Philippines - Central Visayas Regional Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 16661 PERFORMANCE AUDIT REPORT PHILIPPINES CENTRAL VISAYAS REGIONAL PROJECT (LOAN 2360-PH) June 10, 1997 Operations Evaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Currency Equivalents (annual averages) Currency Unit = Philippine Pcso (P) 1982 US$1 00 14.00 (appraisal) 1984-85 USSI 00 18.75 1986-87 US$1.00 20 50 1988 US$1 00 21.00 1989 US$1.00 21.50 1990 USS1.00 25.00 1991-92 S$1.00 26.00 Abbreviations and Acronyms ANR Assisted Natural Regeneration BDC Barangay Development Council 13FAR Bureau of Fisheries and Aquatic Re,,ourkecs BFD Bureau oforest Development CBCR Comunitv Based Contract Rcforcstati( n COA Committee on Audit CTUP ,omUnity Timber Utilization Permit CVRP Central Visavas Regional Project CVRPB Central VisaNas Regional Project Board CVRPO Central Visayas Regional Projects Offie: DENR Department of Environment and Natural Resources ERR Fconomic Rate of Return FLMA lorest Lease Management Agreement GOP Government of Philippines GTZ Oerman Agency forTechnical Cooperat,on FAO F'ood and Agriculture Organization of thc t ;nitcd Nations FOSA Forest Occupant Stewardship Associata,i ICB International Competitive Bidding LGU I neal Government Unit LFF Land T[enreIL'Nask Force MOA Ministry ofAgriculture OED tperations Evaluation Department NEDA National Economic and DevelopmentAithority NGO Non-governmental Organizations PEO Provincial Engineets' Office PIDS 'he Philippine Institute of DevelopmeiT Studies PPF Pioject preparation Facility PRAC ProN incial Resource Action Committee RDC Regional Development Council RDIP Regional Development Investment )ro, "am RLA Regional Line Agencies RPO Regional Projects Office RRAC Regional Resource Access Coinitte SMU Site Management Unit UNDP I Jnitcd Nations Development Programme UJSAAD I Inited States Agency for Inteinational Development Fiscal Year Government: January I - December 31 Director-Genral, Operations hvaluation Mr. Robert Piciotto Director, Operations Evaluation Dept. Mlr. Roger Slade for Ms. Elizabeth McAllister Division ChiefB Agriculture and Human Development Mr Roger Slade Task Manager Mr. oeohn English FOR OFFICIAL USE ONLY The World Bank Washington, D.C 20433 U S.A Office of the Director-General Operations Evaluation June 10, 1997 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Performance Audit Report on the Philippines Central Visayas Regional Project (Loan 2360-PH) Attached is the Performance Audit report for the Central Visayas Regional project (CVRP), prepared by the Operations Evaluation Department (OED). Loan 2360-PH (US$25.6 million) approved in FY83 supported the project. The loan was closed in June 1992, after extensions covering two years. A total of US$2.9 million was canceled. The CVRP grew out of the attempt of the Government of the Philippines (GOP) during the 1970s to decentralize economic activity and decision making out of Manila and to foster more participative approaches to development programs. The National Economic and Development Authority (NEDA) established 12 regional offices. The Central Visayas Region (Region VII) comprised four provinces centered on Cebu City. Preparation extended over four years because initially a multi-sectoral regional project was envisaged, but it was later decided that this would be too complex and unmanageable, and the effort was split into separate rural and urban operations. In rural areas concern had been increasing about the twin problems of rural poverty and resource degradation, and these formed the focus of the CVRP. Its objectives were to improve the living standards of poor, small scale producers by improving the management of forest, upland and nearshore habitats, and arresting the rapid deterioration of the environment. In addition the project was to reinforce the government's regionalization plan, promote local financial accountability, and maximize participation by local officials and beneficiaries. There were three main thrusts: regularizing resource rights, so as to increase security; promoting improved, but generally simple technologies; and improving access and infrastructure. Operations were confined to defined sites spread throughout the region. There were five components: upland agriculture in four watersheds (one in each province); social forestry in one former logging concession; nearshore fisheries in four sites; infrastructural improvements serving these sites; and support services, including institutional strengthening, training, and technical assistance. The project was highly innovative in several respects and was managed by a regional unit (CVRPO), independent of existing organizations, reporting to the Prime Minister's Office and overseen by a board that included the provincial governors as members Time was required to establish working relationships with the existing structures and to evolve procedures for tasks such as management of financial flows and procurement, and implementation fell behind schedule. The project's innovative aspects - its emphasis on process and fostering change, and its organizational structure - meant that it was influenced more than usual by changing political and policy pressures, and its survival and eventual success owed much to a small number of individuals who led. or otherwise championed, its efforts. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. 2 The project completed activities of the type and scale envisaged. A survey carried out shortly after completion in 1992 confirmed that the activities had been appropriately targeted, in that the majority of the beneficiaries had been poor before the start of the project and that their relative incomes had increased during the project. This increase had been as much in non-farm as in on-farm incomes (this also applied to fishermen), indicating the importance of improved access. At completion the overall ERR was reestimated as 8.2 percent, compared to 17.5 percent at appraisal. The major problems related to resource rights. In the social-forestry activities, the groups formed were originally to have been given forest stewardship contracts. How-ver, the Department of Environment and Natural Resources (DENR) would not do so and only issued more restrictive Timber Utilization Permits (TUPs). When it was determined that some groups were harvesting beyond those products which were permitted, all the permits were withdrawn. This has left the members without formal rights to use the land and has restricted their activities and the benefits to the members have been reduced. In fisheries the project helped local groups to develop artificial reefs and sanctuaries, so as to increase fish stocks. However, the rights of use of the assets were often not respected and, by completion, benefits were limited. However, the local governments have since been given greater powers to police local resources of this type, benefits have improved, and the approaches promoted by the project are now being widely replicated. The PCR rated the outcome of the project as marginally satisfactory, institutional development as partial and sustainability as uncertain. The audit rates the outcome as satisfactory since, despite the modest economic performance, the overall objectives were achieved and, as a pilot, the approach of the project has been replicated and built upon elsewhere in the Philippines. Sustainability is rated as likely, since the most of the groups are still operating and some have broadened their activities. The audit rates Bank and Borrower performance as satisfactory, and institutional development as moderate. The principal lessons of this innovative project are that efforts to improve natural resource management must be as much institutional as technical, and constitute a dynamic process of fostering change. The prerequisites are an appropriate policy and legal framework, adequate local decision making powers, and that the beneficiaries (usually operating as groups) must have the ability to operate within this framework, i.e. the project must help them acquire managerial and political, as well as technical, skills. The Bank might also consider whether projects should not plan for free standing project entities which require a degree of independence from the bureaucracy, such as the CVRPO, to be encouraged to continue to exist after project completion, perhaps as independent non-governmental organizations. Attachment Contents Principal Ratings and Key Staff Responsible.... .... ........... ......... 3 Preface......................................................... 5 1. Introduction and Background .....................................7 Background ........................7....... ................7 The Project Area ............................... ...............7 Project Preparation .................................. ......... 8 2. Project Design and Objectives ...............9......... ...........9 Design ................................. ................... 9 Objectives ........................ ............... ..........9 The Project ....................................... ......... 9 Issues Raised in Review ........................................... 10 3. Project Implementation and Outcome...............................1I Implementation Issues................... .....................1. Administrative.......................................II Resource Rights..................... .................12 Training......................... ...................13 Mid-term Review..................................... 14 4. Outcomes and Ratings..................................................................... 15 Outcomes................................. .. ............ 15 Upland Agriculture....................................1 15 Agroforestry................................................................... 16 Nearshore Fisheries.....................................1 8 General.. ......................................... 19 Compliance with Covenants..... ............... ....... 20 5. Conclusions and Lessons ................................................................. 21 Ratings.................................................. 21 Overall............_........................ .................................... 21 Institutional Development...............................21 Sustainabilityu............................. ..............21 Bank Performance.....................................21 Borrower Performance .................................... 22 Lessons.................................................. 22 Annexes A. Basic Data Sheet.............................................. 25 B. Tables B.1. Achievement of Physical Objectives .........................29 B.2. Determinants of Number of Technologies Being Practiced by Province ...................................31 B.3. Upland Agricultural Practices Adopted, CVRP Project Sites.......... 