Philippines - National Extension Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 7286 PROJECT PERFORMANCE AUDIT REPORT PHILIPPINES NATIONAL EXTENSION PROJECT (LOAN 1626-PH) June 13, 1988 Operations Evaluation Department Thir 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 P = Philippine Peso US$1 = P 7.4 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AFT Agricultural and Food Technician BAEx Bureau of Agricultural Extension HMT Home Management Technician IRRI International Rice Research Institute LO Livestock Officer MAF Ministry of Agriculture (from July 1, 1985) MOA Ministry of Agriculture (to June 30, 1984) OB14 Office of the Budget and Management PAO Provincial Agricultural Officer PCR Project Completion Report RYDO Rural Youth Development Officer SMS Subject Matter Specialist T&V Training and Visit system of extension USAID US Agency for International Development FISCAL YEAR OF BORROWER January 1 to December 31 FOR OFFICIAL USE ONLY THE WORLD BANK Washangi-. DC 20433 USA Oface C Dercto.Caera Opeatmnns lvalwtmun June 13, 1988 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECTt Project Performance Audit Report Philippines National Extension Project (Loan 1626-kH) Attached, for information, is a copy of a report entitled "Project Performance Audit Report: Philippines - National Extension Project (Loan 1626-PH)" prepared by the Operations Evaluation Department. The PCR was prepared by the Government of the Philippines, supplemented by an overview prepared by the Asia Regional Office. Yves Rovani by Ram K. Chopra This document has a restricted distribution and may be used by recipieats only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT PHILIPPINES NATIONAL EXTENSION PROJECT (LOAN 1626-PH) TABLL OF CONTENTS Page No. PREFACE ...................................................... i BASIr DATA SHEET ...................................... . ...... i EVALUATION SUMMARY .............. . ................ iii PROJECT PERFORMANCE AUDIT MEMORANDUM I. BACKGROUND.............. ............. 1 II. THE PROJECT. ................. o ....... 2 III. MAIN FINDINGS......................... ..... 4 A. Extension Reorganization ........ ..... 4 B. Communication Equipment ............ .. 7 Annex: Borrower Comments .................... . ....... 9 BANK OVERVIEW OF THE PROJECT COMPLETION REPORT.......o......... 15 PPOJECT COMPLETION REPORT Introduction - .... ...... ...... ........ 25 Project Identification, Preparation and Appraisal ... 27 Implementation ... .. .... . ............. ... .... 28 Finanicial Performance .*.. ... ... ...... ..... 47 Institutional Performance and Development .-....... 53 Economic Assessment ............. .. ..... o..... 54 Conclusion . .............. ... .. ...... 58 Supplement (MAF-BAEx letter of October 28, 1986 ..... 67 Map IBRD No. 20941 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. PROJECT PERFORMANCE AUDIT REPORT PHILIPPINES NATIONAL EXTENSION PROJECT (LOAN 1626-PH) PREFACE This is a performance audit of the National Extension Project in the Philippines for which Loan 1626-PH was approved in November 1978, for the sum of US$35.0 million and closed on June 30, 1985 after cancellation of US$'4.955 million. The audit report consists of an audit memorandum (PPAM) prepared by the Operations Evaluation Department (OED) and the Project Completion Report (PCR) prepared by the Government of the Philippines, supplemented by an Overview contributed by the Asia Regional Office, dated March 1987. Due to the length of the PCR Annexes, they will not be printed, but will be available in OED files. The PPAM is based on a review of the Staff Appraisal Report (SAR) No. 2049a-MA dated October 24, 1978, the President's Report, the Loan Agreement, and the PCR. Correspondence with the Borrower and internal Bank memoranda as contained in relevant Bank files have been consulted and Bank staff associated with the project have been interviewed. An OED mission visited the Philippines in January 1988. Discus- sions were held with officials of the Ministry of Agriculture and Fish- eries. Field trips to visit project areas and participating farmers were undertaken and the information obtained during the mission was used to test the validity of the conclusions of the PCR. The audit considers the PCR covers adequately the project's sal- ient features and the PPAM generally agrees with the conclusions. The draft audit report was sent to the Borrower on March 4 and May 24, 1988, for comments; the c-ments received have been added to the PPAM as an annex. The valuable assistance provided by the Government of the Philip- pines, the project staff and the farmers met during the preparation of this report is gratefully ackaowledged. - 1i - PROJECT COMPLETION REPORT PHILIPPINES: NATIONAL EXTENSION PROJECT (LOAN 1626-PH) BASIC DATA SHEET KEY PROJECT DATA Appreisal Actual or Actual as % of expectation curent estimate appraisal estimate Project costs ($IS millann) .0.1 43.1 61.5 Loan/Credit amount (USS million) 35.0 20.045 57.3 Date Board approval - 11/07/78 - Date effectiveness - 03/27/79 - Date physical componenrs completed 12/31/82 12/31/87 - Proportion then completed (1) 100 50 - Closing date 06/30/83 06/?0/85 Economic rate of return (%) - - Financial rate of return (M) Institutional performance mediocre Agronomic performance variable Number of direct beneficaies (1985) 4.5 min 2.25 sIn so CUMULATIVE DISBURSEMENTS FY80 FY81 FY82 FY83 FY84 FYRS PY86 Appraisal estimate (USS min) 6.5 17.0 27.0 35.0 - - - Actual (US$ mn) 0.1 2.5 6.5 11.5 15.1 18.1 20.0 Actual as 2 of estimate 2 15 24 33 43 52 57 Date of final disbursement 01/14/86 Principal repaid to ( ., _ (USS milII -n) stat.ii-sa (in weeks) Eizz EMZ EMZ8 EM EMl1 EA EWa EMg flU ElM IrAL PrgsppralelI 16.5 - - * * * - - 16.5 Appraisal 87.6 4.8 - - - - - - - - 41.8 Neotiet1on - 4.8 - * - - - - - - 4.6 Superslo" - 2.8 8.8 7.2 21.1 18.7 8.8 17.2 6.8 4.2 6.9 Other .8 .7 - - - - * - - 1.1 TotaI 47.0 12.4 8.9 7.2 21.1 18.7 8.9 17.2 5.8 4.2 144.9 MISSION DATA Date No. of Man-days Specialisations Performance Type of Mission (mo/yr) persons in field represented /a rating /b Trend /c problems /d Identification/ Preparation 11/77 3 54 A-E-Ex - - - Appraisal 02-03/78 4 76 2A-E-Ex - - - Subtotal 7 130 Supervision 1 08/79 1 7 A 2 2 MF Supervision 2 02/80 3 21 3A 2 2 MF Supervision 3 10/80 2 22 2A 2 1 F Stupervision 4 06/81 2 11 A-F 2 2 P Suparvision 5 02-03/81 3 54 A-2Ex 3 3 MF Supervision 6 09-10/82 2 26 A-Ex 3 1 FM Supervision 7 09/83 2 12 A-F 3 3 FM Supervision 8 03-04! 4 1 9 A 3 3 MF Supervision 9 03/85 1 4 A 3 1 MF Subtotal 166 Total 296 OTHER PROJECT DATA Borr,ver Republic of the Philippines Executing agency MOA, now MAF Fiscal year of borrower Calendar year Name of currency (abbreviation) Appraisal year average (1978) US$1.00 - 7.37 Pesos Intervening years average US$1.00 - 9.86 Peac Completion year average (1985) US$1.00 * 18.61 Pea, Follow-on project: Name Agricultural Support Services Loan/credit number Loan 2040-PH Loan/credit amount (US$ million) 45.0 (US$15.0 aln canc. in 1985) Date Board approval 08/25/81 /a A - agriculturist; Ex - extension specialist; E - economist; F - financial analyst, etc. W 1 - problem-free or minor problems; 2 - moderate problems; and 3 - major problems. 77 1 - improving; 2 = stationary; 3 = deteriorating. 7_ F - financial; M - managerial; T = technical. PROJECT PERFORMANCE AUDIT REPORT PHILIPPINES NATIONAL EXTENSION PROJECT (LOAN 1626-PH) EVALUATION SUMMARY Introduction The National Extension Project was the twenty-second of 32 Bank Group loans and credits for the agricultural sector in the Philippines. The project was in line with the Government's objective to improve the social welfare of the rural population and to strengthen its agricultural extension services. Obectives The project's main objective was to receive Bank assistance in its renewed efforts to (i) promote further production increases in the main foodcrops and expand livestock production; (1i) improve the quality of rural life through higher incomes, better nutrition and general home man- agement; and (iii) reduce rural unemployment by assisting out-of-school youth to establish backyard livestock enterprises. Implementation Experience and Results The project succeeded only to a limited extent in introducing a modified Training and Visit (T&V) extension system to the Philippines. The disappointing results are due to lack of commitment by senior Ministry of Agriculture staff and hampered by the Ministry reorganization which broke the extension line of command. Project implementation was further hampered by the country's severe economic-budgetary crisis which finally led to the cancellation of about US$15.0 million. At present there is no indication of future developments of the extension service. Future reorganizations, especially in the originally intended direction of a T&V system, would require minor financial assistance but a rethinking and firm policy direc- tion from the top. Findings and Lessons The Bank never succeeded in convincing the Philippine authorities about the advantages of the T&V system (PPAM para. 17). The reorganization of the Ministry of Agriculture interrupted the extension line of command and did not bring about the merger of all crop- oriented extension services (PPAM paras. 18-21). - iv - Although the Bank Overview estimated the project ERR at 12%, the audit considers that calculation of the economic rate of return for this extension project is not meaningful since any production increase could have been caused by several supporting services' inputs such as agricultural credit, organized input supplies, improved irrigation facilities, all in addition to extension (PPAM para. 24). Investments in costly communication systems without prior analysis of future message transmittals and their urgency are of doubtful use and cause relatively high operating and maintenance costs (PPAM paras. 26-28). - 1 - PROJECT PERFORMANCE AUDIT MEMORANDUM PHILIPPINES NATIONAL EXTENSION PROJECT (LOAN 1626-PH) I. BACKGROUND 1. The territory of the Philippines extends over 300,000 km2 and includes some 7,100 islands. The population is estimated at 49 million (mid-1980), with a growth rate declining from 3% in 1970 to roughly 2.6% in 1980. There are considerable differences in resource3, socioeconomic con- ditions and production potential between the country'! 12 administrative regions. Historically, economic development has tend4 to concentrate around Central Luzon, the "rice bowl" of the country, aLd near Manila, where most of the infrastructure development has taken place. The less developed areas are Northern Mindanao in Region X, the Visayas in Regions VI, VII and VIII, and Bicol in Region V. 2. Agriculture is the predominant sector in the Philippine economy, accounting for about one third of net domestic product, over one half of total employment, and nearly three quarters of export earnings. Small farms provide the main income for 65% of the rural population. Over 70% of the 9 million ha of land under cultivation is used for the production of cereals, of which rice and corn are the most important. Most of the remaining land is used for cultivation of the major export cropas sugar, coconuts, abaca, pineapples and tobacco. Livestock production, 60% of which is backyard production, currently centers on pigs and poultry, but dairy and beef cattle production is receiving increased government atten- tion and support. 3. At the time of appraisal, it was found that agricultural produc- tion had grown at an average rate of 4.5% per year in the 1970s, despite yields which remained relatively low among Asian countries. The perfor- mance of the sector was especially strong in 1976 and 1977 when production increased by 7% and the Philippines reached self-sufficiency in rice, its main staple. This achievement was due to increased use of high-yielding varieties, expanded availability of credit, and increased irrigation area. Favorable weather in the years 1975-77 was also a significant factor. Production of corn, the second main staple and an important feed ingredi- ent, still fell short of demand, however. In the late seventies, prod'c- tion increases had been due mainly to increases in cropped area. 4. Although the overall performance of agricultural exports was satisfactory over the last three years, the main export crop industries faced serious longer-term problems. The sugar industry was depressed because of low world prices. The industry was alo facing an adjustment problem as a consequence of the Government's adherence to the International Sugar Agreement which provides for an export quota. Some sugar land had -2- been diverted to other crops and more was expected to be diverted in the next few years. The coconut industry faced the problem of low yields as a consequence of over-aged trees. The Government then planned a large-scale replanting program for the 1980s, when seedlings of a high-yielding variety would first become available. The wood industry faced the increasingly severe problem of deforestaticn resulting from slash-and-burn cultivation and inadequate government control of commetcial logging. II. THE PROJECT 5. The project was intended to increase agiicultural production, improve the quality of rural life through better nutrition and home manage- ment, and reduce rural unemployment among out-of-school youth by strength- ening the National Extension Service of the Ministry of Agriculture (MOA). Under the project, the extension service was to be strengthened through provision of buildings and equipment, introduction of sound extension meth- odology through a system similar to the Training and Visit (T&V) system, changes in organization, and implementation of a staffing and training program. Also, the project was to provide for studies to develop effective monitoring and evaluation procedures and an equitable compensation system. 6. Five million rural families were expected to be reached by the project at a total project cost of US$10.00 per family and an annual incremental operating cost at full development of US$2.20 per family. The project was to make an important contribution to the benefits expected from many of Lhe then ongoing agricultural projects supported by the Bank, particularly the irrigatica projects. The project was expected to expand the coverage of the extension service and the smaller, lower-income farmers and their families who received relatively little assistance were expected to benefit the most. Lack of acceptance by farm family clientele of extension recommendations was considered a risk of the project. Risks associated ,.ith the organizational aspects of the project were to be minimized by the provision of consul ants for the development of effective monitoring and evaluation procedures and an equitable compensation system. 7. Components of the project included: (a) Organizational Program. Implementation of an improved organiza- tional structure for MOA which included the establishment of a more unified extension service and closer coordination between research and extension. (b) Buildings, Vehicles and Equipment. (i) Construction of about 500 rural extension centers and reno- vation of existing facilities for extension services; (ii) Provision of communtcations equipment; vehicles for trans- porting staff and materials; office, printing and photo- - 3 - graphic equipment and supplies; and audio-visual aids and other demonstration and training equipment and materials. (c) Extension Methodology. Introduction and implementation of sound extension methodology, with particular emphasis on close supervi- sion, regular training of extension workers and regular visits. (d) Staff Program and Training. Implementation of a staffing and training program to increase the number of trained extension staff, including the provision for additional subject matter spe- cialist positions and for a staff of livestock extension techni- cians. (e) Studies/Consultant Services. A total of 66 man-months of consul- tant services for the purposes of: (i) assisting the Budget Commission in a review of rural techni- cians' and extension workers' job functions and compensa- tion. with A view to identifying overlapping extension ser- vices provided by different agencies and more equitably compensating field staff (36 man-months); (ii) assisting NFAC to develop more effective monitoring and evaluation procedures to determine (a) individual perfor- mance of eutension workers and (b) effectiveness of exten- sion services (24 man-months); and (iii) assisting MOA to upgrade the capabilities of its procurement division and to select various types of equipment to be procured under the project (6 man-months). 8. The project got off to a poor start because of mounting economic difficulties in the Philippines on the one hand and delays in the MOA reor- ganization on the other. 9. Construction of Rural Extension Centers suffered from shortages of local funds and only 298 centers, representing 59% of the appraisal target were completed even after the two-year project extension. Equally hit by tb local funds shortages was the vehicle and equipment component where ret ed budget allocations led to the purchase of 715 vehicles compared wit. 1,234 expected at appraisal and only 5,541 motorcycles as opposed to 7,500 envisaged. 10. Establishment of the communications system was subject to consid- erable modifications. Extended search for free frequencies and introduc- tion of telephones and telex lines caused serious delays in the component's implementation. As a consequence of these delays, Phase III will be completed under the ongoing Agricultural Services Project (Loan 2040-PH). 11. Project staffing also fell far behind appraisal estimates. Instead of filling 3,280 new staff positions, incremental staff numbered only 998, again a consequence of hiring freezes due to budgetary con- straints. Training programs of extension staff took place and about 25,000 attendants participated during project implementation. 12. Consultancy services focused on the development of effective moni- toring and evaluation systems, a review of extension workers' salaries and incentives, the communications system, evaluation of the research positions in the MOA, and some assistance in efforts to implement the T&V system (4 man-weeks only), and for some specialized training activities. 