Announcement of Twenty-Five Million Six Hundred Thousand Dollar Loan to the Philippines on December 8, 1983

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U S.A.* Telephone: (202) 477-1234 BANK PRESS RELEASE NO. 84/25 Contact: Pat Sison December 8, 1983 (202) 477-3573 WORLD BANK TO SUPPORT PHILIPPINE REGIONAL DEVELOPMENT PROGRAM The Philippines will use a World Bank loan of $25.6 million to launch a regional development program that will help improve the incomes and living standards of some 90,000 people in four provinces. This is the government's first regional development project and it will be implemented on a pilot scale in five watersheds in Central Visayas. The project will help increase production in agriculture, forestry, and fisheries in the island provinces of Cebu, Bohol, Siquijor, and Negros Oriental. One of the poorest regions in the country, Central Visayas has limited agricultural potential because of its rugged and inaccessible terrain. It ranks among the lowest in terms of per capita distribution of arable land and agricul- tural productivity. However, it has good forestry and fisheries potential. To take advantage of this potential, the project will assist upland farmers to shift from cultivating annual crops to perennial crops. This will have the added advantage of reducing soil erosion caused by annual cropping. A nearshore fisheries program will establish artificial reefs and coral reef sanctuaries, and replant denuded mangrove areas. A forestry program will rehabilitate deteriorated forests of about 8,000 hectares, reforest 5,000 hectares, and prepare 3,000 hectares for crop planting by people in the area. Access roads and trails will be constructed. During the first five years of the project, forestry production is expected to yield 15,000 cubic meters of logs, while about 1.3 million cubic meters of saw logs and over 420,000 metric tons of firewood will be produced during the life of the project. At full development in 1990, annual production in the fisheries will be about 400 metric tons of finfish and 180 metric tons of other sea products. Annual agricultural crop production will increase by 9,000 metric tons. The project will help strengthen administration in government ministries and agencies and provide training and technical assistance to improve the skills of staff, farmers, and fishermen in project implementation. Applied research aimed at improving low-cost farming systems and preparation of other regional projects will also be supported. The government will contribute $18.8 million to the project, which has a total cost of $44.4 million. The World Bank loan is for 20 years, including five years of grace, with a variable interest rate linked to the cost of the Bank's borrowings. It ) also carries an annual commitment charge of 0.75% on undisbursed balances and a front-end fee of 0.25% on the amount of the loan. NOTE: Money figures are expressed in U.S. dollar equivalents.