Cordillera Highland Agricultural Resource Management

Completion Report
Project Number: 26517

Loan Numbers: 1421/1422-PHI(SF)
May 2006
Philippines: Cordillera Highland Agricultural Resource

Management Project
CURRENCY EQUIVALENTS
Currency Unit – peso (P)
At Appraisal At Project Completion

(31 October 1995) (9 December 2005)
P1.00 = $0.0385 $0.01875
$1.00 = P26.00 P54.12
ABBREVIATIONS
ADB – Asian Development Bank

ASS – agricultural support services
ADF – Asian Development Fund
BME – benefit monitoring and evaluation
BNRMP – Barangay Natural Resource Management Plan
CADT – certificate of ancestral domain title
CAR – Cordillera Administrative Region
CHARM – Cordillera Highland Agricultural Resource Management Project
CIS – communal irrigation system
DA – Department of Agriculture
DA-CAR – Department of Agriculture-Cordillera Administrative Region
DAR – Department of Agrarian Reform
DENR – Department of Environment and Natural Resources
DWS – domestic water supply system
EIRR – economic internal rate of return
FIES – Family Income and Expenditures Survey
FMR – farm-to-market road
HADP – Highland Agricultural Development Project
ICC – indigenous cultural community
IFAD – International Fund for Agricultural Development
IPM – integrated pest management
LGU – local government unit
NCIP – National Commission on Indigenous Peoples
NGO – nongovernment organization
NIA National Irrigation Administration
OCR – ordinary capital resources
O&M – operation and maintenance
PEO – Provincial Engineering Office
PMO – project management office
PSO – project support office
RISC – Regional Interagency Steering Committee
SSCG – Small Savings and Credit Group
GLOSSARY
barangay – The lowest local government administrative unit

lapat – Forest management practice by the indigenous people
NOTES
(i) The fiscal year (FY) of the Government ends on 31 December.
(ii) In this report, "$" refers to US dollars.
Vice President C. Lawrence Greenwood, Jr., Operations Group 2

Director General R. M. Nag, Southeast Asia Department (SERD)
Director U. Malik, Agriculture, Environment and Natural Resources Division,
SERD
Team leader T. Miyazato, Senior Water Resources Specialist, CWRD (formerly with
SERD)
Team member E. Tayao-Castro, Assistant Project Analyst, SERD
CONTENTS
Page
BASIC DATA i
MAP vii
I. PROJECT DESCRIPTION 1
II. EVALUATION OF DESIGN AND IMPLEMENTATION 2
A. Relevance of Design and Formulation 2
B. Project Outputs 4
C. Project Costs 6
D. Disbursements 6
E. Project Schedule 6
F. Implementation Arrangements 6
G. Conditions and Covenants 7
H. Consultant Recruitment and Procurement 7
I. Performance of Consultants, Contractors, and Suppliers 8
J. Performance of the Borrower and the Executing Agency 8
K. Performance of the Asian Development Bank 8
III. EVALUATION OF PERFORMANCE 9
A. Relevance 9
B. Effectiveness in Achieving the Outcome 9
C. Efficiency in Achieving Outcomes and Outputs 10
D. Preliminary Assessment of Sustainability 11
E. Impact 12
IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13
A. Overall Assessment 13
B. Lessons 13
C. Recommendations 14
APPENDIXES
1. Project Framework 16
2. Summary of Training Programs 28
3. Organization Chart 29
4. Actual Annual Project Cost 32
5. Project Implementation Schedule 35
6. Status of Compliance with Loan Covenants 38
7. Staffing Schedule of Consultants 42
8. List of Equipment 44
9. Economic Analysis 48
BASIC DATA
A. Loan Identification
1. Country Philippines
2. Loan Number 1421/1422(SF)
3. Project Title Cordillera Highland Agricultural Resource
Management Project
4. Borrower Republic of the Philippines
5. Executing Agency Department of Agriculture; Department of
Environment and Natural Resources
6. Amount of Loan L1421: $9,500,000
L1422: SDR6,357,000 ($9,500,000)
L397-IFAD: $9,200,000
7. Project Completion Report Number PCR:PHI 942
B. Loan Data
1. Appraisal
– Date Started 17 May 1995
– Date Completed 8 June 1995
2. Loan Negotiations
– Date Started 19 October 1995
– Date Completed 19 October 1995
3. Date of Board Approval 11 January 1996
4. Date of Loan Agreement 8 May 1996 (signing date)
5. Date of Loan Effectiveness

– In Loan Agreement 30 September 1996
– Actual 3 June 1997
– Number of Extensions 4
6. Closing Date
– In Loan Agreement 30 September 2003
– Actual L1421: 16 May 2005;
L1422: 10 June 2005
– Number of Extensions 1 (for L1421)
2 (for L1422)
7. Terms of Loan
– Interest Rate Pool-based variable rates
– Maturity (number of years) 27 years for ordinary capital resources
35 years for Asian Development Fund
– Grace Period (number of years) 7 years for ordinary capital resources
10 years for Asian Development Fund
ii
8. Disbursements
a. Dates
Initial Disbursement Final Time Interval
Disbursement
L1421: 15 September L1421: 16 May 92 months
1997 2005
L1422: 26 November L1422: 10 June 92 months
1997 to BCEOM 2005
Effective Date Original Closing Time Interval

Date
3 June 1997 30 September 2003 75 months
b. Amount
Loan No. 1421-PHI (in $)

Last
Category Original Revised Amount Amount Undisbursed
No. Description Allocation Allocation Cancelled Disbursed Balance
01 Civil Works 3,862,000 6,522,565 (2,660,565) 6,522,565 0
Equipment and
02 Vehicles 455,000 231,040 223,960 231,040 0
Interest and
03 Commitment Charges 1,707,000 1,546,395 160,605 1,546,395 0
04 Unallocated 416,000 0 416,000 0 0
Local Expenditure 3,060,000 0 3,060,000 0 0
Total 9,500,000 8,300,000 1,200,000 8,300,000 0
Loan No. 1422-PHI(SF) (in $)

Last
Cat Original Revised Amount Amount Undisbursed
Equipment and
01 Vehicles 1,273,242 1,506,036 (232,794) 1,506,036 0
02 Training 40,349 652,650 (612,301) 652,650 0
03 Consulting Services 532,012 2,046,291 (1,514,279) 2,046,291 0
Surveys and Special
04 Studies 53,799 1,883,156 (1,829,357) 1,883,156 0
05 Recurrent Costs 321,299 109,932 211,367 109,932 0
Service Charge During
06 Construction 639,610 229,889 409,721 229,889 0
07 Unallocated 200,252 0 200,252 0 0
Total 9,500,000 6,427,954 3,072,046 6,427,954 0
iii
Loan No. 1422-PHI(SF) (in SDR)

Last
Cat Original Revised Amount Amount Undisbursed
Equipment and
01 Vehicles 852,000 1,148,743 (296,743) 1,148,743 0
02 Training 27,000 490,496 (463,496) 490,496 0
03 Consulting Services 356,000 1,530,498 (1,174,498) 1,530,498 0
Surveys and Special
04 Studies 36,000 1,410,912 (1,374,912) 1,410,912 0
05 Recurrent Costs 215,000 82,060 132,940 82,060 0
Service Charge During
06 Construction 428,000 170,370 257,630 170,370 0
07 Unallocated 134,000 0 134,000 0 0
Total 6,357,000 4,833,079 1,523,921 4,833,079 0
9. Local Costs (Financed: ADB+IFAD)

- Amount ($’000) 12,165
- Percent of Local Costs (Actual) 51.19%
- Percent of Total Cost (Actual) 38.16%
C. Project Data
1. Project Cost ($’000)

Cost Appraisal Estimate Actual
Foreign Exchange Cost 9,532 8,111

Local Currency Cost 31,968 23,764
Total 41,500 31,875
2. Financing Plan ($’000)

Cost Appraisal Estimate Actual
Implementation Costs
Borrower-Financeda 13,194 11,599
IFAD-Financed 9,243 5,318
ADB-Financed 16,717 13,182
Total 39,154 30,099
IDC Costs and Service Charge

Borrower-Financed
ADB-Financed 2,346 1,776
Total 41,500 31,875
ADB = Asian Development Bank, IDC = interest during construction.
a
Including beneficiaries’ in-kind contribution of about $2.4 million.
iv
3. Cost Breakdown by Project Component ($’000)

Appraisal
Component Estimate Actual
A. Community Mobilization and Resource Management 13,484 13,181
Community Mobilization and Participatory Planning 3,365 1,395
Natural Resource Management 10,119 11,786
B. Rural Infrastructure Development 14,709 11,174
Farm-to-Market Access 6,130 4,799
Community Irrigation 7,104 5,415
Domestic Water Supply 1,476 960
C. Agricultural Support Services 3,407 4,700
Agribusiness Service 1,009 2,303
Extension Services 1,021 987
Adaptive Research Service 862 893
Integrated Pest Management 438 423
Rural Financial Services 78 94
D. Project Management and Coordination 1,421 1,044
Physical Contingenciesa 3,098
Price Contingenciesb 3,035
Total Project Cost before Service Charge 39,154 30,099
Service Charge and IDC on the Loan 2,346 1,776
Total Project Cost 41,500 31,875
a
At 10% for civil works, vehicles and equipment; and 5% for other items.
b
Annual factor of 2.2% for foreign exchange costs and 8% for local currency costs.
4. Project Schedule
Item Appraisal Estimate Actual
Date of Contract with Consultants Project Consultants: Project Consultants:
Q3 1996 29 Dec 1997
NGO: Q4 1996 NGO:3 May 1999
Completion of Engineering Designs Q4 2000 31 December 2003
Civil Works Contract
Date of Award Q4 1996 Project Consultants:
21 January 1998
NGO: 14 June 1999
Completion of Work Q4 2002 September 2003
Equipment and Supplies
Dates
First Procurement Q3 1996 1997
Last Procurement Q4 1997 2003
Start of Operations
Beginning of Start-Up Q3 1998 11 November 1996
Other Milestones
First Partial Cancellation 26 April 2000 (L1421/1422)
Second Partial Cancellation 12 March 2004 (L1422)
Third Partial Cancellation 23 June 2005 (L1422)
v
5. Project Performance Report Ratings

Ratings
Implementation
Implementation Period Development Objectives Progress
From 1 August 1998 to 30 November 1998 Satisfactory Satisfactory
From 1 December 1998 to 30 June 2000 Partly Satisfactory Partly Satisfactory
From 1 July 2000 to 30 June 2004 Satisfactory Satisfactory
From 1 July 2004 to 30 June 2005 Satisfactory Satisfactory
D. Data on Asian Development Bank Missions

No. of
No. of Person- Specialization of
Name of Mission Date Persons Days Members
Fact-Finding 17 August– 9 162 Livestock Specialist,
7 September 1994 Project Economist, Senior
Environment Specialist,
Consultants (Engineer,
Institutions Specialist,
Agronomist), Credit
Specialist, IPM Specialist,
Project Controller
Fact-Finding (follow-up) 13 February– 6 69 Project Economist, Project
25 March 1995 Engineer, Financial
Analyst, Senior
Environment Specialist,
Consultant (Engineer),
Project Controller
Appraisal 17 May–7 June 1995 5 63 Project Economists, Social
Development Specialist,
Programs Officer
(Environment), Counsel
Special Loan Administration 9–13 December 1996 1 5 Project Economist
Inception 18–26 August 1997 2 9 Senior Project Engineer,
Project Administration
Assistant
Review 7–18 December 1998 2 12 Project Economist,
Assistant Project Analyst
Review 24 March–12 April 1 20 Project Economist
1999
Review 1–20 December 1999 1 20 Project Economist
Midterm Review 10–27 Juyl 2000 5 22 Manager/AEFN, Project
Economist, Consultants
(Development Specialist,
Participatory Development
Specialist), Assistant
Project Analyst
Review 2 May–17 May 2001 1 16 Forestry Specialist
Loan Disbursement 13–17 August 2001 2 5 Control Officer, Senior
Disbursement Analyst
vi
No. of
No. of Person- Specialization of
Name of Mission Date Persons Days Members
Review 14 November– 1 21 Forestry Specialist
5 December 2001
Review 2–11 September 2002 2 10 Senior Water Resources
Specialist, Associate
Project Analyst
Loan Disbursement 19–20 May 2003 2 4 Financial Control
Specialist, Associate
Disbursement Analyst
Review 29 October– 2 15 Senior Water Resources
12 November 2003 Specialist, Project Officer
Project Completion Review 14–24 November 3 52 Senior Water Resources
2005 Specialist, Consultant
(Economist), Assistant
Project Analyst
vii
118o00'E 126o00'E o
120 30'E
o
121 30'E
PHILIPPINES
Project Area
PHILIPPINES
16o00'N 16o00'N
LUZON CORDILLERA HIGHLAND AGRICULTURAL
Manila
RESOURCE MANAGEMENT PROJECT
VISAYAS
Babuyan Channel
8o00'N 8o00'N
MINDANAO
118o00'E 126o00'E
CAGAYAN
APAYAO
ILOCOS NORTE
o o
18 00'N 18 00'N
BANGUED
ABRA
Sallapadan
APAYAO
Bucloc
Boliney
South China Sea
Sagada ISABELA
BONTOC
Tadian MT. PROVINCE
o ILOCOS SUR Sabangan o
17 00'N 17 00'N
Bauko
Mancayan
Bakun IFUGAO
Baguis
N LA UNION
Kibungan
Kapangan Kabayan
Atok Project Impact Area
0 10 20 30 40 Tublay
National Capital
Sablan
Kilometers BENGUET Provincial Capital
LA TRINIDAD City/Municipality
Baguio City Municipal Boundary
Tuba Provincial Boundary
Regional Boundary
Boundaries are not necessarily authoritative.
PANGASINAN
o o
120 30'E 121 30'E
05-4705 HR
I. PROJECT DESCRIPTION
1. The Cordillera Highland Agricultural Resource Management Project (CHARM) 1 was a

successor to the Highland Agricultural Development Project (HADP), 2 funded by the Asian
Development Bank (ADB) and the International Fund for Agricultural Development (IFAD).
HADP was implemented from 1987 to 1993 in 13 municipalities in Benguet and Mountain
Provinces in the Cordillera Administrative Region (CAR). The ADB-funded feasibility study for
the Project was completed in 1994. It was appraised and approved by ADB in 1995 and the
loans became effective in June 1996. The cost at appraisal was $41.5 million, jointly funded by
the Philippine Government, ADB, IFAD, and beneficiaries. The Project was designed to last 7
years. The overall aim was to reduce poverty in CAR by increasing household income in the
target areas through agricultural productivity improvements and sustainable resource
management practices. A project framework comparing the targets at the time of appraisal with
actual achievement is in Appendix 1.
2. The project goal was to increase farm family annual incomes from an average of
P21,200 in 1995 to P56,000 in 2006 (164% increase) and to reduce the number of families with
incomes below the poverty line from 33,000 to 12,000 by 2006, a reduction in poverty incidence
from 70% to 25%.
3. The Project covered 82 barangays in 16 municipalities in three of the five provinces in

CAR—Abra, Benguet, and Mountain Province. Selection of the barangays was based on
minimizing the need for new road construction through environmentally fragile areas; the
potential for intensified irrigated crop production; the area of land that could be developed
relative to the cost of upgrading access to it; and poverty indicators. The immediate objectives
of the Project were to:
(i) promote sustainable resource management practices,
(ii) protect the environment and mitigate adverse development impacts,
(iii) strengthen existing institutions,
(iv) involve project beneficiaries in planning and implementation, and
(v) improve beneficiary access to formal and nonformal credit.
4. The total population in the project area in 1995 was about 170,000 households (850,000
persons at an average of five members per household). The target population was about 23,150
households, with some 139,000 persons benefiting directly. Indirect benefits would reach a
further 50,000 households because of spillover impacts to all barangays within the target and
adjacent municipalities. Thus it was expected that the Project would reach over 40% of the total
population in the project area.
5. The Project had four components:
(i) Community Mobilization and Natural Resource Management. This included

two subcomponents (a) community mobilization and participatory planning that
would mobilize communities to prepare 23,150 household profiles and 82
barangay profiles as the basis for the preparation of Barangay natural resource
1
ADB. 1996. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the
Republic of the Philippines for the Cordillera Highland Agricultural Resource Management Project. Manila (Loan
nos. 1421/1422-PHI[SF]).
2
Republic of the Philippines for the Highland Agriculture Development Project. Manila (Loan No. 0802-PHI).
2
management plans (BNRMPs) in the project areas, and (b) natural resources
management involving reforestation projects identified from BNRMPs and
facilitation of issuance of land tenure instruments.
(ii) Rural Infrastructure Development. This included (a) farm-to-market access
involving the rehabilitation of 150 km of access roads, construction of 100 m of
reinforced concrete bridges, 300 m of low-level spillways, 286 m of foot bridges,
and a 2.5 km tramway; (b) community irrigation systems covering about 2,800 ha
made up of rehabilitation of schemes with 1,066 ha and new construction of
1,688 ha; and (c) domestic water supply involving the installation of 63 domestic
water supply schemes to about 3,260 households.
(iii) Agricultural Support Services. This provided for (a) enhancing agribusiness
support services through market analysis, radio broadcasts on market prices and
agricultural technology, market expansion, promotion and linkage and agro-
processing and post-harvest technology promotion; (b) extension support
services to improve the operational efficiency and effectiveness of agricultural
support services at regional, provincial, and municipal levels with farmer training,
trials, and demonstrations, including integrated pest management techniques;
and (c) adaptive research services relevant to local needs and more closely
integrated with extension functions within the Department of Agriculture (DA)-
CAR and the replication of farmer-controlled parasitic wasp rearing facilities for
integrated pest management (IPM).
(iv) Project Management and Coordination. Establishment of a project support
office (PSO) in DA-CAR prior to loan effectiveness with the principal
responsibility for facilitating the implementation of the Project, including financial
budgeting and control, monitoring and evaluation, procurement of goods and
services, loan disbursement, and coordination and supervision.
6. The DA was the executing agency, with DA-CAR as the lead implementing agency.
Partner implementing agencies in CAR were the National Irrigation Administration (NIA), the
Department of Environment and Natural Resources (DENR), the Department of Agrarian
Reform (DAR), the National Commission on Indigenous Peoples (NCIP), and local government
units (LGUs) of Abra, Benguet, and Mountain Province. The PSO of DA-CAR, assisted by
contracted international and national consultants, was responsible for overall management of
the Project. The implementing arrangements were formalized in several memoranda of
agreement between the partner implementing agencies. Coordination at the regional level was
provided by an interagency steering committee headed by a senior DA official. Provincial
steering committees were headed by the provincial governor. At the provincial, municipal and
barangay levels, project management groups were headed by provincial and municipal planning
and development officers.
II. EVALUATION OF DESIGN AND IMPLEMENTATION
A. Relevance of Design and Formulation
7. The Project was designed to address the following constraints to agricultural