13. Due to the curtailment of project activities and reduced procure- ment, total project costs were reduced from US$70.12 million to US$43.14 million if expressed in US dollars, but in pesos the total cost reduction was only from 1 518.93 million to ? 484.89 million, ruther marginal due to the peso's rapid devaluation. III. MAIN FINDINGS A. Extension Reorganization 14. According to the Bank's classification, the project had "major problems" during more than 60% of the implementation period and is in stark contrast to extension projects being undertaken in parallel in other countries.l/ This is surprising since the staff appraisal report (SAR) states correctly: "the status of the extension service in the Philippines is quite unlike that of other countries where the Bank has assisted exten- sion. The most notable features are the size of the extension force and the academic qualification of personnel. With the Ministry of Agriculture there are about 8,600 extension staff of whom more than 90% have tertiary education..." (para. 2.05). 15. reasons for the service's weak performance were given by the SAR as follows: (a) field staff lack practical training and knowledge of extension methodology; (b) there is a serious shortage of equipment and facilities for field level training of staff and for demonstrating improved technology practices. This is compounded by very inadequate budgetary allow- ances for the printing or reproduction of leaflets, demonstration slides, cassettes, etc., which are generally of high quality and available from various sources; 11 See PPARs on Punjab and Sind Extension Projects in Pakistan and National Extension Project, Malaysia, OED Report Not. 7288 end 7287, dated June 13, 1988. -5- (c) the majority of extension workers have to rely on public transport for mobility, which, together with the unnecessarily large amount of report writing requirements, results in technicians spending only 30% to 50% of their time with clientele; (d) the links between research and extension are poorly developed due largely to the absence of sufficient subject matter specialist (SMS) positions in the extension service; (e) the emphasis of extension workers on those farmers participating in the Masagana, rice and corn production programs has concen- trated the service on a very small proportion of farmers. As the number of farmers participating in the Masagana programs has declined over the past 4 years, the coverage of the agricultural extension service has also decreased; and (f) the present organization of the MOA does not permit clear lines of command from the national level down to the field. While the Bureaus of Agricultural Extension (BAEx) and Animal Industry (BAI) are mainly responsible for extension, the more research and regulatory oriented Bureaus of Plant Industry (BPI) and Soils (BS) also do some extension work. Coordination between Bureaus is poor since even in the country's 12 regions and 73 provinces the staff of each Bureau report to different directors/supervisors. Consequently, under the present organization, the extension force of the MOA is fragmented and its limited resources inefficiently used. 16. To correct this situation, the project was expected, among other things, to bring about a change in MOA's organization, i.e., "streamlining of the Ministry of Agriculture such that a single line of command would exist from the Ministry through the Regional Directors, Provincial Officers and Municipal Officers" (SAR, para. 5.01), and also, "... all crop extension ... would fall under the responsibility of one Assistant Director" (SAR, para. 5.04). The importance of the MOA reorganization is further highlighted by the fact that the Bank introduced a special covenant to the Loan Agreement (Section 3.06) making the appointment of 12 Regional Directors and 24 Assistant Directors mandatory by not later than January 31, 1980.2/ 17. In the mission's view, the appraisal did not present a Zull pic- ture of the actual situation in the Philippines and the proposed project's likely impact. From discussions with Bank staff it becomes clear that at appraisal time MOA had voiced strong objections against the introduction of the T&V which was then increasingly promoted by the Bank, and that there was no chance to merge the crop-oriented extension services dealing with coconuts, cotton, sugarcane, tobacco, etc. 2/ The MOA in its comments has indicated that a further reorganization that will also enhance extension efficiency is imminent. - 6 - 18. As a matter of fact, the Bank-supported MOA reorganization proved to be a major setback to the project. Contrary to the SAR's statement of the project establishing "a single line of command", the Bank-accepted shift of in-line extension responsibility from the Ministry's BAEx to the 12 Regional Directors broke the line of command. Only a few of the newly appointed Regional Directors had had previous extension experience and few of them were committed to the project. In some cases, this led to misallo- cation of project-financed vehicles which were frequently allocated to non- project staff, with Regional Directors giving preference to staff from their previous Bureaus (Plant Industry or Livestock, etc.). 19. From the project files it becomes apparent that the Bank recog- nized the consequences of its recommended MOA changes immediately after they were implemented--when it was too late. 20. While the appraisal succeeded in properly identifying basic pre- project extension shortcomings, i.e., lack of staff practical training and insufficient knowledge of extension methodology as well as the need for closer supervision of field staff, the recommended corrective actions were hampered by the Minister's objections to the T&V system, an approach which would have corrected these shortcomings. But the SAR did not dare to come out strongly in favor of T&V; only between the lines is it hinted that "a slight modification of this system would be adopted under the proposed project" [SAR, para. 2.08 (a)], and "the extension methodology to be implemented is similar to the T&V system adopted in other Bank projects" (SAR, para. 5.10). 21. What are the consequences of this fuzzy project presentation by the appraisal and the reluctance to press for the only reasonable organiza- tional pattern and approach to extension, i.e., the T&V system? Agricul- tural extension in the Philippines is as fragmented as ever. The various crop-oriented extension services continue to operate in parallel while the project-assisted extension service chiefly works on rice and maize. Tech- nical packages were pushed for these two crops prior to the extension proj- ect, as early as 1973. The same packages more or less are still being sold in 1988. This raises the question if the lack of technical knowledge was behind the relatively low rice/corn yields of the farmers at the time of appraisal--5 years after rice/corn extension campaigns had been started--or if other constraints that still exist, like lack of credit, poor input supplies and weak marketing, have been and still are the major constraints hampering production increases. 22. During the audit mission's field trips it was found that the T&V system was never introduced3/ in most Regions and in some others it could 3/ The MOA does not agree with this statement and point out that T&V was introduced to all Regions by 1979. However, in the audit's view, there is a major difference between what the Philippines are considering as T&V system and the Bank's definition of it. As a case in point, the audit mission, despite repeated requests, was unable to see or review any work on training programs, visit schedules, supervision schedules, etc. -7- not be sustained due to changes of top level staff in the Regions. There is no extension planning, no work programs are being prepared, no issues identified to be discussed with farmers, there is no proper supervision of staff and supervising officers are unaware of the activities of their staff, who in turn are never invited to regular training programs, etc. 23. The MOA, according to infortiation supplied to the mission, spent 28.68% of its 1987 budget on agricultural and fisheries extension including appropriations to the BAEx for training activities. In addition to the cost of extension (US$35 million in 1987), the Philippines are obliged to repay US$20 million plus interest to the Bank with the extension service hardly c'anged from pre-project days. 24. Based on a review of the disappointing performance of the project, it is difficult to understand why the Bank is trying to demonstrate that there is, nevertheless, a positive rate of return on project investments. The Ahole idea of considering an ERR for an extension project is abstruse since it is impossible to determine production increases deriving exclus- ively from extension advice and not from availability of &gricultural credit required4/ for the purchase of inputs or improved irrigation. 25. In conclusion, it can be said that the Bank was not showing the necessary strength in trying to convince Government of the need to intro- duce and fully support the T&V system. The Bank also failed in persuading the authorities to agree on a full merger of all extension services. Although problems hampered the project at an early stage, project supervi- sion was weak. During the more than 4.5 final years of the project, when it had a continuous "major problem" rating, only four supervision missions took place. There was even an 18-month interval from the mission that gave the project the "major problem" rating for the first time and the following supervision mission. B. Communication Equipment 26. The appraisal found that one of the most serious constraints hamp- ering effective extension work was the infrequent contacts between exten- sion workers and supervisors/b -kup staff and that information from MOA and Regional offices frequently took a week or more to reach technicians in the field. Consequently, the project allocated funds for the installation of a service-intern radio system. 27. During project implementation, substantial modifications to the communications system were introduced, based on a three-phase program. Due to delays encountered in obtaining radio frequencies and procurement prob- lems, only Phases I and II became part of this project while Phase III is 4 The MOA states in its comments that agriculture credit availability has been curtailed during the past years. The audit, however, only tried to highlight that there are several supporting parameters which contribute to higher output and that it is impossible to pinpoint individual services that contribute to higher production. -8- being financed from proceeds of the Agricultural Services Project, Loan 2040-PH. Phases I and II of the communications system included the acqui- sition of a Telephone, Hot-Line (telex), and Trunked Radio System. Phase III includes the procurement and installation of a High-Frequency Radio System. After completion, the fully integrated system will provide radio, telex, and telephone links from MOA to all 12 Regional Headquarters and telephone connections to some Provincial Offices, while radio communica- tions will be possible with all Provincial Offices as well as some Munici- pal Offices. Total cost of the communications system is now estimated to reach about US$3.5 million. Annual operation and maintenance costs are estimated at US$410,000 (operating costs budgeted at P 3.2 million; maintenance at 7% of investment costs). 28. The audit mission has serious doubts on the communications system's justification. One gets the impression the the system was to substitute for extension planning on the one hand and supervision of exten- sion staff on the other. Too little thought was given by the appraisal and later by supervision missions to the questions of what messages would likely be conveyed from Manila to the Regions, from the Regions to the Provinces and from the Provinces to the Municipalities and vice versa, in light of extension efforts focusing on rice and corn in the first instance. How urgent could any message be that a one week travel zime for a letter was found to be too excessive? What emergency situation could arise which would require MOA or Regional intervention within a week or less. Natural disasters such as frequent typhoons hitting the Philippines and consequent rescue/relief operations are not the responsibility of the extension service. Like in other countries, emergency assistance could and should be provided by the army which has an excellent communications network covering the whole country. 9 ANNEX 1 Republic of the Philippines Department of Agriculture AGRICULTURAL TRAINING INSTITUTE Diliman, Quezon City April 15, 1988 Mr. Graham Donaldson Chief Agriculture, Infrastructure and Human Resources Division Operations Evaluation Department 1818 H Street, N. W. Washington, D.C., U.S.A. Re: Comments to Proiect Performance Audit Report (PPAR) on the Philippines National Extension Project (Loan No. 1626-PH) Dear Mr. Donaldson: We are submitting herewith our comments to the draft Project Performance Audit Report (PPAR) of the above mentioned project as requested. As a whole, we generally agree with the findings mentioned in th. PPAR except a few which we have commented accordingly. We would like to express our appreciations for giving us the opportunity to give our comments on the draft PPAR. Very truly yours, Director enclosed a/s - 11 - ANNEX 1 COMMENTS TO THE DRAFT PROJECT PERFORMANCE AUDIT REPORT (PPAR) ON THE PHILIPPINES NATIONAL EXTENSION PROJECT (LOAN NO. 1626-PH) 1. Evaluation Summary,page.V: The Department of Agriculture is undergoing a reorganization in accordance with Executive Order No. 116. Eighty percent (80%) of the budget of its Regional and Provincial Offices is alloted to field extension services. The Bureau of Agricul- tural Excension and the Philippine Training Center for Rural Development, were merged to undertake the training of field personnel and their clientele. The Department of Agriculture, under the leadership of ATI is conducting an in-house evaluation of extension by region to come up with policies to further improve the delivery of extension services. 2. Project Performance Audit Memorandum (PPAR), paragraph 16, page 9. The reorganization of the Ministry of Agriculture under PD 1579 affected only the appointments of 12 Regional Directors and 24 Assistant Regional Direc- tors and later, the appointments of Municipal Agricultural and Food Officers (MAFO) and Agricultural Production Technicians. The Provincial Agricultural and Food Officers were merely designated from among the senior officers in the region. Then under Executive Order No. 116, with the integration of the regional offices of the Bureau of Cooperative Development (BACOD) and Bureau of Fisheries and Aquatic Re- sources (BFAR), three Assistant Regional Directors were appointed: 1 for research, 1 for field operations and 1 for support services. The Bureaus and Regional Office's Staffing patterns have been approved already and scheduled for implementation this May. If this is pushed through, it will normalize field operations and delineate the functions of field personnel (research, field operations/extension an4 support services). The ATI will now come in and train extension service personnel on the accepted extension delivery systems as well as the training of the DA's clientele. 3. PPAM. paagraph 22, page 11. The statement "that the T & V system was never introduced in most Regions" is not correct. In Regions I-IV, the T & V was introduced in March, 1979 under the Integrated Agricultural Production and Marketing Project (IAPMP) even before the NEP became operational. It was also introduced in Regions V-XII in September- November, 1979 by way of establishing a pilot district. This was followed by a series of T & V orientation trainings of regional staff and field personnel throughout the Regions with the belief that the T & V system will spread regionwide following the "ripple" principle. Then, it was piloted in all provinces. The acceptance of T & V as an extension delivery system might have been hampered by the indifference of top level officials in the region/province who could have exerted greater influence for its adoption in the municipal/barangay level. - 12 - ANNEX I Again, it is not true that there is no extension planning, no work programs, etc. On the contrary, program planning and work programs were some of the outputs required during the training. These were submitted to the tra1ning staff and trainers for critiquing with the provincial head and/or the Regional D'rector or his represen- tative. T & V Managers were designated in the regional and provincial level to over- see the implementation of the system in their respective jurisdiction. The supervision of staff is the responsibility of the provincial/regional super- vising officers who should be aware of all the activities of their staff. Again, laxity in supervision may be attributed to the indifference of supervisors in the system. If the approved staffing pattern of the Department under Executive Order No. 116 is finally implemented, the dificiencies noted may be corrected and/or eliminated. 4. PPAM, paragraph 24, page 11-12: It is very difficult to determine the economic rate of returns (ERR), but we cannot discount altogether the efforts of extension workers who provided technical advice to their clientele on the latest cultural practices, including the integrated pest control management and the use of the organic fertilizer to reduce the farmer's de- pendence on chemical fertilizers. In fact, availability of rural credit have been greatly reduced during the period under review, hence it cannot be considered a major factor in increased production. 