178million, an increase of about 39% over the original appraisal estimate, dueprimarily to inflation and the serious time delays that have been experiencedthroughout the project.

- 36. - ANNEX IIPage 10 of 17

Loan No. 1048 Inter-Island Shipping; $20 Million Loan of October 29,1974; Date of Effectiveness: January 15, 1975;Closing Date: June 30, 1980

The current rate of disbursement and commitments suggests that theloan will be fully disbursed by the revised closing date of June 30, 1980.It is possible, however, that the disbursement period may need to be extendedfor six months for completion of the training programs and for ship construc-tion guarantee payments. A report by a Bank consultant points out that thereis little likelihood that the ship safety inspection system now operated bythe Philippine Coast Guard can be improved without a major disaster providingan impetus for change to a separate, more professional and better qualifiedcadre of ship inspector. This report has been made available to the Govern-ment.

Loan No. 1353 Third Highway Project; $95.0 Million Loan of January 12,1977; Date of Effectiveness: March 30, 1977;Closing Date: June 30, 1981

Contracts have been awarded and work begun on all national roadsafter initial delays in securing Presidential approval for some contracts.However, much difficulty has been experienced in making acceptable progressin many of these contracts, requiring that MPH terminate six out of14 of them for unsatisfactory performance. In two cases, new contractorshave been appointed and work has begun again. Contracts for improvement ofminor roads have been awarded and work will begin following Presidentialapproval of awards. After a delay of about 12 months, the road maintenanceand restoration program is now making satisfactory progress. All but one ofthe 28 workshop contracts have been awarded, with work well advanced oneight of them and the balance awaiting Presidential approval of awards.Procurement contracts for almost all equipment, tools and machinery havebeen approved, with delivery expected during 1979. Consultants forsupervision of construction of roads and workshops are in place. Technicalassistance advisors to MPH and training advisors are due to complete theirassignments in November 1979 and March 1980, respectively. The road andferry feasibility report was submitted in October 1978. Overall projectcosts are expected to remain close to appraisal estimates, but projectexecution is expected to be delayed by about 24 months due to the late startof certain critical activities and to the serious delays occurring in someof the road construction contracts.

Loan No. 1661 Fourth Highway Project; $100 Million Loan of March 9,1979 ; Expected Date of Effectiveness: June 12, 1979;Closing Date: December 31, 1982

Prequalification of contractors for the road construction works isnow under way. Detailed engineering and bidding documents for the roadimprovements were prepared under a previous loan (950-PH) and bidding will

-37 - ANNEX IIPage 11 of 17

take place in the near future after the list of prequalified contractors hasbeen agreed upon. Invitations for proposals have been issued to theshort-listed consulting firms for technical assistance to MPH and MLGCD. Ashort-list of prospective consulting firms for the design and constructionsupervision of workshops is in the process of being drawn up and consultantsfor this work will be invited to submit proposals before the end oif 1979.Preparatory work for the continuation of the Road Maintenance and RtoadRestoration Program begun under the Third Highway Project (Loan 1353-PH) isscheduled to begin during the first quarter of 1980. Selection of TechnicalAssistance consultants to MPWTC for the continuation of the "TransportPlanning Advisory Services," begun under a previous project, (Loan 1282-PH)is in process.

Education Sector

Loan No. 1224 Third Education Project; $25 Million Loan of April 8,1976; Date of Effectiveness: July 29, 1976;Closing Date: June 30, 1981

The project has recently established an autonomous textbook agencyto manage book development, production, and distribution for public element-ary and secondary schools. It includes the writing of 75 textbook titles andproduction of 27 million textbooks. Good progress has been made towardsachieving the key institution-building feature of the project. Implementationis proceeding well with only minimal (four month) delays, and 15 milliontextbooks have been produced and distributed. Project costs are close toappraisal estimate, and disbursements are about 76% of appraisal estimates.

Loan No. 1374 Fourth Education Project; $25.0 Million Loan of March 25,1977; Date of Effectiveness: June 9, 1977;Closing Date: December 31, 1981

Implementation of the project is generally about nine months behindschedule because of delayed contract awards, shortages of building materialsand rapid price escalation. Remedial measures are being taken by the Govern-ment. Enrollment projections and staff development programs show that theproject is making steady progress towards its development impact targets.Project costs are close to appraisal estimates.

Loan No. S-8-PH Educational Radio Technical Assistance: $2 Million Loanof April 21, 1978; Date of Effectiveness: August 22, 1978;Closing Date: December 31, 1981

The project is being implemented by an Educational CommnunicationsOffice (ECO), established for this purpose within EDPITAF. ECO is function-ing smoothly and is successfully preparing and distributing radio programs

-38 - ANNEX II

Page 12 of 17

and printed materials for the two major project subcomponents - RadioAssisted Teaching in Elementary Schools (RATES), and Continuing Educationfor Teachers (CET). These programs have reached the two selected pilot areas

on schedule (Pangasinan and Leyte Provinces). CET will most likely beginanother experimental utilization in Mindanao in early 1980. In order toprovide information on the desirability of nationwide project implementa-tion, the pilot project includes a substantial evaluation component which isproceeding smoothly.

