Announcement of World Bank Loans to Help Small Farmers and Urban Poor in Philippines on December 22, 1978

FOR . IMMEDIATE RE~EASE . •World Bank J818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 79/38 December 22, 1978 WORLD BANK LOANS TO HELP SMALL FARMERS AND URBAN POOR IN PHILIPPINES The small farmer and the urban poor will be major beneftctaries of two projects to be implemented with loans totaling $48.5 million, the World Bank announced today. The loans are: $16.5 million for a small farmer development project and $32 million for a second urban development project. The World Bank loans to the Philippines are for 20 years, including 5 years of grace, with interest at 7.35% per annum. Sma)l Farmer Development The small farmer development project to be implemented by the Land Bank • of the Philippines (LBP) is designed to increase agricultural productivity and expand rural employment opportunities among small-scale farmers, most of whom are beneficiaries of the Philippine government's current agrarian reform program. The project, to be assisted with a World Bank ioan of $i6.5 miiiion, will benefit about 28,000 rural families. The $37 million project includes the prov1s1on of production and market- ing credit mainly for rice, corn, and vegetables, and term credit for light farm mechanization (power tillers and irrigation pumps), post-harvest facilities (portable rice threshers and driers), backyard livestock, attd poultry and cottage industries. The project also includes the strengthening of the field operations of the Land Bank of the Phili~pines, minor infrastructural works in selected agrarian reform areas, and studies aimed at better understanding of the socio- economic conditions of small~scale agriculture. The Land Bank of the Philippines was establi~hed in 1964 principally to help finance land transfers under the government's land reform program. Urban Development The second integrated urban project, to be supported. ln the Philipplnes by the World Bank with a loan of $32 mill ion, will help meet the basic needs of the lowest income families in Metro Manila and three regional cities--Cebu, • Davao, and Cagayan de Oro. It is designed to assist the Philippine government in developing affordable solutions to the problem of poverty, shelter, and environmental sanitation in the project cities. I • • •I NOTE: Money figures are expressed in U.S. dollar equivalents.  • - 2 - The $69.9 million project consists of the prov1s1on of sites and services for about 8,600 families in Metro Manila's Dagat-Dagatan area on a vacant site close to the heart of the city; and sites and services for about 3,800 families, and slum improvement for about 7,600 families in the three regional cities. To help provide employment and increased incomes, development of industrial and commercial areas in Oavao and Cagayan de Oro is also included in the project. Loan funds for small cottage industries and for extension programs will be provided. In Cebu, the slum improvement program will cover 26.6 hectares of existing squatter areas and 4 hectares of vacant land for residential purposes. In Davao, improvement wi 11 be made on 19.6 hectares of squatter areas and 37 hectares of vacant land for residential purposes, and 11 hectares for industrial/commercial purposes. In Cagayan de Oro, approxi- mately 27.5 hectares of squatter areas will be improved, 14 hectares devel- oped for sites and services, and 5 hectares for commercial/industrial purposes. The project also includes the prov1s1on of flood control equipment for Metro Manila, and technical assistance and training. The project will be implemented by the National Housing Authority in coordination with local governments and by national agencies including Ministry of Public Works, Transportation and Communication, Metro Manila Commission, National Economic ~ and Development Authority, and Ministry of Human Settlements. - 0 - • . ... '- • ~ ·• .FORM NO. 1121 (5-76) T EC HN I CAL D A T A • PROJECT: Sma11 Farmer Development Project: Land Bank of the Philippines COUNTRY: Philippines TOTAL COST: $37 million BANK FINANCING: $16.5 million, for 20 years, including 5 years of grace, with interest at 7-35% per annum. OTHER FINANCING: Government of the Philippines, Land Bank of the Philippines, and sub-borrowers. IMPLEMENTING ORGANIZATION: Land Bark of the Philippines (LBP) and various executing agencies for infrastructural works 6th floor, BF Condominium Aduana Street lntramuros, Manila. Philippines PROJECT DESCRIPTION: It includes: production and marketing credit mainly for rice, corn, and