5. BANK's OVERVIEW OF THE PROJECT COMPLETION REPORT (BOPCR), pa- ragaph S, page 2: Under the staffing pattern of field offices, there is only one designation for barangay based field extension personnel - the Agricultural Production Technologist (APT). The class titles "Home Management Technologist" and "Rural Youth Deve- lopment Officers" were reclassified under the class title "Agricultural Production Technologist" and required to function as a "generalist." - 13 - ANNEX 1 25 APRIL 1988 MP. GRAHAM DONALDSON OPERATIONS EVALUATION DEPARTMENT WORLD BANK, UASHINGTON D.C. REUR LETTER DATED 4 MAR 1988 REQUESTING COMMENTS ON THE DRAFT PROJECT PERFORMANCE AUDIT REPORT ON THE NATIONAL EXTENSION PROJECT (1626-PH) PLS BE INFORMED THAT FOLLOWING OUR DISCUSSIONS WITH AGRI TRAINING INST/DA AND DOF, JE HAVE NO FURTHER COMMENTS EXCEPT ON PAGE V, EVALUATION SUMMARY THAT 0UOTE THE BANK NEVER SUCCEEDED IN CONVINCING THE PHILIPPINE AUTHORITIES ABOUT THE ADVANTAGES OF THE T AND V SYSTEM END OF QUOTE PER ATI/DA SIMILAR T AND V SYSTEM HAD BEEN ADOPTED EVEN BEFORE NEP. ATI/DA COMMENTS FORWARDED TO THE BANK SEPARATELY. REGARDS. FILOLOGO PANTE, JR. DEPUTY DIRECTOR-GENERAL, NEDA - 15 - BANK OVERVIEW PHILIPPINES NATIONAL EXTENSION PROJECT (LOAN 1626-PH) PROJECT COMPLETION REPORT Bank Overview of the Project Completion Report Introduction 1. The attached project completion report (PCR) with annexes, prepared by the Ministry of Agriculture and Food's (MAF) Bureau of Agricultural Extension (BAEx), was received on September 5, 1986. It is comprehensive and generally well prepared. Detailed cost tables were subsequently provided, see Supplement 1. The report lacks an economic rate of return calculation but assesses project impact through evaluation studies conducted in a few specific areas (pp. 38-40). This overview, prepared by staff of the East Asia and Pacific Region, based on the Government's PCR, a supplementary letter, and a review of Bank files, summarises and highlights aspects of project implementa- tion, expands on a number of development issues and assesses Government and Bank performance. Project Objectives 2. The project was the first in a series of Bank-financed KAF projects. The main objectives were to: increase production of food crops and livestock; improve the quality of rural life; and reduce rural unemployment. This was to be achieved through a streamlined and decentralized MAF. The organizational reform was authorized by Presidential Decree No. 1579 of June 11, 1978 and a series of Special and Executive Orders, and allowed for the establishment of a unified nationwide extension service under regional management to replace the centrally controlled service operated by four line agencies, and a systematic extension methodology. Project Achievements 3. A modified T&V extension methodology was introduced in 1979 in one pilot district with about 50 villages in each of the 12 regions. It was expected that coverage would expand to the whole country over a four-year period. Progress was slower than planned and at project completion, at the end of 1985, only three regions had been fully covered, while other regions continued to operate with either pilot districts or with one or more fully covered provinces. After six years some 52% of all rural villages were covered, involving some 5,710 Agriculture and Food Technicians (AFT), municipal-level supervisors and Subject Matter Specialists (SMS). Major implementation constraints were: limited commitment of senior staff at the national and regional level to the more systematic and demanding T & V system of extension; low staff remuneration; inadequate staff supervision and technical support; and inadequate applicable and profitable technology due to low produce prices, high input prices and insufficient credit. The project - 16 - BANK OVERVIEW was rated a problem project from May 1982 to March 1985 on the basis of poor managerial, financial and procurement performance. 4. Paddy and corn farmers were the main beneficiaries because AFTs were required to assist farmers under existing Massagana 99 and Maisagana Govern- ment credit programs. In the period 1979 to 1985, paddy production increased by 714,000 tons (average annual increase 1.5%) despite a 1.7% decrease in area. Paddy yields increased by 440 kg/ha or 3.2% p.a., reflecting the adop- tion of new technology (in particular earlier-maturing higher-yielding varie- ties with pest and disease resistance) and an increase in irrigated area. However, during the same period, corn area, yield and production remained static (0.3%, -0.35% and -0.15% p.a., respectively); this reflects poor adop- tion of hybrid corn varieties, which require new seed each year as well as high levels of inputs, and often unattractive local market prices. Con- versely, growing vegetables and grain legumes following rice, and sometimes before a rice crop, was demonstrated to be worthwhile and then adopted as routine crop rotation in many areas. There is inadequate data to conclude that improved extension led to increased production of livestock. In many areas there is also much greater awareness of the danger of soil erosion and corrective practices are being adopted. 5. Unfortunately, the PCR does not evaluate the impact of improved home economic and rural .outh services. However, an additional 300 Home Management Technologists (HMTs) and 150 Rural Youth Development Offices (RYDOs) were appointed and established under the project and in the early years BAEx received USAID technical assistance for youth development programs. Off- setting this, crop diversification and improved livestock production promoted by extension staff has generated employment and improved incomes. 6. Effective reorganization of the Ministry of Agriculture and Food (now Ministry of Agriculture and Fisheries) could only commence following the Special Order of March 24, 1980 which announced the appointment of 12 Regional Directors and 2 Assistants for each Region, and Special Order of March 28, 1980 which appointed the 75 Provincial Agricultural Officers (PAOs). Staff of the various bureaus (mostly specialists) were mainly transferred as gener- alists to the regions. The bureaus became staff agencies rather than line agencies by Administrative Order of April 15, 1981. Unfortunately, the influential Minister for Agriculture resigned as Chairman of the Project Executive Committee. A new Deputy Minister succeeded him, the reorganization was far from smooth, and slowly took effect with considerable resistance from many staff. Many of the Regional Directors were not from BAEx but specialists/administrators from other technical bureaus who frequently continued to favor these specialties. Regionalization was thus initially a setback to the introduction of T&V extension methodology, which, coupled with a lack of commitment and insufficient budgetary support, contributed to the slow implementation. - 17 - BANK OVERVIEW 7. Main project performance criteria are provided in the following table: MAIN PERFORMANCE CRITERIA Actual as % Appraisal of appraisal estimate Actual estimate Incremental staff appointments Subject matter specialists (SMS) 280 80 28.6 Farm management technologists (FMT) 1,000 318 31.8 Home management technologists (HMT) 1,000 300 30.C Rural youth development offices (RYDO) 500 150 30.0 Livestock Officers (LO) 500 150 30.0 Vehicle Procurement Cars, jeeps, buses, vans, etc. 1,225 710 58.0 Motorcycles 6,412 5,541 86.0 Construction Rural Extension Centers 500 290 60.0 Communication System country- 2 of about 60 wiee 3 phases Extension coverage with T&V all prov- half of 50 methodology inces 43,000 villages Staff appointments were 30% of appraisal targets. Motorcycles were procured under a hire purchase scheme for staff. Only about 60% of 4-wheel vehicles were procured and most were used in Manila until the Bank intervened. Only two out of the three phases of the planned communication system were completed mostly because technical standards could not be agreed in a timely manner. Overall budgetary constraints did not allow allocations for foreign-procured vehicles and equipment for several years. Project Costs and Funding 8. The PCR does not provide detailed cost tables for comparison with appraisal estimates. Total project coste could only be obtained from annual obligations in Tables 8 and 9 of the PCR for Peso and US$ funding. Since there were substantial exchange rate fluctuations, in particular in 1983 and 1984 and there was no breakdown of project costs by component, MAF was requested to provide additional information (Supplement 1 to PCR, MAF letter of October 28, 1986). Expenditures to December 31, 1985 (Project Closing Date) and to December 31, 1986 were provided at exchange rates prevailing at bidding/evaluation and at time of payment/reimbursement for all costs except - 18 - BANK OVERVIEW incremental operating costs for which average annual rates were used. For simplicity, final project costs at December 31, 1985 and at time of payment/ reimbursemenr were used for comparison with appraisal estimates are shown in the table below. PROJECT COST COMPARISION Actual costs to December 31, 1985 Appraisal (based on Table 2 Actual costs as estimate MAF letter percentage of (contingencies October 28, 1986 appraisal Component allocated) Annex 2) estimates % Z Based iased Pesos US$ Pesos US$ on Pesos on US$ Vehicles (incl. credit motorcycles) 144.0 19.23 90.13 9.91 62.6 51.5 Equipment and materials 77.65 10.32 110.22 6.73 141.9 65.2 Civil works 42.13 5.65 22.87 2.13 54.3 37.7 Training and consultants 28.03 3.65 45.26 3.59 161.5 98.4 Incremental operating costs 227.12 31.27 216.41 20.78 95.3 66.5 Total costs 518.93 70.12 484.89 43.14 93.4 61.5 After a two-year project extension, expenditures were 61.5% and 93.4% of appraisal estimate in US$ and Peso terms respectively. Expenditures for vehi- cles were significantly lower than estimated mainly due to a Government mandated 50% reduction in the number of four-wheel drive vehicles (to 480) and a significant lower number of pick-ups, buses and boats. The third phase of the communication equipment procurement program could not be completed in time, due to difficulties in agreeing on standards, and this ac-ounts substan- tially for the low costs in dollar terms for the equipment and materials category. It is now proceeding with funding under from Ln. 2040-PH. Only 298 of the planned 500 Rural Extension Centers were constructed and this explains the low fund utilization for civil works. Another 75 units are now being censtructed and funded under Ln. 2040-PH. Lower than planned procurement and construction programs were mostly dictated by a lack of local funds (pp. 34-36). Incremental operating and training and consultancy costs approached or exceeded targets in Peso terms, mostly because of the two-year project extension. 9. Appropriations (budget allocations) by the Office of Budget and Management (OBM) for foreign and local funding amounted to P 850.3 million, - 19 - BANK OVERVIEW almost double the actual expenditures under the project. In the period 1980-83, actual releases averaged about 55% of appropriations for local cost funding, and less than 10% for foreign funding in the three years 1980-82, which reflects the poor nationwide budgetary situation during project implementation. Disbuisements 10. At the original Project Closing Date, disbursements were about 33% of the loan amount of US$35 million. Following a two-year extension, the final amount disbursed was US$20.0 million cr 57% of the loan amount. Disbursement projections are compared with actual disbursements in the following table: DISBURSEMENTS (US$ million) Appraisal Revised estimate estimate Actual Feb. 1983 Category 1 - Civil works 2.0 2.8 1.2 Category 2 - Equipment, vehicles, materials 25.0 18.5 10.9 Category 3 - Credit (motorcycles) 4.0 5.7 4.3 Category 4 - Consultants, training and study tours 2.0 7.0 3.6 Contingencies 2.0 1.0 Total 35.0 35.0 20.0 Loan cancellation US$15.0 m Economic Rate of Return (ERR) 11. The PCR neither recalculates the ERR at project completion nor pro- vides enough cost and benefit data for ERR recalculation. Some assumptions, therefore, had to be made to assess the economic viability of the project at completion. The assessment used the same methodology as at appraisal but took into account the differences between actual and anticipated results. At appraisal, the difficulty of apportioning increased production to improved extension, additional inputs, expanded credit, etc., was realized and the methodology used was, therefore, to assess the increase in production neces- sary to generate an ERR of 15%, which was considered satisfactory compared to the opportunity cost of capital of 10%. This increased production would have required an incremental paddy yield, at full development in year 8, of 34 kg/ha and corn yield of 10 kg/ha only, which were considered easily obtainable through improved extension, with base year cultivated areas under paddy and corn of 3.6 million ha and 3.4 million ha respectively. Benefits from other - 20 - BANK OVERVIEW crops, livestock production and nutrition programs were not quantified. According to the PCR, the actual national incremental paddy yield in 1985 over 1979 was 440 kg/ha. Corn yields declined by 20 kg/ha over 1979 after marginal increases in the intervening years. As regards area coverage, the project at completion covered only 52% of villages in the country and it is expected that full coverage be achieved by 1990. For recalculating the ERR at project completion, only benefits of increased paddy production were used. It was assumed that 10% of yearly national incremental paddy yields were due to improved extension from year 2 (1980) onwards, reaching 44 kg/ha in 1985 and later years. For area coverage, it was assumed that improved project extension services covered 5% of total paddy area of 3.6 million ha in year 2 (1980) increasing to 50% in 1985 and later years. Based on these assumptions, which are considered reasonable, and using economic farmgate paddy prices and economic costs of the project in 1985 constant terms, the recalculated ERR is about 20% compared to the present opportunity cost of capital of 12%. The project, therefore, is considered economically viable. Audits 12. Audit reports were received late and did not contain the source and application of funds related to t4e project. The annual reports were lengthy and established that there remain ample opportunities for improving accounts at both central and regional level. In particular, training and supervision of regional accounting staff should be strengthened. A lack of inventory control by project management was a recurring theme in audits. Government Performance 13. The decentralization of MOA, with Project Management Staff inexperi- enced with Bank procedures, and the appointment of several Regional Directors with minimal commitment to the new extension methodology significantly delayed project implementation. Procurement of vehicles, equipment, materials and buildings was delayed initially by inexperienced staff and later much reduced due to funding constraints and a Presidential moratorium on vehicle purchases. Staff appointments were significantly below appraisal estimates, but adequata staff became available for areas where improved services were introduced. It is the Region's view that, based on a ministerial instruction, too many of the procured vehicles remained in Manila, sometimes for non- project use, leaving extension supervisors and SMSs in the field without transport. Staff training was generally well handled and consulting services were obtained in a timely manner, except when there were Presidential instruc- tions not to hire consultants. Bank Performance 14. Project preparation started following a Bank- and IRRI-organized international seminar in Manila, where senior Philippine extension and research personnel and policymakers were exposed to Asian country experience with the T&V extension methodology. The appraised four-year nationwide project was far too ambitious, particularly as a complete reorganization of MOA was a prerequisite for implementation. The appraisal team considered a scaled-down project but politically (e.g., which Region(s) should benefit) this was not possible. The procuremenL for a complete countrywide - 21 - BANK OVERVIEW communication system should have been expertly reviewed before or during appraisal, although the design was based on proposals made by local consul- tants. Even after a two-year project extension, only slightly more than half the country's farming community was benefiting from the project. A smaller project, restricted to pilot provinces, would have been preferable to test the absorptive capacity of the Philippines. This could then have been expanded nationwide, fully or by stages depending on availability of trained staff and local funds. The impact of budgetary constraint% and slow fund release proce- dures following the energy crisis could not bt . :eseen. 15. The need for the large additional number of lower-level extension workers, as proposed in the Appraisal Report, is questionable since the extension worker to farm family ratio was already much higher than found in most Asian countries. The general ed al standard of this staff category is also generally higher. The Governmc refore may have reasoned that a further increase in staff, in addition to extension staff in other agencies, would lead to future unacceptable high levels of recurrent costs which would not be sustainable following project completion. This view is also expressed in the PCR (p. 40) with regard to transport O&M. For this reason the Govern- ment may, with justification, have deliberately appointed fewer staff than agreed at appraisal. 16. Supervision was adequate and several times included the participa- tion of extension specialists. In particular, there was excellent cooperation with USAID's consultants from Kansas University during early project years. Many mission recommendations could not be acted upon by BAEx because of bud- getary constraints or a lack of a political will. The Bank followed up with a timely loan (Agricultural Support Services Project, Loan 2040-PH) to assist in improving technology generation and verification. 