Announcement of Thirty-Four Million US Dollars Loan for Irrigation in the Philippines on August 14, 1969

INTERNATIONAL BANK FOR • RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 69/60 Subject: $34 million loan for August 14, 1969 irrigation in the Philippines The World Bank today announced a loan equivalent to $34 million to the Philippines for the construction of irrigation facilities to serve about 190,000 acres of fertile land suitable for growing rice. The project will help the country meet its foodgrain requirements. The loan, made to the Government of the Philippines, will be for 25 years, including a seven-year grace period. It will bear interest • at the Bank's current lending rate of 7% per annum. The new interest ri!lte became effective on August 1, 1969. Agriculture and related activities provide employment to nearly two-thirds of the labor force in the Philippines and account for a third of the net domestic product. In order to feed its increasing pop- ulation the Government of the Philippines has launched a program to achieve self-sufficiency in foodgrains, particularly rice and corn. The Government plans to achieve. this goal primarily through increasing the yields by using high-yielding varieties of seeds in conjunction with fertilizer, water and other inputs. Impressive results have already been achieved. In 1967/68 rice production increased by.11% as against an annual average of 1.7% in the previous six years. A major constraint to extending the acreage planted in the new seeds • is lack of assured water supply throughout the year. The abundant water /more  0 Bank P.R. 69/60 - Philippines • - 2 - resources of the country remain largely unexploited. Most of the existing irri- gation systems rely on direct diversion of unregulated river flows. With the exception of the recently completed Angat irrigation project, none of the country's irrigation systems have storage fac;ilities to provide water for irrigation during the dry season. Emphasis on the development of irrigation is concentrated on the improvement and rehabilitation of existing systems and the construction of storage reservoirs for dry season irrigation. The project being assisted by the Bank loan is an imi;,orta.nt element in this strategy. At full development after 13 years, the irrigation project will provide sufficient water to permit the growing of two crops of rice -- the staple diet of the Philippines -- instead of one and the economic use of other agricultural inputs. As a result of double cropping and higher yields, it is estimated that the rice production in the area served by the irrigation system will increase about fourfold to 570,000 metric tons per year~ The annual net income of farmers, most of them small holders with very low income, should increase correspondingly. • The Philippines will be able to save about $36.5 million in foreign.f:!5~1lange each year on imports of foodgrains. The project is located on the upper Pampanga River in Central Luzon about 50 miles north of Manila. Central Luzon is the most important rice producing region in the .Philippines, accounting fot about 17% of the country's rice pro- ducing land and a quarter of the nation's rice production. The project includes the construction of an earth and rockfill dam and reservoir at Pantabangan; re~:: habilitation of the existing irrigation systems serving about 114,000 acres; construction of new irrigation systems to serve 77,000 acres; the building of feeder roads; cons~ltants' services to prepare,final designs and supervision, and a study of possible power development at the dam. The total cost of the project is estimated at $67.5 million and the Bank loan will finance the foreign exchange costs. The local currency costs will be met by the Government. The project will be carried out by the National Irrigation Administration (NIA) established in 1964 to construct and administer all the national irriga- tion systems. The project will take six years to ~uustruct. - 0 - •