development in CAR: (i) inadequate access, (ii) insufficient irrigation services, (iii) inadequate
post-harvest facilities, (iv) lack of appropriate technologies for sustainable highland farming
3
systems, (v) inadequate access to credit for small farmers, (vi) poor marketing services brought
about through a lack of market infrastructure and market information, (vii) land tenure issues,
and (viii) land use conflicts between forest and proclaimed watershed reservations and
agricultural lands.
8. At appraisal and completion, the Project was highly relevant to the Government’s priority
of developing rural communities and reducing poverty. The overall aim was to reduce poverty in
CAR by increasing household income in the target areas. Agricultural productivity would be
improved by providing complementary infrastructure and agricultural support services and by
promoting sustainable resource management practices.
9. The Project was designed under an ADB-financed project preparatory technical

assistance3 (TA), conducted in close collaboration with the Government. It also drew on lessons
learned from the earlier HADP. A joint ADB and IFAD appraisal mission was fielded in June
1995 and the Project became effective in June 1997.
10. The following changes to the design and institutional arrangements were made during
the course of implementation.
(i) The passage of the Indigenous Peoples’ Rights Act in 1997 meant that the
implementing agency responsible for the issuing certificate of ancestral domain
titles (CADTs) and land tenure improvements was changed from the DAR to the
NCIP, which joined the Project in early 2001.
(ii) A new target for the formulation of Ancestral Domain Sustainable Development
and Protection Plans was incorporated to complement the issuance of CADTs
and to help indigenous cultural communities (ICCs) in their resource
management and development.
(iii) Indigenous resource management practices were promoted as a means of
empowering and encouraging ICCs to take care of their resources. For example,
lapa, the indigenous land management system in Abra, was officially recognized
by the ICCS, LGUs, and DENR.
(iv) Agro-forestry was promoted to increase income generation and enhance forest
conservation.
(v) NGO services were extended to help prepare beneficiaries for the eventual hand-
over of project facilities to local communities and to help integrate people’s
organizations into the activities of the LGUs, and BNRMPs into the barangay and
municipal development plans.
(vi) Plans and targets for some infrastructure components were revised to make
them more relevant, e.g., the number of domestic water supply systems (DWS)
was reduced, design standards for farm-to-market roads (FMRs) were changed,
the length of spillways and service areas for irrigation schemes was increased,
and the tramline project was cancelled in favor of rehabilitating an existing road.
(vii) Targets for agricultural support services (ASS) were increased in response to
proposals from beneficiaries made at annual planning workshops.
(viii) The roles of the project director and project manager were merged, allowing full-
time leadership and supervision of the Project, and a more active regional
coordination committee was created.
3
ADB. 1994. Technical Assistance to the Republic of the Philippines for Cordillera Highland Agricultural Resource
Management Project. Manila (TA 1915 PHI).
4
B. Project Outputs
1. Community Mobilization and Natural Resource Management
a. Community Mobilization and Participatory Planning
11. A consortium of six NGOs based in CAR was hired to undertake this activity. Community
mobilization officers and NGO staff conducted participatory planning activities in the project
area. The output was 10,200 household profiles and 82 barangay socioeconomic profiles in
June–July 2000, and the finalization of 82 BNRMPs in July 2001.
b. Natural Resources Management
12. With respect to land tenure improvement in connection with the issuance of certificate of
ancestral domain claims, DENR-CAR aimed to survey 150,000 ha of ancestral domain claims.
By the end of 2000, it had surveyed 123,765 ha and turned over three certificate of ancestral
domain claim documents (the target was four). After the passage of the Indigenous Peoples’
Rights Act in October 1997, the NCIP joined the Project as a partner implementing agency and
took over responsibility for this subcomponent, with continuing assistance from DENR. In the
course of the surveys a total of 423 Philippine reference system stations (PRS ’92) were
established to serve as official reference points for ground surveys. Environment and natural
resources maps of six municipalities were produced. DAR issued 13,905 ha of comprehensive
agrarian reform program beneficiary certificates, for 12,276 farmer-beneficiaries, and 1,105 ha
certificate of land ownership awards for 1,053 farmer-beneficiaries before NCIP joined the
Project.
13. One certificate of ancestral domain title (CADT) covering 29,444 ha was issued to
Bakum municipality in July 2002 and another covering 26,353 ha was issued to Kibungan
municipality in March 2004. As of March 2005 the Atok ancestral domain was 100% complete
and the Buguias ancestral domain was 70% complete. The CADT for a tribe in Abra was 75%
complete. Some work relating to a boundary dispute remains to be completed.
14. A total of 6,560 ha was reforested (3,806 ha) or benefited from agroforestry (1,781 ha) or
enrichment planting (973 ha). The overall achievement for reforestation was 99.65%.
2. Rural Infrastructure Development
a. Farm-to-Market Access Roads
15. Because of the delay in mobilizing the NGO, the identification of infrastructure projects
was delayed. A total of 151.35 km of FMRs (target 150 km); 95.4 m of bridges (target 100m);
644.5 m of spillways (target 300 m); and 358.5 m of footbridges (target 286 m) were completed
under the Project. All of the completed FMRs have been handed over to the local governments.
The project completion review (PCR) mission visited several FMRs and found that the condition
of FMRs handed over to the provincial governments (109.85 km) was generally satisfactory.
However, FMRs handed over to the barangays (41.5 km) were not so well maintained.
5
b. Community Irrigation Systems
16. A total of 52 communal irrigation systems (CISs) covering an irrigation service area of
2,810 ha were completed under the Project, compared with the original target at appraisal of 63
CISs with 2,800 ha of service area. All of the completed CISs have been handed over to the
irrigators’ associations (IAs) concerned. At PCR preparation, all but five CISs were operational.
The five CISs at Baniwas, Daldalao-Malingeb, Ducligan, Lingey, and Mamulyas-Sinag in Abra
province were badly damaged by floods caused by typhoon Igme in June 2004, affecting a
service area of 645 ha. NIA has prepared a plan to rehabilitate damaged facilities at a total cost
of P24.6 million. Works will begin in 2006.
c. Domestic Water Supply
17. A total of 30 domestic water supply systems (DWSs) covering 3,558 households were
completed under the Project, compared with the original target of 63 systems covering 3,260
households. The size of each DWS at appraisal was smaller than the actual systems that were
constructed, which led to a reduction in the number of number of systems constructed from 63
to 30 (although the number of households served by the DWSs exceeded the target). All 30
systems are operating without any difficulties.
3. Agricultural Support Services
18. This component comprised (i) agribusiness services, (ii) extension services, (iii) adaptive
research services, and (iv) rural financial services. The performance of this component was
generally satisfactory, especially a radio program aired from local radio stations called “CHARM
on the Air” which provides market information and is much appreciated by the farmers in the
area. Although project support has ended, the program is still running and is sponsored by
several private companies. Integrated pest management (IPM) training for farmers was also
much appreciated by farmers as it helped to reduce their pesticide use and lower their
production costs. IPM is leading to safer vegetable and rice production. A summary of training
implemented under the Project is shown in Appendix 2.
19. The targets for the rural finance services subcomponent were scaled back during project
implementation. The Project organized and supported 172 small savings and credit groups
(SSCGs) with 1,355 members, the great majority of whom are women. However, the
performance and sustainability of SSCGs is mixed, with savings by groups mostly used for
onlending to group members for productive purposes.
4. Project Management and Coordination
20. A PSO within the DA-CAR was established in November 1996 before loan effectiveness.
It served as the center of operations for project implementation. Assisted by consultants, the
PSO implemented the policies promulgated by the regional interagency steering committee
(RISC) and carried out budgeting and financial control, procurement of goods and services, loan
disbursement, and coordination and supervision of project implementation. The key staff at the
PSO were obtained from DA-CAR and most had been involved in the earlier HADP. In each
province, two provincial coordinating officers were responsible for coordination and liaison with
the LGUs. A civil engineering assistant was detailed to each provincial engineering office (PEO).
Appendix 3 shows the current project organization chart, compared with the organization
envisaged at the time of appraisal.
6
C. Project Costs
21. At appraisal, the total project cost was estimated at $41.5 million, $9.532 million in
foreign exchange cost and $31.968 million in local currency cost. ADB approved two loans for a
total of $19.0 million equivalent (46% of total project cost) for the Project, consisting of $9.5
million from ADB’s Asian Development Fund (ADF), equivalent to SDR6.357 million, and
$9.5 million from its ordinary capital resources (OCR). IFAD loaned $9.2 million (22% of the total
project cost). The actual project cost was $31.875 million or 76.8% of the original estimate. The
cost underrun was mainly attributed to the depreciation of the peso to the US dollar from P26 at
appraisal to P55 at the loan closing date. In peso terms, the actual project cost was P1.45
billion, compared with P1.32 billion (including contingencies) at appraisal. Appendix 4 shows the
actual annual disbursements under the Project.
D. Disbursements
22. At the initial stage of the Project, disbursement of the loan proceeds was very slow,
because of the delayed implementation of the infrastructure component, such as farm-to-market
roads (FMRs), communal irrigation systems (CISs), and domestic water supply systems
(DWS)—see para. 25.
23. Four imprest accounts amounting to $3 million were established for the Project to help
expedite disbursements. Three imprest accounts were for the DA—two for ADB under L1421-
PHI and L1422-PHI(SF) (footnote 1), and one for the DA component under IFAD. The fourth
account ($327,048.95) was for the DENR component under IFAD, which was established at a
later stage at the request of DENR. During the 5 years of implementation (2000–2004), the
average annual turnover ratios of the imprest accounts were 1.4 for L1421-PHI and 1.0 for
L1422-PHI(SF).
E. Project Schedule
24. The Project was supposed to be implemented over a period of 7 years starting in early
1996. The original project completion date was 31 March 2003. Actual project implementation
was delayed initially because of difficulties in recruiting NGOs, which were required for the
formulation of BNRMPs for each barangay. L1421-PHI was extended once by 1 year and closed
on 30 September 2004. L1422-PHI(SF) was extended twice until 31 March 2004, compared
with the original closing date of 30 September 2003. The IFAD loan was also extended to 30
June 2005 from 30 September 2003. Appendix 5 shows the project implementation schedule at
appraisal compared with the actual schedule.
F. Implementation Arrangements
25. The implementation arrangements were generally successful. A major change from the
previous project, HADP, was that implementation of FMRs was carried out by the provincial
governments, instead of the Department of Public Works and Highways. ADB considered that
the provincial governments were capable of implementing the FMR component, and that this
would generate a stronger sense of ownership.
26. The Project established a project management office (PMO) with staff seconded from
the executing and implementing agencies. The arrangement was different from the original
7
design, which envisaged that the PMO would be staffed by contractual staff, not from the
government agencies. The revised arrangement meant that institutional memory has been
retained within the executing and implementing agencies. Although most of the project staff
have now returned to the DA and other agencies, the project office is still operating.
27. The DA, DENR, and local government project coordination teams in each Province had
regular coordination meetings and visited the three provinces in turn, which helped to resolve
implementation issues in a timely way.
G. Conditions and Covenants
28. The Government’s compliance with the loan covenants was generally satisfactory. None
of the covenants was modified, suspended, or waived during the implementation of the Project.
All the reporting requirements were fulfilled by the Borrower and the executing agency.
Appendix 6 shows the status of compliance with the loan covenants. One of the key covenants
was the issuance of land title to indigenous people. The issuance of certificates of the land title
by DAR and DENR was stopped because of the passage of the Indigenous Peoples’ Rights Act
in October 1997, which effectively transferred the jurisdiction of ancestral lands from DENR and
DAR to NCIP. As part of the Project, NCIP issued the Philippines’ first title for an ancestral
domain for the Bago-Kankanaey tribe of Bakun on 20 July 2002.
H. Consultant Recruitment and Procurement
29. Project consultants were engaged by DA-CAR in accordance with the ADB’s Guidelines
on the Use of Consultants. In total, 283.3 person-months of consulting services were provided,
of which 31.7 person-months were international (30 person-months estimated at appraisal) and
251.6 person-months were domestic (261 person-months estimated at appraisal)—see
Appendix 7 for details.
30. The consultant team was fielded in January 1998 and the services were completed in
September 2003, compared with the appraisal’s planned mobilization of consultants in 1996 and
completion in 2003. Although ADB approved advance actions for the recruitment of consultants
at appraisal, actual recruitment was delayed because of cumbersome government procedures.
31. The NGO for community mobilization and participatory planning was fielded in June
1999, a delay of about 24 months from the appraisal schedule. The main causes of the delay
were (i) after evaluation of the proposals received from shortlisted firms, two first-ranked NGOs
were asked by the Government to form a consortium and it took a long time for the NGOs to
agree on the arrangements; and (ii) the contract amount was high and required the approval of
the President of the Philippines, following time-consuming procedural requirements.
32. Procurement of all the equipment provided under the Project, including heavy equipment
for operation and maintenance of the roads, for a total cost of P74.101 million was conducted
from 1997 through 2003 (7 years), compared with 1996 to 2002 at the appraisal estimate. The
equipment was procured following ADB’s Procurement Guidelines. All procured equipment was
turned over to the user agency or user offices upon delivery. In general, the procurement
process went smoothly. The list of procured equipment, with costs and users, is in Appendix 8.
8
I. Performance of Consultants, Contractors, and Suppliers
33. The performance of the consultants was generally satisfactory. The consultants
(i) guided NGO, DA, and local government staff in formulating household and barangay profiles
and preparing the BNRMPs, (ii) formulated and prepared a “catch-up plan” for the 4-year
infrastructure program and guided the planning, directing, supervising and monitoring of projects
from identification to maintenance after completion, (iii) formulated and prepared the agriculture
support services, and (iv) assisted project management.
34. The NGO achieved the general objectives of managing community mobilization and
participatory planning for 82 BNRMPs, one for each barangay covered, and preparing the
profiles of 82 barangays and 10,200 households. However, with hindsight, it would have been
better to have engaged four or five NGOs rather than one consortium under a large contract.
This would have avoided delays in NGO selection and fielding and would have created a
competitive environment.
35. As envisaged at appraisal, bridges, river crossing spillways, and some sections of FMRs
which needed heavy equipment and technical capability, were implemented by contractors
selected through local competitive bidding. The performance of the contractors was generally
satisfactory. However, construction of small and simple infrastructure for CIS and DWS done by
IAs with the participation of the beneficiaries was slow, and required close supervision and
guidance by the PMO staff.
J. Performance of the Borrower and the Executing Agency
36. The Borrower and the DA worked closely to solve problems, and their performance was
satisfactory. The DA made an effort to provide sufficient counterpart budget and to ensure its
timely release. The implementation capability of the provincial engineering offices (PEOs) for
the rehabilitation of FMRs was weak at the beginning of the Project because of the new
implementation mechanisms, but their performance improved rapidly after they became used to
the system. The Project provided a good opportunity for PEO staff to gain experience. In
addition, DA staff for the agricultural support services (ASS) activities were very innovative in
initiating the radio broadcast program “CHARM on the Air”, which became very popular in the
region and provided up-to-date information about market prices and agricultural technology.
K. Performance of the Asian Development Bank
37. ADB monitored the Project closely, fielding one inception mission, nine review missions
and two loan disbursement missions, involving 211 person-days of staff and consultant
services, and including an intensive midterm review in July 2000. ADB reviewed the Project
annually and took steps to solve problems appropriately during implementation. There were no
disagreements with the Borrower or DA on the terms of reference, bid documents, awards,
project costs, implementation schedule; or other matters affected implementation procedures.
ADB’s performance in jointly administering the Project with DA was satisfactory.
9
III. EVALUATION OF PERFORMANCE
A. Relevance
38. At appraisal and completion, the Project was highly relevant to Government and ADB
policies and priorities to develop rural communities and reduce poverty. The Project was in
accord with the Government’s Medium-term Philippines Development Plan (1993–1998) which
at the time of project formulation promoted sustainable economic growth and poverty reduction
as the foundation for regional and sectoral policies, programs, and projects. The Project was
also in accord with the Department of Agriculture’s Medium-term Agricultural Development Plan
(1993–1998), under which government assistance was to be focused on infrastructure, post-
harvest handling and market assistance, credit support, and research and extension services. It
was compatible with regional planning priorities of the Cordillera Regional Physical Framework
Plan (1994–2020) of the National Economic and Development Authority-CAR. The Project’s
objectives complemented ADB’s country and sector strategy for the Philippines, which
emphasized economic growth based on sustainable development. ADB’s strategy for
agricultural and rural development in the Philippines was to increase agricultural production and
productivity by developing rural infrastructure such as roads and irrigation, post-harvest and
storage facilities, and agricultural support services, especially with respect to (i) community
development and self-help approaches to increase rural incomes, (ii) sustainable approaches to
resource management, and (iii) on-farm research and extension.
B. Effectiveness in Achieving the Outcome
39. The Project was effective and contributed to reducing poverty. It had achieved most of
its revised output implementation targets by the end of the 1-year project extension to March
2004. After the slow start to project implementation (caused by the delay in mobilizing NGOs)
and delays in the process itself, the pace of project implementation picked up in the last 3 years.
All works were completed during the revised project implementation period.
40. The overriding objectives of the Project as stated in the report and recommendation of
the President (RRP) were to increase incomes for smallholder farm families and to reduce
poverty (footnote 1). The appraisal document stated that the objective was to increase the
average annual farm family income from about P21,200 ($820) in 1995 to at least P56,000
($2,170) by 2006 in real terms (a 164% increase). It noted that about 70% of the 47,600
households in the target municipalities were below the poverty line (defined as an income less
than P3,353 [$130] per month in 1992); an associated goal of the project was to reduce the
number of households below the poverty line from about 33,000 to about 12,000. In order to
accomplish this, the Project directly targeted about 23,150 households. Indirect benefits to
another 50,000 households were anticipated through spillover impacts in the adjacent
barangays and municipalities, as a result of the institutional strengthening of implementing
agencies and NGOs, increased economic activity in the target communities, more connections
between markets, and higher demand for labor. In addition it was anticipated that 8,000
households in the influence zone of the improved roads would also benefit, especially from
better access to social services.
41. The Project’s poverty reduction goal was ambitious, as it implied that over 90% of the
direct beneficiaries would be poor. By their nature, the Project’s main activities were aimed at
benefiting the communities as whole rather than selected individuals, which implied that the
Project was to target only the communities that had poverty incidence of over 90%. The detailed
10
social profiles undertaken by the Project showed that the poor households were spread out and
not concentrated in distinct geographic areas, which made it difficult to target the planned
number of poor households and reach the desired level of poverty reduction. Nevertheless, the
Project targeted the barangays with high poverty incidence and had a significant impact in
reducing poverty.
42. Despite the Project’s clear statement of its objectives, and considerable investments in
benefit monitoring and evaluation (BME) during implementation, the available data do not allow
a rigorous assessment of the Project’s impact. Delays in recruitment of NGOs meant that,
although project implementation began in 1997, benchmark surveys could only be carried out in
June 2000. Similarly, the final BME surveys were undertaken in February–March 2004, which
was too early to gauge the full impact. For a sample of beneficiary households, the BME reports
quantify the change in household income between the benchmark survey and the final BME
survey. The results are summarized in Appendix 9, Table A9.2. The average income per month
is expressed in current prices for three activities (CIS, FMR and DWS) and these show an
average increase for the three activities of 97%. However when allowance is made for inflation
between 2000 and 2004 of around 20%, the percentage increase in income in real terms is
reduced to an average of 65% over the 5 years (an average increase of 13% per annum). This
can be compared with the stated objective at appraisal to increase average family incomes by
168% in real teams for the 11 years from 1995 to 2006 (an average increase of 15.2% per
annum). Although the Project has achieved a commendable increase in household income over
the 5 years, it is unlikely that it will achieve its target of 168% by 2006. However, project benefits
are expected to increase further, especially from CIS, because of anticipated increases in paddy
yields.
43. In the absence of poverty data from the BME survey, results from the Family Income and
Expenditures Survey (FIES) of 2000, conducted by the National Statistics Office, were used to
ascertain the impact on poverty incidence. These showed that from 1997 to 2000 the poverty
incidence among families in the CAR had been reduced by 5.9% (from 42.5% to 36.9%), the
biggest decline in the country. For rural families in the CAR, the decline in poverty incidence for
the same period was 5.5% (from 55.5% to 50.0%). Comparable data for poverty incidence are
not available from the FIES 2003, but that year’s survey does show that, with regard to the real
change in average family income by region, the CAR’s performance was the seventh best of the
17 regions in the Philippines, with a decline of 2.4%, compared with a national decline of 10%.
In conclusion it can be assumed that CAR has achieved a measure of poverty reduction during
the Project period that was higher than that in other regions, but considerably less than that
envisaged during appraisal. Some of this poverty reduction would have been due to the Project,
but it is not possible to differentiate its impact from other influences.
C. Efficiency in Achieving Outcomes and Outputs
44. The economic internal rate of return (EIRR) for the overall project (excluding costs and
benefits of the reforestation component funded by IFAD) is evaluated at 15.9%, compared with
the EIRR at appraisal of 18% (Appendix 9). The project has achieved its targets for
implementation of the various components with only a 1-year extension, and was cost-efficient
in that its actual cost in dollar terms was less than the appraisal estimate (which allowed a write-
off of the loans). 4 The EIRR is slightly lower than the appraisal estimate, despite an
4
It should be noted that the cost savings in dollar terms were a result of the depreciation of the peso against the US
dollar during implementation.
11
improvement in the terms of trade for agricultural commodities brought about by the devaluation
of the peso vis-à-vis the dollar. Vegetable producers are facing pressure on prices because of
increases in supply in the CAR and other regions and because of competition from vegetable
imports. The sensitivity analysis shows that the economic return is sensitive to changes in the
level of benefits, especially the returns from vegetable production.
45. The efficiency of the Project is also judged by the efficiency of the process (i.e., the way
in which the executing and implementing agencies and ADB managed the Project). The
efficiency of implementation was satisfactory, particularly through the supervision provided by
the project management and the use of seconded staff with good local knowledge for project
management, rather than hired contract staff. The Government’s allocation of counterpart funds
from the national development budget was also efficient. However, the initial delays in the
appointment of NGOs for the participatory planning process did result in a slow start that
delayed the achievement of the outputs. Project management and ADB were responsive and
flexible to changes in design and approach and maintained a very good dialogue and
relationship throughout which also contributed to efficiency.
D. Preliminary Assessment of Sustainability
46. The sustainability of the improvements to infrastructure and the resulting economic
benefits of increased agricultural productivity largely depend on the effectiveness of the
beneficiaries and local government to fund and organize operation and maintenance (O&M)
adequately to ensure the durability of the irrigation, road, and water supply schemes. The
Project encouraged traditional sustainable natural resources management through a
participatory approach. Most communities prefer to rely on traditional methods of contributing
voluntary labor and in-kind materials for O&M according to need, rather than making regular
contributions of money to a maintenance fund. While this ad hoc system may be able to deal
with minor and routine O&M, it is unlikely to be able to cope when a bigger effort is required to
rectify major problems. 5 The maintenance of FMRs, a responsibility of the barangays, also
suffers from a lack of funds. The Cordillera region is susceptible to regular typhoons that can
cause major flooding and damage, e.g., the damage caused by typhoon Igme to project
irrigation and road infrastructure in June 2004. Although the beneficiaries are prepared to
contribute labor and in-kind materials for periodic repair of the infrastructure, they have not put
in place a system for regular contributions to a fund for O&M as was envisaged at appraisal.
47. These factors will reduce the sustainability of the facilities installed by the project. A
culture of organized self-help needs to become institutionalized in the beneficiary communities
and ways and means developed to apply “user pays“ to collect more finds for O&M. On the
other hand, the sustainability of the agricultural support services appears to be more assured as
there is good appreciation of the value of training and knowledge transfer (helped by the
relatively high level of education of the beneficiaries). For example, it has been possible to
attract private sector sponsorship in order to maintain the radio program “CHARM on the Air”
after closure of the Project. As a result, overall the Project’s sustainability is rated as “less likely”.
Follow-up action is recommended to ensure that the implementing agency continues to promote
O&M by the communities. Overall the sustainability of the Project is assessed as “likely”.
5
This was also mentioned in ADB’s Special Evaluation Study on the Effectiveness of Participatory Approaches in
Rural Development Projects – Do the New Approaches Offer an Effective Solution to the Conventional Problems?
(2004).
12
E. Impact
48. At completion, the Project had made significant strides towards achieving its twin goals
of increased farm incomes and reductions in the poverty. As discussed above, farm incomes
had risen by about 65% by 2004 (from 2000 levels), and poverty incidence had declined by
about 6% in 2000 (from 1996 levels). Because of lack of data, these results, while significant, do
not fully capture the Project’s impact on incomes or poverty levels. While the Project was
implemented from 1997 to 2004, income improvements are reported for the period 2000–2004,
and reductions in the poverty level for the period 1996–2000. Interestingly, the most recent data
available for poverty incidence in the Project area predate the benchmarks for the income data.
While the Project will not achieve the ambitious levels of poverty reduction envisaged at
appraisal, the PCR mission’s interaction with the stakeholders suggests that the Project’s
impact on incomes and poverty is considerably larger than that indicated by the available data,
and is anticipated to increase further when the full benefits of components such as the CISs
materialize.
49. The environmental impact was minimal and mostly positive. The Project was primarily
involved with the rehabilitation and improvement of existing facilities—irrigation and roads—and
the promotion of better agricultural practices. The changes it made to agricultural production
systems are unlikely to have a major environmental impact. The development of new irrigation
systems and the improvement of FMRs have resulted in the more intensive cultivation of some
agricultural land, but most of the land was already being used for rainfed agriculture. Improved
agricultural practices, especially the adoption of IPM by 52% of farmers, have helped farmers to
make better informed decisions about the use of agro-chemicals and fertilizer, reducing risks to
the ecosystem. The reforestation of 6,560 ha is expected to have major environmental benefits.
On the other hand, the better infrastructure has resulted in more intensive vegetable production
and there is a risk that inappropriate land management practices will be applied, especially on
steep land, and that there will be greater use of agro-chemicals.
50. Construction of project facilities led to considerable local employment, which has had a
positive impact on the local economy. The participatory approach that was used to identify
community needs and to prepare the BNRMPs under the project has heightened awareness of
development issues and priorities and has strengthened the sense of ownership and community
responsibility.
51. The Project had no adverse impacts on livelihoods or assets. The amount of land
voluntary contributed by the beneficiaries for infrastructure or conversion to other uses (resulting
in loss of income, livelihood, or assets) was negligible. There was no land acquired under the
Project. Most of the aggregates required for road rehabilitation were collected from riverbeds
and no major quarry sites were opened.
52. The Project had a positive impact on indigenous people. It facilitated the first issuance of
CADT of 29,444 ha for the Bakum and 26,353 ha for Kibungan communities. This was major
breakthrough in the conflict over land titles in the Philippines and was the first step to giving the
land titles to individual owners, which will have significant impact on the economic development
of the indigenous people in the area.
13
IV. OVERALL ASSESSMENT AND RECOMMENDATIONS
A. Overall Assessment
53. The overall performance rating for the Project is “successful”. The Project was relevant
to the Government’s and ADB’s agriculture and rural development policies when it was
prepared and it continues to be relevant. The Project met all its physical targets and achieved
most of its immediate development objectives. It was implemented as conceived with only minor
changes that improved the overall outcome (e.g., the design for FMRs was changed from gravel
roads to concrete wheel tracks). Agricultural support services have raised agricultural
productivity but have yet to reach their full potential. Performance and project outcomes, as
measured by the BME surveys, were in line with expectations for the main indicators: cropping
intensity, rice yields, farm household income, and employment. It has also had a significant
effect on rural poverty and livelihoods, but has not yet achieved the target for reducing the
percentage of households below the poverty line. Overall, the reevaluated EIRR of 15.9% is
acceptable and indicates that the Project was efficient.
54. The maintenance and sustainability of the infrastructure developed by the Project (FMR,
CIS, DWS and reforestation) is an issue. The capacity of the beneficiaries and LGUs to provide
ongoing O&M is not certain and further support is needed to build capacity, institutionalize fee
collection, and introduce “user pays” systems. Repairs to major damage caused by extreme
climatic events will continue to rely on support from provincial governments.
B. Lessons
55. The following key lessons were learned from the Project.
(i) Using the new approach to the Project, it is necessary to train the government
officials and project staff properly at the very beginning of the Project. The
Project was the first ADB-funded project in the Philippines to use a participatory
process to mobilize and empower local communities to bring them into the
development process. It also strengthened the capacity of government
institutions with responsibility for delivering a range of services. Although the
participation of community members was largely confined to the planning stage,
with implementation undertaken by the line agencies using conventional means,
valuable experience was gained that will be relevant to similar projects.
(ii) In the participatory process, early and quick mobilization of planning facilitator is
the key to success of the Project. The 2-year delay in completing the contractual
arrangements and mobilizing the locally-based NGOs led to delays in initiating
the participatory process and resulted in a compressed time frame for the
participatory process and delayed implementation, which should be avoided in
future projects.
(iii) The involvement of an NGO in the formulation of BNRMP was very useful since
the NGO was familiar with the participatory approach, the CAR, and indigenous
people.
(iv) For the establishment of new project implementation office, the secondment of
staff from the participating agencies to the project support office, rather than
hiring contract staff, contributed to human resource development and enabled
14
institutional knowledge to be retained within the implementing agencies, which