17. When the Project Closing Date was extended to June 30, 1985 the loan amount should have been reduced, in view of the large uncommitted Loan amount and local budget constraints to Lower commitment charges over the two-year project extension period. In late 1984 the Bank agreed to continue financing several uncompleted project components (full coverage of the extension service, procurement and installation of the communication system and comple- tion of the Rural Extension Centers) under the Agricultural Support Services Project, Loan 2040-PH. Sustainability 18. The prospect for project sustainability is generally good. The Ministry of Agriculture and Food is now fully committed to cover all regions fully with the improved extension services by 1990 and under Loan 2040-PH there are substantial provisions for further improved technology generation and verification on farms. However, farmer acceptability of available technologies depend greatly on produce prices and their ability to achieve costs of production that allow adequate profits. Extension ratios are high at about one field extension agent to about 350 farm families and substantially higher than in most neighboring countries. The education standard of exten- sion workers is also generally higher. With adequate motivation the Philippines could have an excellent agricultural extension service. Unfortunately, extension workers are poorly paid and receive insufficient - 23 - MINISTRY OF AGRICULTURE & FOOD NATIONAL EXTENSION PROJECT (IBRD LOAN NO. 1626-PH) PROJECT COMPLETION REPORT - 25 - NATIONAL EXTENSION PFoJECT (1626-PH) PROJMCT CMPLETION REPORT 1.0 INTMOUCTION The Philippines is predominantly an agricultural country. About 70% of the Filipinos live in the rural areas and are dependent on agriculture as their main source of livelihood. Agriculture provides more than 50% of the total employment. It contributes about one-third to the country's gross domestic product. With approximately 6.3% growth rate in the national economy for the last decade (1970-1980), agriculture recorded a 4.9% growth for the same period. Of the ?82.08 billion added in agriculture, forestry and fisheries in 1983. agriculture gave the biggest share of ?47.71 billion (58.13%). In 1982. however, a decline in the output growth was noted. Due to the eight month drought, rice production fell by 10.2%, corn by 4.7%, coconut by 9% and sugar by 15%. But during the crop year 1983-1984, corn harvest was at 69.9 million tons which ree-aced imports by over 100,CC0 tons or 23%. An annual growth rate of 6% is projected for agricultural production for 1984 to 1988. Grains production is placed at 5.5% annual growth, corn at 8.5%, comercial crops at 7.1% and others at 3.9%. A sustained growth rate of 6.2% is expected for poultry, 2% for livestock products and 2.5% for fisheries. In consonance with the major national development goals of sustained economic growth, equitable income distribution and improved quality of life, the agriculture sector has for its primary objectives the following: 1. "Expand production and step up productivity to increase agriculture's contribution to the balance of payments through export expansion and import substitution; 2. Attain self-sufficiency in all basic food items, including grains as well as fish and meat products, and ensure the availability of requisite food supplies at reasonable prices, with special emphasis on in- digeneous food products with high nutrient value for the nutritionally vulnerable and deprived population groups; 3. Improve and stabilize farmer's income and welfare through high productivity, better marketing, and a more efficient system to pricing, subsidies and incentives. - 26 - 4. Enhance landless rural worker's welfare by assuring then of better access to agricultural resources and a bigger share of national income through higher returns, intensified resettlement activities, and by provisions of more gainful on and off-farm employment; 5. Carry out a land management policy which will foster the retantion of land suitable for agriculture in agricultural use, discourage diversion of such land to other uses, and enhance the security of land tenure.* With the Ministry of Agriculture and Food (MAF) at the helm of all agricultural activities, it is primarily responsible for the acceleration of agricultural development through increased produc- tivity and farm incomes as well as the overall socio-economic up- liftment in the countryside. Hence, the thrusts are not only focused on increased food production, but also to bolster export expansion and import substitution, and nutrition intervention. In support of all these comodity programs is the agricultural extension component. This was provided by no less than 15 govern- ment agencies with about 50,000 personnel. The MAF has the biggest extension force of about 12,900 extension workers at the grassroot level. Having the biggest extension manpower, the MAF's presence became more prominent than the other Ministries poviding rural extension work. The proliferation of extension work into so many agencies is not only common between ministries. In the MAF alone, agricultural extension work was carried out by no less than four former line bureaus. With the recent reorganization of the MAF, however, agri- cultural extension work mas consolidated under the Ministry proper including those Provided by the Bureau of Cooperatives Development (S00), and the B3yreau of Fisheries and Aquatic Resources (BFAR). In a review Londucted by a World Bank mission in February and March 17, fragmentation was only one of those weaknesses found in the Philippine agricultural extension system. Other were the lack of training, poor supervision, lack of vehicles and other facilities. These conditions promted the Philippine Government to request assistance from the International Bank of Reconstruction and Deve- lopment (IBRD) in a bid '(a) to promote further production increases in the main food.crops and expand Livestock production; (b) to im- prove the quality of rural Life through higher incomes, better nutri- tion and general home managements and (c) to reduce rural unemployment !)y assisting otit-to-school youth establish backyard livestock enter- prises.' - 27 - Dubbed as the National Extension Project (NEP), IBRD Loan No. 1626-PH. it has five mutually supportive components, namely: (1) organization program; (2) buildings, vehicles and equipments; (3) extension methodology; (4) staffing and training program; and (5) consultancy services. The total project cost was US$70.1million including the Philippine counterpart of US$35.1 million. 2.0 PROJECT IDENTIFICATION, PREPARATION AND APPRAISAL The Philippine Government requested a World Bank Mission to review the Philippine extension service. This was done in February and arch 1977. After a series of consultations, the Ministry of Agriculture and Food (then Ministry of Agriculture), through the Bureau of Agricultural Extension (BAEx), took over the preparation of a project paper. Thus, on November 15, 1977, a Project Fonaulation Task Force was created in the BAEx under Special Order No. 82, Series of 1977. Its main task was to prepare a project proposal, with the assistance of consultants from the University of the Philippines at Los Banos (UPLB), International Rice Research Institute (IRRI), and the National Food and Agriculture Council (NFAC). The proposal wasappraised by a World Bank mission in February and March 1978, and the World Bank approved a US$35 million loan on December 21, 1978. The Project became operational on krch 29, 1979. As stated earlier, the Project is composed of five components. These are: * 2.1 Organizational Program. Implementation of an improved organizational structure for the Ministry of Agriculture and Food that would bring about closer coordination bz"ween research and extension. 2.2 Vehicles, Buildings and Equipment. 2.2.1 Vehicles - Provision of service/utility vehicles for transporting staff and demonstration and extension teaching materials. There is also a Special Vehicle Loan Fund wherein mtorcycles are loaned out to farm- level technicians. 2.2.2 Buildings - Construction of some 500 small rural extension centers and renovation of existing extension facilities. 2.2.3 Equipment - Provision of communication equipment, office, - 28 - printing and photographic equipment and supplies, audio visual equipment, and other demonstration and training equipment and materials. 2.3 Extension Methodology. Introduction and implementation of a sound extension methodology which emphasizes on regular training, close supervision, regular visits and use of contact leaders. 2.4 Staffing and Training Program. Implementation of a staffing program that would increase the total manpower for the MAF by 1,000 Farm Management Techonologist, 1,000 Homne Management Tech- nologist, 500 Rural Youth Development Officers, 500 Livestock Extension Officer, and 280 Subject Matter Specialists. This includes the implementation of a human resource develop- ment program in order to increase the number of well-trained exten- Q *JA 4 A4. 2.5 Studies/Consultancy Service 2.5.1 36 man-months of consultant services to conduct a review of rural technicians and extension workers' salaries and incentives, for the Budget Commission, with a view to more equitably compensating such staff and to identifying overlapping extension services provided by different agencies. 2.5.2 24-man onths of consultant services to develop more effective monitoring and evaluation proce- dures to evaluate (a) individual performance of extension workers and (b) effectiveness of extension services provided. 2.5.3 6 man-months of consultant service to assist the Ministry of Agriculture in upgrading the capabilities of their procurement division and to advise on the suitability of various types of equipment to be procured under the project. 3.0 IMPLENENTATION The project was beset with a major problen at the start. 'It was implemented at a time when the country was facing severe balance of payments difficulties brought about by the adverse eco- nomic conditions due to the second oil shock in 1979. The value of the peso as against the dollar went down from an average of 2.25% to 167.15% based on the original rate of exchange used at the start of the Project at ?7.50 to US$1.00. As a consequence, there was acorresponding decrease in the units of some items procured. Those components which were 100% financed from the loan proceeds, particularly through direct payments, were not greatly affected. - 29 - 3.1 Original Implementation Schedule The National Extension Project was originally scheduled for a four-year period to be completed on December 31, 1982. and June 30. 1983, as the closing date. During this period, significant accomplishments have been made in terms of technical staff build-up, provision of vehicles and motorcycles, acquisition of printing and office equipment, and construction of small rural extension centers. However, performance was rather low in other components. Adoption of the modified Training and Visit System was slow. The acquisition of audio visual and communication equipment was likewise hampered by some external administrative constraints beyond the control of the project management. Even the organiza- tional program has somehow suffered an impasse due to some social and economic restraints. It was on this context that the NEP was proposed for an exten- sion of another two years. The request was granted with the Pro- ject's new termination date on June 30, 1985. This was further extended up to December 31, 1985. During this period, a more vigo- rous program of training focusing on T & V was pursued. 3.2 Actual Implementation Schedule The NEP was implemented for almost seven years starting in 1979 to 1985. The following are the accomplishments of the said duration. 3.2.1 Organizational Program Presidential Decree No. 1579 reorganizing the Ministry of Agriculture was implemented last March 24, 1980, with the signing of appointments and in- ducting into office of twelve ministry-wide Regional Directors and twenty-four Assistant Regional Directors. In line with this reorganization, four offices under .the Ministry were made into staff bureaus, namely, the Bureau of Agricultural Extension, Bureau of Animal In- dustry, Bureau of Plant Industry, and Bureau of Soill. This was followed by the issuance of Special Order No. 131, series of 1980, on March 28, 1980, designating seventy-five Provincial Executive Officers in the province. Executive Order 595 dated May 21. 1980, trans- ferred the Bureau of Cooperatives Development (BOOD) to the Ministry of Agriculture. Executive Order 967, dated June 30, 1984 also transferred the Bureau of Fisheries and Aquatic Resources (BEAR) and renamed the Ministry of Agriculture into Ministry of Agricul- ture and Food (MAF). - W3 - With the final staffing already completed from the regional offices down to the village level, appointment paper have also been prepared and processed. This will be followed at the staff bureau level wherein a drastic reduction in the number of personnel is almost certain. See Annexes A to F for copies of issuances. 3.2.2 Rural Extension Centers (REC) The civil works provided for under the Project is the consturction of some 500 units of small rural extension centers designed to provide modest office space for the extension workers and also to serve as a meettng place between the extension workers and their clientele. The centers with a floor area of about fifty (50) square meters were built on lots donated to or leased on long term at a nominal cost of P1.00 a year by the Ministry of Agriculture and Food (MAF). From 1980-82, the construction of centers was conducted with the Bureau of Buildings now the Building Service and Real Property Management Office (BSRPMD) of the Ministry of General Services. Three (3) sets of separate Maorand=n of Agreement were signed to this effect by and between the MAF and the BSRHMD covering a total of 272 units of REC for construction. Respon- sibility for the construction of the centers was later trans- ferred to the regional offices of the MAP. Of the 50D units targetted for the life of the project, only 59% or298 were reported to have been constructed, as shown in Table 1. TABLE I RJRAL EXTENSION CENTERS NO OF UNITS CONSTRUCTED REGIONS AT FULL DEVELOPMENT REGION__ TOTAL 1 56 31 3 34 II 36 26 3 29 III 40 19 2 21 IV 77 47 3 50 V 37 11 2 13 VI 43 19 3 22 VII 40 23 4 27 Vil1 47 20 2 22 IX 27 9 8 17 X 39 32 2 34 XI 27 17 3 20 XII 31 5. 4 9 T 0 T A L 500 259 39 298 / Under the supervision/administration of the Building Service and Real Property Management Office (BSRPM0) and the MAF Regional Office. For the specific location of centers, - 31 - The original appropriation cost per unit was ?59,200.00 or $8,OO0 while the actual construction cost ranged from about P?0.0.C) to ?100,C00.O0 per unit. The increase in the construction cost was due to price escalation of cons- truction materials compounded with the unavailability of the materials, particularly in remote construction sites in the regions. Some 75 units are programmed for construction under the restructured ASSP II scheduled for '1986-1987. Among the major factors that contributed to the low percentage of accomplishmient are as followss 1. Difficulties in the solicitation and documentation of donated sites/leased lots for the REC to meet the requirement as prescribed in the guldelinc for the regional offices. 2. Delayed submission of the report of liquidation by the BSR1.D and the MAF regional offices. 3. Constructioa of RBC in a given year was dependent on the actual funds made available during the period. 4. Price escalation of construction materials and the inavailability of same particularly in remote places in the region. 5. Peace and order condition in some areas. 3.2.3 Vehicles and Equipment A major component of the NEP is the provision of equipment and materials for extension services, including vehicles for use of extension staff. As originally programmed, equipment and materials for extension services consist of 1,234 units of vehicles of various types, 677 communications equipment, 10 units printing and photographic equipment, 5,044 units office equipment and-8,128 units audio-visual and other deonstration and training equipment. These targets were, however, reduced to one half by the Ministry cf Budget (NdOB) due to the inability to raise the peso counterpart requirements brought abaut by the economic crisis prevailing in the country. Procurement of the above equipment was originally target- ted to be completed within the four-year period but delays in the releases of the peso counterpart and the MDB approval of the release of non-cash disbursement ceiling contributed to further delays in procurement schedule. - 32 - International competitive bidding was adopted in the procurement of specialized items as well as items purchased in small quantities ($50,000 but not exceeding US$20 M) following government procedures acceptable to the Bank. Items costing not more than US$10,000 each but not exceeding US$500,000 were purchased locally. Local competitive bidding was adopted for items manufactured locally. The procurement program enabled the purchase of additional vehicles and equipment to enhance the mobility of extension personnel to effectively perform their functions. Tables 2 and 3 show the different vehicles and equipment purchased. See Annex H for the list of equipment procured by year and Annex I for the distribution of vehicles and equipment by region. TABLE 2 NMMER OF VEHICLES PROCURED 'MSTAL AT FULL UNITS DEVELOPMENr PIOCURED 1. Car 40 49 a. 1300 cc. 33 b. 1600 cc. 6 c. 2000 cc. 10 2. Jeep 968 480 a. 2 x 4 wheel drive 125 b. 4 x 4 wheel arive 225 c. 4 x 4 wheel drive 130 3. Audio ViFual Mbbile Van 30 * 4. Pick-Up 113 73 5. Combi/Van (Hi-Ace) 28 28 6. Mini-Bus/Coaster 76 50 7. Boats 9 5 TOTAL 1.234 715 9 units of the car and the 30 units of the audio-visual mobile van were deducted from the allocation for jeep. - 33 - TABLE 3 EQU!PMENT PROCURED ITEMS TAL AT FULL UNIT DEVELOPMEW PROCURED Communication Equipment 677 1.4091/ Audio Visual Equipment 8,129 2,2652 Office Equipment 5,044 9,214 Office Furnitures - 12,653 Printing Equipment 10 17 Extension Equipment 65,274 39,957 Books - 2,285 Automotive IMintenance tools 494 An entirely new plan for communication systems was designed by a consulting firm and approved by IBRD consisting of four (4) integrated comunication systems: (a) Telephone Systems (b) Trunl(ed Radio system (TRS); (c) Hot Line & Low Speed Data Transmission system; and (d) HF SSB Radio System Includes the changed items as recommended by Dr. Hatch, Agricultural connunication Consultant and approved by the NEP Management Committee. 