Document ofFIEC PThe World Bank

FOR OFFICIAL USE ONLY

Report No. 2811-PH

STAFF APPRAISAL REPORT

PHILIPPINES

MEDIUM SCALE IRRIGATION PROJECT

February 25, 1980

Projects DepartmentEast Asia and Pacific Regional Office

This document has a restricted 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

Currency Unit - Philippine Pesos (P )

P1 = US$0.135

US$1 = P 7.4

WEIGHTS AND MEASURES

1 ha = 2.47 acres

1 km = 0.62 miles

1 sq km 0.386 sq mileI m = 3.28 ft1 sq m = 10.76 sq ft1 cu m = 35.31 cu ft1 M cu m 810.7 ac ft1 mm 0.039 in1 kg 2.2 lb1 cavan = 50 kg

20 cavans 1 m ton

ABBREVIATIONS

ADB - Asian Development BankRAE - Bureau of Agricultural ExtensionBPI - Bureau of Plant IndustryFSDC - Farm Systems Development CorporationJOCV - Japanese Overseas Cooperation VolunteersMAR - Ministry of Agrarian ReformMCM - Million Cubic MetersMES - Malaria Eradication ServiceMOH - Ministry of HealthNEDA - National Economic and Development AuthorityNFAC - National Food and Agriculture CouncilNGA - National Grain AuthorityNIA - National Irrigation AdministrationNISIP - National Irrigation Systems Improvement ProjectO&M - Operation and MaintenancePDD - Project Development DepartmentSPO - Special Projects OrganizationUPRP - Upper Pampanga River ProjectWMT - Water Management Technician

GOVERNMENT OF THE PHILIPPINESFISCAL YEAR

January 1 - December 31

FOR OFFICIAL USE ONLY

PHILIPPINES

STAFF APPRAISAL OF THE MEDIUM-SCALE IRRIGATION PROJECT

TABLE OF CONTENTS

Page No.

1e BACKGROUND . . . . . . . . .. . . . . . . . . . . . . . . . . 1

General . . . . . . . . . . . . . . . . . . . . . . . . . . IThe Agricultural Sector . . . . . . . . . . . . . . . . . I 1Project Formulation . . . . . . . . . . . . . . . . . . . . 3

2. THE PROJECT AREA . . . . . . . . . . . . . . . . . . . . . . . 5

General. 5Climate . . . . . . . . . . .. . . . . . . . . . . . . 5Topography, Drainage and Soils . . . . . . . . . . . . . . . 6Land Tenure and Farm Size . . . . . . . . . . . . . . . . . 7Existing Irrigation Facilities . . . . . . . . . . . . . . . 11Transportation . . . . . . . . . ... . . . . . . . . . . . . 11

3. THE PROJECT . . . . . . . . . . . . . . . . . . . . . . . . . 12

Project Description . . . . . . . . . . . . ... 12Project Works . . . . . . . . . . . . . . . . . . 12Water Supply, Demand and Quality . . . . . . . . . . . . . . 16Status of Engineering . . . . . . . .. . . . . . . . 18Input-Output Monitoring ... . . ..... . . . . . . . . 23O&M Study and Training . . . . . . . . . . . . . . . . . . 23Strengthening of Malaria Control Unit in Palawan . . . . . 24Cost Estimates . . . . . .. . . . . . . . . . . . . . . . . 25Financing .... . . . . . . . . . . . . . ...... . . 29Procurement . . . . . .. . . . . . . . . . . . . . . . . . 29Disbursements . . .. . . . . . . . . .. .. . . . . . . . 30Accounts and Audit .... . . . . . . . . . ....... . 30Environmental Effects . . . . . . . . . . . . . . . .. . 30

4. ORGANIZATION AND MANAGEMENT ... . . . ..... . . . . . . 31

Project Management . . . . . . . . . . . . . . . . . . . . . 31Agricultural Supporting Services . . . . . . . . . . . . . . 32

5. AGRICLTLTURAL PRODUCTION ... . . . . * .... . . . . . . . 35

Present Cropping Pattern . . . . . . . . . . . . . . . . . . 35Future Cropping Pattern . . . . . . . . . . . . . . . . . . 35Yields and Production . . . . . . . . . . . . . . . . . . . 35Cropping Calendar . . . . . . . . . . . . . . . . . . . . . 38

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

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Page No.

Farm Mechanization . . . . . . . . . . . . . . . . . . . . . 38

Drying, Storage and Processing . . . . . . . . . . . . . . 38

6. MARKET PROSPECTS, PRICES, FARM INCOMES AND PROJECTCHARGES . . ............................. ............... .... ...... 40

Market Prospects . .. . . . 40Prices .o. . .... . 40

Far Incomes . .. . . . . . . . . . . . . . . . . . 42Cost and Rent Recovery . . . . . . . . . . 43

7. BENEFITS, JUSTIFICATION AND RISKS . . . . . . . .. . . 46

8. AGREEMENTS REACHED AND RECOMMENDATION . . . .. . . 54

ANNEXES

1. Climatological Data, Project Features, Equipment List,Annual O&M Cost, Price Increases, Expenditures, Disburse-ments and Allocation of Loan Proceeds

2. Input Prices, Production Costs, Labor Costs, Crop and FarmBudgets

3. Schedule of Early Events4. Accounting Procedures for Force Account Work and Minor Contracts5. Related Documents, Cost Estimate Tables and Other Data

Available in the Project File

LIST OF TABLES IN MAIN TEXT

Table No.

2.1 Land Ownership Distribution . . . . . . . . . 9 . . . . . . . 92.2 Land Tenure . . . . . . . . . . . . . . . . . . . . . . . 103.1 Diversion Structures . . . . . . . . . . . . . . . . . . . . . 133.2 Project Water Requirements Summary . . . . . . . . . . . . . . 293.3 Estimated Cropping Area, Water Requirements and Supply . . . . 203.4 Present and Future Irrigated Areas . . . . . . . . . . . . . . 213.5 Cost Estimate .............. . . . 27

3.6 Irrigation Service Area - Cost Estimate . . . . . . . . . . . 285.1 Present and Projected Yields . . . . . . . . . . . . . . . . . 365.2 Present and Projected Paddy Production . . . . . . . . . . . . 376.1 Price Structure for Rice . . . . . . . . . . . . . . . . . . . 416.2 Fertilizer Prices . . . . . . . . . . . . . . . . . . . . . . 426.3 Farm Incomes . . . . . . . . . . . . . . . . . . . . . . . . . 426.4 Cost and Rent Recovery . . . . . . . . . . . . . . . . . . . . 457.1 Net Value of Production . . . . . . . . . . . . . . . . . . . 507.2 Labor Supply.. ................ 517.3 Economic Costs and Benefits . . . . . . . . . . . . . . . . . 527.4 Sensitivity Analysis . . . . . . . . . . . . . . . . . . . . . 53

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Page No.

LIST OF FIGURES

Figure 3.1 - Implementation Schedule . . . . . . . . . . . . . . . . 85Figure 4.1 - NIA Organization . . . . . . . . . . . . . . . . . . . 86Figure 4.2 - Proposed Organization for Project Construction . . . . 87Figure 4.3 - Proposed Organization for Operation and Maintenance . . 88Figure 5.1 - Proposed Cropping Calendar . . . . . . . . . . . . . . 89

LIST OF MAPS

IBRD 14589 - Medium Scale Irrigation Project, Mindoro SystemsIBRD 14590 - Medium Scale Irrigation Project, Palawan Systems

I

PHILIPPINES

MEDIUM SCALE IRRIGATION PROJECT

1. BACKGROUND

General

1.01 The Government of the Philippines has requested the Bank to assistin financing irrigation development in the islands of Mindoro and Palawan.The project would provide for the construction of irrigation facilities tobenefit about 38,000 ha of rice land, spread over seven irrigation systems.The two islands are relatively unaffected by typhoons, are areas of immigra-tion from the overcrowded islands of Luzon and the Visayas, and contain someof the few remaining, easily developed substantial areas of irrigationpotential in the Philippines. The project would also support the Govern-ment's policy of a more geographically balanced development program.

1.02 The project was prepared by the Project Development Department (PDD)of the National Irrigation Administration (NIA). This report is based on thefindings of a preappraisal mission in May 1979 comprising Mr. A.N. Khan andMs. V. Mackrandilal (Bank) and Messrs. R. Campbell and A. Yambao (consultants)and an appraisal mission consisting of Messrs. A.N. Khan, M. Cox, and Ms. V.Mackrandilal (Bank), and Messrs. A. Yambao and G. Cazaux (consultants), whichvisited the Philippines in September 1979. Messrs. E. G. Giglioli and R.O'Sullivan assisted in writing the report.

The Agricultural Sector

1.03 Agriculture is the predominant sector in the Philippine economy,accounting for about one third of net domestic product, over one half oftotal employment, and more than half of export earnings. Over 70% of the 9million ha of land under cultivation is used for the production of cereals,of which rice and corn are the most important. About 1.2 million ha areirrigated. The remaining land is taken up by the major export crops: sugar,coconuts, abaca, pineapples, and tobacco.

1.04 The performance of the agricultural sector is crucial in deter-mining whether the Philippines can increase incomes both rapidly andequitably. At present, the domestic market for industrial products islimited by relatively low rural incomes. Although in recent years there hasbeen a substantial change in the terms of trade in favor of agriculture, theproblems of poverty and income distribution continue to be acute in ruralareas; of the 15 million people in the lowest 40% of the income scale, 12million live in rural areas. To deal with this problem the Government hasinitiated a number of programs designed to assist the rural poor.

1.05 A major Government objective is to increase rice and corn produc-tion as a means of raising the income of small farmers and of attainingnational self-sufficiency in food grains. After experiencing substantialdeficits in the early 1970s, rice production grew by 5% p.a. during crop

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years 1974-77 and the Philippines was able to provide for consumption solelyfrom domestic production during the crop years 1975-77. In 1978,the Government exported 270,000 tons and built stocks to supply about fourmonths of domestic consumption. The major factors contributing to the recentsharp rise in production appear to be the continued expansion of irrigatedarea and the use of high yielding varieties on both irrigated and rainfed landas well as a run of particularly favorable weather. With the continued growthin population and incomes, the demand for rice is expected to rise by about3.0% annually over the period 1978-90. Given average weather conditions, thePhilippines should be able to sustain an annual growth rate of 3.7% in produc-tion and is expected to be, by 1985, in a position to export between 100,000and 125,000 tons annually. By 1990 the Philippines could export from350,000 to 375,000 tons. Exports of this magnitude, about 3% of projectedworld rice trade in 1990, could be accomodated without adversely affectingprices. This would require an increase in irrigated harvested area of about425,000 ha between 1977 and 1985 and an increase of about 200,000 ha between1985 and 1990. World Bank-assisted projects for which financing has beenarranged or is contemplated would provide about 240,000 ha of irrigatedharvested area.

1.06 The Government recognizes that in order to increase production inboth irrigated and rainfed areas further improvements in supporting serviceswill be necessary beyond those initiated in recent years. In 1973, theGovernment instituted a national program for supervised credit for riceproduction, Masagana 99, which greatly increased the availability of produc-tion credit and technical assistance, mainly to smaller farmers. However, thelevels of arrears under the program have been very high in the last severalyears and as a result the credit coverage of the program has declined sharply.The Government is aware of this problem and is presently reviewing a study ofthe causes of the high arrears undertaken by the Technical Board forAgricultural Credit under the provisions of Loan 1399-PH. In the meantime,efforts are continuing to enable farmers to make the most effective use of thelower level of inputs they are able to afford using their own cash and fromnon-institutional sources of credit. The Government is also taking steps tobring about improvements in the national extension service through therecently initiated National Extension Project which is in part financed bythe Bank (Loan 1626-PH). The Bank is presently helping the government toprepare a project to provide assistance to the agencies dealing withagricultural research, crop protection, soils and agricultural economics.

1.07 Since 1969 the Bank Group has financed eleven irrigation projectsdesigned to increase rice production in the country. These projects - threein Central Luzon, four in the Cagayan Valley of Northern Luzon, one onMindoro Island, one in the Visayas and two for smaller systems throughout

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Northern Luzon, the Visayas and Mindanao /1 - have set the pattern for the

type of irrigation rehabilitation, new construction, and operations neededto increase rice production. The projects are providing improved irrigationand drainage facilities, better road systems for efficiency of operation

and for the marketing of farm products, stronger supporting services to assistfarmers in adopting the new irrigation techniques needed to increaseproduction, and technical assistance and training to help the NationalIrrigation Administration (NIA) expand and improve its irrigation program.These projects would bring about substantial increases in rice production onabout 400,000 ha and would benefit over 200,000 farmer families, most of whom

are smallholders.

1.08 Work on the first Bank-assisted project, the Upper Pampanga RiverProject (Loan 637-PH), is completed. Progress on all the irrigation projectshas been generally satisfactory and the NIA has proved itself to be a wellmanaged and technically competent organization. The total cost of the first

two projects was about 70% over appraisal estimates in the case of thePampanga project (Loan 637-PH) and 55% in the case of the Aurora-PenarandaIrrigation Project (Loan 984-PH and Credit 472-PH) largely because of rapidinflation following the oil price increase in 1973. However, as a result ofconsiderable increases in the projected world market price of rice and earlierthan anticipated irrigation benefits, the rates of return on both projectshave not changed significantly.

Prolect Formulation

1.09 The development of Mindoro and Palawan has lagged behind that of the

more populous and larger Luzon island. Mindoro is well endowed with land andwater resources and both islands have favorable climates being largely freefrom typhoons. They are also relatively underpopulated and are areas ofactive immigration from Central Luzon and the neighboring Visayas wherepopulation pressures on land are intense. While NIA has had plans for thedevelopment of the irrigation potential in Mindoro and Palawan for many years,implementation has been delayed because of the need to give priority to the

/1 The Upper Pampanga River Irrigation Project (Loan 637-PH), Aurora-

Penaranda Irrigation Project (Loan 984-PH, Credit 472-PH), Tarlac Irri-gation Systems Improvement Project (Loan 1080-PH), Mindoro Rural Devel-opment Project (Loan 1102-PH), Magat River Multipurpose Project Stage I

(Loan 1154-PH), Chico River Irrigation Project Stage I (Loan 1227-PH),Jalaur Irrigation Project (Loan 1367-PH), National Irrigation Systems

Improvement Project I (Loan 1414-PH), National Irrigation SystemsImprovement Project II (Loan 1526-PH), Magat River Multipurpose ProjectStage II (Loan 1567-PH) and Magat River Multipurpose Project, Stage II

Irrigation (Loan 1639-PH).

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traditional rice bowls in Central Luzon, Cagayan Valley and Mindanao. Irriga-tion development in Mindoro and Palawan has been confined in the past toprivate and/or communal schemes of 50 to 300 ha located on small streams. TheMindoro Rural Development Project, initiated in 1975 with Bank assistance(Loan 1102-PH), included provisions for the improvement and expansion of twonational irrigation systems of about 12,000 ha in Mindoro Oriental and helpedto focus attention on the island's irrigation potential. By 1978 the MindoroProject Office had identified an irrigable potential of about 70,000 ha spreadover the two island provinces. At-the same time the Region 4 Office of theNational Economic Development Authority (NEDA) proposed a project for thedevelopment of infrastructure in Palawan, including irrigation development.As both islands are in the same administrative region, NIA decided to combinethe two sets of proposals into a Medium Scale Irrigation Project. Theproposed project, prepared by NIA's Project Development Department (PDD),consists of the construction of seven new national irrigation systems coveringa total area of about 37,800 ha, with three systems and 22,000 ha in MindoroOriental two systems and 5,800 ha in Mindoro Occidental, and two systems and10,000 ha in Palawan.

THE. PROJECT AREA

General

2.01 The project would build seven irrigation systems with a total irri-

gable area of 37,800 ha on the islands of Mindoro and Palawan, which are

southwest of the main Philippine island of Luzon. These systems can be divi-

ded into three distinct subproject areas. The Mindoro Oriental subproject

includes three systems while the 1{indoro Occidental and Palawan subprojects

include two systems each. Mindoro is separated from Luzon by a sea crossing

of about 45 km. Palawan is some 300 km to the southwest of Mindoro (Map

14589). Both islands are rugged and mountainous with large areas of unin-

habited forest. Mindoro, with a land area of 10,250 sq km and a population of

about 550,000, is divided administratively into two provinces Mindoro Oriental

and Mindoro Occidental. Palawan, which has a land area of 15,000 sq km and a

population of some 350,000 forms one province, the largest in the Philippines.

Presently, rice is the main crop grown in the project lands. However, in

addition to some small areas of corn and tobacco scattered in the different

subprojects, there are 2,500 ha of old and low yielding coconuts in Mindoro

Oriental as well as 3,200 ha of uncultivated brushland in Palawan where the

project areas lie mainly within a Ministry of Agrarian Reform (MAR) land

settlement. Population density in all three provinces is substantially below

the national average and per capita incomes range from 92% of the national

average for Mindoro to about 65% for Palawan. The population lives mainly in

the rural areas, but there are a number of small towns around the periphery of

both islands. In Mindoro the most important town is Calapan in MindoroOriental where there is an important port and where banking, storage, and

processing facilities are to be found, as well as supplies of agricultural

inputs. In Mindoro Occidental similar facilities are available in the town of

San Jose. In Palawan the towns are generally smaller and the services are

less developed. Puerto Princesa on the eastern shore of the island is the

most important urban center.

Climate

2.02 Four distinct climatic types are found in the Philippines, depending

on the amount and distribution of rainfall. Three of these types, the first,

third, and fourth, prevail in the project provinces. The first type, found

in Mindoro Occidental, is characterized by a very pronounced wet seasonbetween May and October and a dry season for the rest of the year; the third

type found in Palawan, is relatively dry between January and April and wet for

the remaining months of the year; while the fourth type, found in Mindoro

Oriental, has no maximum rainy period and no dry season. Average annual

rainfall varies from a low of about 1,600 mm in Palawan to nearly 2,200 mm in

Mindoro Occidental. There is little monthly variation in temperatures and

relative humidities throughout the year or between the three provinces. The

rainfall, together with river flows in the wet season, is generally adequate

for a single rice crop. Dry season cropping, however, entails a greater risk

and irrigation is essential to ensure a crop. A large proportion of the

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typhoons that occur in the Philippines do not hit the three provinces directlyand pass through south of Mindoro island, sometimes touching the northern edgeof Palawan. Climatological data in a summarized form are given in Annex 1.

Topography Drainage and Soils

2.03 Although the three subproject areas are separated geographically,they have generally similar characteristics. The proposed systems are locatedon the coastal plains ranging in width from 4-5 km in Palawan to 10-15 km inMindoro Oriental. The plains are not continuous on either island and inplaces the mountainous central ranges extend to the coastline. In Palawan thegently sloping coastal plain abuts directly onto the steep slopes of thecentral mountain spine of the island while in Mindoro the transition fromplain to mountain is less abrupt. The land is flat within the project areawith generally good surface drainage, except for the extreme lower reaches ofthe rivers near the coast and in the vicinity of lake Naujan on the south-eastern edge of the Mag-asawang Tubig system in Mindoro Oriental. This parti-cular area also has a moderate incidence of schistosoniasis. Provision wouldbe made under the project to deal with the drainage problem. The riversserving the proposed systems are short, ranging in length from 10 km up to70 km. Due to the short river lengths, steep slopes in the upper mountainousrange with abrupt transition to flat plains and very high seasonal variationbetween wet and dry season flow, most rivers in IMindoro have developed wide,abraided, gravel-filled channels over their lower reaches. Channel shiftingin these reaches is not uncommon.

2.04 Soils in the Mindoro subproject areas are variable, but loams andsilt loams, clay loams and clays of the Agustin, San Manuel, Quingua andTagulod series predominate. These soils are of alluvial origin, moderatelydeep and generally have good internal drainage. Soils of the Agustin and SanManuel series are brown, dark brown and grayish brown, loose and friable withgood fertility, good internal drainage and are suitable for diversified crops.Soils of the Quingua and Tagulod series are silty clay loams and clays and areof dark grayish brown to gray color with weak angular blocky structures,sticky when wet and friable when dry, slightly acidic reactions, slow internaldrainage, occasionally low phosphoric acid specially in Mindoro Oriental,adequate cation-exchange capacity and no salinity problems. The predominantsoil type in the Palawan subproject areas is a clay loam of the Bugsuangaseries. Soils of this type are developed from transported terrace soilmaterials, are of shallow depths, and are of dark grayish brown color with aweak, fine granular structure, good internal drainage, moderately acidic toneutral reactions, fairly high organic matter, low phosphoric acid, adequatecation-exchange capacity and no salinity problems. Preliminary resultsobtained from 1975-79 rice production experiments on paddy soils in Palawanindicate a deficiency in phosphorous. An application of about 40 kg/ha ofphosphoric acid, is recommended for these soils. The soils of the threesubproject areas are well suited for rice which has been grown on them formany years.

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Land Tenure and Farm Size

2.05 Since 1972 the Government has pursued a program of agrarian reform

aimed at the transfer of land ownership to tenant farmers on rice and corn

lands. Presidential Decree No. 27 (PD 27), the basic legislation of the new

program, provides for the transfer to the tenant, whether sharecropper or

leaseholder, of up to 3 ha in an irrigated area and 5 ha in a rainfed area.

According to PD 27, the landlord may retain up to 7 ha if he tills the land

himself. Since there are some two million rice and corn farmers on about

4 million ha, of which less than 1 million ha are irrigated, there is little

prospect of achieving the 5 ha rainfed and 3 ha irrigated family farms nation

wide. The Ministry of Agrarian Reform (MAR) completed the issue of land

transfer certificates to tenants for all lands in holdings over 24 ha in 1975.

In November 1974, the Government decided to proceed with the transfer of land

in holdings between 24 and 7 ha. In October 1976, the Government extended the

provision of PD 27 to holdings of less than 7 ha, belonging to landowners with

more than 7 ha of other agricultural land, or belonging to landowners with

residential, commercial or urban land from which they derive adequate incomes

to support themselves. At present it is not known how many landlords and

tenants would be affected by the new legislation.

2.06 NIA surveys show that about 11,600 farm families live in the project

area. More than 80% of these families live in Mindoro, mostly in the Oriental

province. In Palawan the average farm size is 5.2 ha, in Mindoro Oriental2.8 ha, and in Mindoro Occidental 3.1 ha. The farm size distribution in the

three subproject areas is as follows:

Mindoro Oriental Mindoro Occidental PalawanNo. of No. of No. of

Farm size farms Area farms Area farms Area

(ha) -…-- -. …- -

Less than 1.0 4 1 1 1 4 11.0 - 1.9 24 10 22 8 8 12.0 - 3.9 50 43 46 36 18 94.0 - 6.9 18 29 21 29 55 55

More than 7.0 4 17 10 26 15 34

Total 100 100 100 100 100 100

In the two Mindoro provinces, most of the farms are between 2 and 4 ha.

There is more dispersion around the mean farm size in the less densely

populated province of Mindoro Occidental where farms of more than 7 ha

account for 10% of the farms and 26% of the area. In Palawan where the

subproject is located mainly within a land settlement managed by the

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Ministry of Agrarian Reform (MAR), farm sizes are substantially larger thanin the rest of the project. More than half the farms with 55% of the areaare between 4 and 7 ha, and 15% of the farms with 34% of the area are biggerthan 7 ha. However, nowhere in the project areas does the average sizeof the bigger than 7 ha farms surpass 12 ha.

