Philippines - Samar Island Rural Development Project

Document of The World Bank FOR OFFICIAL USE ONLY FILE COPY Report No.2627-PH PHILIPPINES SAMAR ISLAND RURAL DEVELOPMENT PROJECT STAFF APPRAISAL REPORT November 12, 1979 Projects Department East Asia and Pacific Regional Office 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 US$1.00 = Pesos (P) 7.40 P 1.00 = US$0.135 WEIGHTS AND MEASURES 1 hectare (ha) = 2.47 acres 1 kilometer (km) 0.62 miles 1 square kilometer (sq km) = 0.386 square miles 1 meter (m) = 39.37 inches I square meter (sq m) = 10.76 square feet 1 cubic meter (cu m) = 35.31 cubic feet 1 million cubic meters (MCM) = 810.7 acre feet 1 millimeter (mm) 0.039 inches 1 kilogram (kg) = 2.2 pounds I cavan (paddy) = 50 kg 20 cavans = 1 metric ton ABBREVIATIONS BCD - Bureau of Community Development BHS - Barangay Health Station BS - Bureau of Soils BWUA - Barangay Water Users' Association COA - Commission on Audit FSDC - Farm Systems Development Corporation IAD - Integrated area development IO Institutional Officer ISA - Irrigation Service Association LWOST - Low Water Ordinary Spring Tide MAR - Ministry of Agrarian Reform MOH - Ministry of Health MPH - Ministry of Public Highways MPW - Ministry of Public Works NACIAD - National Council on Integrated Area Development NCSO - National Census and Statistics Office NEA - National Electrification Administration NEDA - National Economic Development Authority NGA - National Grains Authority NIA - National Irrigation Administration NPC - National Power Corporation PDD - Project Development Department PJFH - Philippines Japan Friendship Highway PPA - Philippines Port Authority PPDO - Project Preparation Development Office PPDS - Project Preparation Development Service RHU - Rural Health Unit SCRS - Schistosomiasis Control and Research Service SIRDPO - Samar Integrated Rural Development Project Office WHO - World Health Organization GOVERNMENT OF THE PHILIPPINES FISCAL YEAR January 1-December 31  FOR OFFICIAL USE ON; PHILIPPINES SAMAR ISLAND RURAL DEVELOPMENT PROJECT TABLE OF CONTENTS Page No. 1. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . 1 General . . . ... . .................... . .......... . .... . ................ . 1 Area Development . . . . . . . . . . . . . . 1 Development of Samar . . . . . . . . . . . . . . . . . . . . 2 Australian Assistance to Samar Development . . . . . . . . . 3 Project Formulation . . . . . . . . . . . . . . . . . . .. . 4 2. THE PROJECT AREA . . . . . . . . . . . . . . . . . . . . . . . 6 Generate.l . . . . . . . . . . . . . . . . . . . . . 6 Topography, Drainage and Soils . . . . . . . . . . . . . . . 7 Population, Farm Size and Land Tenure . . . . . . . . . . . . 9 Agricultural Production . . . . . . . . . . . . . . . . . . . 11 Existing Transport Facilities . . . . . . . . . . . . . . . . 12 Existing Irrigation Facilities . . . . . . . . . . . . . . . 13 Water Supply Facilities . . . . . . . . . . . . . . . . . 13 Public Health . . . . . . . . . . . . .... . . . . . . . . . . 13 3. THE PROJECT . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Project Description . . . . . . . . . . . . . . . . . . . . . 15 Ports ooo. 17 Irrigation. . . . . . . . . . 18 Water Supply . . . . . . . . . . . . 21 Schistosomiasis Control . . o. . .o . . o o . . . . . 22 Catubig Valley Development Study . . . . . . . . . . . . . . 23 Cost Estimates . .. ... . . . o o o o . . o 23 Financing . . . . . . . . . . . . . . 27 Procurement . . . . . . . . . . . . . .. . . . . . 27 Disbursements . . . . . . . 28 Accounts and Audit . . . ......... ...... . . . . 28 Environmental Effects . . . . . . . . . . ... 28 4. ORGANIZATION AND MANAGEMENT . . . . . . . . . . . . . . . . . . 29 Project Management . . . . . . . . . . 29 Regional Organization . . . . . . o. .. . . . . . . .. . . . . 29 Provincial Organization . . . . . . . . ... . . . * . . . . 30 Agency Responsibilities . . . . o. . . . . . . . * . . 30 Consultancy Services and Technical Assistance . . . . . . . . 31 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- Page No. 5. BENEFITS, JUSTIFICATION AND RISKS . . . . . . . . . . . . . . . . 32 National Roads . . . . . . . . . . . . . . . . . . . . 32 Economic Analysis . . . . . . . ..... . . . . . . . . 33 Catbalogan Port . . . . . . . . . . . . . . . . . . . . 34 Economic Analysis . . . . . . . . . . . a . . . . . . . 36 Economic Analysis . . . . . . . . . . . . . . . . . . . . . . . 39 Water Supply . . . . . . . . . . . . . . . . . . . . . . . . . 41 Schistosomiasis Control . . . . . . . . . . . . . . . . . . . . 41 Weighted Economic Rate of Return . . . . . . . . . . . . . . . 