will be useful for similar projects in the future.
(v) Support for the ‘CHARM on the Air” radio program provided market information
and increased awareness of the Project. Because of strong support from
listeners, the radio program has attracted private sector support since project
completion of the Project, which is an ideal way of sustaining project activities.
(vi) The expansion of the IPM program through farmers’ field schools to cover other
activities such as livestock, agro-forestry and child nutrition was successful and
beneficial. This methodology may be applied to other agricultural activities.
(vii) Because of the sense of ownership generated by implementation arrangements
under the Project, the construction of roads by the provincial engineering office
was more effective than using the Department of Public Works and Highways
(which had been used as the implementing agency for the previous HADP).
(viii) Incorporation of indigenous peoples knowledge to the project design makes the
Project more implementable and easy to be understood by the people. The
Project incorporated indigenous forest management practices called lapat. It may
prove to be a model for the use of other indigenous knowledge and institutions in
the management of other sectors—e.g., water, agriculture, and health. Such
indigenous knowledge should be drawn on for future projects.
C. Recommendations
1. Project-Related
56. Future Monitoring. Ongoing monitoring of the Project needs to become institutionalized
within the local government structure to ensure that an ongoing and cost-effective monitoring
and evaluation system is operating and that there is good coordination between the DA and
other line agencies.
57. Covenants. The current covenants in the loan agreement should be maintained without
any major modifications for at least 5 years (unless the Project is affected by a catastrophic
disaster).
58. Further Action or Follow-Up. Rehabilitation of the typhoon damage to irrigation systems
and FMRs, including the abutment of the Wanga bridge, should be carried out as soon as possible.
If feasible, flooded rice fields should be rehabilitated.
59. Timing of the Project Performance Evaluation Report. The project performance
evaluation report should be produced in about 3 years. This will allow the sustainability of the
infrastructure to be assessed and allow time for communities and LGUs to develop O&M
processes.
2. General
60. For future rural development projects in the Philippines the following actions are
recommended.
15
(i) The participatory approach with the local communities and beneficiaries’ full
involvement in scheme selection, design, construction and O&M should be used.
(ii) The pre-construction and pre-implementation participatory planning phase should
be clearly distinguished from the construction and implementation phase, in order
to avoid delays in the implementation schedule and to allow lead-time for
community consultation and preparation.
(iii) More consideration should be given to the sustainability of facilities in projects
concerned with capacity building and strengthening of LGUs and people’s
organizations responsible for O&M. An adequate monitoring system needs to be
in place. Regular collection of fees and the possibility of user charges for the use
of new facilities should be included in the project design.
(iv) Local governments should provide funding from their regular budget to cover
O&M of completed FMRs. In allocating funds, priority should be given to the
O&M budget over the new construction of roads.
(v) The design of FMRs should consider the future O&M needs and aim to reduce
maintenance needs by use of concrete pavement rather than graveled surface,
especially for steep sections.
(vi) Monitoring of household incomes to measure the impact of the Project on level of
poverty levels should be conducted in close coordination with the National
Statistics Office to ensure that the methodology used is compatible with the
Family Income and Expenditure Survey that is usually conducted every 3 years.
16 Appendix 1
PROJECT FRAMEWORK
Design Performance Monitoring Assumptions PCR Evaluation

Summary Indicators/Targets Mechanisms And Risks
Goal
To increase farm • Raise farm • Benchmark • No natural • Final BME
incomes on a family incomes household profiles in disasters. survey in 2004
sustainable basis in 82 target 82 barangays indicated that
barangays from the average
about $820 • Community profiling family income of
(P21,200) to of investment CIP
about $2,170 priorities beneficiaries
(P56,000) in had increased
1995 prices by • Benchmark municipal by 65% from
2006 and by the profiles in 16 P25,968 per
project municipalities year from the
performance benchmark
evaluation • Biannual project survey in 2000
report reviews to P45,324 in
2004; for
To reduce poverty • Reduce the • Socioeconomic beneficiaries of
number of surveys at midterm FMR roads from
families below and after project P46,452 to
the poverty line completion P98,484 per
(1994 indicator) year (112%
in target • Project completion increase); and
municipalities report DWS by 92%
from 33,000 from P35,796 to
households to • PPAR P68,796 per
12,000 household over
households by 5 years.
2006.
Purpose
To increase • Increase yields • Benchmark • Sound • Yields of
agricultural of irrigated rice household, barangay macroeconomic irrigated rice
production and from 2.0 tons/ha and municipal profiles management increased to
productivity in 82 in 1995 to 4.0 by • Socioeconomic policies are 3.09 ton/ha and
barangays in Abra, 2006 and surveys at midterm adopted traditionally
Benguet, and traditionally and project irrigated rice to
Mountain Province, irrigated rice completion • Prices for 2.2 ton/ha
using sustainable from 1.5 tons/ha commercial
resource to 2.0 • Project completion crops and rice
management report/PPAR and corn remain
practices, involving • Increase at real levels • The area of
beneficiaries. vegetable area • Project progress irrigated
irrigated by reports • Infrastructure is vegetables
- Increase overall 1,688 ha by maintained increased by
cropping 2006 • ADB review missions and/or managed 1,780 ha
intensity from
124% in 1995 to • Increase rice • Extension staff • The area of rice
175% by year area irrigated by at local area increased
2006 296 ha by 2006 government unit by 812 ha
level are not
Appendix 1 17