2.07 According to MAR information, the 37,800 ha in the project areaare owned by 9,490 people (see Table 2.1). The pattern of land ownership inthe three subproject areas is similar except for Palawan where the degree ofskewness is slightly more accentuated. In this province 5% of the ownershave holdings greater than 12 ha and account for almost 20% of the area.Presently, in the total project area almost 45% of the farmers own the landthey are farming and account for 55% of the area, the rest are tenantfarmers. The Palawan subproject area has the highest proportion of owner-operators with 77% of the farmers and 87% of the land. Most of these aresettlers on the MAR land settlement schemes in Narra and Aborlan munici-palities. Tenancy is widespread in Mindoro where it ranges from 35% of thefarmers with 40% of the area in the Mindoro Occidental suproject to 57% ofthe farmers and 51% of the area in the Mindoro Oriental subproject. Aftercompletion of the Government's land reform program some 23,600 ha or 63% ofthe project area will be cultivated by 6,100 owner-operators equivalent to53% of the farmers (see Table 2.2). The remaining 5,500 tenants wouldoperate under a written lease arrangement. The incidence of tenancy wouldremain high in the more densely populated Mindoro Oriental subproject.While MAR expects to complete the issue of land transfer certificates andthe transformation of share tenancy into leasehold contracts by December1980, it can realistically be expected that this process will be finishedwhen the project is completed in 1985.

Table 2.1: LAND OWNERSHIP DISTRIBUTION

Mindoro Oriental Mindoro Occidental Palawan TotalHolding Owners Area Owners Area Owners Area Owners Areasize (ha) No. % Ha % No. % Ha % No. % Ha & No. % Ha %

< 2.0 1,665 25 2,400 11 300 24 500 9 135 8 195 2 2,100 22 3,095 8

2.0-6.9 4,485 69 15,870 72 805 65 3,675 63 1,360 77 6,440 64 6,650 70 25,985 69

7.0-11.9 300 5 2,820 13 105 8 985 17 175 10 1,470 15 580 6 5,275 14

12.0 40 1 910 4 30 3 640 11 90 5 1,895 19 160 2 3,445 9or more

Total 1,240 100 5,800 100 6,490 100 22,000 100 1,760 100 10,000 100 9,490 100 37,800 100

Table 2.2 LAND TENURE

Mindoro Oriental Mindoro Occidental Palawan TotalFarmers Area Farmers Area Farners Area Farmers Area

No. x Ha No. % Ha % No. Z Ha Z No. Z Ha %

Existing 1977/78Owner-operators 2,455 32 9,235 42 420 23 2,115 37 1,490/a 77 8,715 87 4,365 38 20,065 53Amortizing owners/b 115 1 220 1 500 27 695 12 - - - - 615 5 915 2Lease holders 745 10 1,250 6 285 15 660 11 - - - - 1,030 9 1,910 5Share croppers 4,465 57 11,295 51 645 35 2,330 40 440 23 L,285 13 5,550 48 14,910 40

Total 7,780 100 22,000 100 1,850 100 5,800 100 1,930 100 10,000 100 11,560 100 37,800 100

Expected Post ReformOwner-operators 2,455 32 9,235 42 420 23 2,115 36 1,490/a 77 8,713 87 4,365 38 20,065 53Amortizing owners 835 11 1,915 9 760 41 1,315 23 155 8 365 4 1,750 15 3,595 10Lease holders 4,490 57 10,850 49 670 36 2,370 41 285 15 920 9 5,445 47 14,140 37

rotal 7,780 100 22,000 100 1,850 100 5,800 100 1,930 100 10,000 100 11,560 100 37,800 100

/a In Palawan most of the owner-operators are settlers in MSAR's land settlement.

/b Tenant farmer who has become an owner under Agrarian Reform Law.

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Existing Irrigation Facilities

2.08 About 3,000 ha within the project area are currently irrigated, mostof which are in communal irrigation systems. In Mindoro, the systems werebuilt by NIA and are operated and maintained by the benefited farmers. Thetwo communal systems in Palawan were also built by NIA to serve the settlementareas and are operated by MAR. The level of facilities in the systems isgenerally poor and maintenance is inadequate. Rice is the only crop grown onthe areas presently irrigated.

Transportation

2.09 The central mountain range in Mindoro makes land communicationbetween the two provinces difficult and there are no current plans for provi-ding a connecting link. An existing gravel road along the eastern coast isbeing improved and transformed into a concrete surfaced national highway inMindoro Oriental. The coastal gravel road along the western coast in MindoroOccidental is in a poor state and impassable during the rainy season becausethere are no bridges across the main rivers and streams. There are plans forimprovement of this road under a proposed Bank-financed rural road project. Anetwork of provincial roads in Mindoro connects various towns and villages tothe main coastal roads. The situation in Palawan is similar to Mindoro with acoastal road on the eastern side passing through the project area and connec-ting it to the provincial capital of Puerto Princesa. The service areas ofeach system of the project are provided with acceptable access. The twoislands have sea access to Luzon through ports at Calapan and San Jose inMindoro and at Puerto Princesa in Palawan. Daily commercial air service toManila is available at the San Jose airport in Mindoro Occidental and PuertoPrincesa airport in Palawan, while Calapan in Mindoro Oriental is servedthree times a week.

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3. THE PROJECT

Project Description

3.01 The project proposed for Bank financing would include:

(a) construction of six diversion dams;

(b) construction of irrigation and drainage facilites and roadson a total area of about 38,000 ha of currently rainfedlands;

(c) construction of three new division offices and three newfield offices and extension of two existing divisionoffices and two field offices;

(d) provision of consulting services to assist NIA in design ofthe diversion dams and major structures and in the training ofpersonnel for detailed topographic maps based on up-to-dateaerial photography;

(e) procurement of vehicles and equipment for project implementationand operation and maintenance; and

(f) strengthening of the malaria control unit of the Ministry ofHealth in Palawan.

The project also provides for (a) strengthening the existing NIA input-output monitorinS' organization and expanding it to cover the nationalirrigation systems in the Mindoro Rural Development Project (Loan 1102-PH)and the project area; and (b) consulting services to evaluate the operationand maintenance aspects of all national irrigation systems and to develop aplan for their improvement.

Project Works

3.02 Diversion Dams. New diversion dams would be built for six of theseven irrigation systems. Diversion works for the Dulangan system inMindoro Oriental were constructed under the Mindoro Rural DevelopmentProject (Loan 1102-PH) by intercepting the flow of the Bayog creek andconveying it through lateral A of the Baco-Bucayao system to the easternbank of the Dulangan river. This lateral would be extended to the westernbank by a siphon 120 m long of 1.2 m dia. The diversion dams would beungated concrete weirs, 140-600 m long, and 1-2.0 m high with canal intakesand sluice-ways. The principal features of the diversion works aresummarized in Table 3.1. A bridge would be provided across the diversiondam of the Mag-asawang Tubig system in the Mindoro Oriental subproject,which would serve the service area on both sides of the river and connect the

Table 3.1: DIVERSION STRUCTURES

Ungated Weir Sluice-wayHeight Right Left Intake structure

Subproject and Design above bank bank -- Right bank --- --- Left bank ---irrigation system River and location flow Length U/S apron No. & No. & No. of Size of No. of Size of

(CMS) (m) (m) size size barrels barrels barrels barrels

Mindoro Oriental

Mag-asawang Tubig Mag-asawang Tubig river - 500 m 5,300 600 2.0 2(5x4m) 2(2.5x4m) 2 (2.2x2.2m) 1 (1.4xl.4m)d/s of confluence of Aglubang &Ibolo rivers, 2 km northwest ofNew Macatoe village located inthe municipality of Victoria

Bongabon Bongabon river - about 2 km 4,200 400 1.0 2(2.5x2.5) - 2 (2x2m) - -

northwest of San Mariana villagelocated in the municipality ofRoxas

Mindoro Occidental

Mongpong Mongpong river - 4 km east of 3,100 175 1.5 2(4x2.5m) - 1 (1.8xl.8m) - -

Tuban village located in themunicipality of Sablayan

Caguray Caguray river - 1 km northeast 2,300 140 1.6 - 1(4x2.5m) - - 1 (1.5xl.5m)of Paclolo village, Magsaysaylocated in the municipality ofSan Jose

Palawan

Malatgao Malatgao river - about 1 km north- 1,800 200 2.0 2(4x3m) 2(4x3m) 1 (18xl.8m) 1 (1.8xl.8m)west of Barrio Dumanguena in themunicipality of Aborlan

Batang-Batang Batang-Batang river - about 5 km 1,700 115 1.2 _ 1(4x3m) - _ 1 (2.2x2.2m)northwest of Barrio PrincessUrduja in the municipality ofNarra

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provincial roads passing through the system. Existing diversion works ofcommunal systems within the proposed systems would be improved andintegrated with the project works.

3.03 Irrigation and Drainage Works. The Mag-asawang Tubig system inthe Mindoro Oriental subproject would be served by two main canals. Theright main canal, 27 km long, would be constructed with a design capacity of13.0 cu m/sec to supply a service area of 12,500 ha on the right bank. Theremaining area of 2,100 ha on the left bank would be served by the left maincanal, 18 km long, designed to carry 2.2 cu m/sec flow. The first 11 km ofthe canals pass through steep topography with a 70 m drop, the right maincanal would be designed with 3 or 4 drops of 15 to 20 m height, which may beused in the future to produce hydro-electricity. The main canal of the secondsystem, Bongabon in Mindoro Oriental would be 15 km long and designed tocarry a flow of 8.5 cu m/sec for a 6,000 ha service area.

3.04 The main canals of Mongpong and Caguray systems in Mindoro Occiden-tal would be 8 km and 16 km long and designed to serve 2,400 ha and 3,400 haareas with a flow of 4.3 cu m/sec and 3.0 cu m/sec respectively. An area ofabout 1,500 ha located on the left bank of Mongpong system would be servedby lateral B. This would involve the construction of a siphon 1.5xl.5m sizeacross the Mongpong river. The Malatgao system in the Palawan subprojectwould be served by two main canals. The right main canal, 11.4 km long, wouldbe constructed with a design capacity of 3.5 cu m/sec to supply a servicearea of 2,600 ha on the right bank. An additional area of 250 ha on theright bank would be served using the existing Taritien-Malatgao communalirrigation system facilities. The left main canal, 13 km long, would beconstructed with a design capacity of 3.8 cu m/sec to supply a service areaof 2,800 ha on the left bank. The existing Manaili diversion dam of thecommunal system would serve an additional area of about 350 ha on the leftbank. The main canal of the second system, Batang-Batang in Palawan wouldbe 2.3 km long and designed to carry a flow of about 5.4 cu m/sec for a4,000 ha service area. A 21 m high drop would be constructed at station3+300 which may be used in the future to produce hydroelectricity.

3.05 Canals and laterals would be provided with water-regulating anddelivery structures such as checks and turnouts. Main canals and majorlaterals with capacities exceeding 1.5 cu m/sec would be provided with watermeasuring devices such as Parshall flumes, while laterals and sublaterals ofsmaller capacities (less than 1.5 cu m/sec) would have constant head orificeturnouts as measuring devices. Canals would be unlined except for shortlengths where the soils are erosive.

3.06 The Mag-asawang Tubig river in Mindoro Oriental overflows on bothbanks and inundates about 3,000 ha in the lower part of the flood plain. Thearea remains under water for about 3 to 5 months, so no wet season crop isgrown in the submerged area. However, a crop is grown during the dry seasonfrom residual soil moisture and some rainfall. The area would be excludedfrom the project as the provision of flood protection, involving theconstruction of long, 3 to 5 m high dikes, would be uneconomical.

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3.07 Gravel surfaced O&M roads would be constructed on the canal anddrain banks. Canals with a design flow greater than 5 cu m/sec, would beprovided with a roadway 5 m wide on both banks, if the service area ison both sides of the canal, and on one bank, where the service area is ononly one side of the canal. In case of a roadway on both banks, only onebank would be gravel surfaced. Canals with a capacity between 2 and 5 cum/sec would be provided with a 3.5 m wide roadway on one bank. The roadwayalong laterals with capacities less than 2 cu m/second and along some of themajor farm ditches would be a non-gravel, 2.5 m wide cycle or cart path.However, as no roadway would be built along these waterways if they werewithin 200 m of a parallel road, access to the laterals would be provided bybuilding 3.5 m wide connecting roads 400-500 m apart. About 70 km of 3.5 mwide access roads would also be provided as links between the existingand/or proposed major roads of the area and the canal O&M roads, and wouldalso serve as farm-to-market roads. Gravel surfacing would be provided onsome of the major existing farm-to-market roads. The main and secondarydrains built under the project would be provided with gravel surfaced O&Mroads of 3.5 to 5m width on one bank. The surfacing would be 20 cm thickfor all roadways. To allow continuous passage along the O&M roads, bridgesand/or culverts across the existing drainage channels would be built.However, on major streams or rivers, the O&M roads would be connected toexisting bridges by short access roads instead of constructing expensivemulti-span bridges.

3.08 The proposed level of on-farm distribution and drainage is similarto that being implemented in other Bank-assisted projects in thePhilippines. On-farm facilities would be provided for water deliveries to arotational area of about 50 ha. Farm turnouts would be provided for each 10ha unit from which farm ditches, constructed as part of the project, wouldconvey water directly to most farms. Rice has been grown in the projectarea for many years and the land is reasonably level and well laid out withlittle fragmentation of land holdings; therefore no land leveling orboundary realignment would be provided. However, the proposed area for thePalawan subproject is a 10 year old settlement area which was cleared andtransformed into paddy fields. Settlers abandoned certain parts of the areaand left it uncultivated due to the lack of irrigation . The project wouldprovide for the clearance of brush land and some land levelling for about3,200 ha in Palawan and the removal of coconut tree stumps for about 2,500ha in Mindoro Oriental. Farm drains would convey excess water from each 10ha unit to the main and secondary drains in flat areas. For more steeplysloping areas, where the land gradient in the direction of flow is in excessof 0.4%, the farms would drain from field to field, and consequently theintensity of farm and collector secondary drains would be somewhat lower.

3.09 Working stations for Water Management Technicians (WMT) would bebuilt at a ratio of approximately one to each 500 ha of irrigated land inthe project. The stations would provide space for temporary storage and

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drying of paddy. Gatekeeper quarters would be constructed at the majorchecks and turnouts of main canals and at each diversion dam.

3.10 O&M Buildings. Five division offices would be established atCalapan and Roxas covering the Mindoro Oriental systems, at San Jose Cityand Santa Cruz covering the Mindoro Occidental systems and at Narra coveringthe Palawan systems. The construction of division facilites would includeoffices, infirmary, staff quarters, guest house, laboratory facilities,warehouse and workshop for repairs and maintenance of O&M equipment.Existing facilities would be expanded at Calapan, Mindoro Oriental and SantaCruz, Mindoro Occidental. Three new field offices would be constructed,which would be located in the town of Victoria in the Mindoro Orientalsubproject, Magsaysay in the Mindoro Occidental subproject and PueftoPrincesa in the Palawan subproject.

Water Supply, Demand and Quality

3.11 All irrigation systems of the project would derive their watersupply from the unregulated flow of separate river sources, using their owndiversion and conveyance system. About 54% of the project area would besupplied with water during the dry season.

3.12 None of the irrigation systems have any stream gauging at or nearthe diversion point, except the Mag-asawang Tubig system in the MindoroOriental subproject. For the four ungauged systems in the two Mindorosubprojects, the long-term flows at each diversion point were developed byusing the streamflow of nearby river basins of similar physical character-istics and adjusting them on an area basis. Stream flow data of theMag-asawang Tubig and Baco-Bucayao rivers were used for the Bongabon andDulangan systems, the Bugsuanga river for the Caguray system and theMamburao river for the Mongpong system. The stream flow data for the twosystems in Palawan were generated using a rainfall-runoff relation developedfrom the data of river basins in the nearby islands of Negros and Panaywhich have similar physical characteristics and sizes. Short-term streamflowdata were extended back to 1949 and up to 1977 by the use of rainfallrecords. The generated streamflows were found to be in reasonable agreementwith the concurrent actual streamflows wherever available. For thosesystems, which have stream gauges located downstream of the diversion point,the available stream flows were adjusted for upstream withdrawals. TheDulangan system would utilize the excess flow of the Baco-Bucayao systemduring the wet season and and additional water is expected from the springflowing into Bayog creek. A minimum flow of 1.0 cu m/sec was assumed on thebasis of 2.0 cu m/sec minimum flow observed from the two year record ofmeasurements of the Bayog creek at the point of the intercepting structurebuilt on lateral A of the Baco-Bucayao system.

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3.13 Design Floods. Flood frequency curves were developed for riverswith adequate data in Mindoro island. For the systems in Palawan and thosewith inadequate stream flow data in Mindoro, a regional flood frequency curvewas developed using streamflow and rainfall data from river basins inMindoro, Negros and Panay islands. Peak flood discharge with recurrencefrequency of 50 years would be used for the design of the diversion dams.

3.14 Water Demand. Water requirements for the project were based on tworice crops per year. It was assumed that transplanted rice using 120-daynon-photosensitive varieties in both the wet and dry seasons would be thedominant crop in the project. Water requirements for rice in the threesubproject areas were based on the cropping calendar shown in Figure 5.1.

3.15 Rice land preparation and nursery were estimated to take 30 dayswith water requirements for saturation, evaporation and percolation as shownin Table 3.2. Flooding requirements to provide a minimum depth of water inthe field for cultivations in each season were estimated to be 20 mmimmediately after transplanting, followed by additional 50 mm about twoweeks later. Field percolation losses were estimated to be 2.5 mm/day inMindoro and 2.0 mm/day in Palawan. Evapo-transpiration rates were taken tobe equal to the computed evaporation rate, using the Penman method or theobserved class A pan evaporation, and effective rainfall was determined fromobserved daily rainfall records and allowing water depth to fluctuate withthe growth of the rice plants and limiting maximum depth to 150 mm. Theoverall irrigation efficiency was assumed to be 43% in the wet season and50% in the dry season at full development, based on farm irrigation wastesof 40% in the wet season and 30% in the dry season.

3.16 Seasonal and total annual diversion requirements are developed inTable 3.2. Monthly water requirements of the three subprojects are shown inAnnex 5. Monthly water requirements and average river flows for all thesystems are shown in Table 3.3. Annual diversion requirements are estimatedto vary between subproject areas from 2.7 m to 2.4 m of which 1.1 m to 1.9 mwould be required in the dry season. The size of the irrigated area foreach system was determined using synthesized discharge records for the27-year period 1948-75, and the estimated seasonal water requirements forrice. The cropping calendar was chosen to maximize the use of rainfallwithout exceeding local manpower constraints. No use of return flow wasassumed. Adequate water supply is available to meet the supplementaryirrigation demand of each system during the wet season. About 21,300 ha canbe irrigated during the dry season in the three subproject areas. Thecurrently irrigated areas and the irrigable areas selected for developmentunder the project are summarized below and given in detail for each systemin Table 3.4.

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Subprolect AreaMindoro MindoroOriental Occidental Palawan Total

Currently Cultivated Area (Paddy)First crop (ha)Rainfed 18,000 5,100 5,900 29,000Irrigated 1,500 700 900 3,100

Coconut 2,500 - - 2,500Brush land - 3,200 3,200Second crop (ha)Rainfed 3,500 - - 3,500Irrigated 1,200 300 600 2,100Cropping intensity (%) 121 105 74 106

Future Irrigable Area (Paddy)First crop (ha) 22,000 5,800 10,000 37,800Second crop (ha) 10,600 3,700 6,000 20,300Cropping intensity (%) 148 164 160 154

Although the future irrigable area for each system in the project was deter-mined taking into account the water rights of existing users, assuranceswere obtained from Government that the necessary water rights for bothexisting and expanded areas would be granted to NIA and no other rightsexcept for domestic use which could adversely affect the project watersupply would be granted except by mutual agreement with the Bank.

3.17 Water Quality. Tests of water samples taken from streams near theproposed location of each system indicate good water quality with totaldissolved solids under 400 ppm. The waters are of low salinity, slightlyalkaline (pH 7-8) and free of toxic elements.

Status of Engineering

3.18 Project planning studies, designs and cost estimates for theirrigation and drainage systems and associated works were carried out byNIA. The basic layouts were prepared using 1:4,000 scale topographic mapswith 1.0 m contour interval. Strip surveys were made to prepare plans andprofiles of main and lateral canals and major drains for determiningconstruction quantities. Six sample areas, one in each system, of about50-300 ha were used for the detailed layout of drainage and on-farm facil-ities. The costs of drains and on-farm facilities were based on unitquantity estimates for each item of work per meter for the drains and perhectare for the on-farm facilities. These were obtained from sample areasapplicable to a particular system, for which designs were prepared.

Table 3.2: PROJECT WATER REQUIREMENTS SUMMARY(mm)

Mindoro Oriental Mindoro Occidental PalawanPaddy Paddy Paddy

Crop Crop Crop1st 2nd Annual 1st 2nd Annual lst 2nd Annual

Land PreparationSaturation 85 55 140 75 50 125 75 50 125Evaporation 160 125 285 162 152 314 160 140 300Percolation 75 75 150 75 75 150 60 60 120

Subtotal 320 255 575 312 277 589 295 250 545

Flooding for cultivation 70 70 140 70 70 140 70 70 140

Crop Water RequirementsEvapotranspiration 396 379 775 439 442 881 438 442 880Deep percolation 225 225 450 225 225 450 180 180 360

Subtotal 621 604 1.225 664 667 1,331 618 622 1,240

Total Field WaterRequirement 1,011 929 1,940 1,046 1,014 2,060 983 942 1,925

Less effective rainfall 446 391 837 676 58 734 515 232 747

Net Farm IrrigationRequirement 565 538 1,103 370 956 1,326 468 710 1,178

Farm irrigation efficiency (%) 60 70 65 60 70 65 60 70 65Farm requirement (turnout) 942 768 1,710 617 1,366 1,983 780 1,014 1,794Conveyance efficiency (%) 80 80 80 80 80 80 80 80 80System operation efficiency (%) 90 90 90 90 90 90 90 90 90Diversion requirement (head works) 1,318 1,075 2,393 856 1,897 2,753 1,088 1,414 2,502Overall irrigation efficiency (%) 43 50 47 43 50 48 43 50 48Water duty for diversion and

conveyance facilities at 200%cropping intensity (1/sec/ha) 1.40 1.90 1.42

Table 3.3: ESTIMATED CROPPING AREA, WATER REQUIREMENTS AND SUPPLY

I IrrigationI I I I I ISubproject! system I Item IJan I Feb IMar I Apr IMay I Jun I Jul I Aug I SepIOct I Nov I DecI

Mindoro I Irrigation diversion requirement - rice (mm) 1921 1761 I 114! 351! 363! 3141 1261 1471 1001 2421 2681Oriental I I I I I I I I I IIII I I

iMag-asawang TubigiRice cropped area: First crop (ha) 1< 14,600 >1 I I I I I <..1 14,600 1....2I ~~~~~I Second crop (ha) I I < I 1530 1 -- I I I II ~~~~~~Diversion requirement (MCM) I 28.01 25.711 6.11 18.61 19.2! 16.61 5.71 21.51 14.61 35.31 39.11

I lWater supply (MCM)/a I 46.41 28.51 18.01 13.61 18.81 20.91 27.11 29.81 27.31 33.21 58.11 59.21

lBongabon IRice cropped area: Firat crop (ha) j< 6,000 >1 I I I I I .J..... 6.A000 tŽl1 1~~ Second crop (ha) I I 1< jI 1 4,~900 11.... _> I I I II I~~~Diversion requiirement (MCM) I 11.5! 10.61 I 5.61 17.21 17.81 15.41 6.21 8.71 6.0! 14.51 16.1!

