The World Bank Report No: ISR4075

Implementation Status & Results Rural Development Project - Phase 2 (P084967)

Operation Name: Mindanao Rural Development Project - Phase 2 (P084967) Project Stage: Implementation Seq.No: 6 Status: ARCHIVED Archive Date: Country: Philippines Approval FY: 2007

Public Disclosure Authorized Product Line:IBRD/IDA Region: EAST ASIA AND PACIFIC Lending Instrument: Adaptable Program Loan Implementing Agency(ies): Department of Agriculture Key Dates Board Approval Date 22-Mar-2007 Original Closing Date 31-Dec-2012 Planned Mid Term Review Date 01-Mar-2011 Last Archived ISR Date 28-Dec-2010 Public Disclosure Copy Effectiveness Date 03-Jul-2007 Revised Closing Date 31-Dec-2012 Actual Mid Term Review Date 07-Jun-2011

Project Development Objectives Mindanao Rural Development Project - Phase 2 (P084967) Project Development Objective (from Project Appraisal Document) MRDP 2 aims to (i) improve livelihood opportunities of targeted communities and (ii) institutionalize a decentralized system for agriculture and fisheries service delivery that promotes participation, transparency and accountability. Has the Project Development Objective been changed since Board Approval of the Program?

Public Disclosure Authorized Yes No

Component(s)

Component Name Component Cost Investments for Governance Reforms and Program Administration 4.40 Rural Infrastructure Component 56.45 Community Fund for Agricultural Development (CFAD) Component 18.00 Natural Resource Management Component 4.40

Overall Ratings Previous Rating Current Rating

Public Disclosure Authorized Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Progress towards achievement of GEO Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Satisfactory Overall Risk Rating Substantial High Public Disclosure Copy Implementation Status Overview This ISR presents the findings of the the Sixth Implementation/ Mid-term Review Mission (June 7-17, 2011).

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Implementation progress continue to accelerate as shown by the following achievements since the 5th Mission in September-October 2010: i) the completion of an additional PhP170 million worth of rural infrastructure (RI) sub-projects representing a 76% increase so that there are now a total of PhP391 million worth of completed RI sub-projects as of May 2011; ii) 108 percent increase in the number of households benefiting from livelihood projects under the Community Fund for Agricultural Development (CFAD) component so that there are now a total of nearly 50,000 beneficiaries; iii) substantial progress in the processing of the RI and CFAD subprojects since the last mission so that further acceleration in project physical and financial accomplishments are expected in the near term; and iv) the coverage of all 35 target municipal local government units (MLGUs) under the Natural Resources Management (NRM) component.

There are also indications that there is already progress in the achievement of the PDOs. The economic benefits of completed RI, CFAD and NRM sub-projects are likely already being felt by the target LGUs and households. In the NRM component, for instance, initial estimates show that the establishment of almost 600 hectares of marine and fish sanctuaries may provide a total of about PhP19 million pesos annually in additional income to communities, the 390 hectares of mangroves is likely to contribute about PhP130 million annually, while agro-forestry activities are projected to contribute to increasing farmers' income by PhP4,000/hectare (after 5 years) to about PhP7,000/hectare (after 10 years). Moreover, the institutionalization of a devolved system of agri/fishery services delivery can already be seen in the mainstreaming of project implementation at the sub-national Public Disclosure Copy level, e.g, in the local development planning process, and in the regular functions of the Department of Agriculture's (DA) Regional Field Units (RFUs).

The current scale of these accomplishments, however, still fell short of what is being targeted at this stage of the project due to continuing implementation difficulties. With only some 20% of the loan disbursed as of June 2011, it will not be possible to fully utilize the loan by loan closing on December 31, 2012. Given the current implementation trajectory, it is estimated that at least a one year extension of the loan would be required to fully utilize the funds. It should, however, be noted that there had been an 18-month implementation hiatus brought about by the uncertainties generated by discussions between the DA and the Oversight agencies on the NG-LGU cost sharing arrangement in the project. Factoring out this hiatus, project implementation is delayed by only about six months.

By component, disbursements are approximately on track for Natural Resources Management (NRM) and Implementation for Governance Reform (IGR), and lagging in the case of the Rural Infrastructure (RI) and the Community Fund for Agricultural Development (CFAD). The pace of RI and CFAD implementation is, however, accelerating such that, by December 2011, it is estimated that 20% of the RI allocation and 30% of the CFAD allocation would have been utilized.