- Raise net farm • Increase rice diverted to • Cropping
incomes from cropping nonextension intensity for new
$2,133 intensity in activities rice irrigation in
(P55,000) in Benguet and Benguet and
1995 to $5,935 Mountain • Counterpart Mountain
(P153,000) by province from funding is provinces
year 2006 108% to 150 % released in a increased from
by year 2006 timely manner 91% to 192%
- Achieve an and vegetable and in adequate (111% increase)
economic cropping amounts and vegetable
internal rate of intensity from cropping
return of 18% 140% to 200% intensity from
by year 2006 132% to 212%
- Reduce the use (61% increase)
of pesticides • Increase rice in 2004
from 47 kg/ha in cropping
1995 to 18 kg/ha intensity in Abra • For rehabilitated
by year 2006 from 120% to vegetable
175% by year irrigation the
2006 and cropping
vegetable intensity
cropping increased from
intensity from 132% to 161%
140% to 175% (22% increase)
by year 2006 in 2004
• Increase net
farm incomes by • Increases in net
$2,133 farm incomes
(P55,000) to ranged from
$5,935 206% for new
(P153,000) by vegetable and
year 2006 rice irrigation in
Benguet to 85%
for rehabilitation
of rice irrigation
• Achieve an in Mountain
economic Province In 2004
internal rate of
return of 18%
• Reduce the use

of pesticides • No data on
from 47 kg/ha in absolute
1995 to 18 kg/ha reduction in
by year 2006 pesticide use are
available but the
number of
farmers stating
that they had
decreased their
use of fertilizer
18 Appendix 1

and
agrochemicals
had increased
from 7% at the
time of the
benchmark
survey to 32% at
the time of the
final BME survey
• Increase the
area under • The Project has
forest cover in increased the
the 82 target area of forest
barangays by cover through
6,150 ha 3,806 ha of
reforestation,
• Involve 23,150 972 ha of
families in target enrichment
barangays in planting. and
participatory 1,781 ha of
planning agroforestry, a
programs total of 6,560 ha
Outputs
1. Community
Mobilization
and Resource
Management
1.1. Communities • Prepare 23,150 • Project progress • LGUs and • Target was
mobilized and household reports and review NGOs work reduced to 100
involved in profiles, 82 missions effectively household
planning project barangay together profiles per
activities profiles, and 16 barangay.
municipal • NGO is effective 10,200
profiles household
• Political profiles were
• Prepare commitment to completed
prioritized list of the Project is
investment forthcoming at • BNRMP were
needs for 82 LGU level prepared for the
barangay 82 target
barangays
1.2. Natural • Preserve • Project progress • Existing forest • Reforestation
resource existing area reports and review estate target was
management (211,013 ha) of missions resources not achieved with
improved protection protected an acceptable
forestry survival rate
• Survival rates of
• Reforest 6,150 reforested areas
ha by 2002 with are high
an average
survival rate of • Community
80% enthusiasm for
Appendix 1 19

reforestation
• Establish a activities • Geographic
geographical information
information • Geographic systems was
system information established
systems
• Undertake activities are
cadastral linked with
surveys project planning
covering about and
26,450 ha of implementation
land by 1999,
and issue land • Cadastral
titles mapping
requests from
• Issue municipalities • Two certificates
certificates of are acted upon of ancestral
ancestral domain title
domain titles • Department of were issued
covering about Environment
150,000 ha by and Natural
2002 Resources
(DENR) has
inadequate
resources or
attaches low
priority to
project activities
2. Rural
Infrastructure
Development
2.1. Farm-to-market • Rehabilitate • Project progress • Selection • Rehabilitation of
access about 26 road reports and review criteria are not 151.35 km of
constructed or segments missions applied roads was
rehabilitated covering 150 km achieved
and utilized • Contractors
• Construct about perform • 95.5 m of
100 m of vehicle satisfactorily vehicle bridges,
bridge; 300 m of 644.5 of low
low level river • Supervision is level river
spillway; and adequate spillway and
290 m of 358.5 m of
footbridges • Consultants are footbridge were
fielded in a constructed
• Construct a pilot timely manner • The pilot
tramline/project tramline project
of 2.5 km was shelved
when it was no
• Rehabilitated and longer required
new access because of
facilities properly improved road
maintained. access
20 Appendix 1

2.2. Community • Rehabilitate • Project progress • Adequate LGU • 52 community
irrigation and/or extend reports and review resources for irrigation
rehabilitated or about 20 CISs missions maintenance schemes
constructed covering 1,066 serving 2,810 ha
and operational ha net irrigable • Beneficiaries were
area are sufficiently rehabilitated or
involved in constructed
• Construct about planning/design
34 communal
irrigation • Selection
projects CIPs criteria are
covering 1,688 applied
ha net irrigable
area • Construction
activities are
• Maintain about satisfactory
2,800 ha of
CIS/CIP • Beneficiaries
can repay the
debt incurred
• Beneficiaries
have technical
and financial
resources for
maintenance
2.3. Domestic water • Construct about • Project progress • Consultants are • 30 domestic
supply 63 domestic reports and review recruited in a water supply
constructed water supply missions timely manner schemes
and functional schemes serving 3,558
serving 3,259 households
households in were
27 barangays constructed
2.4. Engineering • Strengthen the • Project progress • Counterpart • Three provincial
services three provincial reports and review funding engineers’ office
provided engineer’s missions availability does had been
offices by not delay strengthened
providing 630 institutional through training
person-days of strengthening
training, activities
together with
additional plant • Attrition law
and equipment prevents hiring
of additional
• Provide staff
additional
resources to • Consultants are
National fielded in a
Irrigation timely manner
Administration
and the three
provincial
irrigation offices
Appendix 1 21

3. Agricultural
Support
Services
3.1. Agribusiness • Undertake 8 • Project progress • Attrition law • 22 market
services market analyses reports and review prevents hiring studies were
enhanced and systems missions of additional prepared
investigations staff
• The “CHARM on
• Daily wholesale the Air” program
market price was broadcast
from three local
bulletins
broadcast radio stations
daily
• Twice-weekly • Extension
extension information
information service centers
programs were
broadcast established in
each province
• 16
agroprocessing • 16 feasibility
feasibility studies on agro-
studies process and
undertaken post-harvest
technology were
conducted
3.2. The • Provide • Project progress • Consultants are • Provincial
effectiveness of additional reports and review fielded in a agricultural
extension resources to missions timely manner offices were
services three provincial supported
improved agriculture • LGU staff are through a range
offices and 16 not diverted to of activities
municipal non-project including
agriculture activities equipment,
offices materials,
• Farmers are special training,
• 70% of target willing to short-courses
beneficiaries participate in • The final BME
perceive field survey recorded
extension demonstrations that 100% of the
support services surveyed
to have been • Beneficiaries farmers were
improved by are willing to aware of the
2002 adopt Project and that
recommended 97% had taken
• The number of farming advantage of its
farmers practices support.
adopting • 79% of farmers
recommended • Good said that they
farming coordination had applied
practices between lessons learned
increased by extension and from project
100% by 2002 training
22 Appendix 1

from 1995 research
3.3. Enhanced • Contract for 35 • 50 adaptive
research specific applied research
services research subprojects
subprojects were introduced
• About 2,244
• About 8,200 farmers
farmers attend attended farmer
farmer field field schools
schools during during the
1996–2002 Project
3.4. Access to and • Formation of • Project progress • Beneficiaries • The target was
utilization of 1,529 reports and review are willing to reduced and the
rural financial savings/credit missions form groups and Project helped
services farmer groups be guided form 172
improved SSCGs
• On-site • Beneficiaries • 42 SSCGs were
facilitation are willing to linked to semi-
groups by use tenurial formal and
community instruments for formal lending
mobilization formal credit institutions
officers
4. Project
Management
Coordination
4.1. Institutions • Establish strong • Project progress • Organizational • Project
strengthened project planning reports and review structure of DA- management
and execution missions CAR confirmed coordination
capability within was achieved as
the DA-CAR • Adequate staff planned
and at LGU resources within
level DA-CAR and at
LGU level to
implement
project activities
4.2. Provincial • Regular annual • Project progress • Staff detailed in
government • Provincial
planning and reports and review a timely way
planning governments
evaluation missions
capability planning
workshops are
strengthened capacity was
conducted in
strengthened,
80% of target
but there were
barangays by
some delays at
2000
the early stage
of the Project
• Specific
personnel
assigned to the
three PPDOs to
coordinate
project activities
4.3. Appropriate • Management • Project progress • Adequate • Monitoring and
monitoring and information reports and review management evaluation
Appendix 1 23

evaluation system provides missions information system are in
systems timely feedback systems place, but needs
established on the provided to be
performance of strengthened
project activities • Benchmark
information
• 6-monthly bank collated and
review missions synthesized
fielded and
monitoring by an • Feedback from
independent progress reports
agency of mission
reviews
• Benefit incorporated
monitoring into project
evaluation planning/
surveys execution
conducted in activities
1996, 1998,
2000, and 2002
Activities
1. Community
Mobilization
and Resource
Management
Communities • $4.0 million • Review missions and • Capable NGOs • Implemented as
mobilized and • One NGO to project progress are identified appraised but
involved in coordinate 41 reports and are willing slow
planning project community to participate
activities mobilization
officers • Existing
• Community provincial and
mobilization municipal staff
specialists (12 are detailed to
person-months) community
planning
exercises
Enhanced Land • $3.9 million • Review missions and • No delays in • Implemented as
Security: project progress signing of MOA appraised
- MOA with reports
DENR and
Department of
Agrarian
Reform
Natural resource • $8.2 million • Review missions and • No delays in • Implemented as
management: • 35 person- project progress signing of MOA appraised but
- MOA with months of reports delayed
DENR international and • Good community
local consultants participation in
reforestation
activities
24 Appendix 1

2. Rural
Infrastructure
Development
2.1. Farm-to-market • $7.3 million • Review missions and • Consultants are • Implemented as
access: • 84 person- project progress recruited in a appraised
- detailed months of reports timely manner
design consultant
- construction services • Feasibility reports • No right-of-way
acquisition
• Contract documents problems
• Acceptance
criteria adhered
to
2.2. Community • $8.5 million • Review missions and • Consultants are • Implemented as
irrigation: • 23 person- project progress recruited in a appraised
- detailed months of local reports timely manner
design consultant
- establishment services • Feasibility reports • Acceptance
of irrigators’ criteria adhered
association • Contract documents to
- construction
- training in • Beneficiaries
operation and included in
maintenance planning
process
• Irrigators’
associations
willing to take
over CIS after
implementation
2.3. Domestic • $1.8 million • Review missions and • Implemented as
Water Supply: • Ten person- project progress appraised
- detailed months of local reports
design and consultant
costing for services • Feasibility reports
nominated
sites • Contract documents
- construction
- training in
operation and
maintenance
3. Agricultural
Support
Services
3.1. Agribusiness • $1.2 million • Review missions and • Consultants are • Implemented as
services: • 40 person- project progress fielded in a appraised and
- contracts for months of reports timely manner completed as
radio time consultant scheduled
Appendix 1 25

slots services • Existing DA-
- identification CAR staff have
of priority capacity for
market additional tasks
research
studies and
key wholesaler
groups
3.2. Extension • $1.2 million • Review missions and • Farmers • Implemented as
services: • 31 person- project progress participate as appraised and
- workshops months of reports expected completed as
- training consultant scheduled
- farmer services • Feasibility reports • LGU staff
exchange • Three vehicles (MOAs and
visits • 3 motorcycles • Contract documents agricultural
- field • 112 extension technicians) are
demonstration kits sufficiently
motivated to
actively
participate in
extension
activities
3.3. Research • $1.5 million • Review missions and • DA-CAR, • Implemented as
services: • 33 person- project progress Bureau of Plant appraised and
- procurement months of reports Industry staff are completed as
of equipment consultant sufficiently scheduled
- training services • Feasibility reports motivated to
- exchange actively
visits of • Contract documents participate in
scientists research
activities
• DA-CAR,
Bureau of Plant
Industry staff
have the
capacity to take
additional tasks
3.4. Rural financial • $0.09 million • Review missions and • Farmers • Implemented but
services: • 6 person-months project progress participate as the target was
- form 1,529 of consultant reports expected reduced
savings/credit services
farmer groups • Formal credit
targeting sources
poorer accessible to
households groups
- conduct
training • Groups engage
- access formal in income-
credit sources generating
- engage in activities
income-
26 Appendix 1

generating
activities
4. Project • $1.7 million • Review missions and • Consultants are • Implemented as
Management • 13 person- project progress recruited in a appraised
and months of reports timely manner
Coordination consultants
- arrange MOAs • MOAs are
between DA- signed without
CAR and delay
National
Irrigation • Attrition law
Administration, prevents
Department of adequate
Agrarian resourcing of
Reform, DA-CAR
DENR, and
the three
provincial
governments
4.1. Local • $0.2 million • Review missions and • Staff are • Implemented as
government • 4 person-months project progress detailed or appraised
planning for local taxation reports recruited
capability specialist
strengthened:
- appointment/
detailing of
three staff at
PPDO
- procurement
of plant
equipment
- training for
PPDO staff
ADB = Asian Development Bank, BME = benefit monitoring and evaluation, BNRMP = Barangay Natural Resources
Management Plans, CAR = Cordillera Administrative Region, CIS = communal irrigation system, CIP = communal irrigation
project, DA-CAR = Department of Agriculture-Cordillera Administrative Region, DENR = Department of Environment and
Natural Resources, LGU = local government unit, MOA= Memorandum of Agreement, NGO = nongovernment organization,
PCR = project completion review, PPAR = project/program performance audit report, PPDO = provincial planning
development offices, SSCG = small-scale credit groups.
Appendix 2 27
SUMMARY OF TRAINING PROGRAMS
Duration Number of Persons Total

Component (days) Batches Male Female Total Days
A. Conducted for Beneficiaries
1. Community Mobilization
and Resource Management 11 207 4,067 2,470 6,537 13,097
2. Agricultural Support Services 711 326 5,208 5,957 11,165 46,498
3. Rural Infrastructure
Development 27 34 828 394 1,222 3,286
Total 749 567 10,103 8,821 18,924 62,881
B. Conducted for Staff

1. Community Mobilization
and Resource Management 138 308 3,969 3,400 7,369 19,146
2. Agricultural Support Services 271 112 1,563 1,843 3,406 11,780
3. Rural Infrastructure
Development 47 15 324 158 482 1,720
4. Project Management and
Coordination 162 119 3,637 2,848 6,485 16,255
Total 618 554 9,493 8,249 17,742 48,901
Source: Project completion report prepared by the Department of Agriculture-Cordillera Administrative Region.
28
ORGANIZATIONAL STRUCTURE
Appendix 3
Department of Agriculture-Cordillera Administrative Region at Appraisal
Regional Director
CHARM Project Technical Assistance on

Support Office Integrated Pest Management
Other Foreign-Assisted
Projects
Institutional Development Administration Finance Legal Planning Monitoring Information Agribusiness CIARC
and Training and Evaluation System
Asst. Regional Director for Asst. Regional Director Asst. Regional Director for
Fisheries for Crops Livestock
Sectoral Division Chief for Sectoral Division Sectoral Division Chief for
Fisheries and Operations Chief for Crops Livestock and Regulatory
Regulatory Technical Regulatory Technical Regulatory Technical

Assistance Assistance Assistance Assistance Assistance Assistance
Licensing and Aquaculture Seed Quality Soils/ Production Services Regional Disease
Law Enforcement Control Engineering Diagnostic
Laboratory
Animal Nutrition
Conservation of Postharvest Plant Crops/
Inland Resources Quarantine Production
Animal Breeding Livestock
Quarantine
Fish Laboratory Soils Laboratory Farming
Systems Forage and Pasture
Development Feed and Drug
Pest Analysis Quality Control
Laboratory Kasakalikasan
General Technical
Services Licensing and
Pesticide Registration
Residue
Technology
Dissemination
CHARM = Cordillera Highland Agricultural Resource Management, CIARC = Cordillera Integrated Agricultural Research Center.
Source: Project Completion Report prepared by the Department of Agriculture-Cordillera Administrative Region.
Appendix 3 29
Project Support Office at Appraisal
Regional Director
Project Manager
Project Monitoring and Administration and

Evaluation System Finance
Resource Rural Infrastructure Agricultural Support

Mobilization and Development Services
Management
3 Provincial
Coordination
Officers
30 Appendix 3
DA-Cordillera Highland Agricultural Resource Management Project (CHARM) Project

Organizational Chart
as of July 2004
Department of Agriculture – Central Office

Assistant Secretary for Field Operations and Foreign Assisted Project
DA-CARFU
Project Director/Manager
Administration Training Planning, Monitoring Geographic Information Finance

and Evaluation Information Unit
System Unit
Supply Unit
Budget Unit
Property
Motorpool Accounting Unit
Cashier
Agricultural Support Services

HRMO/Personnel and Records
Adaptive Research Services Unit

Janitorial Services/Security/Administrative
Services
Integrated Pest Management Unit
Community Mobilization and Rural Infrastructure

Resource Management Development
Extension Support Services
Reforestation Farm-to-Market Roads
Agribusiness Unit
NGO Domestic Water Supply
Land Tenure Community Irrigation Rural Finance Services

Improvement Projects
Provincial Coordinators
DA-CARFU = Department of Agriculture-Cordillera Administrative Region Field Unit, HRMO = Human Resouce
Management Office, NGO = nongovernment organization.
Appendix 4 31
ACTUAL ANNUAL PROJECT COST

Table A4.1: Actual Costs per Category per Year for L1421
Category Actual Cost

Number Category Year ($)
01 Civil Works 1997 0.00
2000 299,124.37
2001 1,122,037.95
2002 1,274,834.60
2003 2,426,826.21
2004 373,600.36
2005 1,026,141.69
Subtotal Category 01 6,522,565.18
02 Training 2000 218,690.43

2001 12,349.66
Subtotal Category 02 231,040.09
03 Interest during Construction 1997 16,743.75

1998 89,002.77
1999 128,723.48
2000 139,722.46
2001 178,811.92
2002 257,707.09
2003 360,220.15
2004 375,463.10
Total 8,299,999.99
Source: Project completion review mission.
32 Appendix 4
Table A4.2: Actual Costs per Category per Year for L1422

01 Equipment and Vehicles 1997 0.00
1998 95,821.89
1999 38,901.97
2000 504,348.35
2001 298,075.44
2002 426,308.67
2003 114,832.64
2004 27,747.13
02 Training 1997 0.00

1998 7,239.93
1999 72,212.13
2000 110,873.28
2001 141,935.15
2002 61,401.20
2003 140,770.65
2004 118,217.66
03 Consulting Services 1997 0.00

1998 541,509.74
1999 354,547.23
2000 349,372.75
2001 323,508.03
2002 159,329.26
2003 254,334.88
2004 63,689.29
04 Surveys and Special Studies 1997 0.00