I lWater supply (MCM)/a I 52.11 31.91 19.71 14.11 17.3! 19.31 26.51 30.01 27.41 33.2! 63.21 64.711 1~~ ~~ I I 1 I I I I I I I I I

IDulangan IRice cropped area: First crop (ha) j< 1,400 >1 I I I I I 1 140 >I ~ ~~I Second crop (ha) I I I 1s..I... 400..i.2j. > I I I II I~~~Diversion requirement (MCM) I 3.01 2.81 I 0.4! 1.4! 1.51 1.2! 13.5! 1.41 1.81 4.11 4.81

Mindoro I l~~IIrrgto ieso eurmn ie(m 460 318 334 I I8 119 263 146 I 251 266 Oc i e t l I I I I I I I I I I I I I I

IMongpong lRice cropped area: First crop (ha) I I 7.8! I 1< I... .I..2J400 J.......t. I I II I Second crop (h a) 1< 12,4001 -> I I I I I I 1< 12,4001 >1lI IDiversion requirement (MCM) I 11.0! 7.61 8.01 1 2.1! 2.9! 6.3! 3.51 I 6.0! 6.4! 12.21I lWater supply (MCM)/a 1 19.9! 10.0! 10.2! 10.4! 11.3! 16.0! 34.5! 54.6! 54.5! 25.4! 30.4! 30.4!

1 1~~ ~~~ ! 1 I 1 I I I 1 I 1 I 1 IICaguray IRice cropped area: First crop (ha) I I I I I<......... 1_ 3,4001 ___ 1. >i I I I

I ~ ~I Second crop (ha) 1< 11,3001 ->I I I I I I I < 11,3001 -> II I~~~Diversion requirement (MCM) I 6.0! 4.1! 4.3! I 3.0! 4.1! 8.9! 5.0! 1 3.3! 3.5! 6.6!

I !Water supply (MCM)/a 1 7.8! 4.5! 4.61 2.8! 5.0! 16.9! 19.81 77.4! 44.3! 29.3! 16.0! 7.8!1 1~~ ~ ~~~~ 1 1 I I I 1 I I I I I I

Palawan I jIrrigation diversion requiremnent - rice (mm) 1 379! 298! 304! 1 441 110! 338! 363! 140! 112! 70! 343 I1 1~~ ~~~~~~ 1 ! 1 I 1 1 1 1 ! I 1 I

IMalatgao IRice cropped area: First crop (ha) I I I I l< I 1__6,0001 ___ L >1 I I II ~~~~I Second crop (ha) 1< 12,9001 ->1 I ! I I I I <I 2.900 1 I

I IDiversion requirement (MICM) I 11.0! 8.6! 8.8! 1 2.6! 6.6! 20.3! 21.8! 8.4! 3.2! 2.0! 9.9!1 l~~~Water supply (MCM)/a I 11.0! 10.2! 10.4! 12.7! 22.5! 37.8! 29.3! 28.6! 28.1! 25.3! 26.0! 13.1!1 1~~~~ I. 1 1 I 1 I 1 ! ! I I 1

IBatang Batang IRice cropped area: First crop (ha) I I I I !<JJA 14,0001 1 >__1 I I II ~~~I Second crop (ha) !< 13,1001 >1 I I I I I <.J 3, 100 I.L> II I~~~Diversion requirement (MCM) I 11.8! 9.2! 9.4! I 1.8! 4.4! 15.5! 14.5! 4.3! 3.5! 2.2! 10.6!

1 lWater supply (MCM)/a I 11.8! 10.71 11.0! 13.9! 22.7! 39.6! 30.3! 29.5! 28.9! 25.9! 26.6! 14.3!_____IIJ__ __1___I 1........[__

/a Monthly flow with 80% probability of occurence (four out of five years).

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Table 3.4: PRESENT AND FUTURE IRRIGATED AREAS

Irrigable area (ha)---- Present---- -----P Future-----

Irrigation First Second First SecondSubproject system crop crop crop crop

Mindoro Mag-asawang Tubig 800 600 14,600 5,300Oriental Bongabon 700 600 6,000 4,900

Dulangan - - 1,400 400

Subtotal 1,500 1,200 22,000 10,600

Mindoro Mongpong 400 200 2,400 2,400Occidental Caguray 300 100 3,400 1,300

Subtotal 700 300 5,800 3,700

Palawan Malatgao 500 300 6,000 2,900Batang Batang 400 300 4,000 3,100

Subtotal 900 600 10.000 6,000

Total 3,100 2,100 37.800 20,300

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Requirements for structures were determined according to basic irrigationdesign practices. Operation and maintenance roads were based on canalcapacity and needs within the service area, and were checked in the field toensure that adequate access to project works would be provided. Theplanning and design of the sample areas has been carried out in sufficientdetail to allow the rapid completion of final design and plans for the firstyear of construction by June 1980. Sufficient investigations have been madeto ensure that suitable materials are available for construction of canalembankments and maintenance roadways.

3.19 The topographic maps of 1:4,000 scale used in the sample areastudies were prepared by conventional ground survey methods. Thetopographic maps of the service area on a scale of 1:4,000 would be preparedusing recent aerial photographs and the spot height identification surveymethod. These maps would be used for detail planning and design of on-farmfacilities, as well as the distribution and drainage systems. NIA wouldemploy a consultant for a total period of about two years, in four to sixassignments of two to six months for the duration of the project, to assistin the preparation of the maps and to train NIA survey personnel in new andadvanced survey procedures and photogrammetry. Provision would be made forabout 25 man-months of consulting services at an overall rate of US$8,000per man-month, consisting of a billing rate of US$6,000 per man-month,international travel expenses of US$800 per man-month, and local expenses ofUS$1,200 per man-month.

3.20 Detail foundation investigation are underway for finalizing thelocation of diversion dams and NIA expects to complete the design ofdiversion structures for Bongabon, Caguray and Malatgao systems beforeSeptember 1980. NIA would employ consultants to review the foundation data,hydrology, location and assist in the design of all diversion dams and othermajor structures such as the drops in Mag-asawang Tubig and Batang Batangsystems and siphon across the Mongpong river. The project provides forabout 45 man-months of consulting services at an overall rate of US$10,000per man-month, consisting of a billing rate (including home-office overhead)of US$8,000 per man-month, international travel expenses of US$800 perman-month, and local expenses of US$1,200 per man-month. Assurances havebeen obtained that the consultants to be employed by NIA for assistance inthe design of the diversion dams and for the assistance in advanced surveyprocedures and photogrammetry (para. 3.19), would be under terms andconditions acceptable to the Bank.

3.21 Construction of the irrigation and drainage system would begin inearly 1981 with preconstruction activities starting in the middle of 1980(see Figure 3.1). All project works are expected to be completed byend-1985.

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Input-Output Monitoring

3.22 The NIA is currently constructing and/or rehabilitating about320,000 ha with Bank Group assistance and if the proposed project and thecompleted Upper Pampanga River Project (UPRP) are included, this wouldamount to 450,000 ha, providing a livelihood for about 240,000 families. Ifthese projects are to be successful when NIA has completed their construc-tion, besides attaining the projected cropping intensities, farmers mustreach the projected paddy yields of about 4.0 ton/ha. To do this on asustained basis, farmers must receive a sufficient and timely supply of farminputs, such as credit, seed, fertilizer, pesticide, labor, threshing anddrying facilities, and transport and marketing services. If these inputs donot reach the farmers, the success of the entire NIA irrigation programcould be threatened.

3.23 A program of input-output monitoring was established under theChico River Irrigation Project (Loan 1227-PH) with the objectives of (a)monitoring the flow and build-up of farm inputs in each project area beforeand during each crop season, to give NIA sufficient warning of any shortfalland allow it to take appropriate action; and (b) monitoring the size and therecipients of benefit flows in each project area. This program has been inoperation in the UPRP service area for about three years, with usefulresults. It was extended under the National Irrigation Systems ImprovementProject II (Loan 1526-PH) to the systems of NISIP I and II. The monitoringpersonnel are under training, and a five-year agricultural development planfor the chosen systems is being finalized. It would be desirable to extendthis program to the systems of the l4indoro Rural Development Project (Loan1102-PH) and the proposed project.

3.24 The program would be implemented in three phases. Phase I, duringthe first two years of project implementation, would cover the training ofmonitoring personnel and preparation of five-year agricultural developmentplans. Phase 2, extending over a period of two years, would implementmonitoring procedures on the Baco-Bucayao system of the Mlindoro RuralDevelopment Project. In Phase 3, the program would be extended to cover thePula river Irrigation System in Mfindoro Oriental and a minimum of threesystems, one in each subproject area during the last three years of theimplementation period. The program would be implemented under the directionof the Farmers' Assistance Department of NIA who would coordinate closelywith the National Food and Agricultural Council (NFAC). The projectprovides for 30 man-months of local consultants at an average cost ofUS$3,000 per man-month to assist NIA in both the input and output monitoringphases of the program.

O&M Study and Training

3.25 It is expected that by 1985, NIA would have about 800,000 ha ofupgraded national irrigation systems under operation. With the completionof major irrigation development, NIA has to change its enphasis from

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construction to operations and maintenance. The Government has requestedBank-financed assistance in the preparation of a study which would evaluatethe present situation and develop a plan of action for improving theoperation and maintenance of all national irrigation systems. The projectprovides for about 45 man-months of consulting services to assist NIA at anoverall rate of US$10,000 per man-month, consisting of a billing rate(including home-office overhead) of US$8,000 per man-month, internationaltravel expenses of US$800 per man-month, and local expenses of US$1,200 perman-month. Assurances have been obtained that NIA would prepare terms ofreference and an outline of the study to be financed under the present loanand, after review by the Bank, that it would carry out the study with theassistance of consultants, under terms and conditions acceptable to theBank. Funds would also be provided under the project for about 30 studytours and training scholarships of three to five weeks duration in neighbor-ing countries with projects of similar nature and about six post graduate

scholarships for one or two years duration. The scholarships and study tourswould be for the benefit of NIA staff working on design, construction,operation and maintenance, input-output monitoring and agricultural aspectsof irrigation projects.

Strengthening of Malaria Control Unit in Palawan

3.26 Malaria is the leading disease in Palawan. In the project area itranks second among the ten leading causes of morbidity and is a major factorin reducing farm labor productivity. On average, incidence has been of about50 cases per thousand population in the last 3 years. While malaria is alsopresent in the province of Occidental Mindoro, it is not endemic in any ofthe project systems. The Ministry of Health (MOH) has an ongoing program ofmalaria control in Palawan consisting of passive case detection, biologicalcontrol, chemotherapy and residual spraying of houses. However, due to lackof financial resources and trained personnel the results have been discour-aging. The major problems encountered have been inadequate coverage andlittle cooperation of the local population. Some of the P. falciparumstrains are resistant to chloroquin treatment.

3.27 The project envisages a provision of US$400,000 to strengthen the

Malaria Control Unit in Palawan during a five year period. To achieve this,the unit would concentrate its operations in the municipalities of Narra andAborlan, where the two project systems are located, and would carry out thefollowing major activities:

(a) increase the residual spraying of houses to twice a year;

(b) carry out weekly larvicide applications in selected breeding places;

(c) expand biological control measures in selected areas; and

(d) reinforce surveillance operations and enlist community acceptance

of program implementation through information campaigns.

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3.28 The Malaria Eradication Service of MOH which is responsible formonitoring and control of the disease in the affected area would direct theprogram under the project. The field unit in Palawan is understaffed andlacks logistical support facilities. The project would provide field labs,equipment and vehicles and increased personnel. A separate control teamcovering the two municipalities and based in Narra would be headed by asenior malariologist with appropriate supporting personnel. Because of alimited tenure of five years and location it is difficult for MOH to attractqualified personnel at the Government civil service salaries. To overcomethis problem the personnel used by the project would be paid by NIA. Anassurance has been obtained that NIA and MOH would enter an agreementacceptable to the Bank by December 31, 1980, for the implementation of themalaria control component of the project. Provision would also be madeunder the project for an information campaign to alert the population to thedangers of the disease and to supply information on prevention andtreatment.

Cost Estimates

3.29 Total project costs are estimated at US$118.5 million, of whichUS$55.3 million or 47% is foreign exchange. Project costs are based onquantity estimates for feasibility designs and unit prices prevailing in theBank-assisted irrigation projects in mid-1980 adjusted to conditions in thethree subproject areas. Unit prices for equipment, materials and suppliesare based on recent quotations received by NIA. The Government exempts NIAfrom paying taxes or duties for equipment, material and services procuredunder foreign-assisted projects, so all the costs exclude such taxes. NIA'scosts for design and construction supervision are included under engineering.All costs are indexed to a common level mid-1980, and this is the base costlevel for the project. A physical contingency factor of 15% was used forall works. Costs due to expected price increases over the implementationperiod amount to about 39% of the base cost plus physical contingencies,assuming the following inflation rates:

Annual inflation rate (%)1980 1981 1982 1983-85

Equipment and Civil WorksLocal 16 10 7 7Foreign 10.5 9 8 7

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3.30 Details of cost estimates are presented in Tables 3.5 and 3.6, andare summarizd below:

ForeignLocal Foreign Total Local Foreign Total exchange- (Pesos M) ----- ----- (US$ M) (Z)

Irrigation systems 227.7 261.7 489.4 30.8 35.2 66.0 53

Input-output monitoring 4.7 2.7 7.4 0.6 0.4 1.0 36

O&M study and training 4.0 4.9 8.9 0.5 0.7 1.2 58

Strengthening of malariaunit in Palawan 1.3 1.4 2.7 0.2 0.2 0.4 50

Engineering, administrationand supervision 52.0 - 52.0 7.0 - 7.0 -

Base cost estimate 289.7 270.7 560.4 39.1 36.5 75.6 48

Physical contingencies 35.4 35.9 71.3 4.9 4.9 9.8 50

Expected price increase 140.9 102.9 243.8 19.2 13.9 33.1 42

Total Pro_ject Cost 466.0 409.5 875.5 63.2 55.3 118.5 47

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Table 3.5: COST ESTIIIATE

ForeignLocal Foreign Total Local Foreign Total exchange

------- (P 100o) -------- ------- (uS$'000) ------- … (

A. Irrigation Systemns

1. Civil WorksDiversion dain & intake works 44,940 68,160 113,100 6,07n 9,210 15,2P0 60Main conveyance & secondary distribution system 57,690 70,510 128,200 7,80n 9,52n 17,320 55Main and secondary drainage systemr 29,200 29,200 58,400 3,960 3,93n 7,89n 50Service, access & farm roads 32,050 32,n50 64,100 4,34n 4,320 8,660 50On-farm ditches & drains 46,030 31,170 77,200 6,210 4,?00 In,410 40Water management stations 5,500 2,360 7,860 740 320 1,060 30flatekeeper quarters 340 150 490 50n 2 70 30Topographic surveys & mapping 1,530 1,520 3,050 200 210 410 5nPhysical contingencies (15%) 33,220 34,580 67,800 4,500 4,670 0,170 S1Enginecring, supervision & administration (10%) 52,000 - 52,000 7,030 - 7,010 -

Subtotal 302,500 269.700 572,200 40,900 36,400 77,300 47

2. n&M BuildingsProject headqtlarters 4,810 2,600 7,410 630 370 1,000 35Field offices 2,970 1,600 4,570 410 240 650 35Physical contingencies 1,220 600 1,820 160 90 250 35

Subtotal 9.000 4,800 13,800 1,200 700 1,900 35

3. Consulting ServicesDesign of major structtures 400 3,000 3,400 50 400 450 90Survey & mapping adviser 150 1,350 1,500 20 180 200 90'Jelhicles & sutpplies 150 950 1,10n 30 12n 150 80

Subtotal 700 5,300 6,000 1on 700 800 88

i. O&M Equipment 1,900 17,100 19,000 300 2,300 2,60n 90

Subtotal Item A 314.100 296.900 611,000 42,5nO 4n,10n 82,600 49

J'. Inptut-Output Monitoring

1. T'roject personnel & training 3,700 1,500 5,200 500 200 7n0 302. 'OTISUmltiig services 350 350 700 50 50 100 5n3. F(qulipnent & supplies 700 800 1,50n 100 100 200 50PhysLcal contingencies 10% 450 250 700 50 50 100 5s

Subtotal TItem B 5.200 2,900 8,100 700 400 1,100 36

C. O&M Study & Training1. Project personnel 1,700 900 2,600 230 120 350 352. Consulting services 7no 3,100 3,800 1o0 420 520 803. Equiipment & siupplies 600 400 1,000 70 60 130 504. Contractual services I,o00 500 1,500 150 50 200 25Physical contingencies 10% 300 400 700 50 50 100 50

Subtotal Item C 4,300 5,300 9,600 600 700 1,300 54

10. Strengthening of Malaria Unit in Palawan1. Project personnel 1,250 250 1,500 170 30 200 152. Equipment and supplies 100 1,100 1,200 10 150 160 90Physical contingencies 10%0 150 150 300 20 20 40 50

Subtotal Item T) 1,500 1,500 3,000 20n 200 40n 50

Total Items A-D 325.100 306,600 631,700 44,000 41,400 R5,4nn 49

I':xpected price increase 140,900 102,9nO 243,800 19,200 13,000 33,lnn 4?

TOTAL COST 466,000 409,500 875,500 63,200 55,300 118,500 47

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Table 3.6: IRRIGATION SERVICE AREA - COST ESTiriATE

Subproject ProjectMindoro Mlindoro TotalOriental Occi.lental Palawan cos,t Local Foreign------------ __ _ _ _----- (ITS$ 000)…

1. Civil WorksDiversion dam & intake works 9,860 2,650 2,770 15,280 6,070 9,210Main conveyance & secondary

distribution system 11,580 2,040 3,700 17,320 7,800 9,520Main & secondary drainage

system 4,890 1,L20 1,880 7,890 3,960 3,930Service, access & farm roads 5,220 l,'80 2,160 8,660 4,340 4,320On-farm ditches & drains 5,500 1,410 3,500 10,410 6,210 4,200Water management stations 610 170 280 1,060 740 320Gatekeeper quarters 30 20 20 70 50 20Topographic surveys & mapping 240 60 110 410 200 210

Total Base Cost 37,930 8,750 14,420 61,100 29,370 31,730

Physical contingencies(15%) 5,700 1,310 2,160 9,170 4,500 4,670

Engineering, supervision &administration 4,350 1,020 1,660 7,030 7,030 -

Subtotal 47,980 11,080 18,240 77,300 40,900 36,400

2. O&M BuildingsProject headquarters 340 400 260 1,000 630 370DField offices 350 170 130 650 410 241)Plhysical contingencies (15%) 110 90 50 250 160 90

Subtotal 800 660 440 1,900 1,200 700

3. Consulting ServicesDesign of major structures 210 130 110 450 50 400Survey & mapping adviser 90 60 50 200 20 180Vehicles & supplies 70 40 40 150 30 120

Subtotal 370 230 200 800 100 700

4. O&M Equipment 1,500 400 700 2,600 300 2,300

Total 50,650 12,370 19,580 82,600 42,500 40,100

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Financing

3.31 The proposed Bank loan of US$71 million would cover 60% of thetotal project costs and finance the full foreign exchange cost of theproject and about US$ 15.7 million of the local project costs. TheGovernment would provide the remaining P 351 million (US$47.5 million) toNIA from annual budget appropriations.

Procurement

3.32 Equipment, vehicles, spare parts and supplies would be procuredafter international competitive bLidding in accordance with Bank GroupGuidelines. A preference limited to 15%- of the c.i.f. price of importedgoods, or the customs duty, whichever is lower would be extended to localmarnufacturers in the evaluation of bids. Local procurement practices areappropriate for off-the-shelf items costing less than US$20,000 each becausethe advantages of international competitive bidding would be clearlyoutweighed by the administrative costs involved. The total cost of suchitems would not exceed US$400,000. Bank staff have reviewed the localprocedures and they are acceptable. There is adequate competition andforeign firms can participate. A list of equipment requirements is given inAnnex 1.

3.33 Construction of the diversion dams, intake works and main canalsfor the two irrigation systems in Mindoro Oriental (US$15.0 million) wouldbe the only project works suitable for international competitive bidding.The remaining works on the project service area (US$45.0 million) would bescattered over seven separate locations in three different provinces and twoislands. They would include the construction of laterals, sublaterals,drainage system, access and service roads, on-farm facilities and OIbuildings for seven systems of the project, as well as the diversion dams,intake structures and main canals of the four systems in Mindoro Occidentaland Palawan. In the case of Mindoro Rural Development Project (Loan 1102-PH),NIA has experienced considerable difficulty in attracting bids for suchworks and about 70% of the total works in that project are being implementedby force account. Therefore, some civil works construction would be carriedout by force account. In previous Bank-financed irrigation projects, theamount of civil works to be done by force account was limited to 40% of thetotal cost, as lower limits were found to be unrealistic. An assurance hasbeen obtained that NIA would ensure that the aggregate amount of civil worksdone by force account wiould not exceed 40% of the total cost of civil worksexcluding those subject to ICB. Competitive bidding in accordance withlocal procedures is appropriate for the balance of the work. Bank staffhave reviewed the local procedures and they are acceptable. There isadequate competition and foreign firms can participate.

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Disbursements

3.34 Disbursements would be made at the rate of 100% of the foreignexchange cost of directly imported equipment and 100% of the ex-factoryprice of locally manufactured equipment and 65% for imported equipmentprocured locally. Disbursement for civil works would be 55% of certifiedmonthly progress payments or expenditures. Disbursement for force accountworks would be made against certificates of expenditure; the documentationfor works would show the quantities of major items of works accomplished andthe expenditure would be based on agreed unit rates. NIA would submit adetailed unit rate analysis with supporting documents for Bank review beforeDecember 31, 1980, and whenever any change in the unit rates is desired.Disbursement for minor contracts (less than P 1 million) would also bemade against certificates of expenditure based on actual payments made tocontractors. The borrower would make available all documents related to theforce account expenditure for inspection by the Bank's supervision mission.The project offices of NIA have the staffing and institutional capability toprovide such documentation in a satisfactory manner (Annex 4). For civilworks, contractors' mobilizatioa and equipment, disbursement would be at therate of 100% of foreign expenditare. For consulting services and technicalassistance, disbursements would be at the rate of 100% of total costs.

3.35 It is expected that disbursements would be completed by December 31,1986, approximately one year after the end of construction. An estimatedschedule of expenditures, a sem-.-qnnual disbursement schedule and a proposedallocation of loan proceeds are given in Annex 1.