42 Distribution of Benefits . . . . . . . . . . . . . . . . . . . 42 6. AGREEMENTS REACHED AND RECOMMENDATION . . . . . . . . . . . . . . 43 ANNEXES 1 Project Features, Equipment List, Price Increases, Expenditures, Disbursements and Allocation of Loan Proceeds 2 Economic Data 3 Accounting Procedures for Force Account Work 4 Schedule of Early Events 5 Related Documents and Data Available in the Project File LIST OF TABLES IN MAIN TEXT Table No. 2.1 General Statistics of Project Provinces 2.2 Summary of Climatological Data 2.3 Soil Groups 2.4 Farm Size Distribution 2.5 Tenure Status of Rice Farmers 2.6 Summary of Existing Roads (1978) 2.7 Wells and Springs 3.1 Cost Estimate 5.1 Roads - Sensitivity Analysis 5.2 Catbalogan Port - Sensitivity Analysis 5.3 Irrigation - Sensitivity Analysis LIST OF FIGURES Figure 3.1 - Implementation Schedule Figure 4.1 - Project Organization MAP IBRD 14344 - Samar Island Development Project  PHILIPPINES SAMAR ISLAND RURAL DEVELOPMENT PROJECT 1. BACKGROUND General 1.01 The Government of the Philippines has requested Bank assistance in financing a Rural Development Project on the island of Samar. The project would include road construction and port improvements; a communal irrigation program; schistosomiasis control measures; a rural water program for small villages; and assistance in preparation of a development plan for the Catubig valley. The project would be a part of the Government's overall program of development of Samar island in which both Japan and Australia are partici- pating. 1.02 The Project Planning and Development Office (PPDO) of the Ministry of Public Works was responsible for coordinating the preparation of the project. The present report is based on the findings of an appraisal mission composed of Messrs. E.G. Giglioli, A.J. Carmichael, B.H. Liese and V. Talvadkar (Bank) and D. Bradley, L. Bird and R. Strang (Consultants), which visited the Philippines in February 1979 and of a follow-up mission comprising Messrs. E.G. Giglioli, A.J. Carmichael and V. Talvadkar (Bank) and Mr. R. Strang (Consultant) which visited the Philippines in June 1979. Area Development 1.03 In order to promote the accelerated development of previously neglected or backward rural areas and to reduce the movement of people from the countryside to the towns, the Government embarked on a program of Integrated Area Development (IAD) in the early seventies. The concept of IAD involves the close coordination and synchronization of the various agencies of the Government for the most effective utilization of limited resources leading to the development of a selected geographical area. Priority for inclusion in the program is given to areas with: a) potential for development in more than one sector; b) low incomes; c) potential for rapid development; and d) requirements for relatively small incremental investments to generate high benefits. * The most common project components include transport development, particularly roads and ports; irrigation, flood control and drainage; health, education and water supply facilities; and agricultural support facilities and services. While the degree of integration of the programs, in terms of interdependence of the various components, is not notable, it is evident in terms of coordi- nation of line agencies working in different sectors.  1.04 The Cabinet Coordinating Committee on Integrated Rural Development Projects (CCC/IRDP) was created in 1973 as the policy making and governing body for all rural development projects. In late 1978, the role of the CCC was taken over by the newly established National Council on Integrated Area Development (NACIAD). The Mindoro Rural Development Project, initiated in 1975 with assistance from the Bank (Loan 1102-PH), was the first in the series of projects generated under the IAD program. Others include the Bicol River Basin Development Program and the Cagayan Integrated Rural Development Project. Also included in the program, although with a lesser emphasis on area development, is the Rural Infrastructure Project, covering six provinces in Luzon and the Visayas and started in 1978 with Bank Group assistance (Cr. 790-PH). Samar island was chosen for inclusion in the CCC's program from the beginning of the program. Because of its poverty, backward- ness, high outmigration, low level of infrastructure and considerable potential for development, Samar was an obvious choice for the IAD program. Work on preparation of a development program for the island began in 1974 under the leadership of the PPDO. By late 1976 preparatory work had advanced to the point where the Government formally recognized the existence of a Samar project in Presidential Decree No. 1048 and created the Samar Integrated Rural Development Project Office (SIRDPO) to coordinate the planning and implementation of the project. Development of Samar 1.05 The plan prepared by the PPDO for the development of Samar calls for priority attention to five major sectors: provision of transport infra- structure; intensification of agricultural services; efficiency in the management of water resources; improvement of health care delivery, and provision of essential utilities. 