1999 238,569.19
2000 252,317.91
2001 271,700.72
2002 127,066.89
2003 508,167.78
2004 485,333.79
Appendix 4 33

05 Recurrent Costs 1997 0.00
1999 6,808.12
2000 24,726.88
2001 43,653.85
2002 10,510.33
2003 20,240.64
2004 3,991.90
06 Service Charge 1998 8,672.33

1999 19,107.17
2000 25,099.42
2001 38,109.94
2002 44,941.67
2003 58,072.77
2004 35,885.78
Total 6,427,954.35
34 Appendix 5
Appendix 5 35
36 Appendix 5
Appendix 6 37
STATUS OF COMPLIANCE WITH LOAN COVENANTS
Reference to Status of
Covenant Loan Agreement Compliance
The Borrower will make available promptly ADB: Sec. 4.02 Complied with.
funds, facilities, services, land and other IFAD: Sec. 3.01 and The central government,
resources which are required to carry out the Sec. 4.01(a) provincial governments, and
Project. beneficiaries were able to
provide enough counterpart
funds in cash or in kind.
The Borrower shall cause competent and ADB: Sec. 4.03 Complied with.
qualified consultants and contractors to be IFAD: Sec. 4.01(a) BCEOM French
employed upon terms and conditions Engineering Consultants in
acceptable to the Bank. association with four local
firms were mobilized in late
January 1998. Consultant
contract was extended until
31 March 2003. Addendum
No. 2 extended the contract
until 30 September 2003.
Work of consultants
completed.
The Borrower will maintain records and ADB: Sec. 4.06(a) Complied with.
accounts adequate to identify the goods and IFAD: Sec. 4.01(a) One full time accountant,
services and other items of expenditure two part time budget
financed out of the proceeds of the Loans. officers, one bookkeeper,
and two cashiers were
detailed to the Project to
ensure proper accounting
and record-keeping. One
contracted staff was hired to
assist the budget unit, and
four contracted staff was
assigned to the accounting
unit.
The Borrower will maintain separate records ADB: Sec. 4.06(b) Complied with.
and accounts, have such accounts audited IFAD: Sec 4.01(a) Audited financial statements
annually and furnish the Bank with a copy of submitted before due date.
the audited reports 12 months after the end
of each related fiscal year.
The Borrower will prepare quarterly progress ADB: Sec. 4.07(b) Complied with.
reports for submission to the Bank. IFAD: Sec. 4.01(a)
38 Appendix 6
The Borrower will prepare a Project ADB: Sec. 4.07(c) Complied with.
Completion Report for submission to the IFAD: Sec. 4.01(a) Government’s project
Bank three months after the physical completion report was
completion of the Project. received in October 2005.
The Borrower shall establish immediately an ADB: Sched. 3, para 8 Complied with.
Imprest Account at Bangko Sentral ng IFAD: Sec. 3.02 and
Pilipinas to expedite disbursements of the Sched. 4, para 1
Loan proceeds.
The Borrower shall designate the Regional ADB: Sched. 6, para 2 Complied with in 1997.
Director of the Department of Agriculture- However, a minor change
Cordillera Administrative Region (DA-CAR) took place thereafter when
as Project Director, and establish an the former project manager
adequately staffed Project Support Office as was promoted to project
a Section within DA-CAR reporting directly to director in March 2001 to
the Project Director. improve implementation and
provide more hands-on
guidance to the Project. The
project support office was
adequately staffed by
qualified people.
The Borrower shall establish a Regional ADB: Sched. 6, para 3 Complied with.
Interagency Steering Committee (RISC) The regional coordinating
which shall meet at least four times annually. committee was created in
the first quarter of 1999 and
meets monthly to settle
implementation issues.
Each of the Provinces shall establish a ADB: Sched. 6, para 4 Complied with.
Provincial Steering Committee (PSC) which
shall meet at least four times annually
following the RISC meeting.
Each of the Participating Municipalities shall ADB: Sched. 6, para 5 Complied with.
establish a Municipal Steering Committee
which shall meet at least four times annually
following the relevant PSC meeting.
Each of the Provinces, Participating ADB: Sched. 6, para 6 Complied with.

Municipalities, and Project Barangays shall
establish a Project Management group
composed of a local government unit action
officer, a representative of the
nongovernment organization engaged under
the Project, and a community representative.
Appendix 6 39
The Provinces, Participating Municipalities ADB: Sched. 6, Complied with.
and Project Barangays shall be responsible Para 13 Provinces have provided
for the operation and maintenance (O&M) of maintenance funds and
the roads rehabilitated under the Project. equipments for completed
road projects.
The Irrigators Associations (IAs) shall be ADB: Sched. 6, Complied with.

responsible for the O&M of Irrigation systems Para 14 IAs being trained for O&M
after completion of the civil works. of irrigation systems. 52 IAs
were trained.
The O&M of trees shall be the full ADB: Sched. 6, Being complied with.
responsibility of the concerned community Para 15 Communities are
from a date three years after planting. maintaining the trees using
the fund released as
retention money, but funds
are becoming depleted and
no funds will be available in
future.
Drinking water supply schemes shall be fully ADB: Sched. 6, Being complied with.
operated and maintained by Barangay Para 16 Training on O&M was
Waterworks and Sanitation Associations conducted for all beneficiary
(BWSAs) or Rural Waterworks and associations. Operation and
Sanitation Associations. maintenance of completed
projects being carried out by
by concerned BWSAs.
The Provinces shall ensure that adequate ADB: Sched. 6, Complied with.
and timely funds are available for the proper Para 17 Provinces have provided
maintenance of roads and facilities maintenance funds and
constructed under the Project and equipment equipment for completed
provided or turned over to them. road projects.
DA-CAR shall continuously monitor the ADB: Sched. 6 Complied with.

physical progress of the Project Para 18 benefit monitoring and
implementation and the economic, financial, evaluation (BME) study was
social and environmental impacts of Project carried out by DA-CAR.
activities, particularly on indigenous cultural
communities.
A Mid-Term Review shall be conducted and ADB: Sched. 6 Complied with.

this will include BME survey. Para 19 The BME study was
implemented by the
Benguet State University. A
midterm review was
conducted by an ADB
mission from 10–21 July
2000.
40 Appendix 6
DA-CAR shall ensure that necessary ADB:Sched. 6, para 20 Complied with.
environmental mitigation measures will be IFAD: Sec. 4.01(b) The implementing methods
carried out, including the maintenance of and approaches of the
appropriate agricultural pesticide control various project components
practice. and activities take into
consideration environmental
impacts and concerns and
guard against adverse
effects.
The Borrower shall expedite issuance of ADB: Sched. 6, Complied with.

certificate of land ownership award by DAR Para 21 The issuance of certificates
and certificates of ancestral domain claim by by DAR and DENR has
the Department of Environment and Natural been stopped because of
Resources (DENR) to qualified beneficiaries the passage of the
in the project area. Indigenous People’s Rights
Act which effectively
transferred the jurisdiction
of ancestral lands from
DENR and DAR to the
National Commission on
Indigenous People (NCIP).
NCIP now issues titles for
ancestral domain lands. As
part of this project, NCIP
issued the first title for an
ancestral domain in the
Philippines (for the Bago-
Kankanaey tribe of Bakun
on 20 July 2002).
DA-CAR shall ensure that staff training ADB: Sched. 6, Complied with.
provided under the Project is undertaken. Para 23 A total of 553 batches of
staff development training
were undertaken in the
areas of project
management, project
implementation, report
writing, documentation and
enhancement of technical
skills and knowledge,
trainers’ training, etc.
The Borrower shall ensure that each of the ADB: Sched 6, Complied with. Municipal
Participating Municipalities will submit a Para 24 revenue plans for the three
report to the Bank on ways to mobilize provinces have been
additional revenue through new taxes submitted. Training and
permitted under the Local Government Code workshops for financial
or through more efficient tax administration officers of the participating
and collection. municipalities were
conducted in 2002.
Source: Project completion review Mission.
CONSULTANTS’ STAFFING SCHEDULE
Original Revised Appraisal Actual

Person- Person-
month month CY CY CY CY CY CY CY CY CY CY CY CY CY
Name of Expert Schedule Schedule 96 97 98 99 00 01 02 Total 98 99 00 01 02 03 Total
A. International
1. Community
Mobilization and
Participatory
Planning 3.00 3.93 2.00 1.00 0.00 0.00 0.00 0.00 0.00 3.00 2.00 0.00 0.00 1.06 0.00 0.00 3.93
2. Natural Resources
Management/CAR 4.00 4.07 4.00 0.00 0.00 0.00 0.00 0.00 0.00 4.00 4.07 0.00 0.00 0.00 0.00 0.00 0.00
3. Project
Management
Specialist/CAR 3.00 2.97 2.00 1.00 1.00 0.00 0.00 0.00 0.00 4.00 2.97 0.00 0.00 0.00 0.00 0.00 0.00
4. Farm-to-Market
Access/CAR 15.00 14.85 0.00 6.00 0.00 6.00 0.00 0.00 0.00 12.00 8.29 4.53 0.23 1.79 0.00 0.00 14.84
a. A 6.00 6.00 0.00 2.00 0.00 4.00 0.00 0.00 0.00 6.00 4.23 0.83 0.23 0.70 0.00 0.00 5.99
b. B 4.00 3.93 0.00 2.00 0.00 0.00 0.00 0.00 0.00 2.00 1.33 2.60 0.00 0.00 0.00 0.00 3.93
c. C 5.00 4.92 0.00 2.00 0.00 2.00 0.00 0.00 0.00 4.00 2.73 1.10 0.00 1.09 0.00 0.00 4.92
5. Extension
Services/CAR 6.00 5.86 1.00 3.00 2.00 1.00 0.00 0.00 0.00 7.00 2.07 0.93 2.86 0.00 0.00 0.00 5.86
a. D 3.00 3.00 0.00 2.00 1.00 1.00 0.00 0.00 0.00 4.00 2.07 0.93 0.00 0.00 0.00 0.00 3.00
b. E 3.00 2.86 1.00 1.00 1.00 0.00 0.00 0.00 0.00 3.00 0.00 0.00 2.86 0.00 0.00 0.00 2.86
Subtotal (A) 31.00 31.68 9.00 11.00 3.00 7.00 0.00 0.00 0.00 30.00 19.40 5.46 3.09 2.85 0.00 0.87 31.67
B. National
1. Community
Mobilization and
Participatory
Planning 9.00 8.77 3.00 3.00 3.00 0.00 0.00 0.00 0.00 9.00 5.77 2.00 0.63 0.37 0.00 0.00 8.77
2. Natural Resources
Management/CAR 29.50 28.83 9.00 7.00 6.00 3.00 3.00 3.00 0.00 31.00 16.79 9.91 0.50 0.43 0.00 1.20 28.83
a. F 1.50 1.30 0.00 1.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 1.30 0.00 0.00 0.00 0.00 1.30
b. G 16.00 15.53 3.00 3.00 3.00 3.00 3.00 3.00 0.00 18.00 10.43 4.67 0.00 0.43 0.00 0.00 15.53
c. H 12.00 12.00 6.00 3.00 3.00 0.00 0.00 0.00 0.00 12.00 6.36 3.94 0.50 0.00 0.00 1.20 12.00
3. Project
Appendix 7
Management
Specialist/CAR 15.00 23.84 6.00 5.00 1.00 1.00 0.00 0.00 0.00 13.00 14.50 4.31 0.00 0.37 0.67 3.99 23.84
a. I 5.00 12.50 3.00 3.00 0.00 0.00 0.00 0.00 0.00 6.00 6.54 1.97 0.00 0.00 0.00 3.99 12.50
b. J 3.00 3.68 0.00 2.00 1.00 1.00 0.00 0.00 0.00 4.00 1.00 1.64 0.00 0.37 0.67 0.00 3.68
c. K 7.00 7.66 3.00 0.00 0.00 0.00 0.00 0.00 0.00 3.00 6.96 0.70 0.00 0.00 0.00 0.00 7.66
41
Original Revised Appraisal Actual
42
Person- Person-
month month CY CY CY CY CY CY CY CY CY CY CY CY CY
Name of Expert Schedule Schedule 96 97 98 99 00 01 02 Total 98 99 00 01 02 03 Total
Appendix 7
4. Farm-to-Market
Access/CAR 65.00 68.77 0.00 12.00 18.00 12.00 12.00 12.00 6.00 72.00 11.04 12.73 12.00 12.00 12.00 9.00 68.77
a. L 55.00 67.00 0.00 6.00 12.00 12.00 12.00 12.00 6.00 60.00 10.00 12.00 12.00 12.00 12.00 9.00 67.00
b. M 10.00 1.77 0.00 6.00 6.00 0.00 0.00 0.00 0.00 12.00 1.04 0.73 0.00 0.00 0.00 0.00 1.77
5. Community
Irrigation
Systems/CAR 19.00 19.31 8.00 9.00 2.00 2.00 2.00 0.00 0.00 23.00 7.80 7.74 0.00 3.77 0.00 0.00 19.31
a. N 11.00 11.07 4.00 4.00 2.00 2.00 2.00 0.00 0.00 14.00 4.00 3.30 0.00 3.77 0.00 0.00 11.07
b. O 4.00 4.00 3.00 3.00 0.00 0.00 0.00 0.00 0.00 6.00 3.80 0.20 0.00 0.00 0.00 0.00 4.00
c. P 4.00 4.24 1.00 2.00 0.00 0.00 0.00 0.00 0.00 3.00 0.00 4.24 0.00 0.00 0.00 0.00 4.24
6. Domestic Water
Supply/CAR 9.00 9.00 0.00 5.00 5.00 0.00 0.00 0.00 0.00 10.00 3.80 4.00 0.00 0.00 1.20 0.00 9.00
a. Q 5.00 5.10 0.00 3.00 3.00 0.00 0.00 0.00 0.00 6.00 1.90 2.00 0.00 0.00 1.20 0.00 5.10
b. R 4.00 3.90 0.00 2.00 2.00 0.00 0.00 0.00 0.00 4.00 1.90 2.00 0.00 0.00 0.00 0.00 3.90
7. Agribusiness
Service 32.00 41.26 7.00 9.00 8.00 5.00 4.00 4.00 3.00 40.00 12.99 7.43 13.58 1.54 1.67 4.05 41.26
a. S 3.00 3.07 0.00 1.00 1.00 1.00 0.00 0.00 0.00 3.00 3.07 0.00 0.00 0.00 0.00 0.00 3.07
b. T 7.00 7.03 0.00 3.00 3.00 1.00 1.00 1.00 1.00 10.00 3.73 0.50 1.43 0.67 0.70 0.00 7.03
c. U 12.00 19.00 5.00 3.00 2.00 1.00 1.00 1.00 0.00 13.00 4.92 3.36 4.83 0.87 0.97 4.05 19.00
d. V 10.00 12.16 2.00 2.00 2.00 2.00 2.00 2.00 2.00 14.00 1.27 3.57 7.32 0.00 0.00 0.00 12.16
8. Extension
Services/CAR
a. W 20.00 17.36 12.00 12.00 0.00 0.00 0.00 0.00 0.00 24.00 1.40 11.00 4.96 0.00 0.00 0.00 17.36
9. Adaptive
Research
a. X 24.00 24.07 8.00 12.00 2.50 2.50 2.50 2.50 0.00 30.00 10.97 11.10 2.00 0.00 0.00 0.00 24.07
10. Integrated Pest
Management
Services
a. Y 4.00 4.37 0.00 0.00 3.00 0.00 0.00 0.00 0.00 3.00 2.34 2.03 0.00 0.00 0.00 0.00 4.37
11. Rural Financial
Services
a. Z 6.00 6.00 5.00 1.00 0.00 0.00 0.00 0.00 0.00 6.00 4.34 1.23 0.33 0.10 0.00 0.00 6.00
Subtotal (B) 232.50 251.58 58.00 75.00 48.50 25.50 23.50 21.50 9.00 261.00 91.74 73.48 34.00 18.58 15.54 18.24 251.58
Total 263.50 283.26 67.00 86.00 51.50 32.50 23.50 21.50 9.00 291.00 111.14 78.94 37.09 21.43 15.54 19.11 283.25
CAR = Cordillera Administrative Region, CY = calendar year.
Appendix 8 43
LIST OF PROCURED EQUIPMENT
Year Procurement
Quantity Particulars Amount User Agency/Office
Method
Acquired
1997 4 units Desktop Computer 352,000.00 PSO LCB
3 units Printer, Laser 134,400.00 PSO LCB
4 units Fax Machine 114,296.00 PSO LCB
6 units Plain Paper Copier 489,736.00 PSO LCB
4 units Total Station 1,195,920.00 3-DAR, 1-DENR LCB
1 unit GPS 839,850.00 DENR LCB
Subtotal 3,126,202.00
1998 1 unit Television 39,989.00 PSO LCB

Video Camera
1 unit Recorder 36,140.00 PSO LCB
1 unit VHS Player Recorder 12,480.00 PSO LCB
10 units Desktop Computer 552,848.00 7-PSO, 3-DAR LCB
3 units Notebook Computer 274,482.00 PSO LCB
8 units Printer 132,158.00 5-PSO, 3-DAR LCB
1 unit UPS 24,800.00 PSO LCB
2 units Camera 98,847.00 PSO LCB
1 unit Scanner 37,000.00 PSO LCB
Subtotal 1,208,744.00
1999 3 units Notebook Computer 240,678.00 PSO LCB