Accounts and Audit

3.36 The NIA is a Government agency and its accounts are auditedannually by the Government's Commission on Audit. Assurances have beenobtained that NIA would maintain separate accounts for the project and thatafter audit by the Commission on Audit, the project accounts, together withthe auditors' comments and opinion on the certification of expenditure forforce account work, would be sen- to the Bank within six months of the closeof each financial year.

Environmental Effects

3.37 The principal health p-oblems in all three areas are protein

deficiencies in small children, enteric diseases and tuberculosis. Theproposed project would have little impact on these. The proposed drainageworks for the Mag-asawang Tubig system in the Mindoro Oriental subprojectwould have a beneficial effect on the Schistosomiasis-infested areas of thesystem. The area is also covere, bv the Schistosomiasis health controlprogram under the Mindoro Rural Development Project (Loan 1102-PH). Malariais prevalent in Palawan and parts of Mindoro. The Government program ofhouse spraying with residual insecticides is effective in Mindoro. Thestrengthening of the Malaria Control Unit in Palawan (para. 3.26) would helpto reduce the incidence of malaria in Palawan.

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4. ORGANIZATION AND MANAGEMENT

Project IIanagement

4.01 NIA was created in 1964 and given responsibilities for developing,operating and maintaining all national irrigation systems in thePhilippines. The Government finances NIA through the sale of bonds or fromappropriations. The agency is presided over by a board of directors; theAdministrator, who is appointed by the President of the Philippines, isresponsible for operations and management. NIA has recently beenreorganized in order to improve its capacity to deal with the requirementsof the Government's policy of irrigation development. The major foreignassisted projects were previously under a Special Projects Organization(SPO) headed by an Assistant Administrator who handled all project aspectssuch as implementation, operation and maintenance and finances. Under thenew reorganization four Assistant Administrators handle these aspects.However, the most crucial aspects of the implementation dealing with design,procurement, and construction would be handled by the AssistantAdministrator for Development and Implementation. NIA is currentlyresponsible for 20 foreign-assisted major projects and has built up astructure of staff which, with specialist consultant input where necessary,is competent to implement large-scale projects.

4.02 NIA intends to use the Director of the Mindoro Rural DevelopmentProject (Loan 1102-PH) as Project Manager of the proposed project. The Di-rector is a senior NIA employee who was closely involved in the formulationand preparation of the proposed project. The Rural Development Project isapproaching coiapletion and will, therefore, make fewer demands on his time.The project area would be divided into five construction divisions, two inMindoro Oriental centered around Calapan and Roxas, two in MindoroOccidental centered on Santa Cruz and San Jose and one in Palawan centeredon Narra (Figure 4.2). The Project Manager would be assisted at the fieldlevel by the five Project Engineers, one assigned to each division.

4.03 For O&M purposes, the entire project area of about 37,800 ha wouldbe administered by a single project manager (Figure 4.3). There would besix support divisions, dealing with administration, accounting, equipment,engineering, operations and agricultural aspects. The project area would bedivided into five Irrigation Districts with centers in Calapan, Roxas, SantaCruz, San Jose and Narra. Each district would be divided into 50 ha irriga-tion units. A ditchtender would manage two such units (100 ha), while aWater Management Technician (WMT) would supervise five ditchtenders (500 ha).A supervisor would be responsible for a water management division whichincludes five WIfT's (2,500 ha). Two to five divisions would constitute azone under a superintendent. The Calapan District would have two zones andthere would be one zone in each of the remaining four districts.

4.04 At completion of the construction, about 76 WMTs would be required.Most of the technicians would be newly recruited graduates in agriculture orin agricultural engineering, although some may be promoted from the ranks ofcompetent and experienced ditchtenders. All tWMTs, whether directly recruited

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or promoted to the post, would undergo a one-year training program in watermanagement, crop production and farmer organization at the training centerat Iloilo established under the Jalaur Irrigation Project (Loan 1367-PHl).

4.05 The malaria control program would be supervised from Manila by aspecialist from the Malaria Eradication Service (MIES) in the Ministry ofHealth (MOH). Actual implementation of the program would be undertaken bythe MES's field personnel in Palawan which would be strengthened under theproject. NIA would procure the equipment and supplies and pay the servicesof additional personnel employed by Ml0T under a special memorandum ofagreement between NIA and MOH.

Agricultural Supporting Services

4.06 Extension. The National Food and Agricultural Council (NFAC) isresponsible for coordinating the activities of all agencies involved in foodcrop production and is the body overseeing the implementation of the Masaganacampaign for increased rice production. The coordinating function of NFACat the level of individual irrigation systems woujld be carried out by theprovincial and municipal action committees. The number of farmers perextension worker averages about 105 in the project systems. The techniciansare all graduates and come mainly from the Bureau of Agriculture Extension(BAE) and the Bureau of Plant Industry (BPI) of the Ministry of Agriculture.Other technicians active in some, if not all, irrigation systems are from thteBureau of Soils, the Philippine National Bank, the Farm Systems DevelopmentCorporation (FSDC) and the Ministry of Agrarian Reform (MAR). The Ministryof Agriculture is in the process of reorganizing the extension service andimproving its efficiency throughout the Philippines with Bank assistance(Loan 1626-PH). The water management staff (para. 4.04) would be additionalto the existing extension personnel provided by the various Governmentagencies.

4.07 Research. In addition to the central research facilities providedby the College of Agriculture of the University of the Philippines, theInternational Rice Research Institute at Los Banos, and the BPI Maligaya RiceExperiment Station in Nueva Ecija province there are several researchsubstations in the project area. The BPI conducts applied research in ricevariety trials and multiple cropping from a station in Victoria, MindoroOriental and supports variety, fertilizer and multiple cropping trials inNarra, Palawan in cooperation with the Japanese Overseas Cooperative Volun-teers and the Palawan National Agricultural College at Aborlan. The Bureauof Soils has soil laboratories in Palawan and Mindoro Occidental but theyare not completely equipped. The Bureau of Agricultural Extension operatesa regional demonstration and training center at Barcenaga. Mindoro Oriental.

4.08 Seed. At present the average seeding rate in the project area isabout 90 kg/ha with some farmers using as much as 120 kg/ha mainly becauseof poor germination, damage to seedlings at transplant:ng, arid drought. Asa result, a total of about 3,600 tons o. rice seed is required each year, mostof it is obtained by retention of or-farm production, though it is notuncommon for farmers to purchlse seed from registered growers or from other

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farmers wrho grow tlLe desired variety. In the future, assuming an assuredsupply of high quality seed and water, it is estimated that the averageseeding rate will be about 50-60 kg/ha which implies that the project areawill require about 3,000 tons of seed annually. Assuming a replacement ofseeds every four seasons the average annual requirement of certified seedswould be about 1,500 tons, in order to meet these requirements about 450 hawould have to be devoted to certified seed production each cropping season.No difficulties are foreseen in the distribution of seed or the establishmentof registered growers. Farmers in all three subprojects are well informed onthe new improved varieties and their characteristics, and readily purchasethe output of registered seed growers. Some improvements will be requiredin the testing and certification of the seed growers' output. The seedanalysis laboratory in Mindoro Oriental, though not yet fully equipped, willinstitute testing of seed produced by registered growers and help toaccelerate the distribution of high quality seed to farmers.

4.09 Fertilizer. Present annual consumption of fertilizer in the threesubproject areas is about 1,000 tons in Palawan, 2,200 tons in MlindoroOriental, and about 1,700 tons in Mindoro Occidental. The nost conmonlyused fojriiulatiorls are urea, ammonium phosphate, 14-14-14 and sinilarcomapounds. Ammonium sulphate is widely used in Mindoro Oriental. Appli-cation rates vary from 50 kg/ha or less in some rainfed areas subject toflooding to 200-250 kg on better farms with reliable irrigation. Farmersoften use coTmpound fertilizers such as 14-14-14 due to ready availability,lack of proper recommendations, and the belief that it is cheaper.At full development it is expected that urea would be the major source ofnitrogen and triple superphosphate would be the phosphoric acid source.Potassium is not considered necessary in the project areas. In terms ofnutrients, the average application per hectare for each crop would be about80 kg of nitrogen and 40 kg of phosphoric acid in Mindoro Oriental andPalawan. In Mindoro Occidental only nitrogen would be required at a rate of80 kg per hectare. Annual fertilizer requirements at full development inthe project area would be about 10,000 tons of urea and 4,200 tons oftriple-superphosphate. The existing fertilizer distribution network isadequate and could be easily expanded to neet increased demand in the future.

4.10 Agrochemicals. Agrochemicals are readily available in the projectarea and are widely used in nodest quantities. Survey results show that about80% of the rainfed area and over 90%, of the irrigated area receive somepesticide application. Average application rates are 0.6 qt/ha on rainfedpaddy and about 1 qt/ha on irrigated paddy. Farmers are also well-acquaintedwith herbicides and about 50% of the rainfed areas and 60% of the irrigatedareas receive herbicide applications averaging 0.7 qt/ha. Serious outbreaksof insect pest and disease infestations are not common. Extensive rat danagehas been reported for most systems at one time or another over the past 5years. A rodent control component is included in the BPI-Cerman SurveillanceProgrami which, armong other activities, trains plant pest control officers.For the future the application rates of agrochemicals are not expected toincrease. Future demand of agroclhemicals due to increased area will heeasily r,wtt from existing sources within the subproject areas.

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4.11 Farmers' Organizations. As part of the Agrarian Reform program,the Government, through the Ministry of Local Government and CommunityDevelopment (MLGCD), is promoting the formation of pre-cooperative farmerorganizations, based on a barrio or hamlet. The organizations would serveas channels for the inflow of technical services, credit and inputs and asassembly points for produce intended for markets. It is expected that theseorganizations will eventually grow into full-fledged, formally constitutedcooperatives. This approach to cooperative organization fits in well withthe NIA effort to set up irrigators' associations based initially on the 50ha irrigation units.

4.12 Credit. Under the Masagana program the Government has easedcredit to small farmers, previously dependent on the landlords and privatelenders for their requirements. A system of uncollateralized "supervisedcredit" is used, which includes the provision of technical services to theborrower to ensure that recommended practices, such as variety, fertilizerand agrochemical inputs are adopted. The Masagana credit program has runinto difficulties as a result of poor repayment of previous loans and is nowbeing reviewed by the Government with a view to devising means of overcomingthe current problems. Within the project area Masagana loans have beenprovided to about 20% of the farmers. The mean size of loan was P1l,100/haor P 3,150 per farm. At full development it is assumed that 50% of thefarmers in the project area, covering about 60% of the land, would requirecredit from official sources at the current maximum rate of P 1,400/ha.On this basis, the annual requirements for the project area would be aboutP 45 million (US$6.0 million) of which P 30 million for the wet seasonand P 15 million for the dry season crop.

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5. AGRICULTURAL PRODUCTION

Present Cropping Pattern

5.01 In most of the project systems land preparation for the first or wetseason rice crop begins in May or June and transplanting is usually completedby July, while the harvesting is done between November and January. Thesecond or dry season crop extends from December to June. The croppingcalendar for rainfed paddy is dependent on the arrival of the southwest mon-soon which can vary by a month or more from year to year. A rainfed crop isplanted in the second season in parts of the Mindoro Oriental subproject,usually in December or January. Almost all project land, whether irrigated orrainfed, is planted to high yielding varieties. In the project area seedlingsare transplanted from field nurseries onto puddled fields. In addition torice, which is by far the most important crop in the area, there are smallareas of corn and tobacco and about 2,500 ha of old and low yielding coco-nuts. All of these areas are expected to be cropped under rice once irriga-tion is provided.

Future Cropping Patterns

5.02 In the absence of the project, significant changes in the croppingpatterns are not expected. The new irrigation facilities of the projectwould permit the expansion of the irrigable area in the wet season from3,100 ha to 37,800 ha. In the dry season the irrigation facilities andbetter water management would increase the irrigated rice area from about2,100 ha to 20,300 ha, thereby raising the overall cropping intensity from106% to 154%. The greatest improvement in cropping patterns would be inPalawan where about 3,200 ha of currently uncultivated land would be convertedto paddy fields.

Yields and Production

5.03 Without the project yields in the rainfed areas would increase atabout 0.8% per year, and at 1.0% per year in the presently irrigated areas.These yield increases would be induced by an improved transportation infra-structure, better availability of inputs and more effective extension ser-vices. Improved yields with the project would be due mainly to a reliablesupply of water on the presently rainfed areas, together with better access toinstitutional credit and inputs and improved extension service support.Present and projected paddy yields are shown in Table 5.1. The projectedyields are already being surpassed by good farmers in the area, with reliablewater supplies. As a result of the project, paddy production would increasefrom about 52,000 tons at present to an estimated 227,000 tons at full projectdevelopment in 1990 (Table 5.2). Lower yields have been projected for Palawanthan for Mindoro in consideration of the managerial difficulties involved inchanging from extensive rainfed cropping to a highly intensive irrigated ricecultivation on the larger farms that exist in the area.

Table 5.1: PRESENT AND PROJECTED YIELDS(ton/ha)

P a d d yRainfed crop 1 Rainfed crop 2 Irrigated crop I Irrigated crop 2

Future Future Future FutureSubproject Present without Present without Present Without With Present Without With

MindoroOriental 1.4 1.5 1.2 1.3 2.0 2.2 4.0 2.1 2.2 4.0

MindoroOccidental 1.5 1.7 - - 2.0 2.3 4.0 2.3 2.6 4.2

Palawan 1.4 1.5 - - 2.0 2.3 3.5 2.1 2.4 3.8

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Table 5.2: PRESENT AND PROJECTED PADDY PRODUCTION('000 tons)

Mindoro Oriental Mindoro Occidental Palawan TotalPresent Future Present Future Present Future Present Future

Rice

Wet Season

Irrigated 3.0 88.0 1.4 22.6 1.8 30.0 6.2 146.2Rainfed 23.8 - 6.7 - 7.0 - 37.5 -

Subtotal 26.8 88.0 8.1 22.6 8.8 30.0 43.7 146.2

Dry Season

Rainfed 4.2 - - - - - 4.2 -Irrigated 2.5 42.4 0.7 15.5 1.3 22.8 4.5 80.7

Total 33.5 130.4 8.8 38.7 10.1 57.8 52.4 226.9

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Cropping Calendar

5.04 The achievement of maximum benefits from irrigation is dependent onstrict adherence to a cropping calendar. A closely followed cropping calendaralso minimizes technical and organizational bottlenecks and facilitateseffective extension and water management. Calendars have been developed foreach of the sytems and are shown in Figure 5.1. Minor shifts are made fromexisting practices to obtain maximum benefit from the available water and toavoid harvest in months of heavy rain. The greatest adjustment is made inMindoro Oriental where the current calendar is brought forward by about twomonths to maximize the dry season irrigable area. Typhoon damage to standingcrops is uncommon in the project area and therefore modifications in thecropping calendars to avoid typhoon damage were not necessary.

Farm Mechanization

5.05 At present mechanized land preparation on the individual systemsranges from less than 10% to about 50%-60%, and for the project as a whole itis about 20%. The use of machines is more widespread in irrigated areas dueto higher farm incomes, easier access to institutional credit and the need fortighter scheduling of operations. Both four-wheel (40-60 h.p.) and two-wheel(8-15 h.p.) tractors are used. With the requirement for tighter scheduling,better access, and increased cropping intensities in the future, it is esti-mated that about 80% of land preparation would be done mechanically. Most ofthe machinery would be owned by farmers and contracted out to neighbors. Someequipment would be Government owned, such as the machinery operated by the MARResettlement Unit at Narra, Palawan.

5.06 Manual harvesting by sickle is expected to continue in the future inthe entire project area. At present mechanized threshing is common throughoutthe project area, ranging from 25% in some rainfed areas of Palawan to over90% on the larger systems with existing irrigation on Mindoro. Overall about75% of the harvest is threshed mechanically. Mechanized threshing is proj-ected to increase in the future to cover 85% of the harvest. Currentthreshing contract rates of 6%-7% of the volume harvested are assumed toprevail in the future.

Drying Storage and Processing

5.07 Depending on weather conditions, harvested paddy may be allowed todry in the field for a day or two before threshing. After threshing the paddyis sun dried on whatever suitable surface is available before being stored athome or carried to market. A few portable mechanical dryers belonging to theNational Grains Authority (NGA) are in operation in Mindoro Oriental whichhas an extended rainy season. Most of the larger rice mills have concretedrying floors. Major NGA milling/storage centers have drying floors andlimited mechanical drying facilities. Existing drying arrangements are gene-rally adequate for Palawan and Mindoro Occidental, but would require improve-ment in Mindoro Oriental where difficulties are encountered due to excessively

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wet paddy. For the future, additional drying capacity would be required inall three project provinces. For Palawan and Mindoro Occidental, solar dryingwould meet all needs, while in Mindoro Oriental some artificial dryingcapability would be required because of the wetter climate.

5.08 Present storage capacity is adequate in the Palawan and MindoroOccidental subproject areas, but deficient in Mindoro Oriental. NGA plans toincrease the storage capacity in each subproject area over the next few yearsto meet the projected production increase of 175,000 tons. Both the privatesector and the NGA are expected to make the necessary investments to accom-modate the increased production. In the project municipalities there areabout 200 mills and hullers with a total annual capacity of over 300,000tons of paddy, more than enough to handle the present area production ofabout 270,000 tons. The milling capacity is evenly distributed throughoutthe project area. In the future, however, incremental milling capacitywould be required to process the estimated additional 175,000 tons of paddyto be generated by the project. No difficulties are anticipated in theprovision of expanded milling facilities since the private sector isenterprising and has access to development financing earmarked for this typeof investment.

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6. MARKET PROSPECTS, PRICES, FARM INCOMES AND PROJECT CHARGES

Market Prospects

6.01 A major Goverment objective has been to increase rice productionas a means of raising the incomes of small farmers and of attaining nationalself-sufficiency in food grains. After experiencing substantial deficits inthe early 1970s, rice production grew by 5% p.a. during crop years 1974-77and the Philippines was able to provide for consumption solely from domesticproduction during the crop years 1975-77. In 1977/78, the Governmentexported 90,000 tons and built up a supply of about three months. The 1978end-of year stock held by the Government was about 260,000 tons and for 1979it is expected to reach 400,000 tons. The good performance in the pastthree years has been due mainly to an increase in yields brought about byfavorable weather. With the continued growth of population and incomes, thedemand for rice is expected to rise by about 3.0% annually. Based on aprojected growth of 3.7% in production and with average weather conditions,the Philippines is expected to achieve sustained self-sufficiency by 1982and to have a surplus of between 350,000 and 375,000 tons by 1990. With acontinuing effort to improve rice quality, the Philippines should have nodifficulty in exporting this surplus.

6.02 Mindoro and Palawan islands presently produce about 280,000 tonsof paddy in excess of their requirements. The surplus is mainly sold inSouthern Luzon and the Eastern Visayas. About 2,400 tons of project areapaddy were exported overseas in 1978 and it is expeced that about 16,000tons will be exported in 1979. At full development a total surplus of about450,000 tons of paddy, would have to be sold outside the islands of Palawanand Mindoro. Most of it would continue to go to the Eastern Visayas andSouthern Luzon and some increases in overseas exports can be expected, asquality of the product improves.

Prices

6.03 Since 1957, the Government has set an annual farm-gate supportprice for paddy to encourage production and allow some purchases of paddy byGovernment to build stabilization stocks. Responsibility for operating thesystem through purchases in the market is vested in a statutory body, theNational Grains Authority (NGA). Through 1972, the farm-gate support pricefor paddy and the domestic consumer price for rice kept pace with changes inthe world market price for rice. Between 1972 and 1975, to keep domesticprices down in the face of record high world market prices for rice, theGovernment subsidized consumers by maintaining a low official ceiling pricefor rice and a correspondingly low farm-gate price for paddy by sales ofimported rice on the domestic market below cost. Since 1975, the officialsupport price and the import parity prices have been practically the same.

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6.04 According to the Bank's commodity price forecasts, the worldmarket price of Thai 5% broken rice is expected to rise (in constant mid-1980prices) from US$430/ton f.o.b. Bangkok in 1980 to US$504/ton in 1990. Thequality of rice likely to be exported by the Philippines in the mid-1980s is25-35% broken, which historically trades at a 30% discount from the price of5% broken rice. On this basis, the world market price of Thai 25-35% brokenis expected to rise from US$270/ton in 1980 to US$350/ton in 1990. Theeconomic and financial paddy farm-gate price calculations are shown inTable 6.1 for 1980 and 1990, the-year full development is reached.

Table 6.1: PRICE STRUCTURE OF RICE /a

1980 1990Financial Economic /b Financial Economic /bP/ton P/ton US$/ton P/ton P/ton US$/ton

Export pricef.o.b. Manila25-35% broken /c 2,000 2,000 270 2,590 2,590 350

Less:Port charges 55 45 55 45Port handling & storage 40 35 40 35Cost of transportationproject to Manila 160 125 160 125Milling cost 140 115 140 115

Plus:Value of

millingbyproducts 200 165 200 165Price, exmillProject area 1,800 1,845 2,395 2,435Paddy equivalentprice (63% recovery) 1,135 1,160 1,510 1,535

Less:Paddy procurementcost /d 45 35 45 35

Farm-gate paddyprice /e 1,090 1,125 150 1,465 1,500 205

/a All prices expressed in terms of mid-1980 values./b Economic prices have been determined by applying to the transportation

costs the conversion factor for transport (0.78) and for the other items,the standard conversion factor (0.82).

/c Derived by taking a 30% discount from the price of 5% brokens f.o.b.Bangkok.

/d Includes costs of required storage capacity./e Financial price for 1980 is actual, for 1990 it is the export parity price

for paddy.

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6.05 The farm-gate fertilizer prices are based on the Bank's priceprojections for urea and triple-superphosphate. Table 6.2 shows all presentand future fertilizer prices used in the farm budgets and economic analyses.

Table 6.2: FERTILIZER PRICES(P/ton)

Fertilizer P r e s e n t F u t u r e(per nutrient ton) Economic Financial Economic Financial

Nitrogen 4,200 4,600 5,100 5,400Phosphoric acid 4,500 4,900 5,300 5,800

Farm Incomes

6.06 Farm incomes have been prepared for Mindoro and Palawan showing themost prevalent farm size in each area, representing the present condition of arainfed farm and showing how these farms would develop in the future with theproject. No farm model for presently irrigated land has been presentedsince such lands are less than 10% of the total project area and neversurpass 15% of the area of any single subproject. The farm models aresummarized below and presented in detail in Annex 2.

Table 6.3: FARM INCOMES

IncrementalFarm Farm Family Income Farm Income

Subproject size Present Future Present Future Per farm Per capita& farm type (ha) ---- (P) --- --------------- (S$) - …-----------

Mindoro: coconut 2.5 3,490 13,030 470 1,760 1,290 215rice 2.5 2,600 13,030 350 1,760 1,410 235

Palawan: rice 5.0 3,450 22,700 465 3,070 2,605 430

6.07 The above farm models represent owner-operated farms which, aftercompletion of the land reform program, would represent 40% of the farms and55% of the land. The remaining farms would be operated by leaseholders and,after rent payment, the respective annual incomes on these farms at full

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development would be lower than that from an owner-operated farm by fromabout US$600 for a 2.5 ha farm in Mindoro, to US$1,290 for a 5.0 ha farm inPalawan. Furthermore, in the initial phases of the project, some of theowner-operators would still have to make payments for land acquired underthe land reform, and thus their incomes would be less than the figures shownabove.