32 B.4. Comparison of Gross Income Between CVRP Cooperators and Non-cooperators in Upland Agriculture.....................32 B.5. Income Data of Sample Respondents in CVRP Upland Agriculture Sites by Province and by Adopters and Non-adopters of UA Technologies, 1992 ..................................... 33 B.6. Reasons for Improvement in the Socio-Economic Conditions After Participation in CVRP Upland Agriculture Activities, 1992.......... 34 B.7. Annual Income (P) of Social Forestry Respondents at Various Points of CVRP Implementation (1985, 1988, 1991) . ............ 34 B.8. Comparison of Income per Household or Social Forestry of Cooperators and Non-cooperators, Before and After CVRP, 1992 ....35 B.9. Average Fish Catch per day of Fishermen Before and After the Introduction of Artificial Reefs in the Project Sites...... ...........35 B.10. Factors Causing Observed Changes in Resource Base/Fishing Activities, 1992 ....................................... 36 B.11. Regression of Fish Catch on Factor Inputs by Selected Fishing Area and Fishing Gear, all NSF Sites ......... ..... .........37 B.12. Income Differences, NSF Cooperators and Non-cooperators 1985 and 1988 .................................. ......38 B.13. Gross Fishing Income for Cooperators and Non-cooperators by Province, 1992 ..................................... 38 C. Comments from the Regional Development Council/Regional Center for CBRM ........................................... ..... 39 Boxes 4.1: Evolution of Farmer Groups....................................... 16 Maps IBRD Nos. 17219, 17031, 17032, 17033 3 Principal Ratings PCR Audit Outcome Marginally satisfactory Satisfactory Sustainability Uncertain Likely Institutional Development Partial Moderate Borrower Performance Satisfactory Bank Performance Satisfactory Key Staff Reponsible Task Manager Division Chief Country Director Appraisal D. Parberrry R. Krishna A. Jaycox Midterm A. Mercer D. Dowsett-Coirolo G. Kaji Completion T. Wiens P. Cox C. Madavo  5 Preface This is the Performance Audit Report (PAR) of the Central Visayas Regional Project, for which Loan 2360-PH, in the amount of US$ 25.6 million, was approved on December 6, 1983. The Closing Date was June 30, 1992. The final disbursement from the loan was made on November 3, 1992. A total of US$2.9 million was cancelled. The PAR is based on the Project Completion Report (PCR) prepared by the East Asia and Pacific Regional Office, on the Staff Appraisal Report (SAR), President's Report (PR), the legal documents, on study of the project files, supervision reports and project documents, and on the discussions and findings of an OED mission which visited the Philippines in May 1996 and met with officials of the Government of Philippines, the implementing agencies, and with persons affected by the project. The collaboration of these officials and other persons is gratefully acknowledged. The draft PAR was sent to the government for comments. The comments received from the Regional Development Council/Regional Center for CBRM are reproduced as Annex C to the PAR.  7 1. Introduction and Background Background 1.1 The Central Visayas Regional Project (CVRP) grew out of the government's attempt during the 1970s to decentralize economic activity and decision making out of Manila to foster more participative approaches to development programs. The National Economic and Development Authority (NEDA) assisted by the Bank and UNDP under the Regional Planning Project, established regional offices in each of 12 regions, of which the Central Visayas, comprising the island provinces of Cebu, Bohol, and Siquijor, and the province of Negros Oriental (the eastern half of the island of Negros), was designated as Region VII. Elected regional assemblies and Regional Development Councils (RDCs) were also created.I The NEDA offices, together with the assemblies, RDCs and mayors of the local jurisdictions, worked to prepare Regional Development Investment Programs (RDIPs). The Project Area 1.2 The hub of Region VII is the city of Cebu, which has long been the second largest urban center in the Philippines. A number of prominent families have traditionally given the city dynamic leadership, and it is not surprising that the Region (under the impetus of Cebu) recognized the opportunity offered by the decentralization efforts of NEDA in the late 1970s and responded to them with alacrity, and it was in this context that the Bank agreed to provide project support. 1.3 The region has significant mineral resources, but much of its topography is rugged and, in consequence, its overall agricultural potential is limited. The region ranks among the poorest in the Philippines in terms of per-capita availability of agricultural land. As a result, the Region was, and remains, characterized by a relatively high incidence of poverty. In 1975, 60 ercent of its households were defined as poor, compared to 45 percent in the country as a whole. As elsewhere in the Philippines, the rural population has responded to population growth by moving into the hills to clear land and, in consequence, the pattern of land use is characterized by insecurity of tenure, which leads to short-term land use policies, minimal interest in resource conservation and consequent erosion and degradation. 1. The RDC is composed of the elected local chief executives in the provinces, cities and municipalities (governor, city and municipal mayors) and regional director of line agencies. The Borrower in its comments notes that the composition of RDCs has recently been expanded to include private sector representatives from each province. 2. World Bank, Aspects of Poverty in the Philippines: A Review and Assessment, Report No. 2984-PH, 1980. 8 Project Preparation 1.4 Project preparation was an extended process, very much bound up with the development of regional planning capacity within NEDA. In 1978, a Bank economic mission helped undertake a review of Region VII that was used to initiate the process of regionalization. The regional plan that resulted suggested a broad range of investment priorities: infrastructure in rural areas and small towns; improvements in education and health services; a regional fisheries project; an "agroforestry" project; industrial estates and an export processing zone; and a comprehensive infrastructure investment program for Metro-Cebu. 1.5 Given the lack of data (noted by the Bank mission) and the limited resources available to the NEDA Region VII staff, this wide-ranging list of priorities was not very helpful. A six- volume Regional Development Investment Program (RDIP), prepared a year later, did little to reduce the scope of the intended program. It covered everything from primary production programs-including agriculture, livestock, fisheries, agrarian reform, and resettlement-to secondary production programs, which included manufacturing, export promotion, market development, training and appropriate research-to social services programs, including housing, education, health, nutrition and manpower development; and infrastructure programs, covering roads and bridges, small scale irrigation, ports, telecommunications, water supply, public 4 markets and slaughterhouses. Merely to prepare an appraisal report would cost an estimated US$1.3 million. 1.6 Delays in mobilizing assistance to cover preparation costs held up further work. In the meantime, there were discussions in the Bank on the most appropriate means of managing the proposed program. Given the complexity of the Cebu metropolitan area (ten constituent municipalities) and the size of the investment envisaged there (nearly $100 million), the Bank decided to separate the urban area from the widely dispersed rural activities. The desirability of having two projects was finally agreed to in October, 1980, with one project to focus on the infrastructure needs of the major urban centers of the region and the second on tackling the problems of sustainable agriculture and forestry systems in the uplands. Project Preparation Facility (PPF) funding was subsequently made available for preparation. 3. From the mid-1970s to the early 1980s, NEDA was assisted by a UJNDP-funded program of technical assistance, for which the Bank was the Executing Agency, and to which a series of Bank staff members were seconded. 4. Memo Parberry to Krishna; November 30, 1979. 9 2. Project Design and Objectives Design 2.1 The need to reduce natural resource degradation and to improve the incomes and living standards of the rural poor were the major concerns in the design of the CVRP. When an FAO/World Bank Cooperative Programme mission arrived in 1981 to help facilitate the preparation of the rural project the proposals were still rather a "shopping list" and lacked coherence. The lack of focus reflected the fact that most of the work had been done by local staff from relevant line agencies, who lacked experience preparing proposals for external funding, and with limited support from the center. A Projects Office was established to prepare both the rural and urban projects and a PPF of $500,000 approved for the preparation of the rural project. 2.2 Resource management issues were at the top of the agenda. Seven upland sites were chosen for activities aimed at helping local communities develop sustainable agricultural systems. These systems would be supported with appropriate small-scale infrastructure and expanded land reform effort. Problems with the transfer and management of the PPF funds and disagreements about the number of consultants required delayed preparations, and it was not until a year (and several postponements) later that a six-person FAO/World Bank Cooperative Programme preparation mission was sent. The proposed project, completed by the local Projects Office, was appraised in November 1982. Objectives 2.3 The project's objectives were to improve the incomes and living standards of poor, small-scale producers by improving the management of forest, upland and nearshore habitats, and arresting the rapid deterioration of the environment. In addition, the project was to reinforce the government's regionalization plan, ensure greater administrative and budgetary autonomy for the region, maximize financial accountability by project managers, and maximize participation by local officials and project beneficiaries. The Project 2.4 Project activities were to be concentrated at five sites in the provinces of Region VII. These would cover a land area of 140,000 ha, a coastline of 200 km, and a population of about 200,000. The estimated cost was US$44.4 million. There were five components: (i) Upland agriculture in four watersheds (one in each of the four provinces). This component aimed to provide secure tenure to upland farmers and to assist them in transferring from shifting cultivation of annual crops to