3 2.4 Telecommunication Equipment This sub-component had the primary purpose of upgrading the MAF's comnunication network for facilitating messages, reports and instructions from the head office to the regional and provincial offices as well as to the extension centers and vice versa. The network system however , was not made operational before the end of the project. There were many factors that - 34 - contributed to the inability of the NEP project management to make it operational. Previous design of the proposed network system did not conform with the Bank's specification and some requirements of the National Telecommunication Comnission of the Ministry of Transportation and Commnication. The new system designed by the consulting firm consisting of four integrated communication system such as telephone Hot-Line & Low Speed Data System, Trunked Radio System and HF/SSB System was finally approved bf the Bank and the local regulating agency. Due to limited funds, implementation of this component was divided into three phases. Phase I and Phase II covers the acquisition of telephone, Hot-Line & Trunked Radio System. Phase III which is proposed under the redesigned ASSP includes the procurement and installation of HF/SSB radio system which would fully operationalize the system. The services of the present consulting firm is retained to oversee the installation, testing, and training of personnel on the operation and mairte- nance of the comnunication equipment. Installation under Phases I and II is on-going and is expected to be completed by the end of the second quarter of 1986 (Annex J). 3.2.5 Credits for Mbtorcycles (SVLF) The National Extension Project-Special Vehicle Loan Fund (NEP-SVLF) program was designed primarily to provide field- level technicians, field staff/supervisors, subject matter specialists and other MAF personnel the opportunity to acquire a motorcycle, thereby increasing their mobility for intensive and more effec-tive supervision in their areas of assignment. The program provided for a four-year implementation schedule with 862 units for the first year, 900 units for the second, 165' for the third and 3,000 for the fourth year or a total of 6,412 units. During the two-year extension of the project, a total of 2,000 units was programmed, of which 1,200 units was scheduled for the first year and 800 units for the last year. To implement this program, the Mbtor Loan fund was cons- tituted as a revolving fund from the appropriations of the National Extension Project and deposited in the Philippine National Bank under a wCNMO Account (combination of savings and current accounts) whereby deposits to savings account earn interest. All interests earned accrued to the fund, including repayents of borrowers. Initially, individual borrowers were granted loans equivalent to ninety-five per cent (95%) of the cost of the motorcycle but - 35 - not to exceed P9,000.O0 on a repayment scheme of not more than sixty (60) equal monthly installments without interest. The borrower provided an equity offive percent (5%) of the cost of the motorcycle and shouldered the vehicle annual registration fees, premiums for third party liabilities, comprehensive vehicle insurance, personal accident and group life-term insurance. The borrowers were free to choose any motorcycle brand from among the suppliers/dealers accredited with the program. For details, see Standard Operating Procedures of NEP-SVLF, (Annex K). There were four motorcucle Suppliers/Dealers accreditad to the NEP-SVLF Program, with nationwide marketing outlets, namely: (a) Norkis Trading Corporation (Yamaha brand), (b) Honda Philippines, Inc., formerly MARIWASA Inc., (honda brand), (c) Kawasaki Mbtor Sales (Kawasaki brand) and (d) Suzuki Philippines, Inc., formerly Antonio Suzuki Corporation (Suzuki brand). The program was initially implemented with the first release of funds for the Mbtorcycle Loan Fund in July 1980. Subsequent releases of funds were made to replenish the Fund. For the period from July to December 1980, a total of 1,062 loan applica- tions were processed and approved. In CY 1981, 2,219 loan applications were processed and approved, followed by 2,838 in CY 1982 and 844 in CY 1983. During the first two years of the Project, this category was availed of through the reimbursement scheme of the World Bank (Procedure I). However, the period from the time a loan is granted, paid and reimbursed by the World Bank, and finally the release of funds from the Ministry of the Budget for replenishment of the Revolving Fund, took from six months to one year. Some of the reasons for this delay may be traced to C) failure of the supplier/dealer to complete the required documents for payment of their deliveries, (2) applicants were no longer interested to get the motorcycle upon approval of their loan and (3) applicants cannot produce the required equity. These prevented the expedtious grant of motorcycle loans since the suppliers/dealers cannot continue to serve the delivery orders unless previous deliveries have been paid. It is for this reason that in 1982, with IBRD approval, Direct Payment Procedure (Procedure III) of Guidelines for Withdrawal of Proceeds of IBRD Loans and IDA Credits) was applied to pay the suppliers/dealers for motorcycle deliveries to borrowers. With the use of this procedure, more loan applications were processed and approved. and the suppliers/dealers were paid within thirty (30) days after submission of the with- drawal application. Loan availment under this procedure ras made even prior to the release of allotments from the Ministry of the Budget. However, with the issuance of OEM-0OA-Finance Joint Circular No. 5-82 which requires, among other things, that all foreign loans shall be covered by an Advice of'Allotment together with the corresponding Cash Disbursement Ceiling and/or Non-Cash - 36 - Availment Authority, the use of this procedure was discontinued Beginning January 1984, no funds were released by the Ministry of the Budget for this category. Thus, motorcycle loans were granted purely on the availability of funds from the Mbtorcycle Loan Revolving Funds. Some events also occured in the early part of this year which saw the contraction of the government sales operation of the four motorcycle suppliers/dealers because of economic problems which beset the country. Eventually three suppliers/dealers temporarily ceased their government sales. The lone suppliers/dealer left was Norkis Trading Corpo- ration which has allocated a very negligible number of motor- cycle units to NEP-SVLF borrowers. This year saw also the tremendous of ?9,000.00 Loan that maybe granted to a borrower was increased to ?18,000.00 with an extended repayment period of sixty (60) months to eighty-four (84) months. As of the closing date, a total of 5,541 loans were granted under the Project as shown in Table 4. With some 15.100 field personnel of.the Ministry of Agriculture and Food, only a third of them have availed of the loans as shown Annex L. Since there is an urgent need to provide them transportation facilities for greater mobility in servicing the needs of the Ministry's clientele, the motorcycle Loan Revolving Fund was continued as a source of motorcycle loan at a least cost to field personnel. TABLE 4 NEP/SVLF MME1CYLE LOANS & REPAYMENT CALENDAR :IMPLEMEN- : APPROVED :LOAN AVAIL: LOAN : :LOAN BALANCE YEAR :TION : APPLICA- :ED OF (NO.: DISBURSED : REPAYMENT :(CUMMULATIVE) :SCHEOULE_; TION OF UNITS): 1979 - - * 1980 862 1,062 437 ? 3,447.090.50 7 1.662.81 r 3.445.427.69 1981 900 2.219 1,069 8,819,145.90 984,544.09 11,280.029.50 1982 1,650 2.838 2,117 17,824,550.50 2,714,263.25 26,390,316.75 1983 3,000 844 1,461 12,452,969.35 5,351,183.50 33,491,802.60 1984 720- 163 117 1,190,022.40 7.307,497.82 27.374.327.18 1985 360 381 320 5,650.182.90 8,246,024.80 24,778,485.28 T 0 T A L 7,492 7,507 5,541 P49,383,961.55 P24.605.476.27 24.778.485.28 1/ The original target schedule were 1,200 units for 1984 and 800 .mnits for 1985 or a total of 2,000 units for the two- year extended terms of the project. However, the number of units was reduced as indicated based on the availability of funds out of the motorcycle loan revolving fund since no funds were released by the MDB for the category. - 37 - 3.2.6 Staffing Pattern The implementation time-table for incremental staff and extension positions under Part D of Schedule 2 of the Project provided for 3,280 additional positions to augment the existing extension staff of which 118 new position were created in the 1979 budget of the Bureau of Agricultural Extension and 880 new positions in the 1980 budget for the Project as shown in Table 5. These positions were filled up and fielded to the different regions (Annex M). A lump sum appropriationwas provided in the budget of the Project in subsequent calendar years for the remaining 2,300 extension positions. However, the itemization of these position was held in abeyance until the exact number of field extension technologist necessary to provide as effective extension service have been determined and included in the new staffing pattern for the implementation of the reorganization of the Ministry of Agriculture & Food. This staffing pattern was finally approved in late 1985 after undergoing several revisions and was partially implemented from the level of agricultural food technologist (AFT) and to the level of municipal agricultural food technologist (MAO). By December 31, 1985, most of the 12,900 AFTs and 1,559 MAUDs have been extended new appointments. TABLE 5 TECHNICAL STAFF BUILD-UP TOTAL AT FULL N0 OF POSITIONS POSITION CLASSIFICATION DEVELOPMENT CREATED/ FILLED-UP Farm Nnagement Technologist 1,000 318 Home Management Technician 1,000 300 Rural Youth Develor-ent Officer 500 150 Livestock-Poultry Technician 500 150 Subject Mtter Specialist 280 80 T 0 T A L 3,280 998 - 38 - 3.2.7 Training Program The conceptual framework for the training programs was based on the basic goal of the agricultural extension services which is to increase the capabilities of the rural people by providing them the knowledge and developing their competence and skills primarily through group and community learning activities. The basic objectives are to increase the level of farm productivity, to expand productive opportunities in the barangay level, to develop self-reliance and ulti- mately improve the quality of rural family and community life. The training programs were geared towards better under- standing of the clientele and the environment. They provided opportunities for professional advancement of both technical and administrative staff members to enable them to work effectively with the clientele, understanding policies, strengthen rural organizations and facilitite integration of programs. The training programs were divided into three types as shown in Table 6. For details, please see Annex N. 1. Local In-Service Trainings The local in-service training provided similar but locally relevant information to all levels of extension personnel. The executive level composed of the Regional and Assistant Regional Directors were given orientation on the Fxtension Delivery System and the Training and Visit System. They also underwent a management refresher course at the Asian Institute of Management. Regular consultation con- ferences on the different components were also undertaken with th, middle-level supervisors in attendance. The series of Extension Delivery System Orientation Training Courses were conducted first in the four pilot areas which were attended by the Regional, Provincial and Municipal staff. The Training and Visit System as an extension metho- dology in transferring technology to the farming clientele was the core of the courses. Trainings were expanded to all regions of the country. Management trainings for supervisory staff were started with the provincial heads. All the Provincial and City Agriculturists, the Supervising Agricultural Extension Specialists and later the Provincial Executive Officers now the Provincial Agricultural Food Officer (PAFOs), together with some BAEx Staff or a total of 148 were trained on Imple- mentation Management in Agricultural Extension in Coordination with the Management of Rural Development (MARD) Program of the University of the Philippines at Los Banos (UPLB). - 39 - The Mhnicipal Agricultural Officers (MADs), being the next line officers in the organizational hierarchy, were given a similar training modified to suit their needs. %brk- shops on Implementation Management of Agricultural Programs for Municipal Agricultural Officers were conducted throughout the country with a total of 1.609 participants. This provided a learning experience aimed to enhance their managerial. coordinative and supervisory capabilities in the implementa- tion of agricultural extension programs and projects. To enhance the competence and skills of the M&P technical staff, varied training courses were given to them. The Extension Specialist Development Course was conducted to all the Subject Matter Specialists. This course emphasized the Training and Visit System to prepare them to backstop the frontline implentators. These same Subject Mhtter Specialists underwent a month-long training on their areas of specia- lization. To keep the Regional Seri-)r Staff up-to-date on recent management and supervisory i1ques, inter-regional seminai-workshops on Project Mhnagot_ were conducted, with 189 participants. A Trainors Development Courses was conducted for the designated Regional and Provincial Training Officers to develop their skills a.d upgrade their competence as planners and implementors of human resource development programs. In preparation for the nationwide implementation of the unified extension methodology, a Trainors Orientation Training on the Training and Visit System was conducted for the senior staff of the regional and provincial offices. Its major output was an action plan of implementation. The Subject Matter Specialists and senior staff from each of the twelve (12) regions attended the Training of Trainors for Integrating Nutrition into Agriculture. The participants were tasked with the adoption of the "Food, Nutrition and Agriculture guidelines' to suit their respec- tive regional training needs and situations, to echo the training to MAF field technicians. follow-up, monitor and evaluate the program. To upgrade'the competence of the Information Personnel in the different aspects of their job, seminar-workshops on Technical Writing (Extension Notes), Media Reasearch and Farm Broadcast, Photography and Soundslide Production and Hardware Utilization, and others were conducted. The fibld technician's training needs were also attended to. New recruits were oriented on their roles and their duties and reponsibilities before they were fielded. Those already in the service were given'in-service trainings and were oriented on the Training and Visit System. Trainings dealing on specific technical subject matters were also conducted. -40- As a result of the consultation-conference with the regional directors, a training course on *Technology and Extension Methodology for Production Technologists (TEMPT) was given to 3,666 MAF Production Technologists and Extension staff at the farm level to raise competence in extension methodology and in the various aspects of agri- cultura! production and marketing as well as develop proper attitudes needed in the proper dissemination of technologies to the farm families. * There was also a training conducted for field personnel of Regions I to XII on Cost-Reduction Technology in Rice Production focused on judicious fertilizer utilization. including that of organic/farm waste and integrated pest management. The first level personnel doing facilitative services were also reoriented on their roles as support staff. Aside fron the in-house trainings. these personnel attended trainings conducted by other agencies both government and the prfvate sector as well. II. Fellowship/Study Grants A. Local Scholarship Local scholarships, both diploma and masteral degrees, were granted to 339 deserving personnel. Ten-month diploma courses on different disciplines like crop production, crop protection, animal production and soil technology were attended by 302 MAF technicians. Masteral degree courses were also availed of by qualified personnel. B. Overseas Training As part of the incentive program in the exten- sion service, 152 deserving workers were sent abroad to attend degree programs and short-term courses. III. Clientele Training A 10-day Unified Extension Service Training Program jointly participated in by some one hundred (100) farmer leaders, RIC leaders and Anakbukid leaders, together with Subject Matter Specialists in the 12 regions of the country and representatives of the Bureau's msjor divisions was conducted at the Development Academy of the Philippines. - 41 - hbst of the clientele development activities were in the form of weekly/bimonthly visits and trainings conducted by field extension personnel. Conferences, dialogues and consultations were also held for the national officials of the different organizations. Some 41 of these contact leaders were sent to Asian countries for study/observation t urs. TABLE 6 SIAARY OF TRAININGS TYPE OF TRAINING NUMBER CODUCTED PARrICIPANTS I. Local In-Service Training 434 24,510 II. Fellowship/Study Grants - Local 26 339 - Foreign 96 152 III. Clientele Development - Local 33 4,689 - Foreign 5 41 - 42 - 3.2.8 Extension Methodology This component entails the implementation of a sound system of extension delivery which emphasizes on regular training, use of contact leaders, regular follow-up visits and closer supervision. The scheme was initially tested in four pilot districts in Regions I to IV in Wrch 1979. A pilot district consist of 50 villages wherein a team composed of 10 Farm Management Technologists, 5 Home hanagement Technicians and 3 Rural Youth Development Officers is assigned under the supervision of a District Agricultural Officer. In October 1979, coverage of the Training and Visit System (T&V) was expanded to the other eight regions (Regions V-XII). still at one district per region. The following year, it was implemented in all the provinces, again at one district each. This was followed by the launching of the Couplementation Program in eight areas in five regions of the country using the T & V as the extension methodology. At present, there are three regions (Regions III, VIII and X) implementingT & V on a regionwide basis. Expansin in the other regions at a slower pace. The reason behind this phasing is the inadequate logistic support suich does not warrant immediate nationwide implementation of the system. All told, there is a total coverage of some 22,506 villages or about 50% of the country's 43,000 villages. There are at least 5,710 extension workers (SMS, MO, APT) directly involved in the scheme who are providing closer follow-up visits to 38.982 contact leaders. Of these, 54% are farmer leaders; 29% homemaker leaders; and 17%, youth leaders. A total of 624,999clientele were served. Likewise, there are 20,522 different organizations (FA, RIC, AB. SN, FABRIC) organized in these barangays with a total of 923.036 members. Training of Trainors, as well as the Echo Seminar- Wbrkshops on T & V designed to prepare all technicians for the job has been completed. Plans for future expansion are for the rest of the regions to implement by phase within the region with about 30% implementation on the first year, another 40% on the second year and the remaining 30% on the third - 43 - year. With this phasing, it is expected that T & V will become nationwide by 1990. 