1.06 The transportation component of the plan envisages the construction and improvement of about 500 km of secondary roads and 370 km of feeder roads. Most of the roads would be in Northern and Eastern Samar. The Philippines Japan Friendship Highway (PJFH) running along the west cost of the island (234 km) together with the accompanying 72 km of access roads to be built on the island to maximize the PJFH effectiveness under the Japanese Commodity Loan, would cater for most of the needs of Western Samar. The upgrading and rehabilitation of the ports of Catbalogan, San Jose, Guiuan and Dolores is included in the transportation development proposal. 1.07 The agricultural intensification element of the plan proposes a five-year program of crop and farm improvement, covering improved seed production, greater use of fertilizer and agrochemicals and improved cultural practices in selected pilot areas. The program would be supported by an augmented, better managed and more mobile extension service. Initial emphasis would be placed on rainfed rice, corn and coconuts in the municipalities of Catubig, Gandara and Dolores. 1.08 The water resources aspect of the plan calls for the development of two national irrigation systems, covering about 7,350 ha, and eight communal systems of about 2,500 ha. In addition flood control and drainage provisions  - 3 - would be made in the Catubig valley in Northern Samar to protect some 45 sq km of land. 1.09 Under the plan, improvement of the health care delivery system would be obtained by construction throughout the island of about 60 rural health units (RHU) and some 190 barangay health stations (BHS). In addition a schistosomiasis control campaign would be mounted in the 32 municipalities in which the disease is endemic. * 1.10 The public utilities aspects of the plan include the provision of water, power and telecommunications. The water supply component calls for the construction of about 2,500 wells and the development of about 100 springs to serve small villages and hamlets throughout Samar. While the National Electrification Administration (NEA) and the National Power Corporation (NPC) investigate the hydroelectric potential of the Catubig river, the plan calls for installation of diesel powered generators to service Northern and Eastern Samar. The development plan proposes the establishement of a transmission network capable of providing both telephone and telegraphy services, with the three provincial capitals of Catarman, Catbalogan and Borongan as transmission control centers. Australian Assistance to Samar Development 1.11 Under a memorandum of agreement signed on January 29, 1979, the Governments of Australia and the Philippines defined the scope of Australian assistance to the development of Samar. The Australian contri- bution would amount to the equivalent of US$28.0 million, in the form of a grant. Project implementation is expected to take five years, in two stages. Stage I would cover the project components described in the 1979 agreement, a possible Stage II could include components chosen from the development plan for the island prepared by the PPDO-SIRDPO, subject to detailed evaluation of their economic and technical feasibility and the availability of aid resources. Stage I would include provisions for such studies. 1.12 Stage I of the Australian-assisted project would include the following components: a) Roads. Development of about 180 km of roads in Northern Samar, of which 160 km of national and provincial roads to two-lane cement concrete standard and the remainder feeder roads to two-lane gravel standard; subject to the outcome of additional studies, construction of about 240 km of agricultural feeder roads; assistance through provision of training, equipment and workshop facilities to road maintenance at the provincial level in Nothern Samar.  - 4 - (b) Ports. Rehabilitation and expansion of the port of San Jose in Northern Samar. (c) Water Supply. Construction of piped water supplies in the towns of Allen, Catarman, Laoang, Catubig and Las Navas. (d) Power. Implementation of an electrical supply and distribution scheme to transmit power from a diesel generating station at Wright in Western Samar to Catarman and hence to significant population centers along the coast of Northern Samar between Allen and Laoang. (e) Agriculture. Assistance to improve agricultural performance through provision of agricultural development centers, pilot crop and demonstration farms, extension service aids, equipment vehi- cular support and technical assistance. Technical assistance would be an important project component, as provision is made for about 740 man-months of consultant's time, of which about 330 man- months for engineering services and about 255 for agricultural specialists. Prolect Formulation 1.13 The development plan for Samar prepared by the PPDO-SIRDPO provided the main parameters for formulation of the project. In addition, considera- tion was given to the objectives of the Australian-assisted project centered on Northern Samar, to the Japan-assisted road development along the PJFH in Western Samar and to the locally financed road developments aimed at connect- ing the Northern and Eastern Samar road networks and at improving the island's airfields, as well as providing support to the fishing industry. The strengthening of agricultural extension services throughout the island, due to be implemented under the Bank Group-assisted National Extension Project (Ln. 1626-PH), and the improvement of health care delivery infrastructure in Samar envisaged under the Second Population Project (Cr. 923-PH) were also taken into account. The proposed project would be complimentary to ongoing development activities in the island, would give a degree of emphasis to Eastern Samar, the most isolated of the three provinces, and would avoid duplication of efforts. 1.14 Improvement of the transportation infrastructure would be the largest component in the proposed project, reflecting the poor state of the facilities in the island and the high priority given by the Government to the rehabilitation and upgrading of roads and ports as a precondition to other development activities. The small irrigation component would be aimed principally at developing improved methods of operation and maintenance of the irrigation systems by the farmer beneficiaries. The past failures of communal irrigation systems in the island have been due to the inability of the farmers to effectively utilize and maintain the facilities built for them. The village wells and schistosomiasis control elements would contribute to raising the standard and quality of life in the small rural communities, where most of the people of Samar live.  - 5 - 1.15 This would be the fourth Bank Group-assisted rural development project in the Philippines. The others are the Rural Development Project (Mindoro) (Loan 1102-PH), the Rural Development (Land Settlement) Project (Loan 1421-PH) and the Rural Infrastructure Project I (Credit 790-PH). The Mindoro project is similar to the proposed project with components for communal irrigation, roads and a port and schistosomiasis control. Progress on the project was initially disappointing due to slow mobilization and difficulties with the contractors' building the roads, however, the situation has improved and the rate of implementation of the various components, while still slow , is steady. The Land Settlement project also suffered from mobilization problems, but is now making good physical progress. Work on the communal irrigation systems, village wells, health centers and ports included in the Rural Infrastructure project is proceeding very well, while progress on the road component is slow. The relatively poor initial progress of such projects involving a large number of implementing agencies is due to the more difficult task of coordination and the unfamiliarity of some of the agencies with Bank requirements and procedures.  - 6 - 2. THE PROJECT AREA General 2.01 Samar, with an area of about 13,428 sq km, is the third largest island in the Philippines (Map No. 14344). The island lies southeast of the Bicol peninsula in Luzon and northeast of Leyte. It measures approximately 255 km at its longest and 90 km at its widest. The principal city of the island, Catbalogan, is some 635 km from Manila. The island is divided administratively into three provinces: Northern Samar, Western Samar and Eastern Samar. The terrain is generally rugged with narrow and discontinuous coastal plains and restricted river valleys. Most of the island is rolling and hilly and the interior consists of highly dissected hills and mountain peaks reaching altitudes