more stable systems, utilizing perennial crops and livestock. (ii) Social forestry, to be established in only one site. The aims were forest stand improvement and the reforestation of logged-over areas where 10 "slash and bum" cultivators had encroached.5 Land stewardship agreements, which provided secure tenure to the occupants, were to be issued, and various inducements (physical incentives and technical assistance) were to be offered in exchange for conservation work. (iii) The nearshore fisheries component was to establish artificial reefs, replant degraded mangrove areas, and establish coral reef sanctuaries at four subsites in the four provinces. Participating families were to be allocated use rights. The four subsites chosen (one in each of the four provinces) covered shoreline adjacent to three of the upland agriculture areas and the social forestry site.6 (iv) Infrastructure comprised access roads and trails, village water supplies and small irrigation works. These were to support the above components and to respond to more immediate community needs. (v) Support services included institutional strengthening, training, technical assistance, and research for agriculture, forestry, fisheries and aquatic resources. Issues Raised in Review 2.5 The principal concerns raised during the review process related to institutional arrangements and their implications for the channeling of funds and local financing. Initially, the project was based on a regional secretariat, working through provincial secretariats and site management units. At appraisal, the provincial governors proposed a more streamlined approach, with the site units reporting directly to the regional project management. There was considerable support for this notion in the Bank's review and it was agreed. The second issue was whether funds would be channeled directly from the central government to the project unit, rather than through the relevant line agencies. Related to this issue was the prospect of requiring that a portion of the counterpart financing come from local (that is, not directly national) sources. This possibility was seen as being in line with the objectives of supporting decentralization, in that it might add to the incentives for provincial and local governments to collect taxes (which they were authorized to levy) in order to cover their share of the cost. Both of these arrangements were innovative and reflect the willingness of the leadership in the region to step outside traditional channels. 2.6 In line with the emphasis on decentralization, it was agreed at negotiation that the Regional Projects Unit would report directly to the Prime Minister and have an Executive Board that included four local representatives and four from line agencies. It was also agreed that the funds would be channeled to the Projects Unit through NEDA. A loan of US$25.6 million was approved in December 1983. 5. In the Philippines these cultivators are often referred to as Kaingineros Kaingin is a patch of cropland in the forest (intact or cleared). 6. A fifth site at Bayawan was added in 1987. This was a pilot for the provincialization of CVRP 1. 11 3. Project Implementation and Outcome 3.1 The project's rather slow start reflected problems with funding arrangements, institutional issues, and land tenure, as well as with the project's innovative features. The project's innovative aspects-its emphasis on process and fostering change and its organizational structure-reflect how the project was influenced more than usual by changing political and policy pressures, and its survival and eventual success owed much to a small number of individuals who led, or otherwise championed, its efforts. Implementation lagged behind initial expectations throughout the project period, taking more than eight years rather than the five foreseen at appraisal. Implementation Issues Administrative 3.2 The Regional Projects Office (RPO) was to implement the project in cooperation with the provincial and municipal governments and regional offices of line ministries, and the Central Visayas Regional Projects Board (CVRPB) was designated by the Prime Minister to establish and direct the RPO. Site Management Units (SMUs) under the RPO were to be responsible for implementing programs at the five field sites and made up the field staff of the RPO. The local staff of the principal line agencies-the Ministry of Agriculture (MOA), Bureau of Forest Development (BFD), the Bureau of Fisheries and Aquatic Resources (BFAR) and the Provincial Engineers' Offices (PEOs)-were to provide appropriate support services. For example, the MOA was to provide soil and livestock services, while the PEOs would implement the infrastructure components. 3.3 Since this was the first Bank-supported project in the Philippines managed through a regional unit independent of the traditional line agencies, some initial problems were inevitable. In particular, there were problems in transferring the local share of the funds into the special account. Because the project was not included in the budget of a line agency program, special provisions had to be made for counterpart expenditures and these became vulnerable to cuts. At negotiations it had been agreed that all vehicles would be procured through International Competitive Bidding (ICB). In practice, this arrangement created major delays, because it required a double set of approvals. The fact that most purchases were small and could have been made locally at more competitive prices only added to the frustrations of the project management. The unconventional nature of project funding arrangements also attracted the attention of the government's Committee on Audit (COA), whose close scrutiny of project operations contributed to the administrative delays. The resulting uncertainty did not help the situation. 3.4 The new, somewhat unconventional structure meant that new working relationships had to be developed. The role of the SMUs as agents of change led to suspicions at the local level, not least because in some areas the Communists also had cadres in the field trying to organize rural people. There were suspicions as to the real allegiance of project staff and some tension with the Communists, on whose 'turf the project was establishing itself. More prosaically, 12 although barangays had Development Councils (BDCs), these were often moribund, and had to be vitalized to provide an administrative basis for local action. Resource Rights 3.5 It quickly became apparent that resource rights (that is, fishing or land use), and the ability to protect them, would be a fundamental issue in any effort to improve resource management and productivity. The issue manifested itself in a number of ways. In some project areas, owners of large enterprises cultivated some tracts of land when returns were high but otherwise neglected them. Local people then moved in and started to cultivate for their own purposes. Neither party had a formal title, but the large operators were clearly in a better position to press their claim than were the small farmers. Similarly, in several areas farmer groups planted trees on degraded, sloping land. Later, when the trees were well established, others appeared to press claims to the site.8 3.6 The problem of resource rights was most acute in connection with forest-related activities. At the outset, the Smallholder Agroforestry SMU moved to organize community-level forestry organizations (Forest Occupant Stewardship Associations or FOSAs) which were to be issued land use instruments. The first was to be a reforestation contract for "Community Based Contract Reforestation" (CBCR) which was a three-year contract for the group to reforest government owned open grassland. The second type was to be awarded after successful CBCR implementation, complying with minimum standards. This contract, a "Forest Lease Management Agreement" (FLMA), to be issued by the DENR, was to last for 25 years and allow utilization of the timber grown on the reforested area. The third was the "Community Timber Utilization Permit" (CTVP), entitling local residents to legally manage areas of existing forest and provided for the utilization of dead standing timber.9 3.7 The FOSAs were organized hastily, largely by foresters with limited experience or training in community organizing, and often lacked responsible leaders. Perhaps partly for this reason, the BFD refused to provide the required access instruments for the first two years. After its management changed, it issued some CTVPs. However, these permits were soon canceled when it transpired that some FOSAs had been harvesting supposedly protected trees. Despite efforts to improve the situation, the permits were never restored to the FOSAs, nor were any FLMAs issued, severely limiting what could be done. 3.8 More recent developments may have created greater scope for resolving these problems, as the rights of municipal governments have been increased. All municipalities must now set up Land Use Committees and are required to prepare a land use plan, which will form the basis of zoning. This could mean that rights have to be clarified, and larger landowners state any claims, before small operators start on improvements. The project also was instrumental in establishing 7. Barangays are sub-municipal units, usually a village (or a neighborhood in a town). Each Bangaray has a Captain (usually elected) who acts as headman and frequently represents the community. 8. The Borrower, in its comments notes that " In some isolated cases, fraudulent titling and the issuance of tax declaration by municipal government even on lands not classified as alienable and disposable by the national government, tends to justify the claims of absentee claimants over those actual tillers and cultivators." 9. Comment received from RDC/RCCBRM. 13 a Land Tenure Task Force (LTTF) with representatives of the relevant line agencies, the Public Attorney's office, NEDA and CVRPO. 3.9 The effectiveness of this group quickly led to its expansion to cover marine resources and it was renamed the Regional Resource Access Committee (RRAC). To speed up action, and in line with efforts to decentralize, the RRAC organized Provincial Resource Access Committees (PRACs) in 1991, which continue to operate. These can provide a counterweight to the power of local landowners and bring the power of the provincial authorities into the picture. Training 3.10 The project placed considerable emphasis on training, at two levels. At the sites, it provided training for beneficiaries and local government officials. At the regional level, it developed training for staff of the line agencies and for provincial officials. Training modules were designed with the assistance of task forces that included representatives of various client groups. These modules were generally workshops rather than lectures and were designed to focus on the anticipated future roles of the participants. Given the nature of the project, the principal emphasis was on participatory problem solving (for instance, goal-oriented planning) and follow-on implementation. Toward the end of the implementation period, the CVRP training effort became more outward looking and undertook a number of programs on behalf of local government units that had not been included in the project itself, organizing training sessions for local government officials and participants from the local population. In addition, the project's own technical and community development experience was used to produce a range of extension materials for use in the region." 