Announcement of Irrigation Improvement in Philippines to Benefit Four Hundred Sixty Thousand People on May 21, 1993

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* Telephone: (202) 477-1234 IBRD News Release No. 93/95EAP Contact: Erin Burns (202)458-2210 External Affairs - EAPVP IRRIGATION IMPROVEMENT IN PHILIPPINES TO BENEFIT 460,000 PEOPLE Washington, D.C., May 21, 1993 --- A program to improve irrigation in the Philippines will benefit 460,000 poor farm families. The World Bank is supporting the effort with a loan of $51.3 million. Approximately 640,000 hectares of land irrigated by the National Irrigation Administration (NIA) will benefit from the program. Improved irrigation will increase rice production, which will in turn increase incomes of small farmers in the affected areas and create rural employment opportunities. In addition, by the year 2000, the increase in rice production is expected to save the country about $30 million a year in rice imports. Some 165 widely dispersed national irrigation systems in the Philippines, managed by NIA, account for 43 percent of the total irrigated land in the country. The NIA in turn, charges farmers a fee for this management service. In recent years, however, a shortage of funds in NIA has led to inadequate maintenance and a subsequent deterioration in the quality of the irrigation service and the ability of NIA to collect user fees. Beginning in 1986, NIA began to address this problem through a nine-year operation and maintenance improvement program. Part of this program consisted in organizing and training "irrigators' associations" (IAs) to manage and operate the individual systems. The World Bank supported the initial stages of this program with a loan of $23.5 million in 1988. The initial stage of the program was successfully completed, having increased cropping intensity as well as NIA's collection of fees. The $51.3 million loan approved yesterday will support the second and final phase of the nine-year program. Specifically, the project will finance the improvement of 18 selected irrigation systems and urgent structural repairs on 14 systems, construction of three sediment exclusion structures and erosion prevention measures in critical areas; improved operation and maintenance procedures; support for the institutional development of IAs; and support for research and extension, farmer training and promotion of IA-based seed production. The total estimated cost of the project is about $70 million. The NIA will provide $13.5 million in project financing, with the remaining $4.8 million being provided by the Government of the Philippines. The loan is extended for 20 years, including five years of grace, at the Bank's standard variable interest rate, currently 7.43 percent. NOTE: Money figures are expressed in U.S. dollar equivalent.