vegetables; term credit for 1 ight farm mechanization, post-harvest facilities, backyard livestock, and poultry and cottage • industries; strengthening field operations of the Land Bank of the Philippines (LBP); minor infrastructural works in selected agrarian reform areas; and studies aimed at better understanding of the socio-economic conditions of small-scale agriculture. PROCUREMENT: Goods and services under the credit component of the project and equipment for LBP field offices will be purchased through normal commercial channels from responsible suppliers with adequate service facilities. For all such contracts costing above P 10,000, three price quotations will be solicited. Procµrement of these items will not be suitable for international competitive bidding, as individual contracts would be small and bulking of contracts would not be practicable because they would be widely dispersed geographically and phased over time. Service vehicles for LBP field staff will be procured through local competitive bidding proce- dures satisfactory to the Bank. Civil works pertaining to infrastructure, which will be small (usually less than $100,000) and scatteredj will be executed either by force account by the responsib1e line agency, or where possible by contract awarded under local procurement procedures acceptable to the Bank. CONSULTANTS: Training, research,and consultant studies will be carried out by the University of the Philippines at Los Banos, subject to Bank approval of curricula, terms of reference, and conditions of employment. • ECONOMIC RATE OF RETURN: 47% ESTIMATED COMPLETION DATE: 1983 - 0 - FORM NO. 1121 •·' (5-76) T E C H N CA L 0 A T A PROJECT: COUNTRY: TOTAL COST: Second Urban Development Pnilippines $69.9 million • BANK FINANCING: $32 million, for 20 years, {ncluding 5 years of grace, with jnterest at 7-35% per annum. OTHER FINANCING: Government of th~ Phi 1 i pp i nes, National. ·Housing Authority, and beneficiaries. · IMPLEMENTING ORGANlZAT~ONS: National Hous~ng Authorijty, Elliptical Road, Quezon City, PhJlippines; MJnJstry of Human Settlements, Technology Resource Center Building, Buendia Avenue Extension, Hakati, Rizal, Philippines; Ministry of Public Works, Transportation and Communication, NIA Building, Quezon City, Philippines; Metro Manila Commission, Department of Local Government Compound, Quezon City, Phi1ippines; National Economic and Oevelppment Authority, P. 0. Box l1J6, Mani1a, Philippines (Telex: .NEOAPHIL, Manila). PROJECT DESCRJPTJON: consists of: sites and services in Dagat-Dagatan !t (Metro Manila) for about 8,600 families; sites and services for about 3,800 families and slum improvement for about 7~600 families in the regional cities of Cebu, Davao, and Cagayan de Oro; industrial commercial devel- opment in the three regional cities; small business development; flood control equip- • ment for Metro Manila; and technical assistance and training. PROClJREMENT: Civil works contracts ·of more than $1 million each, estimat,ed to amount to a total of $20 milllon, will be awarded on the basis of international competitive bidding (,ca) in accordance with the Bank's guidelines. Because of the need to undertake the work. in small areas on a block-by-block basis with participation of the residents of the project corrmunities, civil works contracts of less than $1 mil1ion each, for a total of about $22 million, will not be suitable for ~CB. These will be awarded on the basis of competitive bidding, advertised locally, ;n accordance with the borrower's procedures which are satisfactory to the Bank. For goods and equipment, except materials for house im- provement, all contracts over $100,000, amounting to at:ut $2.5 million, will be awarded on the basis of ICB in accordance with the 6ank's guidelines. For purposes of bid comparison, local manufacturers will receive a preference of 15% of c.i.f. cost, or the level of customs duties, whichever is lower. Contracts below $100,000, total- ing about $1 miJlion, and procurement of materials for house improvement will be tendered on the basis of competitive bidding locally advertised within the city concerned. CONSULTANTS: Approximately 475 man-months of foreign technical assis- tance and 534 man-months of loca·1 technical assistance will be provided to assist fn planning the national program of low-income shelter, in formulating regiona1 development programs, in updating the Metro Manila flood con- • trol master plan, in smaJl-sca1e employment promotion, ~nd ln tralnlng~ etc. ECONOMIC RATE OF RETURN: 34% EST J MATED COMP LET I ON DATE: 1982 - 0 -