3.2.9 Consultancy Services and Studies During its four-year implementatinn period the Project availed of some cosiult.incy services on different lines of specialization. The selection procedure used to engage the different consultancy service was based on the 'Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency'. The technical compe- tence of the firm, the assignment, the suitability of its proposal and the offered price of the service to be rendered were all considered in the course of the selection nrocess. The following are the studies rendered by the consultants: a) Development of an Effective Mbnitoring and Evalua- tion System for the National Extension Program and Extension Workers - The 24 man-months study involved the evaluation of the existing performance of agricultural extension service and the extension workers; its monitoring and evaluation system; and the results of pre-test and initial installation of the Monitoring and Evaluation systen implementation strategy for the National Extension Program. The Development Specialists Inc., a consulting firm, was hired by the Project to conduct said study which was started on February 27, 1980 and completed on May 18, 1982. They recommended a design of a monitoring and evaluation syt-tem for a more objective assessment of the efficiency and effect- iveness of the national extension program that includes the flow of information, performance indicators, evaluation methods, organizational structure and manpower requirements. The trainings on the system have already been incorporated in the courses conducLed for field extension workers. b) Review of Rural Extension Workers Salaries and Incentives, for the Ministiy of the Budget - This was conducted with a view to more equitably co- pensate such staff and to identify overlapping extension services provided by different agencies. Sycip, Gorrez, Velayo & Co., a consulting firm hired for the said services, conducted the review on January 28, 1981 to June 6, 1983. The consultants' final report included the basic steps and guidelines to ensure the proper implementation of the reconmended position classi- fication and compensatioA administration of extension -44 - positions. The study also resulted in the conso- lidation of extension services of the bureaus under the MAF proper. The first phase of a higher pay scale for extension workers is now being imple- mented in the reorganized MAF. c) Socio-economic research project entitled "Compara- tive Analysis of Agricultural Extension System* - This study started on October 14. 1980 and was in lieu of the procurement consultancy originally programmed under the Project. It was undertaken by the Philippine Council for Agriculture and Resources Research to determine the functional structure, operations and outcomes in providing agricultural extension services to vatious rural development projects in major agricultural pro- duction areas at the regional level. A summary report of the results of the study had been submitted together with soie policy implication for agri- cultural extension in the light of its expanded and more comprehensive coverage. During the extended implementation of the Project, additional technical assistance was availed of in coordination with the Agricultural Support Services Project (ASSP): a) Development of a Sound Communication Network for the Ministry of Agriculture and Food - The Network System. Inc. provided consultancy services to the Ministry in the rationalization and integration of the existing telecounnications network to facilitate communication betwee-i the Ministry and its various bureaus and field offices, and establish data links between its EDP center and bureau users. The hardwaie required had been designed, approved by the Bank, and procured through bidding with clearance from the telecommunication agencies concerned. The project lasted from November 1982 to February 6, 1984. b) Position Classification and Compensation Adminis- tration Study of Research Positions in the Ministry of Agriculture This 6 man-months (January 11 to June 27, 1983) research project contracted with Sycip, Gorres, - 45 - Velayo & Co. is a sequel to a NEP study on position classification and compensation administration of extension personnel. It involves the definition and identification of MAF research positions, and the establishment of a compensation structure that offers sufficient career opportunities and which is comparable to those paid by other government agencies for positions of similar or equivalent functions, discipline and technical expertise. c) Consultancy Services to Assist the Project in the Nationwide implementation of the Training and Visit System (T & V) This was a short-term (April 13-25, 1983 and March 12-28, 1984) consultancy which involved the review of the two-year extension of the NEP and the initial T & V coverage for six regions. W. Romsh D. Sood. a technical Consultant on Agriculture, was hired by the Project for the said services. Arrangements were made for field implemen- tation of the program; the strengthening of the. regional/provincial organizations at various levels; orientation on the T & V methodology that includes a comprehensive program for orientation of staff at regional, provincial and field levels, researchers, as well as contact leaders and other farmers; and the timetable for completion of regional/provincial organizational arrangements. All these were success- fully carried out in the six regions. The second short-term consultancy services involved the assessment of the quality of implemn- tation of the program in the field, including the effectiveness of technicians'visits to farmers, quality of training and guidance provided to - technicians by the subject matter specialists, effectiveness of linkages of the program with research, and the quality of supervision provided by the regional, provincial and central-level officers. A T & V program manager was designated in the regional level to oversee and coordinate implementation of the System from the regional, provincial, down to municipal-level offices. - 46 - d) Consultancy services to cunduct training researches, to develop training modules, methodology and techniques, and to ass'st in the implementation of training programs- The delayed release of local peso counterpart kept the project from being pushed through. The training staff of the Bureau had to make do with the information they gathered to identify the training needs of the regional and provincial-level extension workers. e) Audio Visual Training and Production - A short-term consultancy which involved the training of national and regional staffs of the Ministry in proper operation and maintenancc of audio-visual equipment and facilities received under the NEP. This includes the recommendation to prepare policies and procedures to optimize use of the agri-vans, as well as to provide for repairs and spare parts needed. Through the consultancy services, the Bureau also produced audio-visual programs and the supporting print materials. Other recommendations are for the availment of a new technical assistance and educational and staff training equipment. Dr. J. Cordell Hatch, a Penn-State Agricultural Communication Professor, served from April 15 to hay 24, 1985. f) Consultancy in the form of supervisory services in the implementation of c%e telecommunication project of MAF This covers technical services in the installation of a) Telephone Systfun, B) Hot-Line and Low Speed Data Systear, and c) Trunk3d Radio System. The Network Sys:em, Inc., the firm comissioned by NEP in November 1982 in connection with the develop- ment of a sound telecommunication network in the Ministry again provided its services, starting November 5, 1984 until December 1985. Timetable for each system to be installed was sub- mitted by the respective contractors and installation of the equipment is on-going. Application for permit to install radio stations as well as the mobile radios for the Read Office was submitted to the National Telecommiunication Commission (NTC). Installation of equipment is on-going - 47 - 4.0 FINANCIAL PERFORAANC,E 4.1 Cost Estimate The National Extension Pro)ect was originally estimated to cost US $70.1 million, of which US$35.0 million will be funded from an IBRD loan and the remaining amount from local counterpart funds. In terms of Philippine peso, the Project will cost 9525.75 million based on an exchange rate of P7.50 to US$1.00 then prevailing. The Bank loan of US$35.0 million will cover the foreign exchange cost of US $26.0 million and US $9.0 million equivalent of local cost. Total costs estimates of the Project included (a) the cost for the construction of small rural extenalon centers throughout the country; (b) provision of communications equipment for the Ministry of Agriculture and Food (MAF); (c) provision of equipment and materials for extension services, including vehicles for transporting staff and materials, office, printing and photographic equipment and supplies and audio and visual aids and other demonstration materials, and training equipment and materials; (d) intro- duction and implementation of a sound extension methodology; (e) implementation of a staffing pattern and training program with a timetable for incremental extension staff and new extension positions; (f) various studies on the compensation system for extension staff to determine competitive salary levels and recommendations how these might be reached over time, including the provision of adequate travel allowance to meet their transport requirements; and (g) studies for the development of a more effective monitoring and evaluation procedure to determine individual performance of extension workers and effectiveness of extension services provided. Physical contingencies of 15% for vehicles, equipment and civil works were included and amounted to 6% of project costs and contingency due to expected price Increase over the implementation period which amounted to 15% of total project costs. The original quantity estimates for the various vehicles, equipment and materials, and civil works were based on the project feasibility study which was appraised by the Bank's staff. Unit bid price for civil works, vehicles, equipment and materials, including the cost of motorcycles loaned to field extension technicians and other incremental operating costs for technical staff build-up and travel allowances, foreign consultants' fees and travel costs, local and overseas study tours, scholarships and local in-service trainings were based on present-day cost levels.' - 48 - Actual cost in Incal currencywith its dollar equi- valent varied from year to year ranging from ?7.3820 to F20.0363 per USdollar. Over the years, from the latter part of 1979 to 1985, the value of the peso as against the US dollar has steadily declined. Based on loan avail- ments, the following table showns the fluctuation of the exchange rate and the average rate based on actual total expenditures in US dollars and its peso equivalent. TABLE I ECHANGE RATES PREVAILING BY YEAR ON LOAN AVAILMENS PER US $1.00 AVARAGE YEAR HIGHEST LOEST BASED CN OrAL EXPENDITURES 1979 P7.3820 -7.3820 1980 7.4790 F7.9485 7.6687 1981 7.8990 8.2370 8.0951 1982 8.0028 9.0430 8.7531 1983 8.2174 13.9903 12.7930 1984 13.9216 20.0363 17.7041 1985 18.1640 19.3900 18.4131 The above table showns that the value of the peso as against the US dollar went down from an average of 2.25% in CY 1980 to 167.15% in CY 1984 using the original exchange rate of P7.50 to US $1.00 at appra!- sal date. 4.2 Project Cost Increases/Decreases As a whole, total project cost did not increase. While unit prices of the various components showed a minimal increase in terms of US dollars these were within the estimated price contingencies provided and included in the total project cost. However, when the dollar costs are converted to its peso equi- valent at value date, there is a considerable increase in cost that the estimated during the appraisal of the Project. - 49 - On the other hand, although expenditures in local currency which are eligible for reimbursement have steadily increased in terms of unit costs, these expenditures however, required a lower foreign exchange equivalent. FINANCING 4.3 Pnding for the Local Component Funding for the local peso counterpart was provided for in several Annual Appropriation Acts from the start of the Project in late 1979 to 1985, as shown in Table 8. TABLE 8 PESO 00UN1TERPARI FUNDING (In Thousand Pesos) BATAS CY PAMBANSA AltJINT ALLOTIENT ACUAL BLG. APPROPRIATED RELEASED OBLIGATICNS 1979 1 21,057.8 21,057.8 21,044.5 1980 40 69,620.0 40,626.4 38,776.7 1981 80 91,577.0 58,427.0 53,580.5 1982 131 99,970.0 62,963.8 57,976.0 1983 230 44,498.0 22,126.0 22,125.5 1984 640 32,540.7 30,007.7 29,820.0 1985 866 41,992 41,951.1 40,223.6 T C)T A L 401,264.9 277,063.0 263,518.5 The amount made available in CY 1985 includes P4.35 million from the Rural Productivity Support Project, Eco- nomic Support Fund (RPSP/ESF) to support the farmffamily development project through farming system which is being conducted nationwide to hasten technology transfer and strengthen the capability of the field extension technicians under the modified extension delivery system (T & V). In addition to the funds appropriated and released to the Pro- ject Is the Mbtorcycle Loan Fund (SVLF/NEP Revolving Fund) which was created at the start of the Project. This Fund has now an accumulated working capital of ?l0.0 million and it has been the only source of funding for the motor- cycle loans to field extension technicians since 1984. - 50 - 4.4 Funding of Foreign Exchange Component The foreign exchange requirement of the Project was financed by the International Bank for Reconstruction and Development (IBR)). Total loan granted to the Philippine Government for the National Extension Project amounted to US $35.0 million, US $26.0 of which will cover the foreign exchange cost at US $9.0 million equivalent of local cost. The loan is payable in 20 years, including a five-year grace period, payable in semi-annual installments. It bears an interest rate of seven and thirty-five hundredths percent (7.35%) per annun on the principal of the loan withdrawn and outstanding. The loan is also subject to a comnitmeni charge at the rate of three-monthhs of one percent (3/4 of 1%) per annum on the principal amount of the loan not withdrawn from time to time. In accordance with Budget Circular No. 278, later amended by OEM-COA-Finance Joint Circular No. 5-82, which provides for uniform procedures in budgeting, accounting and inventory control of all foreign-assisted projects, annual appropria- tions were provided under loan proceeds to enable the project to avail of the loan. The aforesaid Circular requires that all foreign loans as well as grants in cash shall be covered by an Advice of Allotment together with the corresponding Cash Disbursement Ceili-ng and/or Non-Cash Availment Authority, all issued by the Office of Budget and Management. The table below shows the various Appropriations Acts and the funds appropriations Acts and the funds appropriated and allotted to the Project. TABLE 9 LOAN PRDCEFDS FUNDING (In Thousand Pesos) BATAS CY PAMBANSA AUM1 ALLODIENT AC1UAL BLG. APPROPRIATED RELEASED OBLIGATION 1979 1 31,897.0 31,897.0 30,674.8 1980 40 44,630.0 3,338.0 3,327.6 1981 80 101,352.0 12,501.9 12,064.8 1982 131 106,980.0 11,797.8 8,036.6 1983 230 92,656.0 74,900.5 74,900.5 1984 640 41,709.3 32,827.9 32,040.3 1985 866 29,811.0 16,334.0 15,913.5. T 0 T A L 449,035.3 187,097.1 177,559.2 PANITA PUNJAB EXTENSION ANO AGRICULTURAL DELOPMENT PROJECT (Credlt 813-PAK) Locatian and Canditon of Transoort Vehiele and Tractora In Movember 195 1/ AGtriet COnltitlon Blevetam Moped£ Motoreveles Pki-Una LU "ra J.5 t Tractnrm Climan- .........................................(no.)