Locations Country First Administrative Division Location Planned Actual Philippines Province of Zamboanga del Sur

Philippines Zamboanga Peninsula Province of Zamboanga del Sur

Philippines Zamboanga Peninsula Province of Zamboanga del Norte

Philippines Caraga Veruela

Philippines Autonomous Region in Muslim Mindanao Upi

Philippines Autonomous Region in Muslim Mindanao Turtle Islands

Philippines Davao Tupi

Philippines Zamboanga Peninsula Tungawan

Philippines Soccsksargen Tulunan Public Disclosure Copy Philippines Northern Mindanao Municipality of Tudela

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Country First Administrative Division Location Planned Actual Philippines Zamboanga Peninsula Tuburan

Philippines Soccsksargen Municipality of Tubod

Philippines Caraga Tubajon

Philippines Caraga Trento

Philippines Zamboanga Peninsula Titay

Philippines Zamboanga Peninsula Tipo-Tipo

Public Disclosure Copy Philippines Davao T"boli

Philippines Autonomous Region in Muslim Mindanao Province of Tawi-Tawi

Philippines Davao Tarragona

Philippines Davao Tantangan

Philippines Autonomous Region in Muslim Mindanao Municipality of Tandubas

Philippines Caraga Tandag

Philippines Autonomous Region in Muslim Mindanao Tamparan

Philippines Davao Tampakan

Philippines Zamboanga Peninsula

Philippines Caraga Talacogon

Philippines Caraga Tago

Philippines Soccsksargen Tacurong

Philippines Caraga Province of Surigao del Norte

Philippines Davao Surallah

Philippines Zamboanga Peninsula Sumisip

Philippines Northern Mindanao Sumilao

Philippines Autonomous Region in Muslim Mindanao Province of Sulu

Public Disclosure Copy Philippines Soccsksargen Province of Sultan Kudarat

Philippines Autonomous Region in Muslim Mindanao Sultan Kudarat

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Philippines Davao Sulop

Philippines Northern Mindanao Sugbongcogon

Philippines Autonomous Region in Muslim Mindanao South Upi

Philippines Autonomous Region in Muslim Mindanao Municipality South Ubian

Philippines Caraga Sison

Philippines Northern Mindanao Municipality of Sinacaban

Philippines Autonomous Region in Muslim Mindanao Simunul Public Disclosure Copy Philippines Zamboanga Peninsula Municipality of Sibutad

Philippines Caraga Sibagat

Philippines Zamboanga Peninsula Municipality of Siayan

Philippines Zamboanga Peninsula Siay

Philippines Autonomous Region in Muslim Mindanao Municipality of Siasi

Philippines Davao Lake Sebu

Philippines Davao Sarangani

Philippines Davao Sarangani

Philippines Davao Santo Tomas

Philippines Davao Santo Nino

Philippines Ilocos Santiago

Philippines Caraga Santa Monica

Philippines Caraga Santa Josefa

Philippines Davao Santa Cruz

Philippines Caraga San Miguel

Philippines Zamboanga Peninsula Municipality of San Miguel

Philippines Central San Luis Public Disclosure Copy Philippines Davao San Isidro

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Philippines Caraga San Francisco

Philippines Northern Mindanao San Fernando

Philippines Caraga San Benito

Philippines Caraga San Agustin

Philippines Soccsksargen Municipality of Salvador

Philippines Northern Mindanao Salay

Philippines Caraga Rosario Public Disclosure Copy Philippines Zamboanga Peninsula Municipality of Rizal

Philippines Caraga Prosperidad

Philippines Soccsksargen President Roxas

Philippines Soccsksargen President Quirino

Philippines Zamboanga Peninsula Municipality of Jose Dalman

Philippines Davao Polomolok

Philippines Soccsksargen Pikit

Philippines Soccsksargen Pigcawayan

Philippines Autonomous Region in Muslim Mindanao Piagapo

Philippines Autonomous Region in Muslim Mindanao Parang

Philippines Autonomous Region in Muslim Mindanao Municipality of Parang

Philippines Davao Pantukan

Philippines Autonomous Region in Muslim Mindanao Municipality of Pangutaran

Philippines Soccsksargen Palimbang

Philippines Mimaropa Province of

Philippines Zamboanga Peninsula Olutanga

Philippines Soccsksargen Province of North Cotabato Public Disclosure Copy Philippines Soccsksargen Province of North Cotabato

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Philippines Davao Norala

Philippines Davao New Bataan

Philippines Caraga Nasipit

Philippines Davao Nabunturan

Philippines Davao Montevista

Philippines Davao Monkayo

Philippines Davao Monkayo Public Disclosure Copy Philippines Northern Mindanao Province of Misamis Oriental