6.08 For 2.5 ha farms, the average farmi size in the Ilindoro subproject,the present per capita incomes range from US$35 for an amortizing owner on arice farm to US$80 for an owner-operator on a coconut farm. These incomesare well below the per capita absolute poverty level of UJS$200 and vary from6% to 13% of the estimated 1980 per capita GNP of US$600 for thePhilippines. With the project, the per capita incomes of these farms wouldrange from about US$195 for a leaseholder to US$295 for an owner-operator.The leaseholders would almost reach the absolute poverty level whileowner-operators would surpass it by almost 50%. These incomes would stillrange from 20 to 30% of the 1990 projected per capita GNP of US$975.

6.09 In Palawan, where the average farm size is 5 ha, present per capitaincomes vary between US$35 for an amortizing owner to US$80 for an owner-operator, also substantially below the absolute poverty level. With theproject, per capita incomes would range from US$295 for leaseholders toUS$510 for owner-operators. Incomes of these farmers would, therefore, riseabove the 1980 absolute poverty level and range between 30 and 50% of theprojected 1990 per capita GNP.

6.10 These comparisons indicate that the project would increase incomesof a large number of poor farmers in the project area and would help narrowthe income gap between the project area and other parts of the country, andbetween urban and rural areas.

Cost and Rent Recovery

6.11 NIA has the authority to collect fees from users of irrigationsystems to finance operations and to reimburse construction fees.Irrigation charges on national systems other than those which are assistedby the Bank are 2.0 cavans (100 kg) of paddy/ha in the wet season and 3.0cavans/na (150 kg) in the dry season. On Bank-assisted projects, the chargeof 3.5 cavans (175 kg) of paddy/ha in the wet season and 4.4 cavans (220 kg)in the dry season, is to be achieved gradually over five years fromconpletion of construction.

6.12 Based on the above water charges, the rent recovery index wasexamined for different farm tenures, types and locations. Indices have beenpresented for owner-operated and leaseholder-operated 2.5 ha rice andcoconut farms in Mindoro and for 5 ha rice farms in Palawan. The incre-mental rent recovery index for the project beneficiaries ranges from 15% foran owner-operator on a Mindoro rice farm to 40% for a leaseholder on a

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Palawan farm. The high index in Palawan would be due to the lower le:el ofyields expected at full development (para. 5.03). The average incrementalrent recovery index is 20%. While these indices show that there would bescope for further cost recovery, even at full development more than half thefarmers in the project area would be below the absolute poverty level, whichin the Philippines is a reasonable approximate value of the critical con-sumption level. Taking the present value of the incremental water charges,project costs, and annual 0&2I costs, the cost recovery index is 16%. Theindex is smaller than those in other Bank-assisted projects in thePhilippines. This is due to the fact that the proposed project consistsprimarily of construction of new irrigation facilities, while previousprojects have had large components aimed at rehabilitation of existingfacilities.

6.13 To ensure sound O&M practices and an equitable contribution bybeneficiaries toward recoaery of project capital costs, the following assur-ances have been obtained:

(a) the NIA would make annual budgetary provision to supply thefunds necessary for O&M of the project works;

(b) irrigation fees would be levied to provide NIA with sufficientfunds to ensure sound O&M practices and to contribute towardsrecovery of as much as possible of the investment cost withina reasonable period, taking into account farmers' incentivesand capacity to pay. A gradual increase in irrigation feesover a period of five years from completion of construction to alevel equivalent to about 3.5 cavans of paddy per ha in the wetseason and 4.4 cavans in the dry season would meet the require-ment;

(c) the NIA would take all necessary actions to ensure full andprompt collection of the irrigation fees; and

(d) the Government and the Bank would consult annually on the adequacyof water charges and the collection thereof.

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Table 6.4: COST AND RENT RECOVERY /a(P)

r{indoro Oriental PalawanRice farms Coconut farms

Owner Lease- Owner Lease- Owner Lease- Totaloperator holder operator holder operator holder Project--------------- 2.5 ha ------------- ----- 5.0 ha----- (P nil Lion)

At Full Project Development

Incremental gross value ofproduction /b 14,210 11,030 16,910 16,010 31,355 24,000

Less: Incremental cash productioncosts lb 3,725 3,725 6,315 6,315 11,200 11,200

Equals: Incremental cash income 10,485 7,305 10,595 9,695 20.155 12,800

Less: Increanental:Imputed return on own capital /c 200 200 215 215 550 550Imputed value of family labor Id 835 835 2,700 2,700 1,800 1,800Imputed ialue of fans management /e 1,420 1,105 1,060 970 3,140 2,400Allowance for risk & uncertainty /f 1,420 1,105 1,060 970 3,140 2,400

Equals: Project rent 6.610 4,060 5,560 4,840 11,525 5,650

Incremental water charges 960 960 960 960 2,235 2,235

Incremental water char,es as a %of incremental cash income 9 13 9 10 11 17

During Project's Life

Project rent _.a 30,500 20,100 27,600 24,000 57,100 28,000 40L.1Incremental water charges /9 4,700 4,700 4,700 4,700 11,100 11,100 79.7Rent recovery index (%) 15 23 17 20 19 40 20.0Project costs /g 504.8Cost recovery index (%) 16

/a All calculations in mid-1980 prices and represent incremental conditions, that is, with project ilinnswithout project conditions.

/b From Annex 2.

/c Assumes 10% p.a. return on portion of production costs niet from farmer's own resources.

/d Family labor valued at P 10.0/man-day.

/e Ten percent of incremental gross value of production.

/f Ten percent of incremental gross value of production.

/g Present values in 1980 discounted at 10% p.a. over project life.

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7. BENEFITS, JUSTIFICATION AND RISKS

7.01 The provision of improved water control and drainage under the pro-posed project and better agricultural supporting services would increaseyields on about 37,800 ha which are currently under rainfed cultivation orlimited irrigation. Rice would be the principal crop grown throughout theproject area, and about 5,700 ha of land presently devoted to coconuts,and rough grazing or brushland would be converted to paddy fields upon thea-vailability of an assured water supply. Approximately 11,600 farm familiep;and 900 laa,lless laborers' families, a total of about 74,000 people, wouldbenefit directly from the proceeds of increased production and consequentemployment. The annual demand for farm labor would increase by about 3million man-days, equivalent to some 12,500 full-time jobs. Access to markel:swould be enhanced in the project area by the improved and denser network ofroads that would be built along the canals and drains. In the Palawan sub-project area the project would contribute to an intensification of the malariacontrol program aimed at reducing the disease risk for a population of 12,000people. The project's per hectare construction cost of US$2,185, excludingcosts due to expected price increases, is in line with the costs of previousBank-assisted irrigation projects. The project would meet the Government'sobjectives of increased food production and more balanced regional distribti-tion of development at a capital cost of about US$7,170 per benefited farmfamily. The cost of the malaria component would amount to about US$200 perfamily in the endemic area. At full agricultural development the projectwould result in rice exports worth US$61 million per year at the forecastworld market prices for rice. The net foreign exchange earnings would beUS$50 million per year after deducting the incremental costs of importedfertilizer, chemicals and fuel.

7.02 Distribution of Benefits. Farmers within the three subproject are:aswould benefit from the project roughly in proportion to the area of land theycultivate in a given year. However, smaller farmers would tend to receive alarger share than would correspond to their farm sizes as a result ofincreased employment opportunities generated by greater cropping intensities.About 90% of the benefits to be derived from the project at full development.jould accrue to the target group which consists of 98% of the farm familiesor about 68,000 people. In the Palawan subproject area, where the skewness inland distribution is more marked, about 20% of the benefits would go to 6% ofthe farmn families falling outside the target group. However, the incomes ofthese families are only marginally above the absolute poverty level.

7.03 Foreign Exchange. The unit of account is uncommitted foreignexchange in the hands of the Government, expressed in terms of local currency.All tradeable components are valued directly in foreign exchange and convertedto local currency at the official exchange rate and adjusted for local trans-port and handling. Specific conversion factors for a number of broad cate-gories of goods and services produced or consumed by the project have beenused to express all nontradeable inputs and outputs in terms of the commonunit of account (Annex 2, Table 14).

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7.04 Benefits. Expected future yields, cropping intensities, and produc-tion with and without the project are discussed in Chapter 5. Chapter 6presents the farm-gate prices for inputs and outputs, based on the Bank'scommodity price forecasts for rice and chemical fertilizers. Gross returns,production costs, net returns (without accounting for labor) and laborrequirements per ha are given in Annex 2. Figure 5.1 shows the proposedcropping calendar. Table 7.1 summarizes the foregoing information and givesthe expected benefits in the project area at full agricultural development.

7.05 Farm Labor. As a result of the project, the demand for labor wouldincrease from 3.6 million man-days without the project to 6.4 million man-dayswith the project. Presently, there are an estimated 11,600 farm families and900 landless families in the project area. The average family size is 6.0,from which two full-time workers are available, giving a total labor supply of24,900 workers. Assuming an annual growth in labor force of 3% in MindoroOriental, 4% in Mindoro Occidental and 5% in Palawan where immigration isexpected to accelerate moderately due to the relative abundance of land andthe oil exploration activities going on in the island, (compared to ahistorical growth in population of 3.35%, 5% and 4.78% in each of theseprovinces respectively, due to migration, and 2.5% for the country as a whole)the total labor supply at full development in 1990 would amount to 35,000workers. Assuming 20 days of work per month, the total available monthlylabor supply would be 0.7 million man-days in 1990 (see Table 7.2). Anexamination of the monthly demand for labor (Annex 2, Table 7) shows that thepeak demand occurs between September and March. While for some of thesemonths shortages could develop in Palawan, it is expected that extra laborwould be supplied by the other agricultural areas in the island, where crop-ping intensities would be substantially lower. Due to heavy underemploymentin the agricultural sector the shadow wage rate for rural workers in thePhilippines has been estimated at 52% of the ongoing market wage of P 10/dayor P 5.2/day. In order to convert it into border prices, a consumptionconversion factor of 0.84 was applied rendering an economic cost of labor ofP 4.4/day which bears the same relation to the ongoing market wage as wasfound in previous irrigation projects. The incremental labor cost due tothe project would be P 12.3 million.

7.06 Investment Costs. The total economic capital cost in border pricesis US$71.8 million comprising US$43.9, for the Mindoro Oriental subproject,US$10.6 for the Mindoro Occidental subproject and US$17.3 for the Palawansubproject. The annual O&M costs are on average US$40/ha for the projectareas. These capital cost figures include allowances for physical contingen-cies, as well as US$400,000 for the malaria component in Palawan but excludeprice contingencies.

7.07 Development Period. If work proceeds according to the implementa-tion schedule, all the systems in the project would be completed in time forthe second crop in 1986. On some of the systems, especially the smaller ones,benefits would be realized earlier, but for the purposes of the economicanalysis, it is assumed that benefits from the irrigation systems would beginin the sixth year and continue increasing until the projected maximum isachieved in 1990.

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7.08 Economic Rate of Return. On the basis of the foregoing

assumptions and discounting the costs and benefits over a 40-year period,the economic rate of return of the project is 18% (Table 7.3). Rates of

return for the subprojects are 17% for Mindoro Oriental, 20% for MindoroOccidental, and 19% for Palawan. At a discount rate of 10%, the estimatedopportunity cost of capital in the Philippines, the economic net present

value of the project in 1980 is US$58 million.

7.09 Sensitivity Analysis. Sensitivity analysis was used to determine

which variables would be most crucial to the success of the project. Incarrying out the sensitivity analysis, two measures were developed for eachvariable tested - the crossover value and the elasticity. The crossover valueis the value of the variable tested for which NPV discounted at 10% is zero,and is a measure of how far the variable can differ from its most likely valuebefore the project becomes economically unacceptable. The crossover value mayalso be interpreted as the value of the variable tested, beyond which theeconomic rate of return would be below 10%. The elasticity is defined as thepercentage change in NPV discounted at 10% with respect to a 1% change in thevariable tested. It is a measure of the rate of change of NPV change for anychange of variable, at the most likely value of that variable./I

7.10 The numerical results are presented in Table 7.4, which shows that

the success of the project is mildly sensitive to low cropping intensities,and to shortfalls in yield. The project is also sensitive to future worldmarket prices, which are beyond the control of the project. The probabilityof these critical variations is discussed below:

(a) Yields. The crossover values of yields are about 25% below the

expected project yields at full development. The probability of

future yields falling below the crossover yields is low since manyfarmers are already achieving the projected yield levels in neigh-boring areas with reliable water supply. Also, the incidence oftyphoon damage is low in the area, a factor that depresses averageyields in other regions of the Philippines.

(b) Prices. The crossover value lies around 36% below the projected

level. This should give enough margin, especially if one considersthat the Philippines should be able to improve its export quality by1990.

(c) Construction Costs. A cost overrun of almost 100% in real termsis unlikely considering the simple nature of the works and NIA'slong experience with similar projects.

/I The elasticity generally changes for movements along the NPV-variable

curve.

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(d) Economic Wage Rate. The economic rate of return is insensitive tothis variable since economic wages would practically have toincrease by almost seven times in order to make the projectuneconomic.

(e) Cropping Intensity. It is highly unlikely that this variablewould drop to 116% considering that present intensities withoutirrigation in the project's existing rice areas are practicallyreaching this intensity.

7.11 Risks. No major problems of implementation are anticipated sincethis would be the twelfth Bank-assisted irrigation project in thePhilippines and the NIA has developed considerable experience over theperiod of association. However, a six-year implementation period has beenadopted to allow for the geographic dispersion of the project over threeprovinces.

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Table 7.1: NET VALIIE Of PRODUCTIO/N AT FULL PROJECT DEVELOPMENT

Gross Net Net valtue ofFarm-gate value of Production value of production

Area Yield price production costs production project area

(ha) (ton/ha) (P/ton) ------------ (P/ha) -------------- (P nillion)

Oriental Mindoro SubprojectRice: Painfed Crop 1 W 18,000 1.50 1,500 2,250 995 1,255 22.6

Rainfed Crop 2 lI 3,500 1.30 1,500 1,950 995 955 3.3

Irrigated Crop 1 W 1,500 2.20 1,500 3,300 1,135 2,165 3.2Irrigated Crop 2 Wi 1,200 2.30 1,500 3,300 1,135 2,165 2.6

Irrigated Crop I W 22,000 4.00 1,500 6,000 1,725 4,275 94.1Irrigated Crop 2 1 10,600 4.00 1,500 6,000 1,725 4,275 45.3

CoconuIt (copra): Rainfed Wq 2,500 0.82 1,800 1,480 500 980 2.5

W Ui

(Pesos nillion)Total net value of production (before costing labor) 34.2 139.4Less imputed labor cost 10.0 15.PTotal net value of production 24.2 123.6Net incremental value of production at full project development 99.4

Occidental Mindoro SubprojectRice: Rainfed U 5,100 1.70 1,500 2,550 1,015 1,535 7.8

Irrigated Crop I Wi '700 2.30 1,500 3,450 1,130 2,320 1.6Irrigated Crop 2 11 300 2.50 1,500 3,750 1,210 2,540 n.8

Irrigated Crop 1 W 5,800 4.00 1,500 6,000 1,500 4,500 26.1Irrigated Crop 2 11 3,700 4.20 1,500 6,300 1,570 4,730 17.5

(Pesos million)Total net value of production (before costing labor) 10.2 43.6Less imputed labor cost 2.6 4.6Total net value of production 7.6 39.0Net incremental value of production at full project development 31.4

Palawan SubprojectRice: Rainfed W 5,900 1.50 1,500 2,250 930 1,320 7.8

Irrigated Crop I W 900 2.30 1,500 3,450 1,095 2,355 2.1Irrigated Crop 2 W 600 2.40 1,500 3,750 1,095 2,655 1.6Irrigated Crop I W 10,000 3.50 1,500 5,250 1,585 3,665 36.7Irrigated Crop 2 W 6,000 3.80 1,500 5,700 1,605 4,095 24.6

VT 1

(Pesos million)Total net value of production (before costing labor) 11.5 61.3Less imputed labor cost 3.? 7.7Total net value of production 8.3 53.6Net incremental value of production at full project development 45.3

Total Pro,ectRice: Rainfed Crop I W 29,000 38.2

Rainfed Crop 2 WI 3,500 3.3Irrigated Crop I vI 3,100 6.9Irrigated Crop 2 W 2,100 5.0

Irrigated Crop I W 37,800 156.9Irrigated Crop 2 W 20,300 87.4

Coconut (copra): Rainfed W 2,500 2.5

(Pesos million)Total net value of production (before costing labor) 55.9 244.3Less inputed labor cost 15.8 28.1Total net value of production 40.1 216.2Net increinental value of production at full project development 176.1

U = Future without project

W = Future with project

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Table 7.2: LABOR SUPPLY

Mindoro Mindoro TotalOriental Occidental Palawan Project

1980FamiliesFarm 7,780 1,850 1,930 11,560Landless 690 190 - 880

Total 8.470 2,040 1,930 12,440

Average family size 6.0 6.0 6.0 6.0Population 50,820 12,240 11,580 74,640Percentage in the labor force 33 33 33 33

Total labor force 16,940 4,080 3,860 24,880Million md-year /a 4.0 1.0 0.9 6.0Thousand md/month /b 335.4 80.8 77.2 497.6

1990 /cFamilies 11,385 3,020 3,140 17,545

Average family size 6.0 6.0 6.0 6.0Population 68,300 18,120 18,860 105,280Percentage in the labor force 33 33 33 33

Total labor force 22,540 6,035 6,200 34,775Million md-year /a 5.4 1.4 1.5 8.3Thousand md/month /b 450.8 120.7 124.3 695.8

/a Based on an assumption of 240 man-day per annum per worker.

/b Based on an assumption of 20 man-day per month per worker.

/c Projections for 1990 were determined by compounding the 1980 data at thefollowing rates: 3% for Mindoro Oriental, 4% for Mindoro Occidental and5% for Palawan.

Table 7.3: ECONOMIC COSTS AND BENEFITS(US$ million)

Mindoro Oriental Mindoro Occidental Palawan Total ProjectIncremental Incremental Net Incremental Incremental Net Incremental Incremental Net Incremental Incremental Net

Year costs /a benefits benefits costs /a benefits benefits costs /a benefits benefits costs /a benefits benefits

1 0.4 - (0.4) 0.1 - (0.1) 0.2 - (0.2) 0.7 - (0.7)2 5.4 - (5.4) 1.6 - (1.6) 1.8 - (1.8) 8.8 - (8.8)3 9.3 - (9.3) 2.8 - (2.8) 3.8 - (3.8) 15.9 - (15.9)4 11.1 - (11.1) 2.8 - (2.8) 4.9 - (4.9) 18.8 - (18.8)5 10.3 - (10.3) 2.1 - (2.1) 3.6 - (3.6) 1'6.0 - (16.0)6 8.1 2.7 (5.4) 1.5 0.8 (0.7) 3.4 1.3 (2.1) 13.0 4.8 (8.2)7 0.9 5.4 4.5 0.2 1.7 1.5 0.4 1.4 2.0 1.5 9.5 8.08 0.9 8.0 7.1 0.2 2.5 2.3 0.4 3.7 3.3 1.5 14.2 12.29 0.9 10.7 9.8 0.2 3.4 3.2 0.4 4.9 4.5 1.5 19.0 17.3

10 0.9 13.4 12.5 0.2 4.2 4.0 0.4 6.1 5.7 1.5 23.7 21.211 2.3 13.4 11.1 0.6 4.2 3.6 1.1 6.1 5.0 4.0 23.7 19.712-20 0.9 13.4 12.5 0.2 4.2 4.0 0.4 6.1 5.7 1.5 23.7 21.221 2.3 13.4 11.1 0.6 4.2 3.6 1.1 6.1 5.0 4.0 23.7 19.722-30 0.9 13.4 12.5 0.2 4.2 4.0 0.4 6.1 5.7 1.5 23.7 21.zA 2.3 13.4 11.1 0.6 4.2 3.6 1.1 6.1 5.0 4.0 23.7 19.732-40 0.9 13.4 12.5 0.2 4.2 4.0 0.4 6.1 5.7 1.5 23.7 21.2

Net present value /b 31.0 12.0 15.0 58.0Economic rate of return: 17% 20% 197 18%

/a Incremental costs include O&M costs from the sixth year onward and replacement of O&M equipment every 10 years.

/b Present values in 1980 discounted at 10% p.a. over project life.

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Table 7.4: SENSITIVITY ANALYSIS

Appraisal Crossover Changevalue value /a (%) Elasticity A

Yields at full development(ton/ha)Dry season 4.0 3.0 -25 +4.00Wet season 3.9 2.9 -25 +4.00

World market price(25%-35% broken, f.o.b.Bangkok US$/ton, 1990) 350 225 -36 +2.78

Construction costs 71.8 142.2 98 -1.2(US$ million, economic)

Cropping intensity 154 116 -25 +4.00

Development period 5.0 11.0 120 -0.83

Economic wage rate 4.4 34.8 690 -0.12

/a Value of variable for which net present value is zero at a discount rate of10%.

/b Percent change in net present value (discounted at 10%) due to a 1% changein the variable.

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8. AGREEMEN?S REACHED AND RECOMMENDATION

8.01 During negotiations agreement with the Goverrnjient was reached onthe following principal points:

(a) NIA would prepare terms of reference aoid an outline of the O&M studyto be financed under the project and ifter revi..w by the Bank wouldcarry out the study with the issistance of consultants (para.3.25);

(b) NIA and IHOi would enter an agreement acceptable to the Bank byDecember 31, 1980, for the implementation of the malaria controlcomponent of the project (para. 3.28); and

(c) NIA would ensure that the aggregate amount of zivil workrs done byforce account would not exceed 40'% of .ne total cost of civilworks excluding those subject to ICB (para. 3.33).

8.02 With the above assurances, the proposed project would be suitablefor a Bank loan of US$71.0 million for - period of 21) years including 5 yearsof grace. The borrower would be the Republic of the Philippines.