Urban Sector

Loan No. 1272T Manila Urban Development Project; $10.0 Million andLoan No. 1282 $22.0 Million Loans of June 9, 1976; Date of Effectiveness:

December 9, 1976; Closing Date: September 30, 1981

Overall construction on the Tondo project is about 57% complete.Community facilities such as the high school are in use and final designs forthe remainder of these facilities are nearing completion. Major contractsfor the Radial Road (R-10) have been awarded and implementation is to beginpromptly. The project is generally progressing satisfactorily with manyinitial difficulties overcome and valuable lessons learned which should hastenimplementation of the remainder of the project.

Loan No. 1415 Provincial Cities Water Supply Project; $23 pillion Loanof May 13. 1977; Date of Effectiveness: September 9,1977; Closing Date: March 31, 1982

Under Part A of the project, well drilling activities in five ofthe six WDs are in progress. Designs of distribution networks, pumping

stations and reservoirs have been finalized and bids called. Public hearingson the revised projects have been successfully held in three of the projecttowns, one decided not to implement its part of the project, and one WI) isconsidering a reduction in its project. One N1D did not meet the contribu-tion to construction covenant for 1978, and corrective action is expectedsoon. LWUA has been asked to formulate a plan to furnish assistance to Wnsin their institution-building efforts and to take steps to strengthen itscollection procedures. Part B of the project has been delayed due to ascarcity of local contractors for drilling and testing wells in remotelocations. Disbursements have been slow (30% of appraisal estimate) mainlydue to change in procurement methods, weak project management and delays inthe work of local consultants. This situation is expected to improve nowthat a new Project Manager has been appointed, and it is anticipated thatthe project will be completed within the scheduled period.

ANNEX II- 39 - _Page 13 of 17

Loan No. 1615 Second Manila Water Supply Project; $88 Million Loan ofJuly 26, 1978; Date of Effectiveness: December 21, 1978;Closing Date: December 31, 1983

Part A of the project has been delayed by about one year due mainlyto slow Government approval of major contracts on source works financed byADB, which has produced similar delays in the Bank-financed components(Part B). MWSS' consultants have prepared a new construction programrescheduling the different components in order to meet the original target ofproject completion in June 1983. This new program is reasonable. Award ofcontracts under the IBRD part of the project is expected to begin aboutDecember 1979. Part C of the project is proceeding satisfactorily. A waterrate increase of 59% was implemented in October 1978 as agreed duringnegotiations, and two additional increases of P 0.25 each have been approvedby the President, and will be implemented in 1980 and 1981.

Loan No. 1647-PH Second Urban Development Project; $32.0 Million Loanof January 26, 1979; Date of Effectiveness: April 26,1979; Closing Date: June 30, 1984

The loan became effective on April 26, 1979. Impplementation hasbegun on earthworks, sewage and drainage contracts in Manila and the threeregional cities of Cebu, Davao, and Cagayan de Oro. Designs for communityfacilities in Phase I of Dagat-dagatan are in the final stages.

Credit No. 920 Second Provincial Cities Water Supply Project: S22.0Loan No. 1710 Million Credit and $16.0 Million Loan of June 29. 1q79;

Proposed Date of Effectiveness: December 14, 19'9;Closing Date: December 31, 1985

This loan/credit was signed on June 29, 1979 and is expected to bedeclared effective on December 14, 1979.

Power Sector

Loan No. 809 Fifth Power; $22.0 Million Loan and $10.0 Million CreditCredit No. 296 of April 3, 1972; Date of Effectiveness: July 1,, 1972;

Closing Date: December 31, 1979

The project was completed in mid-1977, two years behind schedule.Due to cost overruns, a part of the transmission project was transferred tothe Sixth Power Project, and the actual project cost as finally constructedwas about US$59.3 million an increase of about US$11.0 million over theoriginal estimate. The Closing Date of the loan has been postponed fromDecember 31, 1978 to December 31, 1979 to allow full disbursement ofcommitted funds. As of the end of September, the undisbursed funds amountedto $1.2 million. Credit 296-PH was fully disbursed in April 1975.