16 units Motorcycles 1,183,200.00 1 each for the 16 LCB
municipalities LCB
(OMAG) covered by
the Project
2 sets GPS 1,571,999.94 DENR LCB
2 units Total Station 500,000.00 DENR LCB
7 units Desktop Computer 284,494.00 4-PSO LCB
1-OPAG Abra LCB
1-OPAG Benguet LCB
1-OPAG Mt. Province LCB
3 units Printer 62,544.00 1-OPAG Abra LCB
1-OPAG Benguet LCB
1 unit UPS 20,078.00 PSO LCB
1 unit Plotter 426,400.00 PSO LCB
1 unit Map Digitizer 209,400.00 PSO LCB
2 units Handled GPS 340,000.00 PSO LCB
44 Appendix 8
Year Procurement
Acquired Method
Data Automation
1999 2 pckgs Software 136,000.00 1- PSO LCB
1-DENR LCB
3 pckgs Arcview 3.1 Software 244,800.00 2-PSO LCB
1-DENR LCB
3 units Airconditioner 48,591.00 PSO LCB
1 unit Typewriter with vault 40,125.00 PSO LCB
4x4 pick-up with
2 units camper shell 1,791,000.00 PSO LCB
16 units Desktop Computer 812,032.00 1 each for the 16 LCB
municipalities
(OMAG) covered by LCB
the Project
16 units Printer 135,760.00 1 each for the 16 LCB
municipalities
(OMAG) covered by LCB
the Project
1 unit Laser Printer 33,495.00 PSO LCB
2 units Utility Vehicle 1,088,000.00 PSO LCB
1999 3 units Dump Truck 4,880,136.00 1 PEO-Abra LCB
1 PEO-Benguet LCB
1 PEO-Mt. Province LCB
3 units Payloader 8,109,435.00 1 PEO-Abra LCB
1 PEO-Benguet LCB
Subtotal 22,158,167.94
2000 10 units 4x4 pick-up 8,695,000.00 2 PSO 7 units LCB

2 DENR 3 Units Repeat
Order
2 PEO-Abra
2 PEO-Benguet
2 PEO-Mt. Province
Video Camera
3 units Recorder 112,320.00 1-PSO LCB
1-OPAG Benguet LCB
2000 3 units Television 79,020.00 1-OPAG Abra LCB
1-OPAG Benguet LCB
VHS/ LCB
3 units Player/Recorder 18,720.00 1-PSO
1-OPAG Benguet LCB
Appendix 8 45
Year Procurement
Acquired Method
2000 20 units Overhead Projector 189,900.00 1 each for the 16 LCB
municipalities
(OMAG) covered by
the Project LCB
1 each for the 3 LCB
Provinces (OPAG)
covered by the
Project LCB
1 PSO LCB
2 units Notebook Printed 25,680.00 PSO LCB
8 units Inkjet Printer 156,250.00 5-PSO LCB
1-PEO Abra LCB
1-PEO Benguet LCB
1-PEO Mt. Province LCB
1 unit Dot Matrix Printer 30,200.00 PSO LCB
11 units Desktop Computer 473,154.00 8-PSO LCB
1-PEO Abra LCB
1-PEO Benguet LCB
1-PEO Mt. Province LCB
3 units Notebook Computer 284,400.00 PSO LCB
12 units Cement Mixer 460,956.00 4 PEO-Abra LCB
4 PEO-Benguet LCB
Subtotal 10,769,360.00
2001 4 units Survey Equipment 940,000.00 1 PEO-Abra LCB

1 PEO-Benguet LCB
1 PSO LCB
7 units Desktop Computer 394,600.00 PSO LCB
4 units Printer 80,950.00 PSO LCB
2001 1 unit Bundy Clock 19,000.00 PSO LCB
1 unit Cellphone 13,995.00 PSO LCB
4 units Camera 66,300.00 2-PSO LCB
1-OPAG Benguet LCB
1 unit LCD Projector 166,250.00 PSO LCB
1 unit Notebook Computer 119,000.00 PSO LCB
3 units Dump Truck 4,950,000.00 1 PEO-Abra LCB
1 PEO-Benguet LCB
46 Appendix 8
Year Procurement
Acquired Method
3 units Road roller 8,289,000.00 1 PEO-Abra LCB
1 PEO-Benguet -do-
1 PEO-Mt. Province -do-
Subtotal 15,282,855.00
2002 3 units Motor Grader 17,910,000.00 1 PEO-Abra -do-

1 PEO-Benguet -do-
1 PEO-Mt. Province -do-
1 unit Laser Printer 18,950.00 PSO -do-
6 units Notebook Computer 551,202.00 PSO -do-
4 units Desktop Computer 126,810.00 PSO -do-
Subtotal 18,606,962.00
Four-wheel Drive
2003 3 units Vehicles 2,949,000.00 1 OPAG-Abra -do-
1 OPAG-Benguet -do-
1 OPAG-Mt. Province -do-
Subtotal 2,949,000.00
Grand Total 74,101,290.94
DAR = Department of Agriculture, DENR = Department of Environment and Natural Resources, GPS = global positioning
system, LCB = local competitive bidding, LCD = liquid crystal display, OMAG = Office of Municipal Agriculturist, OPAG =
Office of Provincial Agriculturist, PEO = Provincial Engineering Office, PSO = Project Support Office, UPS =
uninterruptible power supply, VHS = video home system.
Note: Procurement cancelled: 3 units water truck, 3 units pedestrian roller, 12 units portable radio, 3 units transceiver.
Appendix 9 47
ECONOMIC AND FINANCIAL ANALYSIS
A. Economic Analysis
1. An economic reevaluation of the Project has been carried out for the project as a whole,
excluding the reforestation and agroforestry component, which was funded separately by the
International Fund for Agricultural Development (IFAD) loan. For the economic analysis the
methodology used follows ADB’s Guidelines for the Economic Analysis of Projects. 1 The
analysis is based on information obtained during field visits by the project completion review
(PCR) mission, together with data from project reports, ADB supervision missions, and the
project benefit monitoring and evaluation surveys.
1. Main Assumptions
2. The economic analysis is based on the following assumptions:
(i) Project costs have been adjusted to a constant 2005 base price by adjusting the
actual costs each year by the Philippine consumer price index for the local cost
element, and the manufacturers’ unit value index (MUV) for the international cost
component (Table A9.1).
(ii) Economic prices for tradable commodities (rice, maize, and fertilizer) are based
on the World Bank commodity price records of historical prices and forecasts of
future prices converted to a 2005 base using historical exchange rates. Future
prices are also expressed in constant 2005 prices using an exchange rate of
P55=$1.00. Farmgate prices are derived by making adjustments for quality,
transport and processing costs. These calculations are based on import parity
prices for rice, maize and fertilizer (triple superphosphate [TSP], potassium
chloride (KCL), and urea).
(iii) The costs of civil engineering works have been adjusted to economic levels by a
standard conversion factor of 0.85. Unskilled labor used in construction has a
shadow value of 0.65. Agricultural labor has a shadow value of 0.80.
(iv) Where necessary, allowance is made for additional capital investment to repair
damaged irrigation schemes and for operation and maintenance (O&M) cost for
farm-to-market roads (FMRs), irrigation schemes, and domestic water supply (to
allow for an appropriate level of O&M for sustainable operations in the future to
maintain the projected level of benefits).
(v) The cost of agricultural labor is P150 and P100 per day for male and female
labor, respectively. A shadow value 0.8 is applied to agricultural labor.
(vi) The economic life of the project is assumed to be 25 years starting in 1997.
1
ADB. 1997. Guidelines for the Economic Analysis of Projects. Manila.
48 Appendix 9
Table A9.1: Data Used to Convert to 2005 Prices
Item 1997 1998 1999 2000 2001 2002 2003 2004 2005
CPI Philippines
1994 base 124.70 136.80 145.90 152.30 161.60 167.00 170.00 176.00
2005 base 1.53 1.39 1.30 1.25 1.17 1.14 1.10 1.04 1.00
Ave Ex. rate 29.47 40.89 39.09 44.19 50.99 52.29 54.37 56.37 55.00
MUV Index
1990 base 104.28 104.90 103.56 97.17 95.95 92.99 99.97 106.86 109.43
2003 base 1.049 1.043 1.057 1.126 1.140 1.177 1.095 1.024 1.00
CPI = consumer price index, MUV = manufacturers’ unit value.
Source: World Bank Global Commodity Price Prospects 2005, ADB. 1994. Key Indicators for Philippines.
Manila.
2. Economic Benefits
3. Project benefits are calculated as the difference between the value of agricultural
production that would have been obtained in the situation before and without the project (future
without project) and the production with the project (future with project). Production in the “future
without” scenario is assumed to be the same as at present, although it might be expected that in
the future there would be a decline in production as the infrastructure degenerates and through
the effect of inappropriate land use practices. In common with the original economic analysis in
the report and recommendation of the President (RRP)2 the economic benefits are assumed to
consist of (i) the incremental economic value of crop production due to the rehabilitation and
construction of communal irrigation systems in the target barangays, (ii) the incremental
production in the greater zone of influence of the Project, and (iii) the savings in freight and
passenger transport costs resulting from the rehabilitation of the FMRs. The benefits from the
domestic water supply systems constructed by the Project have not been included because of
the difficulty of quantifying the benefits. The direct benefit is the time savings brought about from
the convenience of having a closer and more reliable source of domestic water and the
associated health benefits. It is also of interest to note that the beneficiaries mentioned that an
added benefit of improved water supply is that it enabled them to rear more pigs because of the
access to a reliable water supply for washing pig pens and for providing water for their pigs. No
allowance is made for the benefits from the reforestation component (as this is funded
separately by the IFAD loan) or of the impact on sustainable productivity because of the natural
resource management component of the Project.
4. As a result of the rehabilitation and construction of the 52 irrigation schemes serving an

area of 2,810 ha by the Project, there has been an increase in crop yields and cropping intensity
resulting from the more reliable supply of water. The schemes are divided into three categories
based on their predominant cropping pattern—vegetable alone, rice and vegetable, and rice
alone within the three project provinces. The increase in cropping intensity varies between 25%
and 58%. Crop yields for rice, as indicated by project benefit monitoring and evaluation (BME),
have increased from 2 t/ha to 3.09 t/ha for improved rice varieties and from 1.41 t/ha to 2.21 t/ha
for traditional rice production. For vegetable crops, the yield of cabbage has been shown to
have increased from 12 t/ha to 14.5 t/ha as a result of improved irrigation and farming practices.
To allow for the irrigation schemes in Abra province that were destroyed by typhoon Agme in
June 2004, the irrigable area has been reduced by 101.7 ha to 2,708 ha.
2
Republic of the Philippines for the Cordillera Highland Agricultural Resource Management Project. Manila (Loan
nos. 1421/1422-PHI[SF]).
Appendix 9 49
5. The benefit from the improved access provided by the 151.35 km of FMRs upgraded
by the Project is based on the same methodology as was used in the original economic analysis.
This assumed a saving in vehicle operating costs, assessed as P0.48/tonne/km for the volume
of goods using the roads. The roads are assumed to have a “zone of influence” of 14.52 ha/km
of road, which is the agricultural land affected by the road, giving a total of 2,198 ha for the zone
of influence of the FMRs. The average amount of produce utilizing the road is assumed to be
5.0 t/ha/year to account for the produce brought into and leaving the area served by the road.
The total benefit estimated from the FMRs is estimated to build up to P79.8 million/year.
Discussion with project beneficiaries during the course of the field work for the PCR confirmed
that a major benefit of improved all-weather road access was increased volume of traffic and
travel to and from the project area, particularly during the rainy season, when road access was
previously often rendered impassable for several months.
6. The other significant benefit was the impact of the agricultural support services (ASS)
which includes the various training courses provided to project beneficiaries, special studies and
demonstration plots, integrated pest management (IPM) and the current vegetable market price
information disseminated through the radio program “CHARM on the Air” that was funded by the
Project. BME studies conducted in the project area have confirmed the high level of awareness
and the positive impact of project activities on livelihoods. However, it is difficult to quantify the
extent of these benefits accurately, although they are significant. To take into account the more
general impact of these ASS activities, a modest percentage increase has been applied to the
value of agricultural production in the project area. The target population in the Project that
benefits directly is estimated as 23,150 households, which at an average farm size of 0.46 ha
indicates that total productive agricultural land is in the order of 10,650 ha. From the sample
survey of project beneficiaries conducted for the final BME study prepared by project
management in 2004, the total annual amount of agricultural production is estimated to be
75,000 t with a value of P983 million. Using this as the base, and applying an increase of 5% for
project impact, results in an annual benefit of P49.15 million per year. It is assumed that this
benefit would build up over a period of time as farmers adopt new technology and reap the
benefits of improvements to their farming systems. In addition to this population that have
directly benefited from the Project, there is a wider group of 50,000 households within the
Project area, and an additional 250,000 households in other barangays outside the Project that
also benefit from the spill-over of broader project activities and FMRs and ASS, such as market
information broadcast over the radio.
3. Results of Economic Analysis
7. The economic internal rate of return (EIRR) for the overall project is calculated to be
15.9%. This can be compared with the EIRR of 18% that was estimated at the time of project
preparation in 1995 and the EIRR of 20% in the project completion report (PCR) prepared by
the Project in 2004. The summary cash flows are included in the tables in Appendix 4.
4. Sensitivity Analysis
8. The results of the overall economic analysis have been tested for changes in the
assumptions relating to the level of benefits and O&M cost, the two variables that will have the
most impact on the future economic performance of the Project. A 17.5% decrease in the
overall level of benefits reduces the EIRR from 15.9% to 12%. By comparison, the annual O&M
costs would have to increase by 165% to reduce the EIRR to 12%. It appears that the economic
performance is quite sensitive to the level of benefits, but is insensitive to changes in the O&M
costs. As a major portion of the benefits is gained from the increase in vegetable production, it
50 Appendix 9
will be important that this industry continues to receive support from government and assistance
to develop post-production packaging, processing, and marketing technology to meet the
challenge from increased competition from imports from overseas and other production centers
within the Philippines.
B. Financial Analysis
9. The project design document states that the overall goal of the Project was to raise
household income above the poverty line so that the percentage of households beneath the
poverty line would reduce from 70% to 25% by 2006. It was predicted that average household
incomes would increase from P21,200 ($820) to P56,000 ($2,170) per year in real terms in the
target municipalities (a 168% increase), while net farm incomes would increase from 104% to
239%, depending on the farming system. While there is not sufficient information to quantify
whether these targets have been actually achieved, they are considered to be optimistic within
the context of rural development.
10. The original assessment of the level of poverty in the project area at the time of project
preparation was based on the information obtained by the family income and expenditures
survey (FIES)3 conducted by the National Statistics Office. FIESs are done at 3-year intervals
(1997, 2000, and 2003 during the life of the Project). The 2000 FIES showed that, from 1997 to
2000, the poverty incidence of families in the Cordillera Administrative Region (CAR) decreased
by 5.9% from 42.5% to 36.9%, the biggest decline in the country. For rural families, CAR’s
decline in the incidence of poverty was 5.5% from 55.5% to 50.0%. Comparable data for the
poverty incidence are not available from the FIES 2003 but that survey does show that, with
regard to the real change in average family income by region, CAR’s performance was the
seventh best of the 17 regions, with a decline of 2.4% compared with the overall national
decline of 10%. During this period the Philippines experienced a decline in real average family
income. In conclusion, it can be assumed that the CAR achieved a measure of poverty
reduction during the Project period that was higher than those in other regions. Some of this
was due to the Project but it is not possible to differentiate its impact from other factors.
11. The BME surveys conducted by the Project also provide information on changes in
household income. The final BME survey conducted in 2004 on a sample of beneficiary
households analyzed the change in household income between the benchmark survey
conducted in 2000 at the start of the project by the NGO contracted to the Project and the final
BME survey carried out in 2004. The results are summarized in Table A9.2. The average
income per month amounts are expressed in current prices and show an average increase for
the three activities of 93%. However, when allowance is made for inflation between 2000 and
2004 of about 20%, the percentage increase in income in real terms is reduced to an average of
61%. This can be compared with the stated objective of increasing average family incomes by
168% in real teams from 1995 to 2006. Although the Project achieved a considerable increase
in household income, it is highly unlikely that its target of 168% by 2006 will be achieved.
3
The Family Income and Expenditure Survey (FIES) is a national survey of households undertaken every 3 years by
the National Statistics Office. It is the main source of data on family income and expenditure and includes levels of
consumption by item of expenditure as well as sources of income in cash and in kind. The results of FIES provide
information on the levels of living and disparities in family income as well as their spending patterns.
Appendix 9 51
Table A9.2: Comparison of Household Income between Benchmark and Final BME
Surveys
Benchmark
2000
Average Final BME
Income Average Income Change
Activity per Month per Month Change Real Terms
(P) (P) (%) (%)
Community Irrigation 2,164 3,777 75 45
Farm-to-Market Roads 3,871 8,207 112 77
Domestic Water Supply 2,983 5,733 92 60
Average 3,006 5,905 97 65
Source: Final Report, CHARM Final Benefit Monitoring and Evaluation (BME) Survey, August 2004.
12. The change in net farm income for the irrigation schemes developed by the Project has
been analyzed based on the information for the farming systems for each area. The results are
shown in Table A9.3. The increase in net farm income varies according to location and ranges
from 73% for rehabilitated vegetable production in Benguet to 234% for rehabilitated vegetables
and rice production in Mountain Province.
Table A9.3: Change in Net Farm Income from Irrigation
Net farm Income