- 55- ANTNEX 1Table 1

PHILIPPINES

MEDIUM-SCALE IPRIGATION PROJECT

Climatological Data

Subproject II I I I I I I I I IIIand location I JanlFeb!Mar!Apr!?MaylJunlJul!Aug!Sep!Oct!NovlDec TotalI

Mlndoro IRainfallJ (mm) /a I I I I Oriental I Average I 971 561 571 951 1731 1711 1931 2051 1631 2761 2361 2091 1,931 1

I Maximum I 2721 1921 2461 2871 4671 3501 5221 4741 4871 6231 975! 5911 ICalapan I Minimum 241 121 01 161 311 241 221 711 451 1061 42! 53! I

INo. of rainy days /b I 181 121 101 101 131 171 161 181 161 18! 191 211 188 IIRelative humidity (%) /a I 821 801 771 761 781 81j 831 841 841 84! 841 841 IlTemperature (degrees C)A a I I I I I I Mean I 22.71 22.9! 23.61 24.61 24.4! 23.8! 23.41 23.8! 23.7! 23.7! 23.6! 23.2! I Mean maximum I 28.51 29.01 30.21 31.7! 32.1! 31.81 31.01 31.2! 31.2! 30.8! 29.9! 28.8! I Mean minimum I 22.3! 22.5! 23.21 24.21 24.0! 23.51 23.11 23.4! 23.3! 23.3! 23.21 22.8! IlEvaporation (ma) Is 1 128] 136! 174! 1821 166! 1351 131! 127! 120! 130! 121! 122! 1,671 IlPrevailing wind direction /d! ME! ME! El El El El NW! NWI NW! NEI NE! NE! IlWind velocity (km/br) /d I 7.4! 7-41 9.3! 9.31 5.61 5.6! 5.6! 5.6! 5.6! 7.4! 7.4! 7.41!INo. of typhoona /e I 0! 0! 3! 1 0! o 0! 1! 0! 0 4! 4! 5! 17 1

1 1~ ~ ~~~~~~ I I I I I I I I I I I I Mindoro !Rainfall (mm)/f I I I I I I I I I I I I I IOccidental I Average I 13! 61 2! 221 2061 292! 374! 510! 343! 2821 96! 31! 2, 17 7

I Maximum I 39! 38! 6! 19011,1431 581! 714! 9821 714! 910! 308! 1081 Lubang I Minimum I 0! 0! 0! 01 1! 36! 89! 171! 38! 37! 5! 0!

INo. of rainy daya /L& I 2! 2! 1, 21 8! 15! 181 21! 20! 13! 9! 5! 116 II ~ ~ ~~~I I I I I I I I I I I I II

Palawan !Rainfall (mm) /a I I I I I I I I I I I I I II Average I 35! 23! 47! 441 146! 163! 182! 188! 188! 213! 217! 154! 1,600

Puerto Priocesal Maximum I 122! 143! 324! 158! 364! 394! 303! 311! 333! 4861 432! 381!

I Minimum I 0! 0! 0! 0! 34! 47! 72! 72! 56! 67! 19! 3! INo. of rainy days /h 1 4! 3! 41 61 12! 15! 16! 171 16! 15! 13! 8! 129 IIRelative humidity (%) lb 1 84! 82! 81! 80! 83! 86! 87! 87! 86! 87! 86! 85! ITemperature (degreesaC)A!b I I I I I I I I I I I I II Mean ! 23.5! 23.5! 24.1! 24.3! 25.3! 24.6! 24.2! 24.2! 24.1! 24.2! 23.9! 23.9! I Mean maximum I 30.7! 31.2! 31.9! 32.9! 32.5! 31.3! 30.91 30.9! 30.9! 31.1! 31.0! 30.8! I Mean minimum I 22.8! 22.8! 23.4! 23.4! 24.6! 24.0! 236! 23.6! 23.51 23.6! 23.5! 23.4! lEvaporation (mm) /I 1 141! 138! 176! 186! 182! 151! 153! 147! 139! 146! 139! 138! 1,836 IlPrevailing wind direction LI NE! NE! NE! NE! WI SW! SI SI WI WI NEI ME! lWind velocity (km/br) /i 1 7.41 7.41 5.6! 5.6! 3.7! 3.7! 5.6! 5.6! 5.6! 3.7! 3.7! 3.7! iNo. of typhoons /k I 0! 0! 1! 1! 0! 0! 0! 0! 0! 0! 4! 4! 10 I

I ~~~I I_ I I I I I I I I I

/a Period of observationi: 1949-77.lb Period of observation: 1951-70.fT Period of observation for data used In computation by Penman method: 1948-75.

Ld Period of observation: 1958-70 and 1973-77./e Period of observation: 1948-75./f Period of observation: 1956-77.fT Period of observation: 1956-78.lb Period of observation: 1949-73./i Period of observation for data used in computations by Penman method: 1949-74 (Roxas City, Capiz).

Li Period of observation: 1951-70 and 1973-76.1k Period of observation: 1948-75.

ANNEX 1- 56 - Table 2

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Principal Project Features

Subproject

Mindoro MindoroOriental Occidental Palawan Total

No. of systems 3 2 2 7Net irrigable area (ha) 22,000 5,800 10,000 37,800Diversion dam (no.) 2 2 2 6

Main CanalsTotal length (km) 65 30 50 145Parshall flumes (no.) 4 2 3 9Lateral turnouts (no.) 16 4 16 36Checks and/or drops (no.) 60 50 45 155Check combined with road crossing (no.) 10 8 12 30Drops or chutes (no.) 10 4 4 18Road crossing (culverts or bridges (no.) 86 29 34 149Siphon (no. and length in m) (3)100m (2) 90m (3)120m (8)310mDrainage structures (no.) 34 11 21 66

Secondary CanalsTotal length (km) 265 50 100 415Parshall flumes (no.) 44 10 31 85CHO turnouts (no.) 256 56 110 422Road crossings (culverts no.) 210 50 110 370Check combined with road crossing (no.) 44 10 15 69Checks and/or check-drops (no.) 180 60 120 360Drops and/or chutes (no.) 8 4 4 16Siphon (no. and length in m) (5)220m (3)110m (11)350m (19)680mLateral turnouts (no.) 24 4 12 40Drainage structures (no.) 26 12 18 56

Main and Secondary DrainsImprovement of existing creeks (km) 95 45 40 180New drains (km) 85 35 80 202Drops (no.) 10 10 65 85Road crossings (no.) 17 7 20 44Farm ditches (km) 1,400 350 750 2,500Farm drains (km) 480 170 320 970

Service Roads (km)Along main canals (3.5-5 m) 60 25 45 130Along main and secondary drains (5 m-3.50 m) 100 50 100 250Along laterals (3.5 m) 210 40 80 330Access roads (3.5 m) 40 10 20 70Farm roads (2.0 m) 210 55 95 360

ANNEX 157 Table 3

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Irrigation Facilities Cost

Subpro iectMindoro Mindoro MeanOriental Occidental Palawan--------- (US$/ha) …a ---------

1. Diversion dam & intake works 470 460 280 420

2. Canal system 530 360 370 460

3. Drainage system 220 190 190 210

4. Roads 240 220 220 230

5. On-farm facilities Lb 270 280 380 300

Total 1,730 1,510 1,440 1,620

l Not including physical contingencies (15%), price contingencies (36%),and engineering, supervision and administration (10%).

/b Includes Water Management Technician stations, gate keeper quarters andtopographic, surveys and mapping.

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Summary of Equipment. Vehicles & Material

QuantIty_ Total cost (USs'00) __Irrigation service Consulting O&M Irrigation service Consulting O&M

area services Input- study area _ services Input- studyOperation (design output & Total Operation (design output &

Force & main- & moni- train- quan- Unit Force & main- & moni- train- Totalaccount tenance surveys) toring ing tity cost account tenance surveys) toring ing cost

1. Earthmoving & Construction EquipmentTractor, swampy, 140 hp 5 5 75 380 380Tractor, swampy, 90 hp 3 3 70 210 210Trator crawler, 140 hp 5 5 80 400 400Tractor crawler, 90 hp 5 5 70 350 350Scrape dozer, 8 cu yd 4 4 160 640 640Crane, mobile, 18 ton 2 2 90 180 180Crane, crawler, dragline 3/4 cu yd 3 3 100 300 300Crane, crawler, dragline 1-1/4 cu yd 1 1 140 140 140 1Crane, crawler, swampy, dragline

O01-1/4 cu yd 1 1 170 170 170Hydraulic backhoe, crawler 0.7 cu yd 3 3 50 150 150Front-end loader, wheeled, 1.5 cu yd 3 4 7 45 140 180 320Farm tractor with blade attachment,

75 hp 3 4 7 15 40 60 100Truck tractor with 25-ton trailer 3 3 75 230 230Motor grader, 125 hp 5 12 17 45 220 540 760Roller, vibratory, self-propelled,

5-8 tons 5 5 35 170 170Roller, 1.0 m wide, self-propelled 6 6 1Q 60 60Roller, sheep foot 8 6 14 5 40 30 70Truck, dump, 6-8 cu yd 16 17 33 30 480 510 990Truck, water 3 1 4 30 90 30 120Truck, flatbed, 6 ton 8 10 18 22 180 220 400Truck, forklift 3 - 3 10 30 30Truck, fuel tanker, 8,000 liters 4 - 4 25 100 100Truck, fuel and lubrication service 2 - 2 70 140 140Mobile repair shop, truck mounted 3 - 3 80 240 240Air compressor 125 CFM 3 - 3 7 20 20Air compressor 400 CFM 2 - 2 15 30 30Generator, 10 KVA 4 - 4 3 10 10Cenerator, 25 KVA 2 2 4 10 20 20 40Welding equipment 10 7 17 3 30 20 50Weed cutter - 370 370 0.2 - 70 70Miscellaneous tools and equipment L.S. L.S. L.S. L.S. 200 - 200Mixer, concrete, 1/2 cu yd - 5 5 4 20 20Mixer, concrete, 1/4 cu yd - 16 16 1.2 20 20Compactor, 19 x 24 plate with

X agenerator 15 - 15 0.7 10 10 i

Concrete vibrator - 16 16 0.6 10 10Water pumps 4-6 size 40 13 53 1.5 60 20 80tiaterials testing equipment L.S. L.S. L.S. L.S. 30 30 60

Subtotal 5.490 1,780 7.270

Ouanti ty - Total cost (US$'000)Irrigation service Consulting DIM Strength- Irrigation service Consulting O&M Strength-

area services Input- study ening of _ area services Input- study ening ofOperation (design output & malaria Total Operation (design output & malaria

Force & main- & moni- train- unit in quan- Unit Force & main- 6 moni- train- unit in Totalaccount tenance surveys) toring ing Palawan tity cost account tenance surveys) toring ing Palawan cost

2. Survev & Miscellaneous EquipmentSecond order automatic level 20 20 40 1 20 20 40One-second theodolite with tripod& Roelaff prism 4 4 8 8 30 30 60

Electronic distance measurementdevice, with traverse equipment 2 2 4 15 30 30 60

Current meters & water stage recorders 6 6 10 60 60Meteorological stations equipment 20 20 3 60 60Radio transceiver (single Sb) 10 10 2 20 20Microscopes 3 3 1.7 5 5Sprayers 25 25 0.2 5 5

Subtotal 80 220 10 310

3. Office & Training EquipmentDesk program calculators - 0 - 6 2 - 8 10 - - - 69 20 - 80Desk calculators 20 6 10 20 4 2 62 0.5 10 3 5 10 2 1 31Pocket calculators 40 20 20 20 20 - 120 0.05 2 1 1 1 1 - 6Typewriters 20 10 - 10 10 4 54 0.10 2 1 - 1 1 1 6Electric typewriters 10 4 - 4 2 2 22 1.0 10 4 - 4 2 2 22Mimeograph machines 4 4 4 4 - - 16 3 12 12 12 12 - - 48Plans 6 drawings copying machines - - 4 - - - 4 4 - - 16 - - - 16Tape recorders with cassette - - - 10 - - 10 0.3 - - - 3 - - 3Miscellaneous office equipment and

supplies L.S. L.S. L.S. L.S. L.S. L.S. L.S. L.S. 24 9 6 9 4 36 88Malaria control supplies, pesticides

and drugs L.S. 40 40

Subtotal 60 30 40 100 30 80 340

4. VehiclesStation wagons, 4 x 4 2 3 2 2 2 1 12 13 25 40 30 30 25 15 165Jeep, utility vehicle, 4 x 4 25 20 4 3 3 3 58 10 250 200 40 30 30 30 580Truck pickup, 3/4 ton,4 x 4 30 8 2 3 3 2 48 6 180 50 10 20 20 15 295Sedan cars 3 2 2 - I - 8 10 30 20 20 - 10 - 80Motorcycles 100 cc 30 100 - 40 10 - 180 0.5 15 50 - 20 5 - 90Bus, 15-20 seater 2 - - - - - 2 20 40 - - - - 40

Subtotal 540 360 100 I0O 90 6O 1.250

Spare parts (10%), Items 1 & 4 only 590 210 10 - 10 10 830

Total 6.760 2.600 150 200 130 160 10.000

- 60 - ANNEX ITable 9

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Cost Estimate - Annual O&M Cost

Subproject Project

MindoroMindoro Oriental Occidental Palawan

(F/ha) (US$/ha) (1P/ha) (US$/ha) (P/ha) (US$/ha) (P/ha) (US$/ha)

Salaries & wages 170 23.0 155 21.0 174 23.5 167 22.5

Equipment operation 50 6.7 55 7.4 55 7.4 53 7.2

Materials & supplies 10 1.3 10 1.3 10 1.3 10 1.3

Administration &general expenses 60 8.0 60 8.3 65 8.8 60 8.0

Total 290 39.0 280 38.0 304 41.0 290 39.0

-61- ANNEX 1

Table 6

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Expected Price Increase Estimate

Calendar year1980 1981 1982 1983 1984 1985 Total…____-_----------- (US$000)…

1. Irrigation systems 200 8,500 21,000 23,'00 ±6,000 13,200 82,6002. Input-output ulonitoring 30 130 300 320 230 90 1,1003. O&M study & training 50 250 700 300 - - 1,3004. Strengthening of malaria

unit 20 140 120 50 40 30 400

Total Without Price Increases 300 9.020 22,120 24,370 16,270 13,320 85.400

Local 300 840 13,640 13,400 8,490 7,330 44,000Foreign - 8,180 8,480 10,970 7,780 5,990 41,400

Annual inflation rate (%)Local 16 10 7 7 7 7Foreign 10.5 9 8 7 7 7

Expected price increases LaLocal 25 185 4,420 5,590 4,380 4,560 19,160Foreign - 1,280 2,160 3,800 3,440 3,260 13,940

Total 25 1.465 6,580 9,390 7,820 7,820 33,100

Total With Price Increases 325 10.485 28.700 33,760 24.090 21.140 118.500

/a Calculated by compounding the estimated rate of price increases in prior years byone half the rate of increase in the year concerned.

- 62 - ANNEX 1Table 7

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Estimated Schedule of Expenditure

TotalItem Cost FY81/a FY82 FY83 FY84 FY85 FY86

……-----------(US$'000) -…

Irrigation systemsservice area lb 80,000 3,700 13,500 21,900 20,000 14,900 6,000

Input-output monitoring 1,100 100 250 300 200 200 50

O&M study & training 1,300 100 450 600 150 - -

O&M equipment 2,600 - - 1,400 800 400 -

Strengthening of malariaunit 400 100 150 50 50 30 20

Subtotal 85,400 4,000 14,350 24,250 21,200 15,530 6,070

Expected price increases 33,100 760 4,020 8,000 8,590 7,820 3,910

Total Prolect Cost 118,500 4,760 18,370 32,250 29,790 23,350 9,980

La IBRD fiscal year.

/b Includes equipment for force account works.

-63 - ANNEX 1Table 8

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Estimated Schedule of Disbursements

IBRD fiscal year Accumulated disbursements& semester -- (US$'000 equivalent) -

FY812nd 200

FY821st 3,0002nd 8,000

FY831st 14,0002nd 21,000

FY841st 29,0002nd 39,000

FY851st 48,0002nd 55,000

FY861st 61,0002nd 66,000

FY87ist 71,000

ANNEX 1- 64 - Table 9

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Proposed Allocation of Proceeds of Loan

Costs ProposedCategory Total Foreign loan

…---- (US$ million) ---

I. Civil worksIrrigation systems /a 56.2 26.0 51.0*Expected price increases 30.0 12.0

Subtotal 86.2 38.0

II. Equipment and suppliesIrrigation systems /b 9.4 8.5 12.0Input-output monitoring 0.2 0.1O&M study & training 0.1 0.1Design & survey 0.2 0.2Strengthening of malaria unit 0.2 0.2Expected price increases 2.6 1.7

Subtotal 12.7 10.7

Disbursement will be 100% of foreign expenditure for directly importedequipment, 100% of expenditure (ex-factory) for locally manufacturedequipment and 65% of total expenditure for imported equipment procuredlocally.

* Of which (a) US$3.5 million for mobilization and contractor's equipmentand (b) US$47.5 million for other civil works. Disbursement for (a) willbe 100% of foreign expenditure and (b) 55% of total expenditure.

III. Consulting services & technical assistance /cInput-output monitoring 0.9 0.4 3.0O&M study & training 1.1 0.6Consulting services for design & survey 0.6 0.5Expected price increases 0.4 0.2

Subtotal 3.0 1.7

Disbursement will be 100% of total expenditure

IV. Unallocated /dPhysical contingencies 9.4 4.9 5.0

(Administrative & engineering) (7.2)

Total 118.5 55.3 71.0

/a Force account equipment (US$6.8 million), excluded and transferred toCategory II; Annex 1, Table 3.

lb Includes equipment for force account (US$6.8 million) and O&M (US$2.6million); Annex 1, Table 3.

/c Other than civil works in Category I and equipment in Category II.

/d See Table 3.5.

C32207/J54632/D2673116-17 WS

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Urea Price Structure, 1980 and 1990 ja

1980 1990

Financial Economic Financial Economic

---- Pesos/ton -- US$/ton ---- Pesos/ton -- US$/ton

Export price, f.o.b. Indonesia 165 210

Ocean freight and insurance 20 25

Import price, c.i.f. Manila 1,370 1,370 185 1,740 1,740 235

Port handling, storage and processing

charges /b 115 95 115 95

Importers' costs /b 315 260 315 260

Average cost of transportation to and

handling at distribution center /c 200 155 200 155

Dealers' margin /b 60 50 60 50

Average cost of transportation from

distribution center to farm /c 40 30 40 30

Urea farm-gate price 2,100 1,960 2,470 2,330

Nitrogen farm-gate price (per nutrientkg) 4.6 4.2 5.4 5.1

/a All values expressed in terms of constant 1980 prices.- The peso is priced at the official

exchange rate of US$1.00 = P 7.4.

/b The economic price for these items was obtained by applying the standard conversion factor of

0.82.

/c The economic prices for transportation were determined by applying the transportation conversion X

factor of 0.78. P

PHILIPPINES

MEDIUM SCALE IRRIGATION PROJECT

Triple Superphosphate Price Structure, 1980 and 1990 /a

1980 1990Financial Economic US$/ton Financial Economic US$/ton-------- (Pesos/ton) -------- -------- (Pesos/ton) --------

Export price f.o.b. US Gulf 135 190Ocean freight & insurance 35 35Import price c.i.f. Manila 1,260 1,260 170 1,665 1,665 225Port handling, storage &processing charges 115 95 115 95

Importers' costs 565 465 565 465Cost of transportation & handlingat distribution center 200 155 200 155

Dealer's margin 60 50 60 50Average cost of transportationdistribution center to farm 40 30 40 30

TSP farmgate price 2,240 2,055 2,645 2,460

s/kg P/kg

Phosphate farngate price 4.9 4.5 5.8 5.3(per nutrient kg)

/a All values are expressed in terms of constant 1980 prices. Peso priced atofficial exchange rate of US$1.00 - P7.4.

/b Economic prices for these items were determined by applying the standardconversion factor for the Philippines of 0.82. a,

/c Economic prices for transportation was determined by applying the trans- s s

portation conversion factor for the Philippines of 0.78.

ANNEX 2

-67 - Table 3

PHILIPPINES

MEDIUK{-SCALE IRRIGATION PROJECT

Rice Crop Production Costs: Physical Inputs and Unit Prices /a

Irrigated Unit prices lbUnit tainted Crop 1 Crop 2 unit Prices

Mindoro OrientalPresentCultivation - Mechanical 14 % area 40 50 50 Pesos/ha 450 (450)

- Animal % area 60 50 50 Pasose/ha 150 (150)Seeds kg/ha 120 115 115 Pesns/kg 1.1 (1.1)Fertilizer - N4 kg nutrient/ha 30 35 35 Pesos/kg 4.2 (4.6)

- P kg nutrient/ha 5 10 10 Pesos/kg 4.5 (4.9)- K kg nutrient/ha 5 t0 10 Pesos/kg 2.3 (2.4)

Threshing - Mechanical Id 1 area 85 85 85 - - -

- Manual Z are. 15 15 15 - - -

Future Without ProjectCultivation - Mechanical 14 2 area 50 55 60 Pesos/ha 500 (500)

- Animal 2 area 50 45 40 Pesos/ha 200 (200)Seeds kg/ha 90 90 go Pesos/kg 1.5 (1.5)Fertilizer - N kg nutrient/ha 35 40 40 Pesos/kg 5.1 (5.4)

- P kg nutrient/ha 10 15 15 Pesos/kg 5.3 (5.2)Threshing - Mechanical 1d I area 85 85 85 - - -

- Manual t area 15 15 15 - - -

Future With ProJectCultivation - M4echanical /c 2 area 85 85 Pesos/ha 500 (500)

- Animal % area 15 15 Pesos/ha 200 (200)Seeds kg/ha 60 60 Pesos/kg 1.5 (1.5)Fertilizer - N kg nutrient/ha 80 80 Pesos/kg 5.1 (5.4)

- P kg nutrient/ha 40 40 Pesos/kg 5.3 (5.8)Threshing - Mechanical 1d % area 90 90 - - -

- Manual 2 area 10 10 - - -

Slindoro OccidentalPresentCultivation - Mechanical /c 2 area 45 45 45 Pesos/ha 450 (450)

- Animal 2 area 55 55 55 Pesos/ha 150 (150)Seeds kg/ha 90 90 90 Pesos/kg 1.1 (1.1)Fertili-e - ii kg nutrient/ha 30 35 40 Pesos/kg 4.2 (4.6)

- P kg nutrient/ha 5 5 10 Pesos/kg 4.5 (4.9- Kt kg nutrient/ha 5 5 10 Pesos/kg 2.3 (2.6)

Threhing - Mechanical14 2d arsea 85 85 85 -- -

-Manual % area 15 15 15 -- -

Future Without ProjectCultivation - Mechanical le 2 area 55 55 60 Pesos/ha 500 (500)

- Animal 2 area 45 45 40 Pesos/ha 200 (200)Seeds kg/ha 80 80 75 Pesos/kg 1.5 (1.5)Fertilioer - N kg nutrient/ha 35 45 50 Pesos/kg 5.1 (5.4)

- F kg nutrient/ha 10 10 15 Pesos/kg 5.3 (5.8)Threhing - Mechanical 1d 2 area 85 85 85 - - -

- Manal 2 area 15 15 15 - - -

Future With FrojeCtCultivation - Mechanical 14 2 area 85 85 Pesos/ha 500 (500)

- Asial % area 15 15 Pesos/ha 200 (200)Seeds kg/ha 50 50 Pesos/kg 1.5 (1.5)Fertilizer - Ni kg nutrient/ha 80 80 Pesos/kg 5.1 (5.4)Threshing - Mechanical 1d 2 area 90 90 - - -

- Manual 2 area 10 10 - - -

PalawanPresent

Cultivation - Mechanical 14 2 re 10 10 10 Pesos/ha 450 (450)- Aninal 2 area 90 90 90 Pesos/ha 150 (150)

Seeds kg/ha 90 90 90 Pesos./kg 1.1 (1.1)Fertilizer - N4 kg nutrient/ha 25 30 30 Pesos/kg 4.2 (4.6)

- F kg nutrient/ha 25 30 30 Pesos/kg 4.5 (4.9)- K kg nutrient/ha 15 30 30 Pesos/kg 2.3 (2.6)

Threshing - Mechanical Id 2 area 50 50 50 - - -

- Manual % area 50 50 50 - - -

Future Without ProjectCultivation - Mechanical /c 2 area 20 25 25 Pesos./ha 500 (500)

- Animal 1 area 80 75 75 Pesos/ha 200 (200)Seeds kg/ha 90 90 80 Pesos/kg 1.5 (1.5)Fertilize - N kg nutrient/ha 30 40 40 Pesos/kg 5.1 (5.4)

- F kg nutrient/ha 30 40 40 Pesos/kg 5.3 (5.8)Threshing - Mechanical /d 2 area 50 50 50 - - -

- Manu.al 2 urea 50 50 50 - - -

Future With ProjectCultivation - Mechanical 14 2 area 70 70 Pesos/ha 505 (500)

- Animal 2 area 30 30 Pesos/ha 200 (200)Seeds kg/ha 50 50 Pesos/kg 1.5 (1.5)Fertilizer - N kg nutrient/ha 80 80 Pesos/kg 5.1 (5.4)

- F kg nutrient/ha 40 40 Pesos/kg 5.3 (5.8)Threshing - Mechanical /d 2 area 80 80 - - -

- Manual % area 20 20 -- -

14Agrocheical cots have heen provided for as a loop sun./b Figure in parenthesis are financial unit prices.1c Excludes cost of labor handling this sachiney./4 Cost of nehanical threshing is estisated to be 7% of yield.