............................................... ashia Vor Khan A - - - I 4 - I i - * 73 - 26 - - - -- - C - - - - 2 - - - - Sub-ToaJ 71 - 21 - IIa vehart A -- - I 3 - I i I * 65 - 28 - - - - - C - - - - 2 - - - - å SubToaJ 65 - 20 I § - I Shetkhpura A - - - I 4 - I I - * 50 19 30 - - - - -- C - - - I 2 I - - sub-Timai 50 19 30 2 6 i - Sehartoha - - - I 5 - - i - * 76 53 15 I - - - - C - - - - 2 - - - S ub-otat 78 63 I 2 a - - Jhelu. a - - - 3 - - j0 I * - 78 14 - - - - - c - - - i 2 I - - ub-Total - 70 U4 2 5 - 10 Hteadquarters A - - - i i - - - - i - - - - - - - C - - I - 3 - - - - Sub-otal- -- - - . msA 6 27 - 3 14 2 O 264 150 113 - - - - C oa- - 2 13 2 - - - GRAND TOTAL 264 150 114 9 40 2 3 14 2 "* tr /L CondltIon defined os A n In services 9 repatrablo; C = out of servtce and not repatrable. - 52 - 4.5 Withdrawal of Loan Proceeds The Loan Agreement provides that the amount of the loan may be withdrawn from the Loan Account in accordance with the provision of Schedule 1 of the Agreement for expenditures financed by the Bank. Actual withdrawals from the Loan Account were usually done under the reimbursement scheme (Procedure I) for expenditures incurred in civil works, study tours and training, motorcycle loans and goods procured locally. Under this scheme, MAF/NEP submits to the Bank an appli- cation for reimbursement of payments made by MAF/NEP for goods purchased locally, supported with copies of the Purchase Order/Contract, Invoice Receipt, Voucher and Checks issued in payment thereof. In the case of Motorcycle Loans supporting documents consist of a list of recipients, type of motorcycle and its cost and the check number and amount paid to the dealer. For expenses actually paid for by MAF/NEP for training and study tours, a Cost Sumary Report is attached to the Application for Reimbursement. Other loan availment procedures used by MAF/NEP were the Direct Payment Procedure (Procedure III) and the Comuit- ment Procedure with Qualified Agreement to Reimburse issued by the Bank in favor of the Commercial Bank of the Supplier (Procedure VI). Under Procedure III, the Bank pays direct to the supplier of the goods or services. Under Procedure VI, a conmercial letter of credit is opened for making payments to a foreign supplier by a commercial bank in the supplier's country. Payments are made to the supplier by the Commercial Bank issuing the Letter of Credit upon compliance witb the terms and conditions of the Letter of Credit. Such letter of credit becomes operative only upon issuance of the Qualified Agreement to Reimburse by the World Bank. Upon payment to the Supplier, the Commercial Bank requests the World Bank to reimburse the former for all payments made to the supplier for the goods or services. In the early stages of the Project where the staff was composed of personnel detailed from other agencies of the Ministry of Agriculture and Food, such staff had to undergo an orientation on the various rules, regulations, laws and procedures applicable to foreign-assisted projects. Like any new organization, there were many problems encountered in the initial stages of the Project but as the Project Management Staff gained more experience and expertise, these problems were minimized. - 53 - 4.6 Loan Disbursemnets As projected in the Appraisal Reports, Cummulative disbursement of the P35.0 million loan is 18.57% for CY 1980, 48.57% for CY 1981, 77.14% for CY 1982 and the balance in CY 1983. After CY 1983. the original termi- nation date of the project, cummulative disbursements amunted to $14.317 million only which is equivalent to 40.9% of the Loan, and $17.825 million equivalent to 50.93% as of December 31, 1984. As of December 31, 1985. commulative disbursements amounted to $20.045 million or 57.27% of the Loan as show in Annexes 0, P and Q. 5.0 INSTITVTICINAL PERFOWANCE AND DEVELOPENIT 5.1 Management and Organizational Effectiveness The report on the study on the Philippine agri- cultural extension system which was conducted by the Wbrld Bank mission in February and March 1977 indi- cated that among others the problems were: (a) proliferation of extension services to so many agenc6es; (b) poor supervision; (c) inadequate specialist support; (d) inadequate training; and (e) lack of vehicles and other facilities. Project NEP has undoubtedly enhanced the effecti-e- ness of the Ministry of Agriculture and Food (MAF). It brought about the unification of agricultural extension services provided by its former line bureaus (BAEx, BPI, BAI, BS), including those from other ministries which were recently transferred to MAF (BCOD and BEAR). The reorganization of the MAF also established closer linkages between extension and research. The subject matter specialists*now work closely with PCARRD and the RIARS. 5.2 Organizational Program The reorganization of the Ministry of Agriculture was effected to streamline operations and to establish clear lines of command from the national level down to the field. In the past, the organization of the Ministry was fragmented and coordination armng the bureaus was poor. With the imple- mentation of this components, both extension and research activities for either crops and livestock were integrated, resulting to a more unified extension service and a closer linkage between research and extension. The implementation of this component was however, rather show as it has earlier stated, suffered an impasse due to some economic and social restraint. However, despite the confusion and anticipated resist once that goes with the transition, it has achieve - 54 - EOCNaIC ASSESSMENr Generally, the NEP has prouted further production increases in the main food crops and expanded livestock production. Rice production inched up from a mean yield of 2.15 million metric tons in 1980 to 2.50 million metric tons in 1984 although there was a decrease of an average annual rate of 3.68 percent in the total area harvested. The mean yield for corn was constantly registered at an annual average of 0.9 million metric tons from 1979 to 1983 despite the decrease in the total hectarage planted (Table 11 a&b) One principal reason for the increased production in the favorable reception by farmers of recommended technology the transfer of which has greately been enhanced by the Project. The decrease in hectarage and in production in some years is attri- buted to the difficulty of securing credit or to high interest rates charged by the banks and the high high cost of production inputs, i.e. fertilizers, pesticides and wag6s. There was also the drought in 1982 to 1983, as well as thp successive typhoons that affected different parts of the country in 1983 and 1984. Nvertheless, there was a mean yield increase of 11.2 percent for rice and 12.5 percent for corn. This is very significant consedering the 1.5 percent targetted average yield increase prior to the Project. Poultry and livestock production had their combined contri- bution of 16.59 percent, 18.72 percent and 18.9 percent during CYs 1982, 1983 and 1984, respectively, to the gross value added (GVA) in agriculture. Production figures in Table 12 show that the Philippines has a attained self-sufficiency in poultry, eggs, and pork but only 70 percent self-sufficiency in cara-beef. Goat production also posted an average growth rate of over 12 percent during the same period. A substantial portion of the benefits from the Project is classified as unquantifiable Table 11 a Production of Major Agricultural Crops/Commodities CYs 1983 - 1987 (Ia Thousand M%tric Tons) ACTUAL PROJECTION 1983 1984 1985 1986 1987 Food Crops Grains Palay 7,730 7,841 8,200 8,430 9,028 Corn' 3.134 3,346 3,039 3,961 4,341 Other Crops Coffee 88 89 98 103 110 Cacao 5 6 6 8 10 Sorghum 17 18 21 24 29 Beans, Seeds us & NuI.s 96 99 112 117 123 Fruil,,s 7,038 6,321 6,396 6,614 6.815 Vegel.able 858 886 914 939 968 Rootc-rops 2,961 3,019 3.064 3,116 3,190 Liveatock 1,003 1,068 1,117 1,173 1,232 Pouli.ry 238 248 263 282 302 Fishory 1,533 1,656 1,745 1,843 1,943 3ources Updated Philippine Development Plan 1984-1987, NEDA, 1984 *Actual Production from Production Series for CYs 1970-1985, BAEcon TABLE 11 b RICE AND CORN PRXCTION. AREA HARVESTED AND MEAN YIELD, CYs 1979 - 1985 (Quantity in Thousand Metric Tons, Area in Thousand Hectares; Mean Yield in Mbtric Tons) Crop Year PALA Y (Rough Rice) Mean C 0 R N Mean Quantity Area Yield Quantity Area Yield 1979 6,430.9 3,674.0 1.75 2,717.3 3,193.2 .85 ;977 6,740.6 3,641.4 1.85 2,774,8 3,242.5 .86 1978 7,178.8 3,601.7 2.00 2,796.1 3,158.1 .88 1979 7,514.8 3,560.7 2.11 3,065.3 3,252.4 .94 01 1980 7,835.8 3,636.8 2.15 3.122.8 3,201.1 .98 1981 7,722.8 3,459.1 2.23 3,109.7 3,238.7 .96 1982 8,121.7 3,442.8 2.36 3,270.2 3,360.7 .97 1943 7,730.5 3,239.6 2.39 3,125.9 3,157.5 .99 1984 7,840.9 3,140.7 2.50 3,346.2 3,270.2 1.02 1985 8,200.1 3,221.8 2.55 3,038.8 3,314.6 .92 Sources Production Series for CYs 197u - 85 Bureau of Agricultural Economics Ministry of Agriculture & Food Table 12 Population of Livestock and Poultry on Farm, by Kind CYs 1976 - 1984 (In million Heads) YEAR CARABAO CATILE GMW HDG CHICKEN DUCK 1976 2.72 1.74 - 6.49 45.67 4.10 1977 2.90 .1.72 1.10 6.70 45.29 4.23 1978 2.96 1.82 1.29 6.91 58.89 5.36 1979 2.80 1.83 - 7.44 49.32 5.34 1980 2.87 1.88 - 7.93 52.76 4.72 1981 2.85 1.94 1.70 7.76 57.72 4.78 1982 2.91 1.94 1.78 7.80 59.71 4.90 1983 2.95 1.94 1.86 7.98 62.25 5.42 1984 2.99 1.95 2.16 8.63 65.67 6.12 1985 * * * * Source: Philippine Statistical Yearbook, 1984 National Economic and Development Authority * No Data Available - 58 - 7.0 CONCLUSION 7.1 Project Justifications and Objectives The National Extension Project was a subject of thorough studies conducted by the technical staff of the Bureau of Agricultural Extension and other agencies under the Ministry of Agriculture, UPLB, IRRI and other related agencies and appraised by the Wbrld Bank Mission. To carry out the objectives of the project, the existing extension services had to be strengthened through the provision of facilitieg, equipment, technical staff increases and training. It also called for the reorganization of the Ministry of Agriculture which in the process of implementation required some revisions and/or modifications in the allocation of manpower, materials and equipment and financial resources of the Project. In the evaluation conducted in the four pilot areas where the Training and Visit System was implemented, modifications In approaches had to be made to suit the actual needs of the clientele, their capacity and willingness to follow the new package of technology being introduced by the extension worker, the level of education and expertise of the extension worker and the expertise of the specialists as back-up staff. The objectives of the Project have become more relevant in the face of the present economic crisis that beset the country. 7.2 Project Implementation and Operating Outcomes The Loan Agreement for the Project was signed by the authorized representatives of both parties on December 21, 1978 and became operational on May 27, 1979 with the organization of an interim group called the NEP Project Management Staff (PMD). However, funding for the Project was not provided for in the regular budget of the goverment for Calendar Year 1979 inasnuch as the government's budget for that Calendar Year had already been submitted and approved earlier than the approval of the Project. For its funding, NEP drew from the lump sum appropriations for Foreign- Assisted Projects (FAP) subject to Special Budget under Section 40 of P.D. No. 1177, otherwise, known as *The Budget Reform Decree of 19771. Initial funding for operational expenses of the Project was released in late July 1979. This enabled the Project to implement the increase in the travel allowance of field extension workers. , - 59 - Funds for the purchase of equipment and motorcycles for the extension workers were also released in late 1979. With respect to the 'splementation of the motorcycle financing, implementation of this category suffered a delay due to a technicality in the object expenditures under which the first release was made. It was released under 'equipment outlayO instead of "loan outlay' to serve as a seed money for the Nbtorcycle Loan Fund. The Special Vehicle Loan Fund (GiVLF) of the Project was finally made operational in July 1980. Problems were also encountered in the procurement of vehicles and other equipment. It may be zecalled that the Project Management Staff (PMS) was composed of personnel coming from the different agencies under the Ministry of Agriculture and Food on special detail. The PS which was charged with overseeing the operations of the Project was implementing a foreign-assisted project for the first time. The PM and the Sub-Conmittee on Bids and Specification of the Project had no prior experience in dealing with externally-financed projects. They had yet to familiarize themselves with the various procedures associated with World Bank loans. This problem was however minimized with the hiring of local consultants who have prior experience in foreign-assisted projects and the training of its staff, including the regional offices staff which played a vital role in the disbursement of funds of the Project. While sufficient funds were released for NEP categories eligible for financing under the Loan Agreement in CY 1979 and CY 1980. shortfalls in disbursements were inevitable for various reasons, among which are: 1. Office of the Budget and Management.(OEM) procedures in releasing allotments and cash disbursement ceilings both for the peso counterpart fund and loan proceeds fund. While totl alot=- ntz fcr C!**D Works, Equipment and Credits for Nbtor- cycle may be released during the first or second quarter of the calendar year and one hundred percent (100%) cash disbursement ceiling may be released for the peso counterpart'fund, only fifty - 60 - percent (50%) of the loan proceeds may be released. There was no problem encountered for loan availments under Procedure III or VI of World Bank. However, under the reimbursement scheme (Procedure I) which requires peso cost financing, the unreleased portion of the cash disbursement ceiling may no longer be utilized for the simple reason that by the time the first cash disbursement ceilings are expended and reimbursed by the Bank, it is almost the end of or already after the end of the calendar year. 2. Bidding procedures of the Bank and the Government for the supply and delivery of equipment and materials required a number of days before Awards were made to the winning bidders and the contract drawn for approval. Furthermore, contracts for the supply and delivery of motorcycle amounting to ?2 Million and above which required the approval of the President suffered a delay of almost one year before the contract was served to the supplier. While procurement of these equipment was pre-scheduled for a given calendar year, disbursements were effected in the succeeding year which accounted for substantial shortfalls in disbursements. 3. The-turn-around period within which Motorcycle loans were received, procured and approved by the Project tanagement Office (PMD), the delivery by the Contractor to the technician-borrower, registration of the motorcycle, and the chattel mortgage, insurance policies and the return of these documents to the PMD took from three to four months. By the time the Contractors were paid out of the revolving fund and the Withdrawal Applications for Reimbursement were prepared and submitted to the Bank, another two weeks or more had elapsed. The use of the direct payment procedure somewhat shortened the turn-around period and increased the number of approved loans. This, however, created technical problems as expenditures exceeded allotments released for this category to the tune of ?8,672,926.40 that we were constrained to discontinue the use of the direct payment procedure. Since CY 1984. no more funds were released by the Budget Ministry. The grant of of the revolving fund. - 61 - 4. Trainings were conducted in the different regions. Since availment of this Category was through the reimbursement scheme, PMD relied mainly on the submission of the cost summary report by the Ministry's regional offices before a Withdrawal Application for Reimbursement could be prepared and forwarded to the Bank. Training funds were released through an Advice of Allotments of which only fifty percent (50%) was provided with a Cash Disbursement Ceiling; While there was a timetable prepared for the conduct of this training, it could only start when funds became available and by the time the first CDC was disbursed, it was almost the end of the year and the balance of the allotment could no longer be availed of as it was reverted to the General Fund of the Treasury in accordance with General regulations. By and large, shortfalls in disbursements under the National Extension Project, notwithstanding the extension of another two years and an exceptional extension of disbursements to December 31, 1985 for items contracted as of June 30. 1985, may be summarized as follows: 1. For the start-up operation, lack of experience and familiarity in dealing with externally-financed projects and the procedures associated with bank loans. Hc-ever, as the Staff gained more experience, and with assistance of local consultants and the Project Officers of the World Bank, this was no longer a problem in the second year of operation of the Project. 2. Difficulty in getting the approval of the agencies under the Ministry of the Budget of our equipment request including its funding. Notwithstanding the listing of some of those equipment in the Bank's Appraisal Report, was required a very detailed justification for each item of equipment. In fact, for CY 1981 and 1982, no funds were released for equipment. 3. E-calation of cost of eau1ment and materials brought about by inflationary pressures. 4. High cost of motorcycles due to the appreciation of the Japanese Yen. While we have sufficient funds under the revolving fund, notwithstanding the non-release of funds in our annual budget for CY 1984 and CY 1985, the high equity cost to be - 62 - shouldered by the borrower has prevented many technicians from availing of the motorcycle loan especially since the increase in loan ceiling per borrower was increased from 39,000.00 to R18,000.00. 5. Difficulty in securing the release of funds for foreign consultants particularly for the T & V system. In the three consultancy services engaged by the Project, funds were only released after a lapse of several months. Fortunately, however, with the Bank's approval, payment for the services of those foreign consultants were made under the Direct Payment Procedure. 6. Inadequate funding of the Project both for the peso counterpart and the loan proceeds during the two-year extension of the Project. With the termination of the National Extension Project. some components which are very vital in strengthening extension service have been carried over in the restructured Agricultural Services Support Project (IBF Loan No. 2040 PH), such as the construction of more rural extension centers, ard audio- visual studio; the third phase of UAF's communication network; further piloting in selected provinces of the modified Training and Visit System and the provision of print materials and softwares. A number of evaluative studies on the T & V System showed the desirability of the improved methodology in terms of its effectiveness in reaching more clientele with better quality extension messages. As a consequence, the number of farmers followfng recommended farm practices has considerably increased. 