Philippines - Watershed Management and Erosion Control Project

.- 96~~1 I- _ f ,_. fOgO0 Bb, 990t a~~~ ~~~ C08Pvvt0 be5 \9 oi~~~'c'vs  CURREENY EOUIVALENTS Currency Unit - Philippine Peso (P) Yea Exchange Rat-e US$1.00 - 1979 (appraisal) 7.38 1980 7.51 1981 7.87 1982 8.38 1983 14.00 1984 18.00 1985 2G.00 1986-88 20.50 1989 (completion) 21.50 WEIGHTS AND MEASURES (Metric System) 1 ha 2.47 acres 1 km - 0.62 miles 1 kg - 2.2 pounds Tons are metric tons of 1,000 kg (2,204 pounds) FISCAL YEAR January 1 - December 31 ABBREVIATIONS BAI Bureau of Animal Industry BFD Bureau of Forest Development BSWB Bureau of Soil and Water Management DA Department of Agriculture DENR Department of Environment and Natural Resources DBM Department of Budget Management FAO/CP FAO/World Bank Cooperative Programme FMB Forest Management Bureau GOP Government of the Philippines IFPFPPP Integrated Fire Protection and Fire Prevention Pilot Project IFPPP Integrated Forest Protection Pilot Project LOI Letter of Instruction MNR Ministry of Natural Resources MRMPP Magat Range Management Pilot Project MSAFP Magat Smallholder Agro-Forest:y Pilot Project MWFS Magat Watershed Feasibility Study NEDA National Economic Development Authority NIA National Irrigation Administration NPC National Power Corporation PCR Project Completion Reporc PPAR Project Performance Audit Report SAR Staff Appraisal Report TCA Treasury Cheque Accounts WMECP Water Management and Erosion Control Project  FOR OFFICIAL UE ONLY THE WORLD BANK Washington. DC. 20433 U.S.A. Odfico CA Gooeto" Op.eatA.o Evalwtbnn September 19, 1991 MEORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Philippines Watershed Management and Erosion Control Prolect (Loan 1890-PH) Attached, for information, is a copy of a report entitled "Project Completion Report on Philippines Watershed Management and Erosion Control Project (Loan 1890-PH)" prepared by the FAO/CP with Part II contributed by the Borrower. No audit of this project has been made by the Operations Evaluation Department at this time. Attachment This document has a restricted distribution and may be used by recipients only in the performnance of their official duties. Its contents may not otherwise be disclosed without World Bank authonizdtion.  Foa OFmICL U ONLIV PROJECT COMPLETION REPORT PHILIPPINES WATERSHED MANAGEMENT AND EROSION CONTROL PROJECT (LOAN 1890-PH) TABLE OF CONTENTS PaUe No Preface .. i Eveluation Surary . ili PART I: PROJECT REVIEW FROM BANK'S PERSPECTIVE 1 . . 1. Project Identity 1 2. Background .1 3. Project Objectives and Description. 2 4. Project Design and Organization. 3 5. Project Implementation. 6 6. Project Results .8 7. Project Sustainability .12 8. Bank Performance .13 9. Borrower Performance .13 10. Project Relationships .14 11. Consultancy Services .14 12. Project Documentation and Data .14 PART II: PROJECT REVIEW PROM BORROWER'S PERSPECTIVE .1S 1. Project Objectives and Design. 15 2. Project Implementation .16 3. Project Impact .17 PART III: STATISTICAL INFORMATION . . . . . . . . . . . . . . . 18 1. Related World Bank Loans . .8 2. Project Timetable ..19 3. Loan Disbursements ..20 4. Project Implementation ..21 5. Project Cost and Financing . .24 A. Project Costs .24 B. Project Financing. 25 6. Project Results ..26 A. Direct Benefits .26 B. Economic Impact .26 C. Studies .27 7. Status of Covenants ..28 8. Use of Bank Resources .29 A. Staff Inputs .29 B. Missions .29 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.  TABLE OF CONTENTS (Cont'd) Annex 1: Area of Plantation Planted and Are& Damaged by Fire in the Pantabangan and Magat Watersheds 30 Tables 1. Pantabangan - Area Established, Excluded and Net Area .... . . . . . . . . . . . . 31 2. Magat - Area Established, Burned and Net Area .32 3. Fire Incidents and Area Afffected .33 Chart 1. Fire Incidents and Area Affected .34  PROJECT COMPLETION REPORT PHILIPPINES WATERSHED MANAGEMENT AND EROSION CONTROL PROJECT (LOAN 1890-PH) Preface 1. This is the Project Completion Report (PCR) of the Watershed Management and Erosion Control Project in the Philippines, for which Loan 1890-PH in the amount of US$38 million was approved in August 1980. The project completion date was extended by two years and the loan closing date by a further 45 days to mid-August 1989. At Government's request, US$2.4 million of the loan was cancelled in September 1987 and at loan closing there was an undisbursed balance of US$2.77 million, which was also cancelled. 2. Parts I and III of the PCR were prepared with the assistance of an FAO/World Bank Cooperative Program (FAO/CP) mission which visited the Philippines in March 1991. They are based on a review of the relevant documents, including the Staff Appraisal Report, the Loan Agreement, supervision mission reports, a draft Project Completion Report prepared by the National Irrigation Authority (NIA), annual project reports and consultants' reports, and correspondence between the Government and the World Bank. The mission also had discussions with the Government and World Bank staff familiar with the project and collected data during a six-day field visit to the project sites in Central Luzon. Part II of the PCR was prepared by NIA on behalf of the Borrower. The Bank wishes to thank the management and staff of NIA and other government agencies involved with the project, and the FAO-CP, for their cooperation in preparing this PCR.  A oto~- 4~~4 "I# . 04, 3 t 'P .~- -6? -11  - iv - access road construction, and having scattered planting sites. The timing of the studies and pilot project components was even more optimistic, with planning and implementation of the pilot projects as well as conclusions on their results and incorporation of these into the Magat watershed feasibility study, all to be completed over a three-year period. In the event, formal designation of BFD to be responsible for the smallholder agro-forestry pilot project and the Bureau of Animal Industry (BAI) to takce charge of the range management pilot project was made only in mid-1982. The pilot projects were included in the project only during the writing of the Staff Appraisal Report, and how they were to be planned and implemented and their precise objectives were vague. 5. A major difficulty for the project was caused 1by the steadily more rigorous enforcement of legislation against felling in the project area from 1983 onwards - even where this was only as necessary thinning of plantations. This effectively killed any hooes that the project could become financially and economically viable. It also exposed the basic ambiguity of the whole project concept in having the twin objectives of both preservation of the catchments and sustainable improvement of the livelihood of the local population. 6. Due to the slower than expected performance, the Loan closing date was twice extended by one year to end-December 1988, and then a third time until mid- August 1989 to accommodate late withdrawal requests. At GOP request, the Bank cancelled US$2.4 million of the Loan in September 1987, and at Loan closing a fur'i