ANNEX 2-68- Table 4

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Crop Production Costs (Excluding Labor) /a /b

(Pesos/ha)

Present Future without project Future with prolect

Rice Rice RiceIrrigated Irrigated Irrigated

Rainfed /c Crop I Crop 2 Rainfed / Crop 1 Crop 2 Crop I Crop 2

1findoro OrientalCultivation 270 (270) 300 (300) 300 (300) 350 (350) 365 (365) 380 (380) 455 (455) 455 (455)Seeds 130 (130) 125 (125) 125 (125) 135 (135) 135 (135) 120 (120) 90 (90) 90 (90)Fertilizer 160 (175) 215 (235) 215 (235) 230 (245) 285 (305) 285 (305) 620 (665) 620 (665)Chemicals 90 (90) 90 (90) 90 (90) 120 (120) 120 (120) 120 (120) 120 (120) 120 (120)Harvesting /d 90 (90) 130 (130) 130 (130) 130 (130) 190 (190) 190 (190) 370 (360) 370 (370)Other 15 (15) 20 (20) 20 (20) 30 (30) 40 (40) 40 (40) 70 (70) 70 (70)Land tax /e (40) (80) (80) (40) (80) (80) (80) (80)Interest If (60) (70) (70) (60) (80) (80) (90) (90)

Total 755 (870) 880 (1.050) 880 (1,050) 995 (1,110) 1,135 (1,315) 1,135 (1,315) 1,725 (1,940) 1,725 (1,940)

Mindoro OccidentalCultivation 285 (285) 285 (285) 285 (285) 365 (365) 365 (365) 380 (380) 455 (455) 455 (455)Seeds 100 (100) 100 (100) 100 (100) 120 (120) 120 (120) 110 (110) 75 (75) 75 (75)Fertilizer 160 (175) 180 (200) 235 (260) 230 (245) 285 (300) 335 (355) 410 (430) 410 (430)Chemicals 90 (90) 90 (90) 90 (90) 120 (120) 120 (120) 120 (120) 120 (120) 120 (120)Harvesting /d 95 (95) 130 (130) 150 (150) 150 (150) 200 (200) 225 (225) 370 (370) 390 (390)

Other 15 (15) 20 (20) 20 (20) 30 (30) 40 (40) 40 (40) 70 (70) 70 (70)Land tax /e (40) (80) (80) (40) (80) (80) (80) (80)Interest /f (70) (70) (70) (60) (80) (80) (90) (90)

Total 745 (870) 805 (975) 880 (1,055) 1,015 (1,130) 1.130 (1,305) 1,210 (1,390) 1,500 (1,690) 1,520 (1,710)

PalawanCultivation 180 (180) 180 (180) 180 (180) 260 (260) 275 (275) 275 (275) 410 (410) 410 (410)Seeds 100 (100) 100 (100) 100 (100) 135 (135) 135 (135) 120 (120) 75 (75) 75 (75)Fertilizer 255 (275) 335 (365) 335 (365) 310 (340) 415 (450) 415 (450) 620 (670) 620 (670)Chenicals 90 (90) 90 (90) 90 (90) 120 (120) 120 (120) 120 (120) 120 (120) 120 (120)liarvesting /d 55 (55) 75 (75) 80 (80) 75 (75) 120 (120) 125 (125) 290 (290) 310 (310)Other 15 (15) 20 (20) 20 (20) 30 (30) 40 (40) 40 (40) 70 (70) 70 (70)Land tax /e (40) (80) (80) (40) (80) (80) (80) (80)Interest If (70) (70) (70) (60) (80) (80) (90) (90)

Total 695 (825) 800 (980) 805 (985) 930 (1,060) 1,095 (1,290) 1,095 (1,290) 1,585 (1,805) 1,605 (1.825)

/a Economic and financial costs are based on rice and fertilizer prices derived in Annex 2, Tables 1 and 2. Figures in

parentheses are financial costs used in farm budgets.

/b Assumptions on physical inputs and unit costs are given in Annex 2, Table 3.

/c Costs for rainfed farms in Mindoro Oriental are the same in the wet and dry seasons.

/d The cost of mechanical harvesting is 7% of gross production.

/e For farms with assessed value < P 3,000 per hectare, the land tax is 1% of the assessed value; otherwise it is 2%.

If Interest charges are based on the rates of financial institutions operating in the project area; they lend 1,000 to 1,400 pesos

per hectare at a rate of 1% per month for six months.

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Crop Labor Requirement /a(Man-days/ha)

Present Future without project Future with projectRice Rice Rice

Irrigated Irrigated IrrigatedRainfed Crop 1 Crop 2 Rainfed Crop 1 Crop 2 Crop 1 Crop 2

Mindoro OrientalLand preparation 16 16 16 17 17 17 20 20Nursery and transplanting 19 21 21 19 22 22 25 25Crop management 30 31 31 30 31 31 32 32 1Harvesting 25 27 27 24 30 30 33 33 -

Total 90 95 95 90 100 100 110 110

Mindoro OccidentalLand preparation 17 18 18 18 20 20 23 23Nursery and transplanting 22 25 24 25 25 25 27 27Crop management 25 25 25 26 27 27 30 30Harvesting 26 27 28 26 28 28 30 30

Total 90 95 95 95 100 100 110 110

PalawanLand preparation 17 18 19 19 20 20 22 22Nursery and transplanting 22 23 23 22 23 25 26 26Crop management 25 26 25 27 27 27 30 30Harvesting 26 27 28 27 30 28 32 32

Total 90 95 95 95 100 100 110 110

rDm

/a Includes labor handling farm machinery, the cost of which is excluded from Annex 2, Table 3. U r

ANNEX 2Table 6

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Monthly Labor Requirements /a /b(man-days/ha)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Mindoro Oriental

Wet SeasonIrrigated rice P - - - - 2 17 20 19 9 11 13 4 95

W - - - - 2 17 20 20 9 11 14 7 100W 12 6 - - - - - 7 24 27 19 15 110

Rainfed rice P - - - - 3 23 17 15 2 10 17 3 90W - - - - 3 23 17 15 2 10 17 3 90

Coconut P 1 2 3 2 3 4 5 4 1 - - - 25W 1 2 3 2 3 4 5 4 1 - - - 25

Dry SeasonRainfed rice P 17 17 14 14 10 - - - - 1 5 12 90

W 17 17 14 14 10 - - - - 1 5 12 90

Irrigated rice P 18 18 15 14 11 - - - - 1 6 12 95W 20 19 16 14 11 - - - - 1 6 13 100W 6 19 27 23 13 15 7 - - - - - 110

Mindoro Occidental

Wet SeasonIrrigated rice P - - - - 11 6 20 18 5 12 18 5 95

w - - - - 12 6 21 18 6 13 19 5 100w - - - - 5 12 23 24 15 13 12 6 110

Rainfed rice P - - - - 11 21 15 7 11 19 3 3 90W - - - - 12 22 16 8 11 20 3 3 95

Dry SeasonIrrigated rice P 25 10 28 19 - - - - 2 4 7 7 95

W 26 10 30 20 - - - - 2 4 8 8 100W 24 20 16 17 4 - - - 4 7 17 17 110

Palawan

Wet SeasonIrrigated rice P 2 - - - 9 22 12 2 27 12 5 4 95

W 2 - - - 10 23 13 2 28 12 5 5 100W 13 18 .7 - - - - - 6 22 25 19 110

Rainfed rice P 6 - - - 5 18 13 7 13 14 10 4 90W 6 - - - 5 19 14 7 14 15 10 5 95

Dry SeasonIrrigated rice P 13 29 8 - - - - - - 10 25 10 95

W 14 30 9 - - - - - - 10 26 11 100W - 8 19 23 17 13 21 9 - - - - 110

/a P = PresentW = Future Without ProjectW = Future With Project

/b Excluding labor handling farm machinery.

- 71 -ANNEX 2Table 7

PHIL[PPINES

MEDIUM-SCALE IRRIGATION PROJECT

Total Monthly Labor Requirements /a('U0O man-days)

Area Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Mindoro Oriental

Wet SeasonIrrigated rice P 1,500 - - - - 3.0 25.5 30.0 28.5 13.5 16.5 1q.5 6.n 142.5

W 1,500 - - - - 3.0 25.5 30.0 30.0 13.5 16.5 21.0 10.5 15n.0

W 22,000 264.0 132.0 - - - - - 132.0 528.0 594-0 418.0 352.0 2,420.0

Rainfed rice P 18,000 - - - - 54.0 414.0 306.0 270.0 36.0 18n.0 306.0 54-0 1,620.01W 18,000 - - - - 54.0 414.0 306.0 270.0 36.0 180.0 306.0 54.n 1,62n.0

Coconut P 2,500 2.5 5.0 7.5 5.0 7.5 10.0 12.5 10.0 2.5 - - - 62.5w 2,500 2.5 5.0 7.5 5.0 7.5 10.0 12.5 10.0 2.5 - - - 62.5

Dry SeasonIrrigated rice P 1,200 21.6 21.6 18.0 16.8 13.2 - - - - 1.2 7.2 14.4 114.0

w4 1,200 24.0 22.8 19.2 16.8 13.2 - - - - 1.2 7.2 15.6 12n.0w 10,600 63.6 201.4 286.2 243.8 137.8 159.0 74.2 - - - - - 1,166.n

Rainfed rice P 3,500 59.5 59.5 49.0 49.0 35.0 - - - - 3.5 17.5 42.n 315.0w4 3,500 59.5 59.5 49.0 49.0 35.0 - - - - 3.5 17.5 42.n 315.0

Subtotal P 83.6 86.1 74.5 70.8 112.7 449.5 348.5 308.5 52.0 201-2 350.2 116.4 2,254.n14 86.0 87.3 75.7 70.8 112.7 449.5 348.5 310.0 52.0 201.2 351.7 122.1 2,267.5w 327.6 333.4 286.2 243.8 137.8 159.0 74.2 132.n 528.n 594.0 418.0 352.0 3,586.n

Mindoro Occidental

Wet SeasonIrrigated rice P 700 - - - - 7.7 4.2 14.0 12.6 3.5 8.4 12.6 3.9 66.5

w4 700 - - - - 8.4 4.2 14.7 12.6 4.2 9.1 13.3 3.5 70.0w 5,800 - - - - 29.0 69.6 133.4 139.2 87.n 75.4 69.6 34.8 638.0

Rainfed rice P 5,100 - - - - 56.1 107.1 76.5 35.7 56.1 96.9 15.3 15.3 459.0w 5,100 - - - - 61.2 112.2 81.6 40.8 56.1 102.0 15.3 15.3 484.5

Dry SeasonIrrigated rice p 300 7.5 3.0 8.4 5.7 - - - - - 0.6 1.2 2.1 28.5

14 300 7.8 3.0 9.0 6.0 - - - - - 0.6 1.2 2.4 30.0

w 3,700 88.8 74.0 59.2 62.9 18.5 - - - - 14.8 25.9 62.9 407.0

Subtotal p 7.5 3.0 8.4 5.7 63.8 111.3 90.5 48.3 59.6 105.9 29.1 20.9 554.014 7.8 3.0 9.0 6.0 69.6 116.4 96.3 53.4 60.3 111.7 29.8 21.2 584.5w 88.8 74.0 59.2 62.9 47.5 69.6 133.4 139.2 87.0 50.2 95.5 97.7 1,045.0

Palawan

Wet SeasonIrrigated rice p 900 1.8 - - - 8.1 19.8 10.8 1.8 24.3 in.8 4.5 3.6 85.9

1w 9oo 1.8 - - - 9.0 20.7 11.7 1.8 25.2 10.8 4.5 4.5 90g.w 10,000 130.0 180.0 70.0 - - - - - 60.0 22n.n 250.0 190.0 1,100.0

Rainfed rice P 5,900 35.4 - - - 29.5 106.2 76.7 41.3 76.7 82.6 59.0 23.6 531.011 5,900 35.4 - - - 29.5 112.1 82.6 41.3 82.6 88.5 59.0 29.5 560.5

Dry SeasonIrrigated rice P 600 7.8 17.4 4.8 - - - - - - 6.0 15.0 6.0 57.0

14 600 8.4 18.0 5.4 - - - - - - 6.0 15.6 6.6 60.nw 6,000 - 48.0 114.0 138.0 102.0 78.0 126.0 54.0 - - - - 660.0

Subtotal P 45.0 17.4 4.8 - 37.5 126.0 87.5 43.1 101.0 99.4 78.5 33.2 673.5'a 45.6 18.0 5.4 - 38.5 132.8 94.3 43.1 107.8 109-3 79.5 40.6 7in.5w 130.0 228.0 184.0 138.0 102.0 78.0 126.0 54.0 60.0 220-0 250.0 190.0 1,760.0

Total Project P 136.1 106.5 87.7 76.5 214.0 686.8 526.5 399.9 212.6 406-5 457.8 170-5 3,481-5w 139.4 108.3 90.1 76.8 220.8 698.7 539.1 406.5 220.1 418.2 461.0 183.9 3,562.5w 546.4 635.4 529.4 444.7 287.3 306.6 333.6 325.2 675.0 864.2 763.5 639.7 6,3q1.0

/a P = Present1W = Without projectW With project

- 72 -ANNEX 2Table 8

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Economic Cost of Farm Labor /a

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Mindoro OrientalLabor requirement (Million W 0.33 0.33 0.29. 0.24 0.14 0.16 0.07 0.13 0.53 0.59 0.42 0.35 3.59

man-days) W 0.09 0.09 0.08 0.07 0.11 0.45 0.35 0.31 0.05 0.20 0.35 0.12 2.27

Market wage rate (Pesos/ W 10 10 10 10 10 10 10 10 10 10 10 10

man-day) /b W 10 10 10 10 10 10 10 10 10 10 10 10

Economic cost of farm labor W 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4

(Pesos/man-day) /c W 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4

Economic cost of farm labor W 1.45 1.45 1.28 1.06 0.62 0.70 0.31 0.57 2.33 2.60 1.85 1.54 15.76

(Pesos million) W 0.40 0.40 0.35 0.31 0.48 1.98 1.54 1.36 0.22 0.88 1.54 0.53 9.99

Incremental economic cost of W-W 5.77

farm labor (Pesos million)

Mindoro OccidentalLabor requirement (Million W 0.09 0.07 0.06 0.06 0.05 0.07 0.13 0.14 0.09 0.09 0.10 0.10 1.05

man-days) W 0.01 0.00 0.01 0.01 0.07 0.12 0.10 0.05 0.06 0.11 0.03 0.02 0.58

Market wage rate (Pesos/ W 10 10 10 10 10 10 10 10 10 10 10 10

man-day) /b W 10 10 10 10 10 10 10 10 10 10 10 10

Economic cost of farm labor W 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4

(Pesos/man-day) /c W 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4

Economic cost of farm labor W 0.40 0.31 0.26 0.26 0.22 0.31 0.57 0.62 0.40 0.40 0.44 0.44 4.63

(Pesos million) W 0.04 - 0.04 0.04 0.31 0.53 0.44 0.22 0.26 0.48 0.13 0.09 2.58

Incremental economic cost of W-W 2.05

farm labor (Pesos million)

PalawanLabor requirement (Million W 0.13 0.23 0.18 0.14 0.10 0.08 0.13 0.05 0.06 0.22 0.25 0.19 1.76

man-days) W 0.05 0.02 0.01 0.00 0.04 0.13 0.09 0.04 0.11 0.11 0.08 0.04 0.71

Market wage rate (Pesos/ W 10 10 10 10 10 10 10 10 10 10 10 10

man-day) /b W 10 10 10 10 10 10 10 10 10 10 10 10

Economic cost of farm labor W 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4

(Pesos/man-day) /c W 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4

Economic cost of farm labor W 0.57 1.01 0.79 0.62 0.44 0.35 0.57 0.22 0.26 0.97 1.10 0.84 7.74

(Pesos million) W 0.22 0.09 0.04 0.00 0.18 0.57 0.40 0.18 0.48 0.48 0.35 0.18 3.17

Incremental economic cost of W-W 4.57

farm labor (Pesos million)

/a W = Future with project, W = Future without project./b The market wage rate of farm labor is P 10/man-day./c The economic cost of farm labor is determined by adjusting the average wage rates by the shadow wage for rural labor

(=0.52) times the consumption conversion factor (=0.84) or by 0.44.

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Description of Farm Types Used in Farm Budgets

Present Future with prolectCrop 1 Crop 2 Crop 1 Crop 2 Percent

Cropping Cropping Cropping Cropping of projectRegion and type Crop pattern Crop pattern Crop pattern Crop pattern area

Mindoro Rainfed rice 100% Rainfed rice 16% Irrigated rice 100% Irrigated rice 40% 70%

Coconut 100% Irrigated rice 100% Irrigated rice 40% 5%

Palawan Rainfed rice 100% Irrigated rice 100% Irrigated rice 60% 25%

m >4e N'0 x

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Crop Budgets (Including Future Without Project) /a

Future

Present Future without project with project

Rice Rice Rice

Rainfed Irrigated Rainfed Irrigated IrrigatedUnit Crop 1 Crop 2 Crop 1 Crop 2 Crop 1 Crop 2 Crop 1 Crop 2 Crop 1 Crop 2

Mindoro Oriental

Yield ton/ha 1.4 1.2 2.0 2.1 1.5 1.3 2.2 2.2 4.0 4.0

Farm-gate price P/ton 1,090 1,090 1,090 1,090 1,465 1,465 1,465 1,465 1,465 1,465

Gross value of production P/ha 1,525 1,310 2,180 2,290 2,200 1,905 3,225 3,225 5,860 5,860

Production costs /b P/ha 870 870 1,050 1,050 1,110 1,110 1,315 1,315 1,940 1,940

Net value of production

without costing labor P/ha 655 440 1,130 1,240 1,090 795 1,910 1,910 3,920 3,920

Labor requirements Mfan-days/ha 90 90 95 95 90 90 100 10p 110 110

Mindoro Occidental _

Yield ton/ha 1.5 - 2.0 2.3 1.7 - 2.3 2.5 4.0 4.2 Z

Farm-gate price P/ton 1,090 - 1,090 1,090 1,465 - 1,465 1,465 1,465 1,465

Gross value of production P/ha 1,635 - 2,180 2,505 2,490 - 3,370 3,660 5,860 6,155

Production costs /b P/ha 870 - 975 1,055 1,130 - 1,305 1,390 1,690 1,710

Net value of production

without costing labor P/ha 765 - 1,205 1,450 1,335 - 2,065 2,270 4,170 4,445

Labor requirements Man-days/ha 90 - 95 95 95 - 100 100 110 110

Palawan

Yield ton/ha 1.4 - 2.0 2.1 1.5 - 2.3 2.4 3.5 3.8

Farm-gate price P/ton 1,090 - 1,090 1,090 1,465 - 1,465 1,465 1,465 1,465

Gross value of production P/ha 1,525 - 2,180 2,290 2,200 - 3,370 3,515 5,130 5,565

Production costs /b P/ha 825 - 980 985 1,060 - 1,290 1,290 1,805 1,825

Net value of production

without costing labor P/ha 730 - 1,200 1,305 1,140 - 2,080 2,225 3,325 3,740

Labor requirements Man-days/ha 90 - 95 95 95 - 100 100 110 110

/a Present financial prices and costs are actual values. All values are in constant 1980 prices.

/b Based on Annex 2, Table 4.

X Zv Z

C

- 75 -

ANNEX 2Table 11

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Farm Budgets

Mindoro Palawan

Future FuturePresent with Present with

Unit ----- 2.5 ha ----- 5.0 ha -----

Cropping intensity % 116 140 100 160Gross cropped area ha 2.9 3.5 5.0 8.0Total production ton 4.0 14.0 7.0 28.9

Gross value of production /a Pesos 4,360 20,510 7,630 42,340Production costs /b Pesos 2,525 6,790 4,125 14,500Costs of hired labor tc Pesos 120 275 900 3,100Net value of productionbefore water charges Pesos 1,715 13,445 2,605 24,740

Water charges /d Pesos 0 960 0 2,235Net value of production /e Pesos 1,715 12,485 2,605 22,505

(a) Amortizing OwnerAnnual payment for

land /f Pesos 1,120 1,120 1,960 1,960

Net crop income Pesos 595 11,365 645 20,545

(b) LeaseholderAnnual rent / Pesos 835 4,405 1,715 9,840Net crop income Pesos 880 8,080 890 12,665

/a Based on financial prices of paddy from Table 6.1./b Based on Annex 2, Table 10./c Based on a minimum of 40 man-days/month and a total of 480 man-days/year

of family labor; hired labor priced at a wage of P 10/man-day./d Based on future charges of P 255/ha (3.5 cavans/ha) and P 320/ha

(4.4 cavans/ha) for wet and dry seasons respectively./e For owner operator./f Based on a price of land of 2.5 times the value of present gross production

and annual payments over 15 years, and 6% interest on the unpaid balance./j Based on rental rate of 25% of gross value of production, net of seed and

harvesting and threshing costs.

ANNEX 2- 76 - Table 12

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Farm Family Income Estimates(P)

Present FutureFarm sizes and tenure Farm Other Total Farm Other Totaltypes income income income income income income

Mindoro

2.5 Ha Rice Farm00 1,715 860 2,575 12,485 540 13,025AO 595 860 1,455 11,365 540 11,905LH 880 860 1,740 8,080 540 8,620

2.5 Ha Coconut Farm00 2,490 1,000 3,490 12,485 540 13,025

LH 1,680 1,000 2,680 8,080 540 8,620

Palawan

5.0 Ha Farm00 2,605 840 3,445 22,205 480 22,685AO 645 840 1,485 20,545 480 21,025LH 890 840 1,730 12,665 480 13,145

00 = Owner OperatorAO = Amortizing OwnerLH = Leaseholder

ANNEX 2

- 77 - Table 13

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Per Capita Farm Family Income Estimates(US$)

MindoroRice farm Coconut farm Palawan

Present Future Present Future Present Future

Tenure type /a ---- 2.5 ha --- ---- 2.5 ha --- ---- 5.0 ha ---

00 60 295 80 295 80 510

AO 35 270 - - 35 475

LiH 40 195 60 195 40 295

/a 00 = Owner OperatorAO = Amortizing OwnerLH = Leaseholder.