of over 800 m. The rivers of Samar are relatively long and fairly deep. Most of them are navigable by small boats and the bigger rivers can be used by launches and larger craft up to 35 km inland. Much of the transport of agricultural products from the interior of the island is by these rivers. Population density in all three provinces is substan- tially below the national average, with Eastern Samar the most sparsely populated province. Per capita incomes range from about 84% of the national average for Western Samar to less than 50% for Eastern Samar. Statistical data for each province are shown in Table 2.1. Table 2.1: GENERAL STATISTICS OF PROJECT PROVINCES Northern Western Eastern Samar Philippines Samar Samar Samar Island Total area (sq km) /a 300,000 3,480 5,609 4,340 13,428 Total population (1975) 42,070,660 354,665 478,378 287,149 1,120,192 Population density - per sq km 140 101 85 66 83 - per cultivated sq km 501 250 427 276 313 Total area cultivated ('000 ha) /b 8,494 142 112 104 358 Ave. income (P/capita) /c 909 648 766 404 606 /a,/c National Census and Statistics Office, 1975. /b 1971 Census of Agriculture.  -7- Climate 2.02 Four distinct climatic types are found in the Philippines, depending on the amount and distribution of rainfall. Two of these types, the second and the fourth, prevail in Samar. The second type, found in Northern and Eastern Samar, is characterized by a very pronounced wet season between November and January and no dry season; while the fourth type, found in Western Samar, has no maximum rainy period and no dry season. Average annual rainfall varies from a low of about 2,600 mm in Western Samar to nearly 4,300 mm in the Eastern province. There is little monthly variation in temperatures and relative humidities throughout the year or between the three provinces. The rainfall is generally adequate for two rice crops in Eastern Samar, but supplementation with irrigation is required to varying degrees in the other two provinces. The island lies well within the typhoon belt and storms are frequent. A large proportion of the typhoons that occur in the Philippines either pass by or originate east of the island. November and December are the months of highest risk. Climatological data in a summarized form are given in Table 2.2. Topography, Drainage and Soils 2.03 Only about 11% of the area of Samar island is classified as flat, 62% as rolling and 27% as mountainous. The flat areas are found in a long narrow strip running along the coast in Northern Samar, in small pockets along the eastern and western coasts and in the valleys of some of the bigger rivers, such as the Catarman and Catubig in Northern Samar, the Oras and Dolores in Eastern Samar and the Gandara and Jibatan in Western Samar. The mountainous area is divided into two, an isolated portion in the northwestern corner of Samar and the main north to south range of hills running down the length of the island, with the ridge line roughly along the provincial boundary between Eastern and Western Samar. Drainage in the flat lands, particularly in the river valleys, tends to be poor due to the high rainfall, the high runoff from the surrounding hills, the restricted areas of the valleys and the poor internal drainage of the soils. The Bureau of Soils (BS) has classified the soils of Samar into three general categories: plain and valley soils; intermediate upland soils; and soils of the hills, mountains and miscellaneous land types (swamps, beach sands, riverwash and stony land). Table 2.3, derived from BS soil survey reports, shows the areas falling into the various categories. 2.04 Five soil series account for nearly 80% of the plain and valley soils. Loams of the San Manuel series are the predominant type and are widely distributed in all three provinces. The San Manuel soils are pale or grayish brown, loose and friable with good drainage, pHs of 6 to 7, good fertility and are suitable for diversified cropping. The main soil type in  Table 2.2: SIJMARY OF CLIHATOLOCICAL DATA Period of Province Location Item observation Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Total Nhrthern Samar Catarmau Aver,age rainfall (emu) 1949-73 410.7 224.6 228.6 157.2 151.0 162.4 199.6 171.2 193.6 399.5 514.9 488.2 3,301.5 Haximna rainfall, (s) 1949-73 1,074.9 482.4 517.3 354.4 334.0 324.5 373.4 366.8 606.6 1,010.4 957.1 1,173.3 4.554.7 Minimum rainfall (am) 1949-73 105.0 38.5 20.1 13.8 34.3 44.2 75.1 49.5 51.8 137.9 288.0 144.0 2,354.1 Number of rainy days 1951-70 22 19 16 16 14 16 17 15 15 20 23 25 218 Relative humidity (X) 1949-73 85 86 84 83 84 84 84 83 84 85 87 88 Mean Temperatuire (