7here was general agreement among the field extension staff that the objective of the Project in promoting further increases in the main food crops, as well as in expanding livestock production was achieved to a great extent. The studies noted the increased number of trained extension personnel, the social acceptance enjoyed by the contact leaders, and the more frequent field visits by extension workers, supervisors, and other support staff. The evaluation conducted in four Extension Delivery System pilot areas in Luzon (Naujan, Oriental Mindoro, Balanga, Bataan, San Carlos City, Pangasinan and Bagabag, Nueva Vizcaya) in 1980 showed that about 82.9% of the technicians perceived that more farm clientele wern being reached under the methodology being tested or these technicians agreed on the effectiveness of-the EDS in reaching more clientele. - 63 - During that time, however, the concept of the Training and Visit System was not fully internalized by implementors in the field level. In Bejerasco's conducted study in 1982, in the EDS pilot municipalities of Consolacion, Liloan and Compostela in Region VII, it was shown that, in general, the EDS program increased, to a large extent, the income of the farm families and consequently improved significantly their standard of living. Majority have implemented the combination of piggery and vegetable project followed by poultry and corn which was an indication of the favorable attitude of the clientele towards the program. A group from Berlin during the same year conducted a study on the EDS in four barangays of Central Luzon; Wakas (Bataan); Sintog (Bulacan); Paludpod (Nueva Ecija) and Nava'lng (Pampanga). The results of the study showed that changes in the extension service were observed by .ontact leaders as f31lows: improvement of extension messages due to better knowledge offered and more useful information rigarding fertilizer application and pest and disease c-ontrol. Another 10% of the respondents assessed the technicians' qualifications as higher than they were in the past. Likewise, the quantity and quality of extension contacts improved. Nearly 40% of the respondents observed changes with regards to the time technicians devoted to the baraagay and the methods employed in transmitting information. Al' -n all, a considerable improvement ti the performance of extension was noted in the study. Bimoli in 1984 conducted a study tc assess the appli- cability and effects of the Modified T & V System in the municipalities of Liloan, Consolacion and Compostela in Region VII. According to the study, there was a favorable attitude/response of contact leaders and farmer clientele towards the Mbdified T & V. The main benefits were (1) first-hand informatton from the technicians, (2) social acceptance, (3) familiarity with many individuals, (4) more knowledge gained about impioved practices in agri- culture and (5) chances to attend training and seminars. More than 85% of the respondents derived sufficient incame for their daily expenses. The modified T & V effected the increase in production and income. The factors of production were fully utilized by the farmers thereby production and income increased. Although not all features of th'e T & V in the study were followed, it was concluded to be effective. -64 - It improved the social acceptance of the contact leaders and increased the number of farmers following recommended practices. An evaluation of the National Extension Project (NEP) was conducted last September 1985 simultaneously throughout the country. The results of the study sh-wed that as a whole, the objectives of the NEP in promoting further production increases in the main food crops and expanding livestock production were achieved to a great extent. The objectives of improving the quality of rural life and reducing rural unemployment were achieved only to a moderate extent. In terms of targets, 61% were achieved to a great extent. Noteworthy of the accomplishments was the increased number of trained extension personnel. This is followed by increased mobility of support staff, use of contact leaders, more unified extension service, minimized overlapping of functions and improved communication. The ot'. targets were achieved only to a moderate extent. In the post-NEP period, MAF is likely to encounter one serious problem as far as the operation and maintenance of the motor vehicles procured under the National Extension Project is concerned. With the financial crisis the government is currently facing, some of these vehicles may become unserviceable. The economic life span of a motor vehicle under normal condition averages from 4 to 6 years. Thereafter, unless funds are provided to keep these vehicles in good running condition, mobility will suffer due to lack of vehicles. In passing, we would like to mention the assistance of Project Officers of the Bank in the implementation of the Project. They have always been very receptive to our request, going out of their way to intercede in our behalf for the approval of our funding requests and consultancy services with the Office of the Budget and Management and the Prime Minister. We appreciate their valuable advice on some technical aspects of the Project, most especially in the procurement of various equipment including the communication network system, which MAF considered to be very essential in the transfer of technology to the extension clientele. We deeply appreciate and acknowledge the assistance of the World Bank officials in allowing the MAF on an exceptional basis to draw from the loan even after its scheduled closing date on June 30, 1985 for some pieces of equipment which due to technical problems arising -65- from the existing procedures in procurement could not be contracted on or before the closing date. We wish to mention also their willingness and enthusiasm in allowing us to continue some of the unfinished components of the Project in the restructured Agricultural Support Services Project (IBRD Loan No. 2040-PH). Octocer 28, 1986 The World Bank 1818 H. Street, N.W. Washington D.C. 20433 U. S. A. Attention: Mr. Ralph Wadsworth Chief, Agricultural Division II East Asia Pacific Regional Office Dear Sir: In connection with your Telex of OctoDer 8, 1986, requesting a cost table which compares appraisal cost with actual cost at project closing date, enclosed are Tables A and B showing comparative cost between the Staff Appraisal Report and the Project Completion Report and Tables I to Iv showing the actual project cost and its financing. There are two sets of figures presented in these tables based on the exchange rates used in converting the pesc equivalent of foreign costs of vehicles and equipment and materials including bank charges for letters of credit, to wit: 1. Based or exchange rates prevailing dt the time of oidding, negotiation (Tables A and I and III) and 2. Based on the exchange rates prevailing at value date as shown in the r.otice of disbursement by IBRD. (Tables B and Tables II and IV) Conversion of the incremental operating cost to US dollars were based r, -ne average excrange rate prevajiing durin7 the calenoar year as shown in Table 7, page 24 of the Project Capletion Report. Conversion rates used in the other components for local cost were the exchange rates prevailing at the tine of reimbursementpayment. . itih I(-.I Tolbs, pioject cost presented in US dolla.rs &()uted to 62 ($43.1i m.lliun) of the project cobt estimated- in the Staff Appraisal Report 70.1 rullion). However, when the cost are presented in terms of Philippine peso using the exchange rate indicated in nLuber 1 above, actual project cost amounted to 87t (453.3 million) on the original estimates of P518.9 million. This was further increased to 93 (P484.9 million) of the original estimaies using the exchange rates indicated in number 2 above. - 67 - Again, the tables showing the financing of the project indicated that in using the conversion rates in nunber 1 above, the Philippine Government financed 54% and IBRD 46% of the total project cost, both in terms of the Philippine peso and the US dollar. However, using the conversion rates in number 2 aforesaid, the Philippine Goverrmnent and IBRD shared equally in financing the project. It is in this context that we made a conclusion that in term of the US dollar, the project cost did not increase. The cost of vehicles and equipment were within the price and physical contingen- cies provided in the Loan Agreement. It may be mentioned in this connection that vehicles and equipment were mostly procured thru the Cmuitment Procedure with Qualified Agreement to Reimburse (Procedure IV) and payment to our suppliers were made through letters of credit upon presentation of the required docunents. From the tine the bids were made up to the time of payment, several months had elapsed. Since most payments were made in CY 1984 onwards when exchange rate oetween the peso and dollar rose fran F8.795 to P14.00, then to as much as Y20.01 in late 1984 and fluctuated between ?18.50 to P19.00 in 1985, this affected considerably the peso equivalent of the cost of these vehicles and equipment. Thus, when project cost were presented in terms of Philippine peso, using the two different exchange rates, it increased by 25% and 31%. using the exchange rate in nunber 1 and 2, respectively. With respect to the COA Audit Reports, enclosed are copies of the Annual Audit Report of the COA Resident Auditor for calendar years 1983, 1984 and 1985. Very truly yours, C. SERRANO Director Encl.: a/s NATI4 NAL EX I.NSION PROJ ICT (1818U) 16P6 PH) March 17, 1979 to Decembor 31, 1986 TABLE A Comparative Statement of Project Cost. Between Staff Appraisal Report and Project Completion Report (In millions) Staff Appraisal Project Complation Percentage of PCM Heipartt ovor SAR Cogt Comnponents IP eot_ P enr _i. Vehicle 1.....0.......). 107.60 14.54 42.53 5,20 81 68 Credits for Motorcycles ......) 44.51 4.72 O0 Equipment and Materials ...... 57.20 7.73 81.67 6.73 143 87 1 Civil Works ................ 31.10 4.20 22.87 2.13 74 51 Trainin .and Consultants e.... 23.50 3.17 45.26 3.62 193 114 Incremental Operating Cost o., 194.80 26.32 216.41 20.78 111 79 Contingencies (total) ........ 104.70 14.15 - - - Total Project Cost ........... 518.90 70.10 453.26 43.17 87% 62$ NOTEs 1. Peso equivalent of foreign co** of vehicles and equipment and materials, inciuding bank charges or lietters of credaa basea on exchange rate prevailing at the time of bidding/negotiation. 2* Dollar equivalent of incremental operatine cost based on the average exchange rates prevailingduring the calendar year per Table 7 of NEP PCR. 3. Differences in the totals due to rounding. NATI4.1.AL EX 1,NS]ON PROJECT (1810 1696 PH) Harch 17, 1979 to December 31, 1986 TABLL 3 . Comparative Statement of Project Costs Between Staff Appraisal Report and Project Completion Report (In milliona) Staff Appraisal Project Completion Percentae of PCR . * Reort .enort over SAR Cot. Comnonents r - S P IP Vehicles ...................,,). 107.60 14.54 45.62 5.20 84 68 Credits for Motorcycles ......) 44.51 4.72 Equipment and Materials ...... 57.20 7.73 110.22 6.73 193 87 CIvil Works .................. 31.10 4.20 22.87 2.13 74 51 Training and Consultants ..... 23.50 3.17 45.26 3.62 193 114 Incremental Operating Cost *,, 194.80 26.32 216.41 20.78 111 79 Contingencies (total) *...... 104.70 14.15 - - - - Total Project Cost . 518.90 70.10 484.09 43.17. 93% 62% NOTE:s 1. Peso equivalent of foreign cost of vehicleq_an..vqui4pment and-materialt including bank charges for letters of credit based on the exchange rate prevailing on value date. 2. Dollar equivalent of incremental operating cost based on the average exchange rate during the oalendar year per Table 7 of JEP PCR. 3. Differences in totals due to rounding. Table I NATIONAL6 EXTENSION PROJECT (IBRD 1626 PH) March 170 1979 to December 11, 1985 ACTUAL PROJECT COST* L.cA_ Foreign Total_ ._Loal Yreign otat nore COMPONENTS - . .-.. . US Milblion * Exchange V el ................. 18.597 23.932 42.529 2.125 5.072 5.197 59 Equipment & materials .... 9.249 72.427 81.676 0.695 6.030 6.725 90 Cr&dits for motorcycles .. 23.717 20.795 44.512 2.446 2.270 4.716 48 ckl Works *............. 22.871 - 22.871 2.132 - 2.132 - Training and consultants 42.111 3.150 45.261 3.350 0.267 3.616 7 a Incremental Operating Costs ................... 216.406 - 216.406 20.784 - 20.784 - Total Project Costs ..... _ .2.931 _A024 45.255, .31.532 11.639 4170 NCTEs * - Total Project Costs include motorcycle loans A.nd payment for bank charges of letters of credits applied through Direct Payment but were not covered by allotments ind payrents out of the revolving fund for motorcycle loans not applied fo: rei*bursement. - Peso equivalent of foreign costs for vehicles and equipment were based on the exchange r2tes prevailing 2t the time of bidding/negotiatior.. - Dollar equivalent of local costs7of other components were based on the exchange rates prevailing at the time cf reimbursemeit/pz*ment except for increamental operatinE erpenses which were computed on the bases of average rates of exchange prevailing during the calendar year per Table 7 pf PEF ?CR. - Differences in total due to rounding NAT]uNAL EXTEhNION PRUJECT (IBND 1626 PH) Narch 17, 1979 to December 11. 1985 ACTUAL PROJECT COST Local Fore.lmn ..Total _Lgoai Form Totiln ForeigSn COMPONENTS ..-.-.-.-----.-.- - US A1hiton **** x an Vehicles *................ 18.5c7 27.0- 45.619 2.325 3.07' 5.1917 59 Equipment & materials .... 9.249 1O.73 10.222 0.695 6.030 6.725 90 Cr&dits for motorcycles . 23.717 20.795 44.512 2.446 2.:70 4.716 48 1 Civil Works *0*0000000*,. 22.871 - 22.871 2.132 - 2.132 - Training and consultants 42.11 3.150 45.261 3.350 0.267 3.591 8 Incremental Operating Costo ................... 216.40f - 2)6.406 20.784 20.784 - Total Project Costs 1..... 2.Z5) a5294 484.891 11.639 170 27% *NOTEt * - Total Project Costs include motorcycle loans and payment for bank charges of letters of credit applied through Direct Payment but were not coverea by allotments and payments out of the revolving fund for moteroycle loans nct applied for reimbursement. - Feso equivalent of foreign costs for vehicles and equipment were based on the exchange rate at value date. - Dollar sc ,valeat o; lu"I &osts 4S othbx .);,o.ants weer based on the exchanWs rates pevaing at the time of payment/reimbursement exce-t for incremental operating costs which were computed on the bases of average rates of exchange prevailing during the calendar year per Table 7 of NEP PCR. - Dlfferendes in total due to rounding. TALE III NA1l0NAL k.XTE-I11N P040JkCl March 17, 1979 to Decemi-er 11. 3985 FINANCINu! IN NILL34 PESOS - - I . N MILLION US VOL.LuS COMPONENTS _Governmeq IBRD Governmegt IBDD Amunt 5. Amount % Total int A----* V,bsesse .................. 2.660 6 39.e6 94 42.529 0.349 7 4.848 9 5.19 Lquipment and materials i , 9.0.5 11 7.;:Sf51 89 81.676 0.667 10 6.05b 9C 6.725 Lreditp for mnotorryclecs ... 6.841 15 37.671 85 44.c,12 0.374 8 4.342 92 4.716 Civil orki ............... 9.279 41 13.592 59 22.871 0.926 43 1.206 57 2.132 2 Training and consultants ,, 0.222 0.5 45.039 Q9.5 45.264 0.025 0.7 3.591 99.3 3.616 Incremental operating costs 216.406 100 - 216.406 20.784 100 - - 20.784 Total Project Costi , ....., 244.48 208.822 AL 2IL511M =Es * - Peso equivalent of loan availments under equiVaent an vehicles were based an the exchange rates previling at the time of bidding/negotiation. All the other components are the qctual echange rate prevaillag at the Ue of reiebursesent/payment except for incremental operating exlensew which was competed on the average exchange rate prevailing during the calendar year per able 7 of RE PCB. TABLE IV X4114sNvA1 kI1.1in PACJLCI (IBMI)60.1t March 17. 1979 to December 11. 194' FINANC5N. IN MILLI%jN PESOS - - - - - --- - - IE MLLION US IKOL.ANS COMPONENTS Govermmeqt let _Garnrant IBM]' Amount b Annn % ?otal EnW Ae.nt b -ota veshilels 2.66C -6 4'.95c; 94 45.619 0*349 7 4.648 95 5.197 Lquipment and materials t.* 9.025 8 101.197 92 .110.222 0.667, 10 6.058 90 6.725 Lrpdite for mntorcyclep c** 6.841 15 37.671 85 44.512 0.374 8 4.342 92 4.716 C1vtl Works .........*e*w** 9.279 41 1.592 59 22.871 0.926 43 1.206 57 2.132 ' Training and consultants .. 0.222 0.5 45.039 99.5 45.261 0.025 0.7 3.591 99.3 5.616 Incremental operating costs 216,406 100 - - 216.406 2,M 100 - - 20,.84 Total Profect Costp ******* A 4.A58 .e.evt IL NOTEs * - Peso equivalent of loan availments under equipent and vehicles were based an the eschange rate at value Ate. All the other coaponents vere based on the actual exchaWge rate prevailing at the time of &e6reeMnft/paymet except for lacremental operating costs which was computed on the average xchange rate prevailing during the calendar year per Table 7 of F CR. I BRD 20941 116. CLASSIFICATION OF PROVINCES 12o 124* By GEOGRAPHICAL REGIONS ILOcos VI WESTERN VISAYAS I'0o0 Nort 38 Akian PHILIPPINES Abra ,9 Capei Jiocs Sw 4C Antique 20' Mountain 4 .d an 20* L a union On - - - - - Ngo Airports *aliel 3 Negros del Norte Pangasn VII CENTRAL VISAYAS ROads CAGAYAN VALLEY 41 begres odentas Batans ioe Boudhoa Railroads Cagayan 4 SeQu,o, KaInga-Apayao Vill EASTERN VISAYAS Province Boundaries Isabela .orte. Samar * uo aa, - Apa-r- Region Bour-Jaries NeoV.zcays* s Eastern Samar 1Ipar 0 Qui,,ne i- Leyte Loog - - - International Boundaries IjI CENTRAL LUZON $ Southern Leyte Nuevo Ec.I IXB WESTERN MINDANAO Tarlac Zantioanga del Nore 2 Zambaoles A Za0oan)a del Su, 10 P*mpanga IXA WESTERN MINDANAO Bulacan8-aI Bataan Slu 10 IVA NATIONAL CAPITAL Tawitaw 2 "o REGION fernarWo, 5 6 - IV SOUTHERN TAGALOG X NORTHERN MINDANAO sa 50 - Aurora X 16, Colston rigiu, del None 14 KILOMETERS Rnal Agusan del Norte 7 1L Cav.te s 16 -0 10 lo ; Laguna liMemin oriental Jos intaigas OCCdental Tbriat MarInduque B..Id.on 16 2o Mindoro Oriental Agusti del Sur Angel4s 1 19 Mindoro Occidental XI EASTERN MINDANAO 17 ?, * Romblo. E Suipao nel Su, 20 23 22 Palawan f, Danao CientaM V BICOL 00o Car-l Norte &4 Davao del Sur2ojt3 ; Cam'arines N 6o rtet Cotabato Catanduane XII CENTRAL MINDANAO AlbayLnao Norte SSorsgonna d Sr 3- Ma"Wis Nurte Cota:ah 'otoo 3 MasbateMguiOdnao W SultaN KdraN Lga o a Pu er o 313 1e Zmo] e B as e t c tu ynIanu 4 65 31 Prnes Sur.go Ferand 59 60 -~ BIituAAln CagaCamngurn S. Aa de o 0e1001:3Malnsam4r,ursOeoOccso ucdental00-00 120Bl?udnon ZMAY Dava Lanaon del No6 PALanAo dernSor 4 Sultan Kudera N~ ~ ~ DPuerto I 7~~~A 1988 10 5