ANNEX 2- 78 - Table 14

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

National Parameters

Opportunity cost of capital 10X

Shadow wage rate rural unskilled (as a per centof market wage) 0.52

Standard conversion factor 0.82

Consumption conversion factor 0.84

Transportation conversion factor 0.78

Absolute poverty income (1980) US$ 200

GNP/capita (1980) US$ 600

GNP/capita (1990) US$ 975

79 ANNEX 3Table 1Page 1

PHILIPPINES

MEDIUM SCALE IRRIGATION PROJECT

Schedule of Early Events

Activity Target date

Surveys & Mapping

1. Complete topographic maps 1:4000 scale, 25 cm contourinterval for systems under:

a. Caguray, Malatgao and Dulangan Systems (15,000 ha) August 1980b. Mongpong, Bongabon and part of Mag-asawang Tubig

Systems (15,000 ha) April 1981c. Batang-Batang and Mag-asawang Tubig Systems

(15,000 ha) December 1981

Design

1. Engagement of consultants for survey and reviewof designs June 1980

2. Complete detailed engineering design and tender documents

a. Diversion dams & intake works for

i. Caguray and Malatgao Systems July 1980ii. Bongabon and Mongpong Systems May 1981iii. Mag-asawang Tubig and Batang-Batang System October 1981

b. Main canals, access roads, service roads andO&M buildings for

i. Caguray, Malatgao Systems July 1980ii. Bongabon, Mongpong, Mag-asawang Tubig

and Batang-Batang Systems July 1981

c. Laterals and on-farm facilities to be implementedin 1982

i. For Caguray and Malatgao Systems July 1981

- 80 - ANNEX 3Table 1Page 2

Activity Target date

Contract Administration

1. Equipment procurement

a. Contract award August 1980b. Delivery of equipment February 1981

2. Civil works contracts: award and start construction

a. O&M buildings in three subprojects Jul-Dec 1980b. Diversion dams of:

i. Caguray and Malatgao Systems Jul-Dec 1980ii. Bongabon and Mongpong Systems Jun-Nov 1981iii. Mag-asawang Tubig and Batang-Batang Systems October 1981

January 1982

c. Main canals

i. Caguray and Malatgao Systems Jun-Nov 1980ii. Four Other Systems Jun-Nov 1981

Force Account Construction

1. Complete detail engineering design for initialyear's construction Jul-Oct 1980

2. Start construction of access roads to diversiondams and other minor structures November 1980

Input-Output Monitoring

1. Training of personnel Jan-Jun 1981

O&M Study and Training

1. Terms of reference for consultants December 1980

2. Selection of consultants April 1981

ANNEX 4- 81 - Page 1

PHILIPPINES

MEDIUM-SCALE IRRIGATION PROJECT

Accounting Procedures for Force Account Work and Minor Contracts

1. Force account work for the proposed project would includeconstruction of drains, gravel surfacing of service roads along laterals,on-farm development and construction of minor O&M buildings. In the past,NIA has experienced considerable difficulty in attracting bids for drains asthe scope of such works is limited and the contractors in the Philippines donot have proper equipment for drainage excavation. NIA also failed toimplement by contract works of such a scattered nature as minor structuresand surfacing of roads along laterals. On-farm development has the addeddifficulty of execution on short notice to avoid the growing season and badweather. The estimated cost of force account works, including pricecontingencies, would be about US$27.0 million. Allowing US$5.0 million tofinish incompleted contract works by force account would bring the totalamount to US$32 million. This would include US$7.0 million for procurementof the force account equipment (by contract), US$5.0 million for procurementof such construction materials as cement and reinforcements etc., (bycontract) and US$20.0 million for such expenditures as costs of labor, fuel,lubrication and miscellaneous materials. Reimbursement for expendituresfrom the US$20 million would be based on the statements of expenditureprocedure. The same procedure would be used for minor civil works contracts(less than P 1 million, or US$140,000).

2. Although NIA maintains accounts and keeps reliable records on thestatus of force account works, it is simpler for the supervision missions toverify the completed works then to scrutinize the details of accounts andexpenditures. Therefore it is proposed that the disbursement would be basedon a percentage of the product of quantities of the following major items ofwork and agreed unit rates. Documentation to support disbursements wouldidentify the location of the completed works. The unit rates would be basedon the analysis for each item to be submitted by NIA with supportingdocuments for Bank review before December 31, 1980. The detailed accountsmaintained by NIA would permit periodic revision of the unit rates asnecessary, on the basis of verification of actual expenditures. For minorcontracts subject to the statement of expenditures procedure, NIA wouldretain copies of contracts, progress reports or invoices and evidence ofpayments made to contractors for periodic review by Bank staff.

- 82 -

ANNEX 4Page 2

Item Unit

1. On-farm development including farm ditches, farm hadrains and related structures..

2. Gravel surfacing of roads(a) 15 cm thick sq km(b) 20 cm thick sq km

3. Concrete Structures(a) 1-5 cu m concrete/structure each(b) 5.1-10 cu m concrete/structure each(c) 10.1-25 cu m concrete/structure each

4. Construction of new drains without service road(a) less than 1.0 cu m/sec capacity km(b) 1.1-2.9 cu m/sec. capacity km(c) 3.0-5.9 cu m/sec capacity km(d) 6.0-9.9 cu m/sec capacity km(e) 9.9-14.9 cu m/sec capacity km(f) 15-25 cu m/sec capacity km

5. Shaping and Cleaning of existing channels(a) less than 2.9 cu m/sec capacity km(b) 3.0-5.9 cu m/sec capacity km(c) 6.0-9.9 cu m/sec capacity km

6. Formation of embankment along drains for serviceroad including compaction

(a) 4.0 m wide km(b) 5.0 m wide km

3. NIA receives yearly budget allocations from the Government for eachproject. The project office prepares a detailed work plan and assigns jobcodes. Separate job codes are assigned for contract and force account works.Detailed cost estimates are prepared for each job by the field offices withheadings for equipment use and time, major materials (centrally procured),miscellaneous materials (locally procured), direct labor, fuel and lubricantsand engineering supervision. These cost estimates are subject to the reviewof an auditor for the Commission on Audits (COA) attached to each Project

-83 - ANNEX 4Page 3

Office. The expenditure is incurred and monthly accounts are submitted byeach field office to the Project Office. All payment vouchers and monthlyaccounts are reviewed by the Auditor. The accounting section of the ProjectOffice verifies expenditures for each job code against the estimated costand submits to the Central Office a summary of expenditure with copies ofpayment vouchers. NIA's central office prepares the withdrawal applicationusing the monthly summary for each project.

- 84 -ANNEX 5

PHILIPPINES

MEDIUM SCALE IRRIGATION PROJECT

Related Documents and Data Available in the Project File

A. General reports and studies on the agriculture sector

Al World Bank, "The Philippines Priorities and Prospects for Development,Basic Economic Report," Report No. 1095a-PH, May 5, 1976.

A2 World Bank, "Agricultural Sector Survey," Philippines, 4 volumes.Report No. 39a-PH, May 2, 1973.

B. General reports and studies relating to the project.

Bl NIA, "Medium Scale Irrigation Project - Feasibility Report (Main reportplus 3 appendices), Manila, August 1979.

C. Selected Working Tables

Cl Estimated Water Requirements and Estimated Cropping Areas (2 Tables)

C2 Quantities and Cost Estimates of Irrigation Systems and O&M Buildings;Estimated Schedule of Expenditure and Cost of Rights of Way(7 Tables)

C3 Price Structure for Various Inputs, Labor Requirements, Crop andFarm Budgets (7 Tables)

C4 Economic Analysis and Sensitivity Test Computer Printouts

PHILIPPINESMEDIUM SCALE IRRIGATION PROJECT Figure 3.1

Implementation Schedule

1980 1981 1982 1983 1984 1985WORK ITEM _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 7 ~ ~ T l r r r r r__________________ _l_ JA OIN ID I | F|M| AI Mi | J I A|SON ID I i F M A M J ASON FM M J AI SON Di F|MA M II A| F MA AM|| A S O|N D

IRRIGATION SYSTEMS ,,,,,/',', ,,. //I//V/7 I /7/777177 '/7///7/ ////'/ ///, '7/7/ 7/1/

1Mapping, Surveys, Design and Contract Administration - < / r 7////, ///// //:

Surveys for Main Canals, Laterals and Structures /77//7/ V 71 / 7///////I7 /////j//// /7174//I,

Surveys fur Main and Secondary Drains / /77/ "'t/ / V/,/////// 7

/////7

/7777 /77,

Tepographis Surveys and Mappingor one farm Wor-ksr "7/7/7 / / /7/ 1/1/ I // 7/rFnundation Investigations fur Diversion Dams r//lI /7/ 7/////7//l I////2//// .1/1747 ///77/7 / I

and Majnr Stru-tures '-,n / // r //n/I/I I 7/I//7I// ' '7/7 /7/

Salection of Consulnts / /77/ 7/7/ """" y7I1 7 ////// 7/ . /77/75// '77//777/

Design of Diversion Dams ./ _ ./ ./// //I, 7//7 //r

Deisgn of Main Canals. Ann-ss and Service Roads / / 7/7/ / I /7/77/77/ C t/,,,/7,Design of Dissbution System //// /'// r••-7 /77 /// /1k //7 /7/. . 7//7 777

Design of Drainage and Flood Control Works / 7 / 7/_ / ' %' I 7///7/7 7/7/7 //. / / 7/

Design of On-Farm Facilities //7 /77I V - " /7/ 777// /// I //7 ///

Contract Administration DELIVERY 7 '1 / / /77/ . // ,/7/'7 /7/. 7/ 7/

Fmocumment of Equipment - * r/77 / r'/'/' /7// //77 /7. //7 /7/.

A & M Buildings and other Facilities i"r ' /'/"'/ V///7// 7//7 /7/

Diversion Dams and Intake Structures -/-/ rMain Cnls, Major Laterals and Roads /7 "" C '"'/ "' , 'z'/"' //%" it

Main Drains and Flnod CntrnlWorks W//I /7/ .,,/ | 7//I '///77 | //7 /. 7/// 77/

2 Contract Work Constructi-n /%//7/7 ' / - 7 | -'-'-'/'/ -/ ,, ,OAMBuildings and Other Facilities I"/%' // I | I I !I

Diversion Dams and Intake Str-ctcres 7/ / 7/ //7 " 11/1/77/ 7/ /

Main Canal and Roads ///// / / I/// ""' //// //

Major Laterals 7/7/77/ 7// | |

Main Drains and Flood Control Works //77 /7 ///7 II I/Il 7// 7/7/7,,7/7///7/

3. Force Accont Work X | ///A//I I ! /7 //A//I, //7/ 7/ /7

Access Roads to DversionWorks ////

Small Lrterals and Minor Structunes //I 7/7/ I //| $ / | //7 | |/ / / II

Secondary Drains and Improvement of I//I/77/ I / A I I A ' ' 7/777 '/

On-Farm F-cilities 7///77/ i I I //I III

INPUT-OUTPUT MONITORING l/////A// 7//I A-V|

1. Training of Personnl /11/ I V

2. Compile Bench-Mark Dora t/7//7/ S -

3. reparep 5 Yeur Plan 717/I/Il ! - |

4 Input-Octput Monitormig (Eisting SystemsI I//I 7//I/7 //I -Input-Output Monitoring (Ne-iSyemnl S/y/st/Is I 7 ' 7ss/ t7/7/7//7//- j//

C&M STUDY AND TRAINING //I I//I Il//I I/I V " /7 | - 7 - 7/'/

1. Selaction of Consultants %j j"/ | 7/777 , /7/7//I I V// 7/7

2. Defineand Collert EnitingData D/7/7/A /I | J / 77 |I I//I 7/I|

3 Preliminary Draft Report ///|/ //// | / 7/7 //7 /I 7/

4. Final Report 1///77 7/I | 7/I |7// /77. /// 7/

World Bank - 20670Note: Shading indicater Wet Seeson Months

- 86 -

PHILIPPINESMEDIUM SCALE IRRIGATION PROJECT Figure 4.1

NIA ORGANIZATION

NIA BOARD

SDMINISTR3O

CENTRAL I SSSISTANT ADMANISTRATOR ASSISTANT ADMINISTRATOR ASSISTANT ADMINISTRATORIO ADMIARTIVEANT I DPRET I LED A D TFINANCE AND DEVELOPMENT AND

I PERSONNEL I I RESOPERATIONS MANAGEMENT IMPLEMENTATION

DENEAGEMENTLDEVELOPME SERVICESASSIST PROJECTDEPARTMENT DEPARTMENT DEPARTMENT DEVELOPMENTp Tr DE ARTMENT~ ~ ~ DEPRTEN

IPERSONNEL RESEARCH AD MANADEMENT DESIGN ANDMANADEMENT E NT SERVICES SDEPARTMENT DEPARTMEN ART DEPARTMENT

PROCREMENT LGAN IYSTEMS CONTROLLERS CONSTRUCTION

1 DEPARTMENT DEPARTMENT

PUBLICS AFFAIS IEUIPMENTANDER INFORATION M1 1 REGONS ANDTARLC IRIGATON I INTANAGEMENT

DEPART MENAL IRRIGATION' MAGAT RIVER' I IDEPARTMENT

LEGAL MAGAT I

DE PARGNICULTURPRTOS LCIOIRGTO IMPLEMENTATION

DEPARTMENT~~~~~~~~~~~~~DEATMN

FIELD AND PROJ E PCTOFFICES

UPPEHR PAMPANGA I EGION OICES AURORA-PENARANDA DAVAl DEL NORTERIVER IRRIGATION 12SREGONS AND TARLAC IRRIGATION NTEGRATEDIRR

SYSTEM IUPRIS)OJECT

NATIONAL IRRRIGATIONA MAGAT RIVER AGUSAN GEEL SURIRESEARCH AND MUTIPURPOSE PROETIRGINSYSTEMS IMPROVEMENT R SRATO S) I I I ECT ATE O

PROJECTS NISIP) ASSISATA SI DAM AND IRRIGATION PROJECTS

ANGAT-MAGAT NATIONAL IG ON INTEGRATEDRA1

AGH ICULTURE OPEATONSCHCOTRRIAONIDEVErLOPMENT PROJECT DiVISI ONFFICE

FOTHER MAJOR J'U RGTO' IGN Ell-REHABILITATION ENGINEERINGJLUIRGAONGNAE Y

PROJECTS ~~~~~DIVISION PROJ"ECT DEVELOPMENT

PROJECTSI FORNEWPRJECST

RBEHABILITATION EOCUIPMENT FMINOR RURAL TAGORIVEROFSLC TE MANAGEMENT DVLPETIRGTO15 NATIOA SYSTEMSMN IRIATO

to.E.. JAAIDIV ISION POET PROJECT

ADMINISTRATIVE HLIPNS-UA ALLAH RIVERDIVISION INRSRCUEIRRIGATION

ACCISOUTNG SAMAR RURAL ~ CAGAYAN INTEGRATED

DIVISION DEV~~~--I ELOPMENT AREA DEVELOPMENT

PROVINCIAL IRIRIGATIO~NOFFICES WAE AAEET LEM ANAN-CASUSAO

CMUNAL SYSTEMS ADROINCTOL NTEG AGR DEVE LOP.

NATIONAL IRRIGATIONSYSTEMS FIELD OFFICES MEIMSAECENTRAL LUZON

PRIOJECT OFFICESFOR NEW PROJECT

W.rld B-1, - 20669

BEl.k-A~.motd Porlect,

PHILIPPINESMEDIUM SCALE IRRIGATION PROJECT

PROPOSED ORGANIZATION FOR PROJECT CONSTRUCTION Figure 4.2

NIA BOARD

ADMINISTRATOR

ASSISTANTADMINISTRATOR

DEVELOPMENT ANDIMPLEMENTATION

PROJECT L CONSMANAGER l

| IIION ll DIVISION l |ACCOUNTING DIVISION |M|NDIVISINTl

1~~~~~~~~~~~~~ I

DIVISION DIVISION CCOUNTING DIVISION DIVISION

DIVISION I [DVISION II DIVISION | | DIVISION IV DIVISION VCALAPANI* ROXAS * SANTA CRUZ, SAN JOSE NARRA

(16,000 + 8,900 ha) (6000+ 5,600 ha) (2,400 + 3,100 ha) (3,400) (10,000)

Areas of other Projects under construction

World Bank - 20667

- 88 -

PHILIPPINESMEDIUM SCALE IRRIGATION PROJECT Figure 4.3

PROPOSED ORGANIZATION FOR OPERATION AND MAINTENANCE

NIA BOARD

ADMINISTRATOR

ASSISTANTADMINISTRATOR

OPERATIONS

FPROJECTMANAGER

RESEARCH ANDIRRIGATORS OPERATIONS ENGINEERING EQUIPMENT ADMINISTRATIVE ACCOUNTINGASSISTANCE DIVISION DIVISION MANAGEMEN DIVISION DIVISION

DIVISION DVSO

MINDORO ORIENTAL MINDORO OCCIDENTAL PALAWAN

DISTRICT I DISTRICT II DISTRICT IIICALAPAN ROXAS SANTA CRUZ DISTRICT IV DISTRICT V

PROJECT AREA PROJECTAREA PROJECTAREA SAN JOSE NARRA116,000 ha) (6000 ha) (2,400 ha) PROJECT AREA PROJECT AREA

OTHER SYSTEMS OTHER SYSTEMS OTHER SYSTEMS (3.400) (10.000(8,900 ha) (5,600 hal (3,100 ha)

I fI I . I IZONE ZONE ZONE l ZONE ZONE

SUPERINTENDENT-/ SUPERINTENDENT SUPERINTENDENT SUPERINTENDENT SUPERINTENDENT(21 ( [ I I1) Ill

DIVISION SUPERVISOR| DIVISION SUPERVISOR ION SUPERVISOR DIVISION SUPERVISOR| DIVISION SUPERVISOR1(71 (2) (1) j (1) 1(4)

WATER MANAGEMENT WATER MANAGEMENT WATER MANAGEMENT WATER MANAGEMENT WATER MANAGEMENTTECHNICIAN TECHNICIAN TECHNICIAN TECHNICIAN TECHNICIAN

(32) 12) (5) 171 (20)

DITCHTENDER DITCHTENDER DITCHTENDER DITCHTENDER DITCHTENDER I(160) (60) j 124) ( 134) (100) J

a/ Personnel requirements shown in parenthesis are for the Project Areas only

World Bank - 20668

- 89 -

PHILIPPINESMEDIUM SCALE IRRIGATION PROJECT Figure 5.1

PROPOSED CROPPING CALENDAR

JAN f E6 MAR APR MAY JUN JUL AUG SEP OC NOV DEC

ALL SYSTEMS OF N _MINDORO ORIENTAL SyS ¶n T

SUBPROJECT _Maintenance(22,000ha) M M

WETSEASON

RICE ALL SYSTEMS OF _

MINDORO OCCIDENTAL AND PALAWAN ;y-t N _ _SUBPROJECTS Maitea TMaintenance

(16.80_ __ = = T - _C m~~H

ALL SYSTEMS OFMINDORO ORIENTAL NM

DRY SUBPROJECT T _SEASON (10.600) M _ _

RICE H

Inc C -MmALL SYSTEMS OF N * _

MINDORO OCCIDENTAL AND PALAWANSUBPROJECTS M'UT TM -m

(9.700 ha) NM mm m iM MU _H _

2NOTATION

C: CULtIVATION 2 7 Palewan Typhoon Freq N: NURSERY T: TRANSPLANTING Soo10H: HARVEST S 5

-j 400 l_. . _

* U~~~~~~~~~~~~U

< l ~~~~~ ~ ~ ~~~~37.4. O

LL 0~~~~~~~~~~~~~~~~~~~~~~ z 0~~~~~~~~~~~~~~~~~~~~~~

< | 343 I

I ,l I r >W~~~~~~~~*

RAINFALL30 _ 2 2i | -Calap n IMindoro Oriental) }| 1 26

........... Lubeng (Mindoro Occidental) | | i236_ _ _ _ Puerto Priers IPebw8enl ) 17momm7 ~Typhoon Frequency (Mindoro) 20 205 -- w -I _209

Typhoon Frequency (Palawan) 200 a -;

l l e4161 j rl 1254~16100 974 1 95 .96 1

World Bank -20671

0 aX0 I I e'a ,-,, 3 IN~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~(

~~~~~~~~~ ~~~~~~~~~~~~~~~ 0~ ~~~~~~~~~~~~0

Fi 0\ 0

2~~~~~ X 0 < 0 n9

Coo

Jp~~~~~~~~~~n

CONOGNIW 1V1NPGIDN3 7< __1_

O090CNIwV IVN-3140

V~~~~~~~~~~~' ,___________-___ 0

! r5t\H >_ F W A; X p~~~~~~~~~~~~~~~~~~~

IBRD 14590

r ~ANAIL/IIB°18030 DECEMBER 1979

MANVAILI

\ DIVERSION DAM

/ A C,t

South chi- 57a p /<< tSO9N>' \Ch i V T gpait

Vuet,oPuttoPacesa -9 :2> 1

f*/ PROPOSED FIEO c D,'

PE, 0~~~~~~~~~~~~~~~~~~~~~~~~~~~~~/

PRPSE IP/ON

O 9FF/CE'29

TAR/TIE/V MAL,ITAD

13-XEtrofoke'sP-t _ t .iERS/ON 0

Solo Sea

- ~~~~~118025 '{ XE -J/

T-s map h-s been P,p-ead by the World Bsnk 's Waf -sl-ielUy for the ovnec | \ ,-~r{) -

tffuljet_s ari09'd7mt-to the 1eglvt- 0-y,voonvhtprtfLe owfi,y adt / ) -- cpta-e of -uh boandans.- ,'/

4~~~~~~~~~~~~ PROPOSED MAI CANALS .

-4 ANVG BiT4N > ;anoaon(tNOrDO)VPRS'ON DAM DM

\ / ra \ > V ~~~~~~~~~~~~PHILIPPINES al

p M EDIUM SCALE IRRIGATi ON PROJECT~~~< X v ~~~~~~~~~Palawan Systems

>X X \ $. _ ~~~~~~~~~~~~~~~~PROPOSED MAIN CANALS

9 \ / 5\ \ , 2. ~~~~~~~~~~~~~~~~~~PROPOSED LATERAL CANALS

t, / ,s,\ X 2 g ~~~~~~~~~~~~~~~~~~~~~PROPOSED DIVERPSI ON DAMSt / 0 .V,¢ X < b ~~~~~~~~~~~~~~~~~~~~~EXISTING DIVERSION D.AMS

r f t \ 4 PROPOSED IRRIGATION AREASEXISTING ROADS

X \ g , ~~~~~Svu/u S ea GT R'VERS

-'\ x X ~~~~~~~~~~~~~~~~~~~~~~MILES

KILOMETERS

1aS30