10. These were composed of representatives from DENR, the Comprehensive Agrarian Reform Program (CARP) of the Department of Agrarian Reform (DAR), and the Commission on Land Settlements and Problems (COSLAP). I1. The Borrower in its comments emphasizes the extensive nature of the training efforts: "Aside from the administrative development trainings to the Site Management Units (SMU), Local Government Units (LGU) and Regional Line Agencies (RLA) involved, technical training that transforms the individual, community and beneficiaries falls into two major categories. (1) Human Resource Development which includes trainings on Institutional Capability Building, Community Organizing, Self Awareness and Team Building and others. (2) Natural Resource Management which includes trainings on different appropriate technologies in Social Forestry, Upland Agriculture, and Coastal Resources Management. The use of site visit and study tours to successful project within and outside the region proved to be highly motivational to LGUs and beneficiaries alike. Integration of community based resource management into the curriculum in the elementary grades was pursued by the Department of Education Culture and Sports. Instructional materials were likewise developed for the school teachers. DECS have also conducted accreditation trainings and seminars to identified Barangay Resource Management Technicians (BRMT) in the region. These BRMTs are project beneficiaries (de facto resource managers) who have the capacity to share their knowledge and skill of the technology." 14 Mid-term Review 3.11 A mid-term review in 1987 stimulated a number of changes, including a greater focus on microwatersheds and an increased emphasis on the role of community organizers and SMUs. Two activities were scaled back: a component to built low-cost trails, and a livestock distribution program. The proposed 475 km of trails were intended to improve access to forests, but did not have cross-drainage structures, so that they became impassable in wet periods. It was clear that tracks that could be used throughout the year were needed, and the program was terminated and replaced by one that provided for the construction of all-weather roads on a reduced scale. The livestock distribution effort was cut back in part because of the difficulties associated with local procurement of animals. 15 4. Outcomes and Ratings Outcomes 4.1 At field level, the project achieved most of its physical objectives (see annex table B-1). There has been some slippage but, at closing, the level of activity sustained in most cases remained above appraisal targets. Because the individual programs (upland agriculture, smallholder agroforestry, and nearshore fisheries) were relatively independent of one another, the outcomes of the individual components are best considered separately. Upland Agriculture 4.2 In the participating communities there was significant uptake of the five resource management practices the project was promoting: on-farm soil conservation; agroforestry development; off-farm reforestation; upland fishponds; and microwatershed planning and implementation. A survey undertaken during the year of completion (1992) of 222 farmers in all four of the project's upland agriculture sites indicated that 88 percent of the farmers had adopted one of more of the main elements.12 4.3 There were no significant differences in the practices adopted by households classified according to of a range of socioeconomic variables. The results of a regression seeking to explain the level of adoption of the different elements of the program were somewhat diffuse (annex table B-2). Given the range of specific technologies the program was promoting, this is not surprising. Of the explanatory variables used, two of the three that showed significant positive relationships with the degree of adoption (attendance at meetings and seedlings received) are in fact elements of participation themselves, so that a positive result should be expected. The only result of note is that farm size had a consistently negative (but nonsignificant) relationship with the degree of adoption, suggesting that land pressure does increase interest in intensification. Annex table B-3 shows the proportion of farmers adopting specific practices. Some 78 percent of the farmers adopted the two most basic elements of more intensive management of cropping on sloping land-the planting of hedgerows and the use of A- frames to assist in contouring. Of the other eight practices surveyed, only one, composting, was adopted by more than 50 percent of the farmers. 4.4 Data drawn from the follow-up study and other sources indicate that, compared with nonparticipants, participants improved both their farm and nonfarm incomes during the project period (annex table B-5). A related survey shows that the greatest difference in income levels was in the on-farm income of participants, which was higher at the end of the project (annex table B-5).13 Not surprisingly, beneficiaries' views on the reasons for the improvement in socio- 12. See H. Arocena-Francisco," The Upland Agricultural Component," Part II in Impact Evaluation of the Central Visayas Regional Project, PIDS, December 1994. 13. It had been hoped that the audit would be able to undertake a follow-up survey to assess changes in level and sources of income and utilization of recommended practices since project completion. Discussions were held with the Philippine Institute of Development Studies (PIDS), which had undertaken the earlier studies on the CVRP. However, 16 economic conditions during the project period varied considerably (annex B-6). About 30 percent cited direct support from the project as the reason for the increase, while just over 40 percent cited qualitative improvements, either in their knowledge or in the status of the land (for example, in soil fertility or environment). 4.5 At completion, the economic rate of return (ERR) to the Upland Agriculture component was estimated as 12 percent (including the costs of infrastructure related to the agricultural activities), compared with the appraisal estimate of 18 percent. In the absence of more recent hard data, a revised estimate is not feasible. However, the audit mission noted that the sources of household income have continued to diversify since completion (see box 4.1). Some of this increase is related to project initiatives, although there is evidence that some of the technologies adopted earlier have been abandoned. Box 4.1: Evolution of Farmer Groups Farmer groups continue to operate, but have moved in different directions since project completion, reflecting the evolving nature of the enterprises of their members. For example, in Magsaysay in Bohol, land is relatively abundant but steep, and farmers had been intercropping trees (which had to be planted close together because of the slopes) and field crops such as maize. When the shade from the fast-growing, thickly planted trees affected the field crops, the farmers stopped cultivating and allowed the plots to become small plantations and planted their field crops elsewhere. Several have developed timber enterprises (for example, in construction, windows and shutters). In contrast, in Valencia on Cebu, the project area was high in the limestone hills, with shallow, free draining soils, and large numbers of small rocks at the surface. The project had provided farmers with incentives to construct contour structures using these rocks. Backed by strips of glericedia sepium, they have increased water retention, and the group has continued its community rock clearing program, even though the financial inducements ceased several years ago. 4.6 The farmer groups have also become more sophisticated in their approach to local authority and are taking advantage of opportunities to get action on their priorities. For example, in the Ayungon hinterland the upland beneficiary group assembled for the audit mission took advantage of the opportunity to complain vigorously about the rapid deterioration of the secondary roads on which the community had labored under the project. When the farmers cited a lack of resources for proper maintenance as the major problem, the mayor committed on the spot a large tractor-mounted front-end loader and suitable road-surfacing materials on a regular basis. Community members committed their own free labor. Without such collaboration, which had not been tried before, the earlier investment in such roads might have been lost. Similar issues were raised in some other audit mission meetings with farmer/fishermen's groups and local officials. Agroforestry 4.7 The social forestry component was aimed at developing and managing forest land, improving timber stands, and reforesting Imperata grassland. It was undertaken within an area because of prior commitments by those involved in the 1992 study and difficulties in locating all of the basic data from that survey, the PIDS concluded that it would not be possible to undertake the proposed survey within the required time and with the resources available. 17 of about 17,500 ha in Negros Oriental, which had earlier been covered by a Timber Lease Agreement to a large logging company. The population was stable. Only about 20 percent of the participants in the program reported having migrated into the area themselves and, of these, only just over half had entered in the past 20 years. Most households depended for at least part of their income on agricultural activity. In effect, most of them were, and are, what are locally described as kaingineros. 4.8 In support of these objectives, the project initiated a number of interventions: (i) production enhancing/on-farm conservation practices; (ii) off-farm conservation/rehabilitation; (iii) use of secondary forest products and timber utilization; and (iv) employment/income generation. The project provided some support for efforts to improve the productivity of the land already being farmed and to develop barangay roads and water supplies. But the component was greatly hampered by land tenure problems (para 3.6). The project established 27 FOSAs. As noted earlier, some groups received permits to extract old and damaged timber, but when it appeared that other trees were being cut, the permits were withdrawn. As a result, the groups have no formal rights to forest areas adjacent to land they occupied earlier. 