Philippines Soccsksargen Midsayap

Philippines Zamboanga Peninsula Municipality of Midsalip

Philippines Davao Matanao

Philippines Soccsksargen Matalam

Philippines Caraga Marihatag

Philippines Calabarzon Maragondon

Philippines Davao Manay

Philippines Zamboanga Peninsula Municipality of Maluso

Philippines Eastern Visayas Malitbog

Philippines Davao Malapatan

Philippines Zamboanga Peninsula Malangas

Philippines Davao Malalag

Philippines Davao Maitum

Philippines Autonomous Region in Muslim Mindanao Maimbung

Philippines Soccsksargen Municipality of Maigo

Philippines Cagayan Valley Mahinog Public Disclosure Copy Philippines Autonomous Region in Muslim Mindanao Maguing

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Philippines Autonomous Region in Muslim Mindanao Province of Maguindanao

Philippines Autonomous Region in Muslim Mindanao Province of Maguindanao

Philippines Autonomous Region in Muslim Mindanao Province of Maguindanao

Philippines Autonomous Region in Muslim Mindanao Province of Maguindanao

Philippines Autonomous Region in Muslim Mindanao Province of Maguindanao

Philippines Autonomous Region in Muslim Mindanao Province of Maguindanao

Philippines Autonomous Region in Muslim Mindanao Province of Maguindanao Public Disclosure Copy Philippines Soccsksargen Magpet

Philippines Calabarzon Magallanes

Philippines Caraga Madrid

Philippines Davao Maco

Philippines Davao Maco

Philippines Zamboanga Peninsula Mabuhay

Philippines Davao Maasim

Philippines Autonomous Region in Muslim Mindanao Municipality of Luuk

Philippines Northern Mindanao Municipality of Lopez Jaena

Philippines Soccsksargen Libungan

Philippines Caraga Libjo

Philippines Caraga Las Nieves

Philippines Zamboanga Peninsula Municipality of Lantawan

Philippines Northern Mindanao Lantapan

Philippines Autonomous Region in Muslim Mindanao Municipality of Languyan

Philippines Autonomous Region in Muslim Mindanao Province of Lanao del Sur

Philippines Autonomous Region in Muslim Mindanao Province of Lanao del Sur Public Disclosure Copy Philippines Zamboanga Peninsula Lamitan

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Philippines Soccsksargen Lambayong

Philippines Zamboanga Peninsula Municipality of Lakewood

Philippines Northern Mindanao Lagonglong

Philippines Zamboanga Peninsula Municipality of Kumalarang

Philippines Soccsksargen Municipality of Kolambugan

Philippines Caraga Kitcharao

Philippines Central Visayas Quinoguitan Public Disclosure Copy Philippines Soccsksargen Kidapawan

Philippines Northern Mindanao Kibawe

Philippines Davao Kiamba

Philippines Soccsksargen Municipality of Sultan Naga Dimaporo

Philippines Soccsksargen Municipality of Kapatagan

Philippines Soccsksargen Municipality of Kapatagan

Philippines Davao Kapalong

Philippines Autonomous Region in Muslim Mindanao Municipality of Kalingalan Caluang

Philippines Northern Mindanao Kalilangan

Philippines Zamboanga Peninsula Kalawit

Philippines Soccsksargen Kalamansig

Philippines Northern Mindanao Kadingilan

Philippines Soccsksargen Kabacan

Philippines Northern Mindanao Municipality of Jimenez

Philippines Caraga Jabonga

Philippines Soccsksargen Isulan

Philippines Cagayan Valley Province of Isabela Public Disclosure Copy Philippines Northern Mindanao Impasugong

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Philippines Zamboanga Peninsula Imelda

Philippines Davao Hagonoy

Philippines Zamboanga Peninsula Gutalac

Philippines Davao Governor Generoso

Philippines Davao Glan

Philippines Northern Mindanao Gitagum

Philippines Caraga Gigaquit Public Disclosure Copy Philippines Bicol Esperanza

Philippines Soccsksargen Esperanza

Philippines Northern Mindanao Don Carlos

Philippines Autonomous Region in Muslim Mindanao Ditsaan

Philippines Zamboanga Peninsula Municipality of Dimataling

Philippines Davao Province of Davao Oriental

Philippines Davao Province of Davao del Sur

Philippines Davao Province of Davao del Norte

Philippines Davao Province of Davao del Norte

Philippines Davao Province of Davao del Norte

Philippines Autonomous Region in Muslim Mindanao Datu Piang

Philippines Central Visayas Compostela

Philippines Soccsksargen Columbio

Philippines Northern Mindanao Claveria

Philippines Northern Mindanao Catarman

Philippines Caraga Carrascal

Philippines Central Visayas Carmen Public Disclosure Copy Philippines Caraga Carmen