ANNEX II- 40 - Page 14 of 17

Loan No. 1034 Sixth Power: $61.0 Million Loan of July 31, 1974:Date of Effectiveness: November 15, 1974;Closing Date: June 30, 1981

The project consists of a 100 MW hydropower plant at Pantabangan,Luzon, transmission lines for the expansion of the Luzon grid and consul-tants' services. The generating plant was commissioned in April 1979, andthe transmission facilities will now be completed late in 1980, more thantwo years behind schedule. The revised cost of the project is estimated atUS$114.1 million, an increase of about 24% over the original estimate(US$92.0 million). The cost overrun for the foreign exchange component isUS$5.2 million (9%). The Closing Date of the loan has been postponed fromDecember 31, 1978 to June 30, 1981 to allow additional time for completionof the transmission systems and payment of the retention money.

Loan No. 1460 Seventh Power Project; $58.0 Million Loan of August 9,1977; Date of Effectiveness: January 6, 1978;Closing Date: June 30, 1982

Procurement has been slow, and as a result disbursements have beenbehind schedule, with only $1.2 million disbursed as of September 2), 1979,compared with the appraisal estimate of $19.0 million. Although the Bankwaived the 8% rate of return requirement for 1978, NPC achieved a rate ofreturn of 7% and expected to achieve 8% in 1979 after taking over plantpreviously owned and operated by Meralco. However, prospects of achievingthe 8% rate of return in 1979 are considered slim because a planned 10%tariff increase in Luzon has not been implemented because of "brownouts" dueto operating problems with its generating plant and increases in fuel costswhich were passed on to consumers. Plans for establishing a trainingcenter, which was to be financed by the Bank, have been deferred.

Loan No. 1547 Rural Electrification; $60.0 Million Loan of April 4,1978; Date of Effectiveness: August 17, 1978;Closing Date: December 31, 1981

The project is behind schedule due to the initial slow pace oftender document preparation and delays in procurement. However, followingreorganization of NEA's management, the first contracts for purchase of Bankproject materials were awarded in April 1979. Construction is expected tocommence in late 1979 or early 1980 after receipt of project materials, andfirst disbursements are expected before June 1980. NEA's financialperformance and position in 1977 and 1978 was good, and steps are beingtaken by NEA to strengthen its monitoring of the financial performance ofthe cooperatives, especially their compliance with the Government'sfinancial performance guidelines.

ANNEX IIPage 15 of 17

Industrial Sector

Loan No. 998 Industrial Investment and Smallholder Tree-Farmin&;$50.0 Million Loan of June 12, 1974; Date of Effectiveness:September 9, 1974; Closing Date: December 31, 1981

The proceeds of the loan were relent to the Development Bank ofthe Philippines (DBP). The industrial portion of the Loan ($48 million) hasbeen used by DBP to finance direct imports for medium and relatively largeindustrial projects. DBP is using the balance ($2 million) to finance about1,300 smallholders in a pilot tree-farming project in Mindanao; this part ofthe loan is nearly fully disbursed.

Loan No. 1052 Private Development Corporation of the Philippines;$30 Million Loan of November 12, 1974; Date ofEffectiveness: February 7, 1975; Closing Date: June 30,1979

The proceeds of the loan are on-lent by PDCP to financially andeconomically viable industrial subprojects. After some slowdown incommitments and disbursements experienced in 1976 and 1977 the loan has nowbeen fully committed. Overall progress is satisfactory.

Loan No. 1120 Small and Medium Industries Development; $30.0 MillionLoan of June 5, 1975; Date of Effectiveness: Au,ust 20,1975; Closing Date: February 28, 1980

The original DBP ($15 million) and IGLF ($12 million) portions of the loanhave been fully disbursed. However, the Rural Industrial Croperative Program($2.3 million) which is being implemented by the National ElectrificationAdministration is facing management and staffing problems because of itsexperimental nature. Disbursements on this component have been slow and,therefore, $1.7 million out of the original allocation of $2.3 million WHasbeen reallocated to DBP, who can utilize this amount quickly. The SmallBusiness Advisory Centers program ($0.7 million) of the Ministry of Industryhas been implemented and is working satisfactorily. Overall progress of theproject is satisfactory.

Loan No. 1190 Industrial Investment; $75.0 Million Loan of Jarnuary 28,1975; Date of Effectiveness: April 6, 1976;Closing Date: March 31, 1980

In February, 1977, the Executive Directors approved a proposal toallocate $25 million of the funds for small and medium industries, and anamendment to the Loan Agreement to this effect was signed on March 16, 1977.Commitments of funds, which were initially much slower than expected due to

- 42 - A1ANEX IIpage 16 of 17

a slowdown of investment in the industrial sector as a whole, improved in1Q78 and 1979. The loan has since been fully committed hy hRP forsubprojects. Disbursement is now proceeding satisfactorily.

Loan No. 1514 Private Development Corporation of the Philippines (PDCP);$30 Million Loan of February 0, 19'SDate of Effectiveness- June 23, 1078- Closing DateMarch 31, 1Q82

As of September 30, 1979 commnitments under the loan amounted to$q.4 million. The project progress is satisfactory.