4.9 On-farm work was not emphasized at first, since the objective was to focus on the improvement and sustainable use of the forest area. Farms were expected to serve only as a secondary source of livelihood, so that the local people would not destroy the forest in favor of the farm. However, when the timber permits were withdrawn, the primary emphasis shifted to on-farm activity. Most of the farmers engage in mixed cropping (especially rice paddy) and/or intercropping, and they reported that they had made few major changes to their cropping pattern as a result of the support of the CVRP, aside from introducing a variety of specialty cash crops and planting of hedgerow crops and fruit trees. The farmers also claimed that the denser forest (a result of restricted timber harvesting) helped to reduce runoff and thus flood damage to their rice paddies. 4.10 Monitoring studies during the project indicated that the incomes of beneficiaries of the component increased sharply between 1985 and 1988 but then leveled off (annex table B-7).1 The timber permits contributed significantly to the initial increase: a survey carried out in 1988 reported that about 15 percent of the incomes of those surveyed was derived from the sale of forest products. But this income disappeared when the CTUPs were withdrawn in August 1988. A survey carried out in 1992, just after completion, showed that those surveyed obtained almost two-thirds of their income from farming activities (annex table B-8), a decline from about 80 percent before the project. Nonfarm income, however, increased. There was some indication that the most active participants in the program (those who adopted most of the recommended practices) may have increased their incomes more than others, but this income difference was not statistically significant. 4.11 At completion, the ERR of this component was reestimated at 9 percent, compared with an appraisal estimate of 17 percent. The later ERR in part reflected the loss of timber income due to the cancellation of the timber permits. Since this issue has not been resolved, and there was little evidence of increased activity compared with 1992, the audit judges that the completion estimate is reasonable. 14. See L. M. Penalba, "Impact Evaluation of CVRP I Social forestry," Part III in Impact Evaluation of the Central Visayas Regional Project, PIDS, December 1994. 18 4.12 The FOSAs have continued their training activities. At the time of the audit mission the emphasis was on tree nursery management and techniques for planting and weeding (mainly for women) and on supervision and patrol procedures (mainly for men). The trainers and trainees met by the audit mission expressed their priorities as more schooling for children, improved food security (preferably through improved irrigation infrastructure), and better roads and road maintenance that would reduce travel time to urban and commercial facilities. Progress on these services, however, seemed to have slowed in the postproject era. Without some resolution of the title issue, no real progress will be made. Some of the groups continue with community activities, but frustrations are mounting. Incidents of forest conversion to agriculture and illegal logging continue, and the present situation does not promote respect for the law among those the project was intended to benefit. Nearshore Fisheries 4.13 At completion, the nearshore fisheries component appeared to be the least promising of the three main project components. While the initial physical objectives (installation of artificial reefs and mangrove reforestation) had been achieved, the results of these efforts were unclear. But, there is some evidence to suggest that the benefits may be greater than anticipated at completion. 4.14 A survey was carried out in 1992 to assess the changes in fish catches at sites where artificial reefs had been established.'5 The 260 fishermen interviewed indicated that gill net fishing in these areas yielded a 65 percent increase in fish catch over the preproject levels, while catches from handline fishing rose by an average of 107 percent (annex table B-9). However, these results were not universal, and respondents were asked to give reasons why catches had increased or decreased. Responses varied widely. Among those who reported increases in catches, the most frequently cited factors were improved law enforcement practices, which had reduced illegal fishing, and the positive impact of the artificial reefs and fish-attracting devices which had been installed (annex table B-10). Others attributed increases to the beneficial effects of the rehabilitation of nearby mangroves. But fishermen who reported decreases in catches noted an increase in the number of fishermen, more sophisticated types of fishing gear, and encroachment by commercial operations. 4.15 In order to investigate this situation further, PIDS carried out a range of analyses (primarily multiple regressions) using project data on fish catches at a range of sites from 1988- 91. These analyses did not give definitive results. Although the coefficients on some variables were statistically significant (annex table B- 11), the overall explanatory power of the equations was low. The coefficient for time was positive, however, an indication that the project's resource management activities were having an increasing impact over time. 4.16 Data indicate that incomes of both participants and non-participants increased over time. At the outset, the incomes of both groups were significantly below the poverty threshold for Region VII, and the increases associated with the project activity have brought both groups significantly closer to the threshold. The studies did not track the same households over the project period, so the fact that the relative rates of increase indicated for the two groups differed 15. M.S. de los Angeles and R.T. Pelayo, "Nearshore Fisheries Component Impact Evaluation Report," Part IV in Impact Evaluation of the Central Visayas Regional Project, PIDS, December 1994. 19 between the early and late phases of the project, may not be significant. Initially, participant incomes were lower, but not significantly so. In 1991, this situation was accentuated, and nonparticipants were better off than participants, largely because of greater non-fishing income. The studies do not report on the nature of the fishing activities by the different groups, or whether the participants had smaller boats and were more dependent on the nearshore fisheries than nonparticipants. 4.17 The beneficiary groups were enthusiastic about both the technical and economic achievements of mangrove rehabilitation, which had resulted in increased fish harvests and abundant regrowth of the reestablished mangroves. But during the audit's field visits, discussion of these issues was largely hijacked by a rash of complaints about attempted takeovers of beach- front assets (mangroves themselves as well as their considerably improved dwellings) by large- scale landowners. They had had barbed-wire fences erected along much of the shoreline to define claims to the land to the low-tide water mark. The issues are before the courts and await resolution. 4.18 Based on data from the 1992 survey and the earlier studies, PIDS estimated the ERR to the nearshore fishery component as less than zero (when the overhead costs of the project are taken into account), or about three percent if these are excluded. Since project completion, a number of changes have altered the conditions in which the fishermen's groups have operated and which appear to reflect a general view that many of the ideas the project promoted do produce significant benefits. Under the Local Government Act, local government units now have increased powers to control access to local waters. As a result many coastal barangays have established fish sanctuaries and provided more protection to local groups, who are utilizing technologies promoted by the CVRP, such as artificial reefs. At the same time, the approaches promoted by CVRP are forming the central elements of subsequent nearshore fishery projects supported by other international donors, such as USAID and GTZ. General 4.19 In 1989 the CVRPO was transferred to the Regional Development Council. The CVRPO was finally wound up in December 1992 and its core activities transferred to a newly established Central Visayas Regional Resources Center, which aimed to promote further efforts in the region along the lines of the CVRP. This has been further transmuted into the Regional Center for Community Based Resource Management to promote these approaches.17 This organization is also supporting itself by undertaking contract work such as project preparation. 16. The Borrower in its comments notes that: "The issue of the mangrove forest in Bayawan was an isolated case whose resolution was dragged overtime. As it appeared during the audit's visit, barbed wire was newly erected which created more tensions between the project's beneficiaries and the wealthy claimant. The organization was seeking assistance from the LGU through the Vice Mayor who was then present during that time. The Vice Mayor assures to provide assistance to resolve the conflict." 17. The Borrower in its comments notes that this office is accountable to the RDC through the Community Based Resource Management Committee. 20 Compliance with Covenants 4.20 Overall, compliance with covenants was good, but there was some slippage in counterpart funding. 