Aveage Farm Future Without Future With Increase
Size Irrigation Irrigation (%)
Item (ha) (P) (P)
Abra
New Rice Irrigation 1.00 7,408 21,373 188
Rehabilitated Rice Irrigation 1.00 10,745 21,373 99
Benguet
New Vegetable Irrigation 0.5 36,573 69,081 89
New Vegetable and Rice
Irrigation 0.5 7,953 24,319 206
Rehabilitated Vegetable
Irrigation 0.5 39,989 69,081 73
Rehabilitated Vegetable and
Rice Irrigation 0.5 8,658 24,319 181
Mountain Province
Rehabilitated Vegetable and
Rice 0.5 9,014.97 30,144.11 234
Rehabilitated Rice Irrigation 0.9 7,527.55 13,839.47 84
ha = hectare.
13. The actual performance is somewhat lower than the estimates at appraisal but still quite
impressive. It was envisaged that new rice farms in Abra province would increase incomes by
239%, while rehabilitated rice farms would increase incomes by 213%. For Benguet and
Mountain Province, it was estimated that new rice production would lead to a 224% increase in
52 Appendix 9
incomes, rice rehabilitation would lead to a 104% increase, new irrigation for vegetables would
lead to a 226% increase, and rehabilitated irrigation for vegetables would lead to a 135%
increase. The PCR analysis shows that the Project has achieved these expectations for
vegetable production, but the performance of the other farming systems is still short of
expectations. However there is still potential for further productivity gains from irrigation, as most
of the schemes developed and rehabilitated by the Project have not been operating long
enough to reach their full potential.
Table A9.4: Summary of Overall CHARM Economic Analysis
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Item (1997) (1998) (1999) (2000) (2001) (2002) (2003)
A. Project Benefits
1. Irrigation Rehabilitation ha Average Benefit/ha
a. Abra - New Rice 358 15,759.12 0 0 1,410,441 2,820,882 4,231,323 4,513,411
Rehab Rice 248 12,271.68 0 0 760,844 1,521,688 2,282,533 2,434,701
b. Benguet - New Vegetable 500 57,330.79 0 0 7,166,349 14,332,698 21,499,047 22,932,317
New Vegetable and
Rice 421 30,208.55 0 0 3,179,450 6,358,900 9,538,350 10,174,240
Rehab Vegetable 43 51,774.55 0 0 556,576 1,113,153 1,669,729 1,781,045
Rehab Vegetable
and Rice 19 28,909.06 0 0 137,318 274,636 411,954 439,418
c. Mountain
Province - Rehab Rice 322 7,346.88 0 0 591,424 1,182,847 1,774,271 1,892,556
Rehab Vegetable
and Rice 797 31,837.81 0 0 6,343,683 12,687,367 19,031,050 20,299,787
Subtotal 2,708 0 0 20,146,086 40,292,171 60,438,257 64,467,474
2. Farm-to-Market Road 3,710,325 24,407,595 65,827,013 79,825,695
3. Agricultural Support Services 2,457,500 4,915,000 7,372,500 17,202,500
Total Benefits 0 0 0 26,313,911 69,614,767 133,637,770 161,495,669
B. Project Costs
1. Investment Costs 8,016,555 51,377,684 83,581,050 194,448,039 229,928,082 171,718,372 211,834,758
2. O&M Costs 0 0 3,918,838 10,322,414 15,828,171 18,073,162 18,073,162
Total Costs 8,016,555 51,377,684 87,499,888 204,770,453 245,756,253 189,791,534 229,907,920
Net Cash Flow (8,016,555) (51,377,684) (87,499,888) (178,456,542) (176,141,486) (56,153,764) (68,412,251)
EIRR 15.9%
Appendix 9
53
54
Year 8 Year 9 Year 10 Year 11 Year 12 Year 25
Item (2004)
Appendix 9
A. Project Benefits
1. Irrigation Rehabilitation
a. Abra - New Rice 4,795,499 5,077,587 5,359,676 5,641,764 5,641,764 5,641,764
Rehab Rice 2,739,039 2,891,208 3,043,377 3,043,377 3,043,377 3,043,377
b. Benguet - New Vegetable 24,365,587 25,798,856 27,232,126 28,665,396 28,665,396 28,665,396
New Vegetable and Rice 10,810,130 11,446,020 12,081,910 12,717,800 12,717,800 12,717,800
Rehab Vegetable 1,892,360 2,003,675 2,114,990 2,226,306 2,226,306 2,226,306
Rehab Vegetable and Rice 466,881 494,345 521,809 549,272 549,272 549,272
c. Mountain
Province - Rehab Rice 2,010,840 2,129,125 2,247,410 2,365,695 2,365,695 2,365,695
Rehab Vegetable and Rice 21,568,524 22,837,260 24,105,997 25,374,734 25,374,734 25,374,734
Subtotal 68,648,860 72,678,294 76,707,294 80,584,342 80,584,342 80,584,342
2. Farm-to-Market Road 79,825,695 79,825,695 79,825,695 79,825,695 79,825,695 79,825,695
3. Agricultural Support Services 24,575,000 41,777,500 49,150,000 49,150,000 49,150,000 49,150,000
Total Benefits 173,049,555 194,281,273 205,682,989 209,560,037 209,560,037 209,560,037
B. Project Costs
1. Investment Costs 103,038,278 72,703,472
2. O&M Costs 17,867,250 17,867,250 17,867,250 17,867,250 17,867,250 17,867,250
Total Costs 120,905,528 90,570,721 17,867,250 17,867,250 17,867,250 17,867,250
Net Cash Flow 52,144,028 103,710,551 187,815,739 191,692,788 191,692,788 191,692,788
EIRR 15.9%
CHARM = Cordillera Highland Agricultural Resource Management, EIRR = economic internal rate of return, O&M = operation and maintenance.
Table A9.5: Calculation of Economic Prices
(At constant 2005 Economic Prices; $/ton, P/kg)
Item Unit 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2010
A. Rice
Indicator price - 1990
a
base $/ton 280.00 291.90 239.90 207.80 180.10 206.00 197.40 221.10 260.00 245.00 231.30 197.00
baseb 306.40 319.43 262.52 227.40 197.08 225.43 216.01 241.95 284.52 268.10 253.11 215.58
Quality differentialc 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80
Equivalent value of
Philippines productd 245.12 255.54 210.02 181.92 157.67 180.34 172.81 193.56 227.61 214.48 202.49 172.46
Freight and insurance cost
Bangkok to Manilae 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00
CIF Value at Manila port 290.12 300.54 255.02 226.92 202.67 225.34 217.81 238.56 272.61 259.48 247.49 217.46
Exchange rate 29.47 40.89 39.09 44.19 50.99 52.29 54.37 56.37 55.00 55.00 55.00 55.00
Value at Philippines portf P/kg 8,549.93 12,289.12 9,968.66 10,027.44 10,333.98 11,783.06 11,842.43 13,447.62 14,993.79 14,271.55 13,611.91 11,960.39
Port handling charges,
storage and lossg 170.00 170.00 170.00 170.00 170.00 170.00 170.00 170.00 170.00 170.00 170.00 170.00
Importers margin 7.5%
CIF 641.24 921.68 747.65 752.06 775.05 883.73 888.18 1,008.57 1,124.53 1,070.37 1,020.89 897.03
Transport cost to selling
centreh 440.00 440.00 440.00 440.00 440.00 440.00 440.00 440.00 440.00 440.00 440.00 440.00
Value at wholesale
market/warehouse 9,801.18 13,820.80 11,326.30 11,389.49 11,719.03 13,276.79 13,340.61 15,066.19 16,728.33 15,951.92 15,242.80 13,467.42
Traders margin 2% of
wholesale price 196.02 276.42 226.53 227.79 234.38 265.54 266.81 301.32 334.57 319.04 304.86 269.35
Transport costs, local mill
to wholesale marketi 425.00 425.00 425.00 425.00 425.00 425.00 425.00 425.00 425.00 425.00 425.00 425.00
Ex-Mill price 9,180.15 13,119.39 10,674.78 10,736.71 11,059.65 12,586.26 12,648.80 14,339.86 15,968.76 15,207.88 14,512.95 12,773.07
Dealer handling and
Processing costsj 265.00 265.00 265.00 265.00 265.00 265.00 265.00 265.00 265.00 265.00 265.00 265.00
By-product value 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00
Value at local
Appendix 9
market/processor/mill 9,415.15 13,354.39 10,909.78 10,971.71 11,294.65 12,821.26 12,883.80 14,574.86 16,203.76 15,442.88 14,747.95 13,008.07
Paddy equivalent price
(65% recovery) 6,119.85 8,680.35 7,091.36 7,131.61 7,341.52 8,333.82 8,374.47 9,473.66 10,532.44 10,037.87 9,586.17 8,455.25
Transport cost - farmgate to
local market/millk 880.00 880.00 880.00 880.00 880.00 880.00 880.00 880.00 880.00 880.00 880.00 880.00
Value at farmgate per
l
ton 3,295.30 4,674.04 3,818.42 3,840.10 3,953.13 4,487.44 4,509.33 5,101.20 5,671.32 5,405.01 5,161.78 4,552.83
55
Crop form at farmgate dry, unmilled paddy
56
Item Unit 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2010
B. Maize
Appendix 9
a
base $/ton 108.20 97.90 87.10 90.90 93.40 106.60 105.20 104.50 91.20 87.30 82.90 89.90
baseb 118.40 107.13 95.31 99.47 102.21 116.65 115.12 114.35 99.80 95.53 90.72 98.38
c
Quality differential 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Equivalent value of
d
Philippines product 118.40 107.13 95.31 99.47 102.21 116.65 115.12 114.35 99.80 95.53 90.72 98.38
Freight and insurance cost
to Gulf to Manila e 55.00 55.00 55.00 55.00 55.00 55.00 55.00 55.00 55.00 55.00 55.00 55.00
Value at Philippines port 173.40 162.13 150.31 154.47 157.21 171.65 170.12 169.35 154.80 150.53 145.72 153.38
Exchange rate 29.47 40.89 39.09 44.19 50.99 52.29 54.37 56.37 55.00 55.00 55.00 55.00
f
Value at Philippines port P/kg 5,110.19 6,629.58 5,875.76 6,826.11 8,016.02 8,975.70 9,249.44 9,546.50 8,514.01 8,279.28 8,014.46 8,435.77
Port handling charges,
g
storage & loss 170.00 170.00 170.00 170.00 170.00 170.00 170.00 170.00 170.00 170.00 170.00 170.00
Importers margin 7.5% of
CIFh 383.26 497.22 440.68 511.96 601.20 673.18 693.71 715.99 638.55 620.95 601.08 632.68
Value at
wholesale/warehouse
market 5,663.46 7,296.79 6,486.44 7,508.07 8,787.22 9,818.88 10,113.15 10,432.49 9,322.56 9,070.23 8,785.55 9,238.45
Transport costs, local to
i
wholesale market 440.00 440.00 440.00 440.00 440.00 440.00 440.00 440.00 440.00 440.00 440.00 440.00
Dealer handling and
Processing costs 2%j 122.07 154.74 138.53 158.96 184.54 205.18 211.06 217.45 195.25 190.20 184.51 193.57
Value at local market 6,225.53 7,891.53 7,064.97 8,107.03 9,411.76 10,464.06 10,764.22 11,089.94 9,957.81 9,700.43 9,410.06 9,872.02
Transport cost - farmgate to
k
local market/mill 880.00 880.00 880.00 880.00 880.00 880.00 880.00 880.00 880.00 880.00 880.00 880.00
l
Value at farmgate 5,345.53 7,011.53 6,184.97 7,227.03 8,531.76 9,584.06 9,884.22 10,209.94 9,077.81 8,820.43 8,530.06 8,992.02
Crop form at farmgate dry grain
Item Unit 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2010
C. Urea
a
base $/ton 118.30 98.90 75.10 103.90 99.30 101.30 138.70 163.80 196.20 187.10 174.50 137.00
baseb 129.46 108.23 82.18 113.70 108.66 110.85 151.78 179.25 214.70 204.74 190.96 149.92
Freight and insurance
coste 56.00 56.00 56.00 56.00 56.00 56.00 56.00 56.00 56.00 56.00 56.00 56.00
CIF Value at
Philippines port 185.46 164.23 138.18 169.70 164.66 166.85 207.78 235.25 270.70 260.74 246.96 205.92
Exchange rate 29.47 40.89 39.09 44.19 50.99 52.29 54.37 56.37 55.00 55.00 55.00 55.00
f
Value at Manila port P/kg 5,465.38 6,715.21 5,401.53 7,498.94 8,396.22 8,724.72 11,296.97 13,260.84 14,888.59 14,340.89 13,582.54 11,325.55
Port charges and
importers margin 7.5%
g
CIF 409.90 503.64 405.11 562.42 629.72 654.35 847.27 994.56 1,116.64 1,075.57 1,018.69 849.42
Admin cost and
contingencies (13%) 710.50 872.98 702.20 974.86 1,091.51 1,134.21 1,468.61 1,723.91 1,935.52 1,864.32 1,765.73 1,472.32
Internal
handling/transport to
h
Project area 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00
Value at wholesale
market/distrib center 7,085.78 8,591.83 7,008.85 9,536.23 10,617.44 11,013.29 14,112.84 16,479.31 18,440.75 17,780.78 16,866.97 14,147.29
Transport cost -
wholesale to farmgate 325.00 325.00 325.00 325.00 325.00 325.00 325.00 325.00 325.00 325.00 325.00 325.00
Dealers margin 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Value at farmgate
(fertiliser) l 7,510.78 9,016.83 7,433.85 9,961.23 11,042.44 11,438.29 14,537.84 16,904.31 18,865.75 18,205.78 17,291.97 14,572.29
Value at farmgate (kg
nutrient) 16.33 19.60 16.16 21.65 24.01 24.87 31.60 36.75 41.01 39.58 37.59 31.68
Fertiliser form at farmgate bagged
Appendix 9
57
58
Item Unit 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2010
D. Triple Superphosphate (TSP)
Appendix 9
a
base $/ton 158.90 166.10 149.20 141.40 132.20 142.90 149.20 174.10 182.50 173.80 165.80 137.00
baseb 173.88 181.76 163.27 154.73 144.67 156.38 163.27 190.52 199.71 190.19 181.43 149.92
Freight and
insurance coste 56.00 56.00 56.00 56.00 56.00 56.00 56.00 56.00 56.00 56.00 56.00 56.00
Value at Philippines
port 229.88 237.76 219.27 210.73 200.67 212.38 219.27 246.52 255.71 246.19 237.43 205.92
Exchange rate 29.47 40.89 39.09 44.19 50.99 52.29 54.37 56.37 55.00 55.00 55.00 55.00
f
port P/kg 6,774.69 9,722.14 8,571.25 9,312.34 10,231.98 11,105.11 11,921.69 13,896.20 14,064.04 13,540.41 13,058.92 11,325.55
Port charges and
importers margin
g
7.5% 508.10 729.16 642.84 698.43 767.40 832.88 894.13 1,042.21 1,054.80 1,015.53 979.42 849.42
Administration costs
13% 880.71 1,263.88 1,114.26 1,210.60 1,330.16 1,443.66 1,549.82 1,806.51 1,828.32 1,760.25 1,697.66 1,472.32
Internal
handling/transport
h
costs 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00
Value at distribution
centre 8,663.50 12,215.18 10,828.35 11,721.37 12,829.54 13,881.66 14,865.63 17,244.92 17,447.16 16,816.20 16,236.00 14,147.29
Dealers margin 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Transport cost - to
farmgatek 325.00 325.00 325.00 325.00 325.00 325.00 325.00 325.00 325.00 325.00 325.00 325.00
Value at farmgate
(fertiliser)l 9,088.50 12,640.18 11,253.35 12,146.37 13,254.54 14,306.66 15,290.63 17,669.92 17,872.16 17,241.20 16,661.00 14,572.29
Value at farmgate
(kg nutrient) 19.34 26.89 23.94 25.84 28.20 30.44 32.53 37.60 38.03 36.68 35.45 31.00
Item Unit 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2010
E. Potassium Chloride KCL
a
base $/ton 107.70 112.40 117.50 125.80 123.10 121.70 113.10 116.40 141.40 129.20 122.20 107.00
baseb 117.86 123.00 128.58 137.66 134.71 133.18 123.77 127.38 154.73 141.38 133.72 117.09
Freight and insurance
coste 56.00 56.00 56.00 56.00 56.00 56.00 56.00 56.00 56.00 56.00 56.00 56.00
CIF Value at
Philippines port 173.86 179.00 184.58 193.66 190.71 189.18 179.77 183.38 210.73 197.38 189.72 173.09
Exchange rate 29.47 40.89 39.09 44.19 50.99 52.29 54.37 56.37 55.00 55.00 55.00 55.00
f
port P/kg 5,123.54 7,319.28 7,215.24 8,557.97 9,724.22 9,892.03 9,773.84 10,336.93 11,590.37 10,856.10 10,434.79 9,519.96
Port charges and
importers margin
g
7.5% 384.27 548.95 541.14 641.85 729.32 741.90 733.04 775.27 869.28 814.21 782.61 714.00
Admin costs and
h
contingencies 13% 666.06 951.51 937.98 1,112.54 1,264.15 1,285.96 1,270.60 1,343.80 1,506.75 1,411.29 1,356.52 1,237.59
Internal handling
transport to project
area 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00
Value at distribution
centre 6,673.87 9,319.74 9,194.37 10,812.35 12,217.68 12,419.90 12,277.48 12,956.01 14,466.40 13,581.60 13,073.92 11,971.55
Dealers margin 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Transport cost to
farmgatek 325.00 325.00 325.00 325.00 325.00 325.00 325.00 325.00 325.00 325.00 325.00 325.00
Value at farmgate
(fertiliser)l 7,098.87 9,744.74 9,619.37 11,237.35 12,642.68 12,844.90 12,702.48 13,381.01 14,891.40 14,006.60 13,498.92 12,396.55
Value at farmgate
(nutrient) 11.83 16.24 16.03 18.73 21.07 21.41 21.17 22.30 24.82 23.34 22.50 20.66
Derived Value of
Compound Fertiliser P/kg 6.65 8.78 7.86 9.27 10.26 10.74 11.94 13.53 14.54 13.94 13.38 11.67
Appendix 9
(estimated from price of N, P205 and K20)
CIF = cost, insurance, and freight; FOB = freight on board.
a
Price in constant 1990 $, World Bank Commodity Price Projections, 2005 November.
b
Price in constant 2005 $, World Bank Commodity Price Projections, 2005 November, having applied manufacturers’ unit value factor of 1.0943 .
c
Value of Philippines product/value of marker product.
d
Marker price x quality differential factor.
e
Cost of insurance and freight between marker product location and Manila port.
59
f
$/ton value converted to P/kg at $=P55 exchange rate.
g
Costs of port handling and other charges in Philippines % of freight on board/cost, insurance, and freight.
h
Costs of transport, handling etc, between wholesale market and port.
60
i
Costs of transport, handling etc, between local and wholesale market.
j
Processing costs/ton of processed product.
k
Transport/handling cost between farmgate and local market.
Appendix 9
l
Farmgate value of unprocessed product.
Table A9.6: CHARM Economic Investment Cost
1997 1998 1999

