Announcement of World Bank Approves Thirty-Eight Million Dollars Loan for Watershed Management Project in the Philippines on July 10, 1980

FOR IMMEDIATE .RELEASE . ·. World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 81/2 July 10, 1980 WORLD BANK APPROVES $38 MILLION LOAN FOR WATERSHED MANAGEMENT PROJECT IN THE PHILIPPINES The World Bank has approved a $38 million loan to help preserve and improve the productivity of the Pant~bangan and Magat catchment/watershed areas in the Philippines. The Pantabangan and Magat areas in Central and Northern Luzon contain the two largest multipurpose dams in the Philippines. Approximately 380,000 hectares of denuded land are lucated in the catchment areas which are sources for irrigation, power, and water supplies. The $75 million Watershed Management and Erosion Project is the first major attempt by the government to solve the problems of rapid erosion in the watersheds. The project provides for reforestation in both the watersheds as • well as construction of primary and secondary forest roads. Charcoal centers in Pantabangan and Magat will also be built. Provisions have also been made for a forest protectio~ and fire control system. A feasibility study of the Magat catchment area identifying critical subwatersheds to be given priority for development will also be made. Pilot programs in range management and smallholder agro-forestry will be implemente~ in Magat to assess the viability of various approaches to solving the problems in the watersheds. Forest protection pilot programs involving 300 families in two provinces in Northern and Central Luzon will also be initiated under the project. It is expected that the project wi 11 create 4,710 and 1,200 full-time jobs in Pantabangan and Magat, respectively,by 1985. Per capita income of those living in the project area will also increase from an average of $75 to $100 in 1979 to about $275 to $375 by 1985. The $38 million World Bank loan is for 20 years, includinq 5 years of grace, with interest at 8.25% per annum. The Government of the Philippines will bear $37 million of the project costs. NOTE: Money figures are expressed in U.S. dollar equivalents . • ... / FORM NO. 1121 (5-76) T E C HN I CA L DA T A PROJECT: COUNTRY: TOTAL COST: Watershed Management and Erosion Control Philippines $75 mi i 1 ion • BANK FI NANC I NG : $38 million for 20 years, including 5 years of grace, with an annual interest rate of 8.25% OTHER FINANCING: Government of Philippines, $37 million IMPLEMENT I NG ORGAN I ZATf ON: I terns (a) through ( f) (See be 1ow) National Irrigation Administration (NIA) NIA Building, E. de los Santos Avenue Oil iman, Quezon City, Philippines Cable address: NIAPHIL Item (g) (See below) Bureau of Forest Development Ministry of Natural REsources Visayas Avenue, Diliman PROJECT DESCRIPTION: Quezon City, Philippines The program includes: a) reforestation in the Pantabangan and Magat watersheds; b) construction of primary and secondary forest roads in Pantabangan and Magat; c) construction of 15 charcoal centers in Pantabangan and 6 in Magat; d) provision of a forest protection and fire • control system; e) a feasibility study of the Magat catchment area identifying cri- tical subwatersheds to be given priority for development; f) pilot programs in range management and smallholder agro-forestry to be implemented in the Magat watershed to assess the viability of various approaches to solving the problems in the watershed; c:ind g) initiation of forest protection pi lot programs involving 300 fami 1 ies in two provinces in Northern and Central Luzon. PROCUREMENT: Equipment, vehicles, and spare parts costing about $9. 1 million will be procured after international competitive bidding. Contracts for construction of about 160 kilometers of forest roads, scattered throughout Pantabangan and Magat, will be awarded after local competitive bidding. CONSULTANTS: About 373 man-months of local and 107 man-months of foreign consultant services wi 11 be needed to help plan and implement the project as well as develop and install an intensive monitoring and evaluation system. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 1986 18% - 0 - •