21 5. Conclusions and Lessons Ratings Overall 5.1 This project was an innovative, generally successful effort to develop approaches to natural resource management under environmentally and economically sensitive conditions. It achieved most of its physical objectives and created local groups of farmers and fishermen who undertook a range of resource management actions, many of which continue. These groups have gained valuable experience in interacting more effectively with others (such as the public agencies and local authorities). Most members of the groups had below-average incomes before the project, and surveys undertaken after completion indicate that, in general, they have improved their relative position. Overall, therefore, the outcome of the project is rated as satisfactory. Institutional Development 5.2 Institutional development is rated as partial. The processes set in train seem unlikely to be reversed even if some groups cease to exist and some technologies are dropped. The overall political, social, and economic environment has changed greatly since the project started, but the project was relatively successful in adapting to these changes. At the same time, the general direction of the changes was favorable to the project's objectives, and the fact that several initiatives (such as inshore fisheries management methods) are now more widely accepted in the Philippines reflects the project's overall success. Sustainability 5.3 The audit rates sustainability as likely. While the CVRPO has closed down, most of the groups formed under the auspices of the project are still operational and effective, as are key public sector initiatives such as the regional Land Disputes Committees. In addition, local government units (LGUs) now have expanded powers over natural resources and greater responsibility for infrastructure. For instance, they are now responsible for maintaining local roads and tracks. Some LGUs have only limited capacity to meet these added responsibilities and many of the tracks constructed by the project have clearly deteriorated as a result. But, the additional functions and responsibilities, linked to popular election of key officials such as the mayor, have meant that these officials may now be more attuned to local priorities. Bank Performance 5.4 Bank performance is judged as satisfactory. From the very beginning, the Bank was supportive of the government's efforts, providing more than the usual resources to the project and displaying considerable patience, as preparation was extended so the newly created units could adapt. The Bank was similarly generally supportive during implementation, although it might have pressed for a clearer position on post-implementation responsibility for the disposition of assets acquired or created by the project. It is noteworthy, however, that Bank task managers during implementation were almost entirely technical agriculturalists and that no 22 social input per se was made after appraisal, despite the nature of the project and its emphasis on local organization. Borrower Performance 5.5 Borrower performance was generally satisfactory, with field staff in particular showing considerable ingenuity and persistence in the initial stages of the project, when community organizations were being established. The borrower created the opportunity for the project by agreeing to a project unit independent of the core governmental structures, supporting it at high levels, and allowing it relatively free rein within the general project objectives. The borrower's principal shortcoming was its failure to address the issue of occupancy rights in the agroforestry field site and on shorelines. Further progress in this general area will require a better resolution of community use rights. It should be noted, however, that the experience with this project has provided a significant input to the design of DENR's current Community Forestry Program. Lessons 5.6 The project's most enduring legacy is the ongoing process of change that has been set in motion in the affected communities. This process is, in part, the result of an increased awareness among farmers of available technologies; more particularly, however, it is fostered by the beneficiaries' new problem-solving skills and ability to work with others. The key driving forces of the project have been (i) managerial rather than technical inputs, which have increased the population's confidence in their ability to deal with their problems; and (ii) the accessibility created by the improved roads and tracks, which has increased both farm and off-farm alternatives. 5.7 The outcome of the CVRP shows that efforts to improve natural resource management must be as much institutional as technical and that these efforts constitute a dynamic process of fostering change rather than just being financial and technical investments with defined physical outcomes. The prerequisites for success in this process are: an appropriate policy and legal framework for effective management; adequate local decisionmaking powers; groups that have the ability to operate effectively within this framework; and appropriate technologies. Initially it may not be clear which of these should receive the most emphasis in specific local situations. Therefore, programs will have to be designed to be sufficiently flexible that they can be modified to fit local circumstances. 5.8 First, an appropriate policy and legal framework is necessary for effective management to occur. The most obvious manifestation of the lack of such a framework in the CVRP was the rigidity of the national policy toward the management of watersheds designated as critical, which resulted in the failure to provide the expected permits under the stewardship agreements. Lacking the proper permits, some groups not surprisingly took matters into their own hands. Under most conditions, resource managers need to have some degree of latitude in the management systems utilized.18 If stakeholders are denied the most cost-effective, and/or economically attractive systems of management, some are likely to adopt extra-legal methods. 18. This issue was well illustrated in the Watershed Management and Erosion Control Project (Loan 1890-PH). Stopping the harvesting of timber and timber-related products reduced the cash flow of the managing entity, the National Irrigation Administration, and reduced its ability to maintain adequate staff to fight fires. In the end, a significant portion of the areas which had been planted with perennials to improve soil cover degraded back to Imperata grassland. 23 5.9 Second, since significant elements of the process are political, those managing the resources on a day-to-day basis must have access to the skills needed to organize groups so as to have an effective voice in the system. A single operator with large financial or other resources may be able to exert pressure alone. But, projects such as the CVRP that deal with individuals with minimal financial or related resources need to make up in numbers what they lack in finances. The project found that its first priority had to be to help the farmers and fishermen form effective groups that could work together to achieve a range of goals, such as creating recognized sanctuaries to enable more fish to breed in inshore fishing grounds. But, the skills required for this community organizing differed from those needed to organize groups of farmers for extension purposes, and it soon became apparent that the line agencies had little to offer. For example, the view has been expressed that part of the difficulties the agroforestry program experienced resulted from the forestry staff's lack of community organizing experience (para 3.6). In order to make solid progress, the project had to reorganize, placing prime responsibility for short-term program organization with the community organizers at the SMUs rather than at headquarters. 5.10 The third aspect of effective management is the need for adequate local decision- making powers. The Local Government Act of 1991 has given municipalities greater powers over natural resources. Municipalities are required to prepare land use plans and can take steps to enforce them. In the context of the CVRP, the most obvious impact has been on the nearshore fishery component. While the measures taken under the project, such as the creation of artificial reefs, were effective in creating breeding areas and increasing the numbers of fish, the benefits to the fishermen's groups that constructed the reefs were reduced because others were able to harvest from the area. Now the LGUs have the power to create fish sanctuaries and to recognize and enforce the rights of local groups in the nearshore locations. Communities have been encouraged by the results of their actions, and there has reportedly been a substantial increase in the number of such sanctuaries. Coastal communities, in effect, are beginning to actively manage their marine resources. More broadly, these approaches have been copied widely and are the central elements of several projects and programs initiated after the CVRP. 5.11 These three lessons illustrate a further aspect of this type of project that contains a potential contradiction. Ideally, it needs to provide examples of change, such as those in the nearshore fisheries area, where awareness of the benefits of protecting reefs and enforcing laws against dynamite fishing and other destructive practices has increased, motivating others to adopt these practices. On the one hand, such projects require an organizational entity, removed from major agencies and power centers, that can effectively broker change. On the other hand, such a structure is inevitably ephemeral and may not institutionalize its strengths. CVRP has only been partially successful in this regard. Under some circumstances the function can be carried out by non-governmental organizations (NGOs), and the Bank should perhaps give consideration to ways in which Bank-supported projects can plan for entities created under them such as the CVRPO to be transformed into independent organizations, including NGOs, that could carry on at least some of the project's activities with non-public funding.  25 Annex A Basic Data Sheet CENTRAL VISAYAS REGIONAL PROJECT (LOAN 2360-PH) Key Project Data (amounts in US$ million) Appraisal Actual or Actual as % of estimate current estimate appraisal estimate Total project costs 44.4 39.0 88 Loan amount 25.6 25.0 Cancellation - 0.6 Date physical components completed Economic rate of return Cumulative Estimated and Actual Disbursements Financial Appraisal estimate Actual Actual as % of appraisal Year (US$ m) (US$m) estimate 1984 3.1 0.9 29 1985 5.6 3.0 53 1986 9.6 3.7 39 1987 14.6 3.7 25 1988 20.6 6.9 33 1989 25.1 11.6 46 1990 25.6 15.7 61 1991 - 17.4 - 1992 20.3 1993 20.3 Date of final disbursement: November 3, 1992 Annex A 26 Project Dates Original Actual Identification (EPS) 04/81 Preparation 10/81 Appraisal 04/25/80 11/82 Negotiations 10/07/83 Board approval 12/83 12/06/83 Signature 02/07/84 Effectiveness 04/84 05/15/84 Closing date' 06/30/90 06/30/92 Completion 06/30/89 12/31/92 a. Project had two closing date extensions, closing date from first extension was 06/30/91. Staff Inputs (staff weeks) Fiscal Year LENPh LENAc LEM' LENN SPNy Total FY80 4.8 - 1.5 - 6.3 FY81 34.8 - 6.1 - - 40.9 FY82 11.5 - 1.8 - - 13.3 FY83 6.5 106.5 6.9 - - 119.9 FY84 - 0.4 3.0 8.0 7.0 18.4 FY85 - - - 8.5 FY86 - - - 7.5 7.5 FY87 - 15.0 15.0 FY88 - 1.2 - 7.5 8.7 FY89 - - - 6.4 6.4 FY90 - - - 3.0 3.0 FY91 -- 1.3 1.3 FY92 - 8.0 8.0 FY93 - - - - 15.9' 15.9 Totals 57.6 106.9 20.5 8.0 80.1 273.1 b.LENP = activities prior to appraisal. c. LENA = activities related to appraisal. d. LEN = lending development. e. LENN = negotiation activities. f. SPN = supervision. g. Supervision (8.2) and PCR preparation (0.3) . h. Supervision (10.6) and PCR preparation (5.3) 27 Annex A Mission Data