Category GOP ADB Total GOP ADB Total GOP ADB Total
Exchange rate 29.47 40.89 39.09
ADB % split
A. Civil Works 59% Foreign 0 0 0 0 0 0
41% Local 209,367 209,367 2,018,557 2,018,557 24,063,090 24,063,090
Total Civil Works 209,367 209,367 2,018,557 2,018,557 24,063,090 24,063,090
B. Non-Civil Works 48% Foreign 493,438 493,438 13,118,724 13,118,724 11,492,308 11,492,308
52% Local 5,627,000 0 5,627,000 14,492,000 17,231,742 31,723,742 21,354,000 22,080,893 43,434,893
Total Non-Civil Works Total 5,627,000 493,438 6,120,438 14,492,000 30,350,466 44,842,466 21,354,000 33,573,201 54,927,201
Total Costs 53% Foreign 0 493,438 493,438 0 13,118,724 13,118,724 0 11,492,308 11,492,308
47% Local 5,836,367 0 5,836,367 16,510,557 17,231,742 33,742,298 45,417,090 22,080,893 67,497,983
Total 5,836,367 493,438 6,329,805 16,510,557 30,350,466 46,861,022 45,417,090 33,573,201 78,990,291
Adjust to 2005 Base

A. Civil Works
Foreign (International MUV Index) 1.049 0 1.043 0 1.057 0
Local (Philippines CPI) 1.53 320,331 1.39 2,805,794 1.3 31,282,018
Total Civil Works in 2005 320,331 2,805,794 31,282,018
B. Non-Civil Works
Foreign 517,617 13,682,830 12,147,369
Local 8,609,310 44,096,001 56,465,360
Total Non-Civil Works in 2005 Values 9,126,927 57,778,830 68,612,730
Total Project Costs (2005 values) 9,447,258 60,584,624 99,894,748
Convert to Economic Costs
A. Civil Works % SCF

1. Supplies and
materials 70% 0.85 190,597 1,669,447 18,612,801
2. Labor
Appendix 9
(i) Skilled 5% 1.00 16,017 140,290 1,564,101
(ii) Unskilled 25% 0.65 52,054 455,941 5,083,328
Total Civil Works Economic Costs 258,667 2,265,678 25,260,229
B. Non-Civil Works 0.85 7,757,888 49,112,006 58,320,820
Total Project Economic Costs 8,016,555 51,377,684 83,581,050
61
62
Category 2000 2001
GOP ADB Total GOP ADB Total
Appendix 9
Exchange rate 44.19 50.99
ADB % split
A. Civil Works 59% Foreign 0 7,798,800 7,798,800 0 33,755,502 33,755,502
41% Local 79,681,647 5,419,505 85,101,152 84,211,543 23,457,213 107,668,756
Total Civil Works 79,681,647 3,218,306 92,899,953 84,211,543 57,212,715 141,424,258
B. Non-Civil Works 48% Foreign 34,128,236 34,128,236 32,425,162 32,425,162

52% Local 27,060,000 37,687,208 64,747,208 31,798,000 34,277,137 66,075,137
Total Non-Civil Works Total 27,060,000 71,815,444 98,875,444 31,798,000 66,702,299 98,500,299
Total Costs 53% Foreign 0 41,927,036 41,927,036 0 66,180,664 66,180,664

47% Local 106,741,647 43,106,714 149,848,361 116,009,543 57,734,350 173,743,893
Total 106,741,647 85,033,750 191,775,397 116,009,543 123,915,014 239,924,557
Adjust to 2005 Base

A. Civil Works
Foreign (International MUV Index) 1.126 8,781,449 1.14 38,481,272
Local (Philippines CPI) 1.25 106,376,441 1.17 125,972,445
Total Civil Works in 2005 Values 115,157,890 164,453,717
B. Non-Civil Works
Foreign 38,428,393 36,964,685
Local 80,934,010 77,307,910
Total Non-Civil Works in 2005 Values 119,362,404 114,272,595
Total Project Costs (2005 values) 234,520,294 278,726,312

1. Supplies and materials 70% 0.85 68,518,945 97,849,962
2. Labor
(i) Skilled 5% 1.00 5,757,894 8,222,686
(ii) Unskilled 25% 0.65 18,713,157 26,723,729
Total Civil Works Economic Costs 92,989,996 132,796,376
B. Non-Civil Works 0.85 101,458,043 97,131,705
Total Project Economic Costs 194,448,039 229,928,082

Category 2002 2003 2004
GOP ADB Total GOP ADB Total GOP ADB Total
Exchange rate 52.29 54.37 56.37
ADB % split
A. Civil Works 59% Foreign 0 39,330,050 39,330,050 0 77,848,459 77,848,459 0 2,425,313 12,425,313
41% Local 26,909,163 27,331,052 54,240,214 5,188,864 54,098,082 59,286,946 3,597,466 8,634,539 42,232,006
Total Civil 26,909,163 66,661,101 93,570,264 5,188,864 131,946,541 137,135,405 3,597,466 21,059,852 54,657,318
B. Non-Civil 48% Foreign 39,265,976 39,265,976 34,699,116 34,699,116 27,361,082 27,361,082

52% Local 28,980,000 17,587,116 46,567,116 17,579,000 44,498,374 62,077,374 2,648,000 35,228,144 37,876,144
Total Non-Civil Works Total 28,980,000 56,853,093 85,833,093 17,579,000 79,197,490 96,776,490 2,648,000 62,589,226 65,237,226
Total Costs 53% Foreign 0 78,596,026 78,596,026 0 112,547,575 112,547,575 0 39,786,395 39,786,395
47% Local 55,889,163 44,918,168 100,807,331 22,767,864 98,596,456 121,364,320 36,245,466 43,862,683 80,108,149
Total 55,889,163 123,514,194 179,403,357 22,767,864 211,144,031 233,911,895 36,245,466 83,649,078 119,894,544
Adjust to 2005 Base

A. Civil Works
Foreign (International MUV Index) 1.177 46,291,469 1.095 85,244,063 1.024 12,723,520
Local (Philippines CPI) 1.14 61,833,844 1.1 65,215,641 1.04 43,921,286
Total Civil Works in 2005 Values 108,125,313 150,459,704 56,644,806
B. Non-Civil
Foreign 46,216,054 37,995,532 28,017,748
Local 53,086,513 68,285,112 39,391,189
Total Non-Civil Works in 2005 Values 99,302,567 106,280,644 67,408,938
Total Project Costs (2005 values) 207,427,880 256,740,347 124,053,744

1. Supplies
materials 70% 0.85 64,334,561 89,523,524 33,703,660
2. Labor
(i) Skilled 5% 1.00 5,406,266 7,522,985 2,832,240
(ii) 25% 0.65 17,570,363 24,449,702 9,204,781
Appendix 9
Total Civil Works Economic 87,311,190 121,496,211 45,740,681
B. Non-Civil 0.85 84,407,182 90,338,547 57,297,597
Total Project Economic Costs 171,718,372 211,834,758 103,038,278
63
64
Category 2005 Total
GOP ADB Total GOP ADB Grand Total
Exchange rate 55.00
ADB % split
Appendix 9
A. Civil Works 59% Foreign - 33,298,298 33,298,298 - 204,456,422 204,456,422
41% Local 33,597,466 23,139,495 56,736,961 289,477,163 142,079,886 431,557,049
Total Civil Works 33,597,466 56,437,793 90,035,259 289,477,163 346,536,308 636,013,471
B. Non-Civil Works 48% Foreign - - - 192,984,043 192,984,043

52% Local - - 149,538,000 208,590,613 358,128,613
Total Non-Civil Works Total - - - 149,538,000 401,574,656 551,112,656
Total Costs 53% Foreign - 33,298,298 33,298,298 - 397,440,465 397,440,465

47% Local 33,597,466 23,139,495 56,736,961 439,015,163 350,670,500 789,685,663
Total 33,597,466 56,437,793 90,035,259 439,015,163 748,110,965 1,187,126,128
Adjust to 2005 Base
A. Civil Works
Foreign (International MUV Index) 1.00 33,298,298 224,820,071
Local (Philippines CPI) 1.00 56,736,961 494,464,759
Total Civil Works in 2005 Values 90,035,259 719,284,830
B. Non-Civil Works
Foreign - 213,970,228
Local - 428,175,405
Total Non-Civil Works in 2005 Values - 642,145,633
Total Project Costs (2005 values) 90,035,259 1,361,430,464

1. Supplies and materials 70% 0.85 53,570,979 427,974,474
2. Labor
(i) Skilled 5% 1.00 4,501,763 35,964,242
(ii) Unskilled 25% 0.65 14,630,730 116,883,785
Total Civil Works Economic Costs 72,703,472 580,822,501
B. Non-Civil Works 0.85 - 545,823,788
Total Project Economic Costs 72,703,472 1,126,646,289

ADB = Asian Development Bank, CHARM = Cordillera Highland Agricultural Resource Management, CPI = consumer price index, GOP = Government of the
Philippines, MUV = manufacturers’ unit value, SCF = standard conversion factor.
Table A9.7: CHARM Economic Operation and Maintenance Costs
Item Unit 1999 2000 2001 2002 2003 2004 2005 2006 2007–2023
1. Farm to Market Roads

Cumulative km 32.63 83.69 137.44 151.35 151.35 151.35 151.35 151.35 151.35
Annual Maintenance Cost per km
Total Annual Maintenance Cost $ 3,181,425 8,159,775 13,400,400 14,756,625 14,756,625 14,756,625 14,756,625 14,756,625 14,756,625
Supplies and materials $ 1,892,948 4,855,066 7,973,238 8,780,192 8,780,192 8,780,192 8,780,192 8,780,192 8,780,192
Skilled labor $ 159,071 407,989 670,020 737,831 737,831 737,831 737,831 737,831 737,831
Unskilled labor $ 516,982 1,325,963 2,177,565 2,397,952 2,397,952 2,397,952 2,397,952 2,397,952 2,397,952
Total Annual Maintenance Cost 2,569,001 6,589,018 10,820,823 11,915,975 11,915,975 11,915,975 11,915,975 11,915,975 11,915,975
2. Irrigation
Cumulative ha 628.65 1689.36 2240.42 2810 2810 2708 2708 2708 2708
Annual Maintenance Cost per ha
Supplies and material $ 935,117 2,512,923 3,332,625 4,179,875 4,179,875 4,028,150 4,028,150 4,028,150 4,028,150
Skilled labor $ 78,581 211,170 280,053 351,250 351,250 338,500 338,500 338,500 338,500
Unskilled labor $ 255,389 686,303 910,171 1,141,563 1,141,563 1,100,125 1,100,125 1,100,125 1,100,125
Total Annual Maintenance Cost 1,269,087 3,410,396 4,522,848 5,672,688 5,672,688 5,466,775 5,466,775 5,466,775 5,466,775
3. Domestic Water Supply

No. Units (cumulative) no. 5 20 30 30 30 30 30 30 30
Annual Maintenance Cost per unit
Total Annual Maintenance Cost $ 100,000 400,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000
Supplies and materials $ 59,500 238,000 357,000 357,000 357,000 357,000 357,000 357,000 357,000
Skilled labor $ 5,000 20,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000
Unskilled labor $ 16,250 65,000 97,500 97,500 97,500 97,500 97,500 97,500 97,500
Total Annual Maintenance Cost $ 80,750 323,000 484,500 484,500 484,500 484,500 484,500 484,500 484,500
Appendix 9
CHARM = Cordillera Highland Agricultural Resource Management, ha = hectare, km = kilometer.

65
66 Appendix 9
Table A9.8: Summary of Crop Input and Output Prices
Financial Economic
Price Pricea Conversion
Item Unit 2005 Ave 2005/2015 Factor
A. Outputs
1. Rice HYV-irrigated kg 7 8.59 1.23
2. Rice-rainfed kg 7 8.59 1.23
3. Maize kg 6 10.21 1.70
4. Vegetables
a. Cabbage kg 10 10 1.00
b. Chinese cabbage kg 5 5 1.00
c. Potato kg 6 10 1.67
d. Carrots kg 7 10 1.43
e. Pepper kg 15 15 1.00
f. Sweet potato kg 6 6 1.00
g. Beans kg 15 15 1.00
B. Inputs
1. Seeds/Planting Material
a. Rice HYV-irrigated kg 9 9.45 1.08
b. Rice-rainfed kg 8 9.45 1.23
c. Maize kg 7 11 1.70
d. Cabbage kg 11,500 11,500 1.00
e. Chinese cabbage kg 11,500 11,500 1.00
f. Potato kg 25 25 1.00
g. Carrots kg 11,500 11,500 1.00
h. Pepper kg 300 300 1.00
i. Sweet potato kg 12 12 1.00
j. Beans 20 20 1.00
2. Fertilizer
a. Urea kg 13 16.64 1.28
c. Triple Super Phosphate kg 12 16.13 1.34
d. KCL kg 7 13.39 1.97
e. Poultry manure kg 3 3 1.00
4. 14-14-14 kg 10 11.44 1.14
3. Ag Chemicals
a. Fungicides lt./kg 450 450 1.00
b. Herbicides lt./kg 1,200 1,200 1.00
4. Other Inputs
a. Bags and packing materials kg 0.10 0.08 0.80
b. Tools and equipment ha 100 100 1.00
5. Land preparation
a. Ploughing and land preparation day 150 127.50 0.85
b. Harrowing day 150 127.50 0.85
c. Discing day 150 127.50 0.85
d. Threshing kg 1.00 0.80 0.80
e. Transport to farmgate kg 0.50 0.40 0.80
6. Agricultural labor
a. Male wd 150 120.00 0.80
b. Female wd 100 80.00 0.80
a
Constant 2005 Financial and Economic Prices; P/kg = 55.
Appendix 9 67
Table A9.9: MUV Index (International Cost Escalation)
MUV Index Percent Change Cumulative Adjustment to

Year (1990 = 100) per Annum Increase 2005 Base
1990 100.00 1.000 1.094
1991 100.60 0.60 1.006 1.088
1992 101.20 0.60 1.012 1.081
1993 101.81 0.60 1.018 1.075
1994 102.42 0.60 1.024 1.068
1995 103.04 0.60 1.030 1.062
1996 103.65 0.60 1.037 1.056
1997 104.28 0.60 1.043 1.049
1998 104.90 0.60 1.049 1.043
1999 103.56 (1.28) 1.036 1.057
2000 97.17 (6.17) 0.972 1.126
2001 95.95 (1.26) 0.960 1.140
2002 92.99 (3.08) 0.930 1.177
2003 99.97 7.50 1.000 1.095
2004 106.86 6.90 1.069 1.024
2005 109.43 2.40 1.094 1.000
2006 112.06 2.40 1.121
2007 114.41 2.10
MUV = manufacturers’ unit value.
Source: World Bank Global Commodity Price Prospects 2003, 2004, and 2005.
Table A9.10: Consumer Price Index (CPI) for the Philippines
Percent Change Cumulative Adjustment to

Year CPI Indexa CPI Indexb per Year Increase 2005 Base
1994 100.0 1.00 1.90

1995 108.0 8.00 1.08 1.76
1996 117.8 9.07 1.18 1.62
1997 124.7 5.86 1.25 1.53
1998 136.8 9.70 1.37 1.39
1999 145.9 6.65 1.46 1.30
2000 152.3 100.0 4.39 1.52 1.25
2001 161.6 106.8 6.80 1.63 1.17
2002 167.0 110.0 3.00 1.68 1.14
2003 170.0 113.8 3.45 1.73 1.10
2004 176.0 120.6 5.98 1.84 1.04
2005 125.0 3.65 1.90 1.00
a
National Consumer Price Index, ADB Key Indicators for Philippines 1994 = 100.
b
ADB Key Indicators for Philippines 2000 = 100.

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Completion Report

Project Number: 26517

Philippines: Cordillera Highland Agricultural Resource

Currency Unit – peso (P)

At Appraisal At Project Completion

ADB – Asian Development Bank

barangay – The lowest local government administrative unit

(i) The fiscal year (FY) of the Government ends on 31 December.

(ii) In this report, "$" refers to US dollars.

Vice President C. Lawrence Greenwood, Jr., Operations Group 2

3. Date of Board Approval 11 January 1996

4. Date of Loan Agreement 8 May 1996 (signing date)

5. Date of Loan Effectiveness

Effective Date Original Closing Time Interval

Loan No. 1421-PHI (in $)

Loan No. 1422-PHI(SF) (in $)

Loan No. 1422-PHI(SF) (in SDR)

9. Local Costs (Financed: ADB+IFAD)

1. Project Cost ($’000)

Foreign Exchange Cost 9,532 8,111

2. Financing Plan ($’000)

IDC Costs and Service Charge

3. Cost Breakdown by Project Component ($’000)

5. Project Performance Report Ratings

D. Data on Asian Development Bank Missions

South China Sea

1. The Cordillera Highland Agricultural Resource Management Project (CHARM) 1 was a

3. The Project covered 82 barangays in 16 municipalities in three of the five provinces in

5. The Project had four components:

(i) Community Mobilization and Natural Resource Management. This included

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation

7. The Project was designed to address the following constraints to agricultural

9. The Project was designed under an ADB-financed project preparatory technical

1. Community Mobilization and Natural Resource Management

a. Community Mobilization and Participatory Planning

b. Natural Resources Management

2. Rural Infrastructure Development

a. Farm-to-Market Access Roads

b. Community Irrigation Systems

c. Domestic Water Supply

3. Agricultural Support Services

4. Project Management and Coordination

G. Conditions and Covenants

H. Consultant Recruitment and Procurement

I. Performance of Consultants, Contractors, and Suppliers

J. Performance of the Borrower and the Executing Agency

K. Performance of the Asian Development Bank

III. EVALUATION OF PERFORMANCE

B. Effectiveness in Achieving the Outcome

C. Efficiency in Achieving Outcomes and Outputs

D. Preliminary Assessment of Sustainability

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

institutional knowledge to be retained within the implementing agencies, which

Design Performance Monitoring Assumptions PCR Evaluation

Design Performance Monitoring Assumptions PCR Evaluation

• Reduce the use

Design Performance Monitoring Assumptions PCR Evaluation

Design Performance Monitoring Assumptions PCR Evaluation

Design Performance Monitoring Assumptions PCR Evaluation