Loan No. 1555 PhilipDines Investments Systems Organization (PISO);$15 Million Loan of May P, 107P- Date of Effectiveness:May 12, 197R, Closing Tnate: December 31, 19R2

The pace of commitment of the loan has been much Caster thananticipated during loan appraisal, and the loan has since been fullycommitted by PISO. As of September 30, 1Q70, disbursements amotnted to$7.R million. Overall progress of the project is satisfactory.

Loan No. 1572 Third Industrial Investment Credit Project through theDevelopment Bank of the Philippines: W80 Million Loanof June 6, 197P- Date of Fffectiveness: September 15,197P; Closing Date: June 30, 1992

Commitments for subprojects under the large industry componentamounted to over $27 million as of September 30, 1079. In addition, as ofthe same date the small and medium industry component had been disbursed tothe extent of $5.4 million. the overall progress of the project issatisfactory.

Loan No. 1727 Second Small and Medium Industries Development Project,$25 Million Loan of June 29, lq79; Date of EffectivenessNovember 9, 1970; Closing Date: June 30, 1083

This loan was signed on June 2, 1970 andl was declared effectiveon November 9, 1970.

Loan No. 1035 Population: $25.0 Million Loan of July 31, 1974-Date of Effectiveness: November 13, 1974; ClosingDate: December 31, 197Q

As of June 30, 1970. 17n of the 219 proiect facilities had beencompleted, 27 were under construction and 13 had not been started.

- 43 -A_NEX IIPage 17 of 17

Contractors had completed 88% of all construction work. During the periodJanuary to October 1979, many Droject components experienced implementationdelays due to non-availability of Government counterpart funds. Wbile thisproblem was partially solved by internal transfer and reallocation of fundsit is likely that there will be a six-month delay in project completion.Since a number of actiVities being funded under this first project ar-preparatory to the second, the continued problems with fund allocation willdelay effective implementation of the second project. In January 1979 theprolect was amended to include financing of additional vehicles arnd equip-ment for service deliverv; training: information, education and communi-cation campaigns; and studies in preparation for the second populationproject. The amended total project cost is $40 million. The total costestimate had decreased from the estimate at appraisal, due mainly to priceincreases not materializing as Forecast. The management situationI in theCommission on Population (POPCOM) is improving and a Functional analysis ofthe Ministry of Health is under way. The recommendations of this study, ifimplemented, should considerably strengthen the health care delivery system.

Credit No. 923 Second Population Project; $40.0 Million Credit ofJune 29 1Q79: Date of Effectiveness: october 15, 7-Closing Date: June 3n, 19R5

This credit was signed on June 29, 1Q7q, and was declared effec-tive on October 15, 1979. Preparatory activities funded under the firstproject are being delayed due to shortages of Govrernment funds.

- 44 -

ANNEX IIIPage 1

PHILIPPINES

FISHERY TRAINING PROJECT

Supplementary Project Data Sheet

Section I: Timetable of Key Events

(a) Time taken to prepare project: September 1977-June 1978

(b) Project prepared by: the Ministry of Education and Culture withFAO assistance

(c) Discussions with the Government onproject preparation: September 1977

(d) First Bank mission to consider project: June/July 1978

(e) Follow-up missions for furtherdiscussion of project: January and April 1979

(f) Departure of appraisal mission: August 1979

(g) Completion of negotiations: November 9, 1979

(h) Planned loan effectiveness: April 1980

Section II: Special Bank Implementation Actions

None

Section III: Special Conditions

The Government Is to:

(a) provide incentives for relocating staff of the UPVCF to Miagao(para. 45);

(b) maintain a staff/student ratio satisfactory to the Bank at UPVCF(para. 45) and at the regional institutes (para. 48).

(c) establish, by March 31, 1980, a committee to review researchproposals to be financed by the proposed project and selectresearch programs in accordance with criteria satisfactory tothe Bank (para. 46);

- 45 -

ANNEX IIIPage 2

(d) discontinue, by 1984, the Bachelor of Science Degree in Fisheryprograms offered at the proposed Institutes of Fishery Technology,except at the Institute at Zamboanga (para. 47);

(e) establish no new postsecondary fishery training institutes duringproject implementation, unless otherwise agreed with the Bank(para. 47);

(f) facilitate appointment and career advancement of the institutes'graduates (para. 47);

(g) set up Regional Fishery Training Development Committees to coordin-ate activities of the Institutes of Fishery Technology and theCenters for Fishermen Training (para. 51); and

(h) develop a monitoring and evaluation system by June 30, 1980,complete the collection of baseline data by March 31, 1981,and furnish an annual report to the Bank for its review eachJune from 1982 to 1985 (para. 53).

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