Date No. of Staff days Specializations Performance Types of (month/year) persons infield represented rating' problems Preappraisal 05/82 4 3 E,Fi,Fo - Appraisal 11/82 6 - A,E,Fi,Fo,Fs.S - Supervision 1 03/84 2 7 E,En 2 - Supervision 2 01/85 2 5 E,En - Supervision 3 10/85 1 8 A 2 Supervision 4 03/86 1 - A Supervision 5 10/86 1 6 A 2 Supervision 6 05/87 5 6 A,E,EN,Fi.P - Supervision 7 09/87 2 4 A,E 2 - Supervision 8 06/88 2 6 E 2 Supervision 9 02/89 2 11 A,E 2 slow procurement Supervision 10 07/89 1 5 A 2 Supervision 11 03/90 1 3 A 2 Supervision 12 08/90 1 4 A I Supervision 13 07/91 2 6 E,Fa 2 Supervision 14 07/92 4 10 A,E,Fs 2 i. A agriculture, E= economics, S= sociology, Fs fisheries, Fi finance, Fo= forestry, En engineering. I problem free or minor problems; 2 = moderate problems: 3 - major problems. Other Project Data Borrower/Executing Agency: FOLLOW-ON OPERATIONS Operation Credit io. Amount Board date (US$ million) none  29 Annex B Table B.1: Achievement of Physical Objectives % of actual Appraisal Actual/SAR sustained at Indicators Unit estimate Actual (%) closing Upland Agriculture Barangays no 103 103 100% n.a. Client-beneficiaries hh 5,698 7,521 132% n.a. On-farm soil conservation ha 7,484 7,421 99% 85% Agro-forestry ha 3.178 3,821 120% 85% Reforestation ha 1,660 1,460 88% 82% Resource access instrumentsa no 4,473 3,172 71% n.a. Livestockb no 11,600 5,288 46% 68% Upland fishpondsc no 0 831 n.a. 43% Microwatershed Plans no 787 1,155 147% 45% Social Forestr Barangays no 12 12 100% n.a. Forest-user groups no 26 27 104% n.a. Client-beneficiariesd hh 1,200 1,420 118% n.a. Reforestation ha 5,050 5,096 101% 83% Agro-forestry (on farm) ha 700 874 125% 96% Resource Access Instruments no 1,000 1,026 103% n.a. Nearshore Fisheries Barangays no 170 182 107% n.a. Client-beneficiaries hh 7,705 5,482 71% n.a. Artificial Reef Clusters no 910 1,164 128% 57% Mangrove reforestation ha 650 1,037 160% 85% Coral reef management ha 3,600 4,621 128% 94% Fish attracting Devicese no 0 278 n.a. 70% Mariculturef ha 2 93 4650% 56% Resource access instruments no 1,736 1,622 93% n.a. Livestock no 0 63 n.a. n.a. Forage developmentg ha 0 unknown n.a. n.a. Infrastructure New roads km 97 110 113% n.a. Road Improvement km 125 175 140% n.a. Trailsh km 475 185 39% n.a. Water supply no 0 221 n.a. n.a. Road maintenance kn 223 304 136% n.a. Bridge construction m 153 153 100% n.a. a. Target was reduced to 2,437 after mid-term review, project achieved 135 percent of the revised target. Actual number processed is 2,812, but 3,172 household benefited. b. Mid-term review reduced target to 4,240 due to investment in government stock farms for animal producion being judged ineffective and livestock procurement proving difficult to manage. Project achieved 125 percent of the revised target. c. Fish ponds (810) were proposed at mid-term review. Project achieved 103 percent of the target. d. Reasons for decrease in client-beneficiaries was not specifically addressed during final evaluation. contributing factors appear to have been: (i) limited participation potential due to limited areas suitable for some project interventions (e.g. artificial reefs); (ii) lack of controls on access and harvest were disincentive to individual investment; (iii) without access control financial returns from harvest are unattractive; (iv) and DENR was unable to issue stewardship contracts for management of existing mangrove until 1991 with the creation of a "Mangrove Stewardship Contract" by Administrative Order. e. Added at mid-term review in response to limited opportunities to assist fishing families provided artificial reefs and mangrove management. Project achieved 117 percent of the target. Annex B 30 f. Targets for mariculture were expanded to 12ha at mid-term review. Despite the apparent success of this component (based on numbers), it is believed that there exists little potential for mariculture techniques as they are highly species and site specific. g. In response to heavy pruning of mangrove for fodder a fodder development sub-component was added. Soon after inception the focus shifted to livestock dispersal as an incentive for participation on other coastal resource management activities. Areas developed for fodder went unreported. h. Mid-term review reduced target to 200km due to original designs not incorporating needed cross-drainage structures. No additional budget was allocated; therefore target was reduced. i. Water supply project were in high demand by communities. Savings generated by labor-intensive rather than equipment- intensive infrastructure construction methods were utilized to construct water supplies. Tabe B.2: Determinants of Number of Technologies Being Practiced by Province Variables Siguijor Bohol Cebu Negros Or. All Provinces Intercept 0.583 -0.276 0.496 0.961 0.860 (0.34) (0.16) (0.384) (0.897) (1.330) Age of HH head 0.016 0.006 0.0063 0.022 0.018 (0.84) (0.43) (0.358) (1.382) (2.274) Highest education in the HH 0.063 0.062 0.1168 0.037 0.065 (0.70) (0.59) (0.106) (0.388) (1.340) Household size 0.085 0.075 0.027 -0.134 -0.014 (0.78) (0.69) (0.234) (1.032) (0.239) Total farm area -0.20 0.036 -0.398b 0.0007 -0.044 (0.99) (0.40) (1.612) (0.012) (1.026) Gross income -0.000014 0.0000001 0.00003 0.00001 0.000003 (0.79) (0.105) (0.763) (1.537) (0.681) Dist in time to nearest town 0.050 -0.0073 -0.005 0.0093 0.0039 center by vehicle (0.70) (0.528) (0.356) (1.121) (0.676) Number of crops cultivated 0.32 -0.055 0.125 0.137 0.117 (0.20) (0.527) (0.874) (1.11) (1.932) Attendance in community 1.094b 2.519b 1.553a -0.692 0.545a meetings (1.91) (1.803) (2.307) (1.154) (1.923) Number of livestock -0.004 -0.646 0.0042 0.654 0.0087 dispersal (0.63) (0.108) (0.258) (2.011) (1.222) No. of seeds distributed 0.002a 0.0012 0.0009a 0.0005e 0.0005' (2.08) (0.498) (2.428) (2.466) (3.489) R2 61.45 26.31 45 45 20 F value 4.30c 0.785 2.512a 2.524a 3.65a a. Significant at 5%. b. Significant at 10%. c. Significant at 1%. Annex B 32 Table B.3: Upland Agricultural Practices Adopted. CVRP Project Sites Technology Adopter Non-adopter No. % No. % 1. A-Frame adoption 174 78 48 22 2. Construction of hedgerows 174 78 48 22 3. Countor ditches 104 47 118 53 4. Terraces 79 36 143 64 5. Rockwall 88 40 134 60 6. Checkdams/diversion canal 87 39 135 61 7. Composting 118 53 104 47 8. Green manure 77 35 145 65 9. Fallowing 37 17 185 83 10. Crop rotation Source: PIDs (1994) Table B.4: Comparison of Gross Income Between CVRP Cooperators and Non- cooperators in Upland Agriculture (pesos) 1985 1989 1992 Cooperator 4,389 11,268 20,843 Non-cooperator 5,062 7,784 13,633 Source: PIDs (1994). 33 Annex B Table B.5: Income Data of Sample Respondents in CVRP Upland Agriculture Sites by Province and by Adopters and Non-adopters of UA Technologies, 1992 Province/ Non-adopter Adopter Source ofIncome Mean Std. Dev. Mean Std Dev. Siquijor (pesos) farm income 1,726 1,802 6,198 5,289 non-farm income 18,465 16,748 14,371 5,743 off-farm - - 2,062 4,896 gross income 20,191 18,408 21,556 45,613 Bohol farm income 9,502 6,571 17,925 28,225 non-farm income 1,553 1,355 2,365 5,743 off-farm - - 579 2,674 gross income 11,055 5,537 20,869 29,919 Cebu farm income 5,557 2,779 9,220 7,018 non-farm income 2,318 4,120 2,410 3,495 off-farm 280 656 546 1,222 gross income 8,154 4,422 12,127 7,078 Negros Oriental farm income 12,264 14,830 22,929 40,169 non-farm income 4,863 5,070 4,306 7,936 off-farm 1,146 1,328 1,601 3,496 gross income 18,274 13,729 28,836 40,395 All Provinces farm income 7,663 9,453 14,418 25,948 non-farm income 5,474 8,893 5,306 22,628 off-farm 496 970 1,119 3,239 gross income 13,633 11,597 20,843 33,638 Annex B 34 Table B.6: Reasons for Improvement in the Socio-Economic Conditions After Participation in CVRP Upland Agriculture Activities, 1992 Reasons % Responding Due to material inputs (livestock, seedlings, 24 fertilizer, given by CVRP There is now better knowledge/technical know how 28 in hillyland farming There was an observed increase in crop inproduction and 15 subsequent improvement in income The resource base (soil fertility and environment) 16 has improved Cropping intensity has increased 5 Trees planted will be turned into cash in a few 5 years time CVRP provides direct employment 2 No answer given 5 Table B.7: Annual Income (P) of Social Forestry Respondents at Various Points of CVRP Implementation (1985, 1989, 1991) Year Cooperator Non-cooperator 1985 4,879 3,811 1988 11,348 8,517 1991 11,905 9,040 Source: 1985 and 1988 data. de los Angeles, MS 1989. 1991 data. 1992 CVRP Social Forestry Survey. 35 Annex B Table B.8: Comparison of Income per Household of Social Forestry Cooperators and Non-cooperators, Before and After CVRP, 1992 (pesos) Sources Cooperator Non-cooperator Total Number of Reporting 87 59 146 Before CVRP (1984) farm income 5,061 5,179 5,105 off-farm income 932 616 775 non-farm income 666 370 582 sub-total 6,659 6165 6,464 After CVRP (1992) farm income 7,143 6,147 6,878 off-farm income 952 904 818 non-farm income 3,810 1,989 3,071 sub-total 11,905 9,040 10,767 Source: 1992 CVRP Social Forestry Survey. Hypothesis Tests for Means: (Mean difference is 0 or => 0) 1. Difference between farm income 1984 and 1992. Reject the Hypothesis: The farm income in 1992 is greater than the farm income in 1984 at 20% tests of significance. 2. Difference between the Mean income 1984 and 1992. Reject the Hypothesis: The mean income in 1992 is significantly greater than the mean income in 1984 at 5% tests of significance. 3. Difference of mean income and farm income between cooperators and non-cooperators is observed to be not statistically significant. Table B.9: Average Fish Catch per day of Fishermen Before and After the Introduction of Artificial Reefs in the Project Sites (in kg/day) Fishing Gears Total Gill Net Handline No. of Project Sites Before After % Increase Before After % Increase Respondents Bohol 3.29 8.79 173.83 1.95 4.46 128.71 47 Cebu 6.90 8.36 21.15 2.13 4.08 91.54 77 Negros Oriental 4.09 8.81 115.40 1.55 3.73 140.64 40 Siquijor 3.49 5.71 63.61 1.30 2.51 93.07 96 Average catch/ day for all sites 4.54 7.52 65.60 1.70 3.52 107.06 260 Note: average number offishing days = 15/month. Source: ADFI (1992), Table 30, p. 20. Annex B 36 Table B.10: Factors Causing Observed Changes in Resource Base/Fishing Activities (1992) Cooperators X Non-cooperators X Increased fish abundance Increased fish abundance and/or catch due to: and/or catch due to:: Law enforcement minimized 11 Artificial reefs and fish 6 illegal fishing attracting devices Presence of artificial reefs and Minimized illegal fishing: 5 fish attracting devices shore patrols Mangrove reforestation/ 7 Mangrove reforestation 3 plantation Fish sanctuary and other 6 Fish sanctuary 2 CVRP projects Less catch due to more 6 Less catch due to more small 6 fishermen, more kinds of fishermen, big-time fishing gear, illegal fishing fishing and commercial operations operations, compressor (illegal) fishing No change due to rampant 2 No change due to illegal 3 illegal fishing fishing methods, more fishermen, nets and commercial operations Changed gear to (more 1 No answer 13 efficient) ring net due to more fishermen Fishing in farther areas due 1 to presence of sanctuary No answer 6 Note: X = no. of times mentioned. Source: PIDS Household Survey of CVRP Nearshore Fisheries Sites, 1992. Table B.11: Regression of Fish Catch on Factor Inputs by Selected Fishing Area and Fishing Gear, all NSF Sites Independent Variables Fishing Area/Gear n Intercept Effort (man-days) Year Season F R2 Artificial Reef/Fish Corral 287 0.133 0.093*** 0.895*** -0.024 13.20*** 0.113 Artificial ReeflGill Net 3,775 1.377*** 0.186*** 0.147*** -0.174*** 41.08*** 0.031 Coral Reef/Fish Corral 331 -0.288 -0.098*** 1.063*** 0.353*** 16.17*** 0.121 Coral Reef/Gill Net 801 1.216*** 0.414*** 0.067 0.108 27.49*** 0.090 Open Sea/Gill Net 1,396 0.594*** -0.219*** 0.456*** 0.341*** 55.91*** 0.106 Payao 293 1.119*** 0.233 1.504*** -0.767*** 5.907*** 0.048 Sea Grass/Gill Net 413 0.985*** 0.000 0.637*** -0.370*** 9.879*** 0.061 Notes: a. Equation estimated is: log fish catch = a + b log fishing effort + c log time + d log season (in kg) (person-days) (t = 1, 1988, (2 = Jan-June, = 2, 1989, 1 = Jul-Dec) = 3, 1990, = 4, 1 9 91) b. *" significant at 5% level. ** significant at 10% level * significant at 15% level. c. Effort per trip, in person-days = (No., of Hours / 8 hours) X (Crew) Source of basic data: CVRPO, NSF Fish Catch Monitoring Data, 1988-1991. Annex B 38 Table B.12: Income Differences, NSF Cooperators and Non-cooperators 1985 and 1988 Gross Income from all sources, Fishing Households in 1985 prices Year in CVRP-NSF Sites Average Standard deviation 1985 Cooperators P 4,216 P 3,843 Non-cooperators 6,119 4,861 1988 Cooperators 8,703 6,709 Non-cooperators 8,369 4,723 Change during Cooperators 4,487 8,400 period Non-cooperators 2,250 7,942 Annual Change, Cooperators 27.3% in percent Non-cooperators 11.0% Source: de los Angeles and Rodriguez (1992). Table B.13: Gross Fishing Income for Cooperators and Non-cooperators by Province, 1992 Income Standard Deviation Site Category (in pesos) (in pesos) Bohol Cooperators 16,703 17,541 Non-cooperators 25,939 18,869 Cebu Cooperators 24,589 12,179 Non-cooperators 25,641 9,306 Negros Oriental Cooperators 28,642 27,510 Non-cooperators 23,442 22,413 Siquijor Cooperators 16,188 14,778 Non-cooperators 43,060 31,366 All Cooperators 20,946 18,338 Non-cooperators 28,235 20,961 39 Fax Transmission No. of pages incl. this one: 3 To: Roger Slade, Chief, Agriculture and Human Development Division Operations Evaluation Department The World Bank Fax number: (202) 522-3123 From: Zosimo Jerome N. Pupos, Jr. Regional Development Council/Regional Center for CBRM RMC Bldg., DA 7 Compound, M. Velez St. Cebu City 6000 Date: Wednesday, May 21, 1997 If you do not receive all pages, please contact: Regional Development Council/Regional Center for CBRM RMC Bldg., M. Velez St. Cebu City 6000 4Phone/Fax: (032) 254-3865 Subject Comments/Reactions on OED reports on Cc itral Visayas Regional Projects - I 40 COMMINTS/REACTION TO THE OPERATLON EVALUATION DEPARTMENT REPORT THE WORD BANK U-ITRODUCTION 1.1 CVRP-1 grew from the governments attempts to decentralize planning and decision making through the NEDA Regional Planning Project with the assistance from IBRD and UNDP. Conceptualization of the project begun in 1978 during the formulation of the first Regional Development Investment Program of the Regional Development Text arnended: para. 1.1 Council. RDC is composed of the elected local chief executives in the provinces, and footnote 1. cities and municipalities (Governor, City and Municipal Mayors) and regional directors of Line Agencies. Executive Committee members are the governors of four provinces, sector representative, and regional directors of selected regional line agencies comprise the old set up. New set up already includes private sector representative from each province. Point noted in 2.4 There were four original nearshore sites, Bayawan nearshore fishery project site was footnote 5. added in 1987. This was a pilot site for the provincialization of program of CVRP-1. RESOURCE RIGHTS Point noted in 3.5 In some isolated cases, fraudulent titling and the issuance of tax declaration by footnote 8. municipal government even on lands not classified as alienable and disposable by the national government, tends to justify the claims of absentee claimants over those actual tillers and cultivators. Text amended: 3.6 Forest Occupant Stewardship Association (FOSA) was supposed to be issued three para. 3.6. instruments within the project life. First, a reforestation contract "Community Based Contract Reforestation" (CBCR) which is a three-year contract for the orgarnzation to reforest a government owned open grassland. The second contract is awarde,, after a successful CBCR implementation and complying a minimum qualification standards. It is a 25 year contract awarded to the organization. The contract is a "Forest Lease Management Agreement" which the Department of Environment and Natural Resources is supposed to issue, in which until the project end non was issued to successful CBCR contracts Text amended in The third was the Community Timber Utilization Permit "CTUP" which entitles local paras. 3.7 and 5.5. residents to legally manage areas with existing forest and provide for the utilization of standing dead timber. This was however cancelled because of instances of live tree harvesting due to some FOSA leaders collusion with timber merchants. The government refused to re-issue the permit despite attempts to strengthen organizing works. This concepts however, provided an input and basis for DENR's Community Forestry Program. COMMENTS I 41 Point footnoted to 3.7 Land Tenure Task Force was renamed to Regional Resource Access (not Action) para. 3.8 (fn 10). Committee. It was composed of representatives from DENR, DAR with Comprehensive Agrarian Reform Program (CARP) , the Commission on Land Settlements and Problems (COSLAP) and the Public Attorneys Office (PAO) and the National Economic Development Authority (NEDA). TRAININGS 3.8 Aside from the administrative development trainings to the Site Management Units (SMU), Local Government Units (LGU) and Regional Line Agencies (RLA) involved, technical training that transforms the individual, community and beneficiaries falls into two major categories. (1) Human Resource Development which includes trainings on Institutional Capability Building, Community Organizing, Self Awareness and Team Building and others. (2) Natural Resource Management which includes trainings on different appropriate technologies in Social Forestry, Upland Agriculture, and Coastal Resources Management. The use of site visit and study tours to successful project Points noted in footnote within and outside the region proved to be highly motivational to LGUs and to para. 3.10 (fn 11). beneficiaries alike. Integration of community based resource management into the curriculum in the elementarry grades was pursued by the Department of Education Culture and Sports. Instructional materials were likewise developed for the school teachers. DECS have also conducted accreditation trainings and seminars to identified Barangay Resource Management Technicians (BRMT) in the region. These BRMTs are project beneficiaries (de facto resource managers) who have the capacity to share their knowledge and skill of the technology. Text amended: (p. 16). Box 4.1 Ln Valencia Cebu, Contour structures using rocks are backed by strips of glericedia sepium, not by vetiver strips. 4.17 The issue of the mangrove forest in Bayawan was an isolated case whose resolution was dragged overtime. As it appeared during the audit's visit, barbed wire was newly Point noted in erected which created more tensions between the project's beneficiaries and the footnote 16. wealthy claimant. The organization was seeking assistance from the LGU through the Vice Mayor who was then present during that time. The Vice Mayor assures to provide assistance to resolve the conflict. This needs a follow-up. There were several land tenure issues resolved by the RRAC during the projec life. Point noted in 4.19 The established office was Central Visayas Resource Management Center and footnote 17. currently the Regional Center for Community Based Resource Management Center. The office is accountable to the Regional Development Council through the Community Based Resource Management Committee. CommETs 2  IBRD 17219 116 CLASSIFICATION OF PROVINCES 120 124. APRIL 19831 BY GEOGRAPHICAL REGIONS NCR NATIONAL CAPITAL REGION PHILIPPINES I ILOcCOS VI WESTERN VISAYAS 1 tiocs.Norte 38 Aklan 2 Abraos 38 Aptiqu CENTRAL VISAYAS REGIONAL PROJECT 3Ilocos Sur 40Antique8 0 20 4 Mountain 41 Iol 81 Provnce 0 La Union 42 NegrosOcclidental Project Provinces 6 Banquet VIENTRALVISAYAS 7 Pagainan N ebu 'rienta PROJECT AREA Panatlan44 Negroto I#RtlI Q 0 MJRCTE II CAGAYAN VALLEY 45 Bohol O MAJOR CITIES 8 Banes 48 Siqullor AIRPORTS 9 Cagayan VIII EASTERN VIAYAS ROADS 10 Kalinga-Apayoo 47 NorthernSamar RAILWAYS 11 Isabela 48 WetterhSamer IlabuyoChannel ---- PROVINCIALBOUNDARIES 12 Ifugeo 49 EaternSomr-t REGIONAL BOUNDARIES 13 NuevaViscays 50 Leyte 1 Aporri -- INTERNATIONAL BOUNDARIES 14 Quirino 51 Southern Leyte Looaog III CENTRAL LUZON (X WEST ERN MINDANAO . 15 Nueva EcIl 52 Zamboangadet Norte 16 Tarlac 53 ZemboangedelSur 2 17 Zambeleg 54 Baillan I 1 18 Pompangs 55 Sulu, I I 19 Bulacan 68 Tawl-Tawl I 20 Batman X NORTHERN MINDANAO 3 IV SOUTHERN TAGALOG 57 Agusan del Norte San 1 12 21 Aurora 58 Agusan del Sur Fernando 5 6 - 22 Qezon 59 Bukdnon 0 50 100 150 200 250 300 23 Rllot 80 Camiguin Ba so 14 - IOMT 24 Cavite 81 Miumlis Occidental \ KILOMETE16 16' 25 Long 62 Miamis Oriental is MILES, 106 * 2 26 Bating.s 63 Surigan del Norte San 210 50 100 150 20 27 Marinduque XI EASTERN MINDANAO Jos 28 Mindoro Oriental 84 Dae del Norto . T7oc Jt 2 Mindoro Occidental 85 Davao Oriental 17 \1 ban luan 30 Romblon 66 Dveo del Sur A l s 19 31 Palawan 67 South C4tebato 22 V BICOL 68 Surigeo del Sur Olonga 20 3 32 Camarines Norte III SOUTHERN MINDANAO R M IL PH/L/PP/NE SEA 33 Camarines Sur 69 Ln6o del Norte 34 Catanduenes 70 Lanao del Sur / 35 Albay 71 MaguIlndanas Pa b1lo 36 Sorsogon 72 North Cotabato \ 36 Masbate 73 Sultan Kudaroet ;p ap 7 n 35 29 souTH CHIN I V SIBUYANSE 3 Sia 5 c MINDA 0CSEA 12' A 48- RULU SES SEA .c'*,59wX S.. MAmb oang 1 50-a 10e1no obt Mow 54.,.AXI P fowN r' 11.c..o'lwi oblt itT NA V 73 6G Gul 120~~ lo 15 S E Aa 6 7 G 5" ~ CEEE SEAle INA 0 E BfpRUNE103Buuo . . .. Celees Se to 12 124 128  - Z * U 20 0 COO - ¶2. I- 2 , ,4 _ ZZ NN ) Cuu àg - W: ! - f ------------ I -  介一：  { & 、 ；…’：…………！！……一…………’ 介；, 、｛一一   IMAGING Report No.: 16661 Type: PPAR