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Philippines Davao Carmen

Philippines Davao Caraga

Philippines Northern Mindanao Municipality of Calamba

Philippines Cagayan Valley Province of Cagayan

Philippines Northern Mindanao Cabanglasan

Philippines Caraga Cabadbaran

Philippines Zamboanga Peninsula Municipality of Buug Public Disclosure Copy Philippines Caraga Burgos

Philippines Caraga Bunawan

Philippines Caraga Buenavista

Philippines Davao Boston

Philippines Autonomous Region in Muslim Mindanao Bongao

Philippines Zamboanga Peninsula Bayog

Philippines Autonomous Region in Muslim Mindanao Bayang

Philippines Soccsksargen Municipality of Baroy

Philippines Caraga Barobo

Philippines Davao Bansalan

Philippines Davao Banga

Philippines Davao Banaybanay

Philippines Northern Mindanao Balingoan

Philippines Autonomous Region in Muslim Mindanao Balimbing

Philippines Zamboanga Peninsula Baliguian

Philippines Northern Mindanao Municipality of Baliangao

Philippines Soccsksargen Bagumbayan Public Disclosure Copy Philippines Davao Baganga

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Philippines Caraga Bacuag

Philippines Zamboanga Peninsula Leon Postigo

Philippines Soccsksargen Bacolod

Philippines Autonomous Region in Muslim Mindanao Ampatuan

Philippines Northern Mindanao Alubijid

Philippines Cagayan Valley Alicia

Philippines Soccsksargen Alamada Public Disclosure Copy Philippines Not Entered Lala

Philippines Zamboanga Peninsula Salug Daku River

Philippines Soccsksargen Municipality of Linamon

Philippines Soccsksargen Municipality of Poona Piagapo

Philippines Northern Mindanao Municipality of Libertad

Philippines Northern Mindanao Municipality of Initao

Philippines Davao Municipality of Malungon

Philippines Davao Municipality of Don Marcelino

Philippines Northern Mindanao Municipality of Bonifacio

Philippines Northern Mindanao Municipality of Don Victoriano Chiongbian

Philippines Zamboanga Peninsula Municipality of Margosatubig

Philippines Not Entered Compostela Valley

Philippines Not Entered Province of

Philippines Central Visayas Concepcion

Results

Project Development Objective Indicators Public Disclosure Copy

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Indicator Name Core Unit of Measure Baseline Current End Target Average household incomes of beneficiary Text Value P5,061 per month 20% higher than baseline and communities 20% higher than baseline and 10% higher than control 10% higher than control group. group. Date 20-Apr-2008 07-Jun-2011 31-Dec-2012 Comments Targeted to be 7% higher than baseline and 5% higher than control group by MTR. Not measured by MTR. However, this will be measuredbefore next mission. Public Disclosure Copy Global Environmental Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Increase in fish population as indicated by 30% Text Value 30% increase in fish biomass increase in fish biomass and density and density Date 07-Jun-2011 31-Dec-2012 Comments Baseline data in the process Baseline data still being of being finalized. finalized. But with the almost 600 hectares of marine and fish sanctuaries established and 390 hectares of mangroves rehabilitated in the NRM sites, it is likely that fish population has significantly increased Decrease by 10% in siltation and Text Value Decrease by 10% sedimentation in coastal areas Date 07-Jun-2011 31-Dec-2012 Comments Baseline data in the process Targeted 5% decrease by of being finalized. MTR. Not measured by MTR, however, since upland interventions are just being implemented. Recommended to beremoved as project indicator due to technical difficulties in measurement. Increase by 10% in live coral cover and sea Text Value 10% iincrease in live coral grass cover cover and sea grass cover Date Public Disclosure Copy 07-Jun-2011 31-Dec-2012

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Indicator Name Core Unit of Measure Baseline Current End Target Comments Baseline data in the process No data available given that of being finalized. related interventions are just being implemented.

Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target 70 % of participating LGUs rate their ability to Text Value 46% of surveyed HH are 70% of participating LGUs better plan and implement investment satisfied with the way the rate their ability to better plan programs (control systems, planning, LGU plans and implements and implement investment supervision) as satisfactory or better, attributing investment programs programs (control systems,

Public Disclosure Copy this to project planning, supervision) as satisfactory or better, attributing this to project Date 20-Apr-2008 07-Jun-2011 31-Dec-2012 Comments Targeted to be 50% of participating LGUs by MTR. Not measured by MTR, however. will be measured before next mission. 15% and 35% of target beneficiaries report Text Value 15% at midterm, 35% at end significant improvement in LGU service of project delivery, at midterm and at end of MRDP2, Date 20-Apr-2008 07-Jun-2011 31-Dec-2012 respectively Comments Baseline data in the process Not measured by MTR. Will of being finalized. be measured before next mission. 15% increase (compared to baseline) in Text Value 15% increase in expenditures expenditures for agricultural investments for agricultural investments among participating LGUs by end of MRDP2 among participating LGUs by end of MRDP2 Date 20-Apr-2008 07-Jun-2010 31-Dec-2012 Comments Baseline data in the process of being finalized. Travel time in targeted areas reduced by at Text Value 30% of target least 30% at the end of MRDP2 compared to baseline; Date 20-Apr-2008 31-Dec-2012 Comments Baseline data in the process of being finalized. Public Disclosure Copy

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Indicator Name Core Unit of Measure Baseline Current End Target Savings in passenger and produce transport Text Value 10% increase in savings costs increased by at least 10% at the end of MRDP2 Date 20-Apr-2008 31-Dec-2012 Comments Baseline data in the process of being finalized. Average cropping intensity increased to a Text Value 150% to 180% increase over range of 150 % to 180% over baseline by the baseline end of MRDP2 Date 20-Apr-2008 31-Dec-2012 Comments Baseline data in the process of being finalized. Public Disclosure Copy Time to fetch water reduced by 65% over Text Value 65% decrease over baseline baseline by end of project Date 20-Apr-2008 07-Jun-2011 31-Dec-2012 Comments Baseline data in the process of being finalized. At least 50% increase in the number of Text Value 50% increase households reporting reduced incidence of water-borne diseases by end of project. Date 20-Apr-2008 31-Dec-2012 Comments Baseline data in the process of being finalized. At least 80% of participating LGUs have Text Value increased their revenues in accordance with set targets over baseline. Date 20-Apr-2008 07-Jun-2011 31-Dec-2012 Comments Removed as project indicator during first restructuring. Average household incomes of beneficiary Text Value P5,061 per month 20% higher than baseline and communities 20% higher than baseline and 10 10% higher over control % higher than control group. Date 20-Apr-2008 07-Jun-2011 31-Dec-2012 Comments Targeted to be 7% higher than baseline and 5% higher than control group by MTR. Not measured by MTR, however. will be measured before next mission. At least 30% of CFAD allocations are accessed Text Value No baseline data needed (to 59% combined access by IPs by IPs and women by end of the project be measured at mid term) and and women by MTR. EOP based on project data financing. Public Disclosure Copy Date 20-Apr-2008 07-Jun-2011 31-Dec-2012

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Comments MTR target - 15% end of project target - 30% 10% decrease in siltation and sedimentation in Text Value 10% decrease coastal areas, as a result of better land management practices. Date 20-Apr-2008 31-Dec-2012 Comments Targeted 5% decrease by MTR. Not measured by MTR, however, since upland interventions are just being implemented. Recommended to beremoved as project indicator due to technical difficulties in measurement. Public Disclosure Copy 20% increase in public awareness and Text Value 20% increase community participation in better land management practices, and coastal and Date 20-Apr-2008 07-Jun-2011 31-Dec-2012 marine biodiversity conservation. Comments Baseline data in the process Targeted to be 10% increase of being finalized. in awareness by MTR. No concrete data, however, but based on a rapid survey conducted by the team indicate that public awareness in better land and coastal resources management practices and biodiversity conservation has increased. Will be measured before the next mission.

Data on Financial Performance (as of 31-Aug-2011)

Financial Agreement(s) Key Dates Project Loan No. Status Approval Date Signing Date Effectiveness Date Closing Date P084967 IBRD-74400 Effective 22-Mar-2007 03-May-2007 03-Jul-2007 31-Dec-2012 P096836 TF-94704 Effective 16-Oct-2009 16-Oct-2009 16-Oct-2009 31-Dec-2014

Disbursements (in Millions) Project Loan No. Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P084967 IBRD-74400 Effective USD 83.75 83.75 0.00 19.37 64.38 23.00 P096836 TF-94704 Effective USD 6.35 6.35 0.00 1.27 5.08 20.00 Public Disclosure Copy

Disbursement Graph

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Key Decisions Regarding Implementation DA management confirmed its commitment to accelerate project implementation, and to attempt to complete the project as scheduled, although projections indicate that at least a one year extension will be needed. The DA will continue supporting the project through its counterpart funding assistance (CFA) mechanism which provides for regular DA budget to supplement loan funds, in co-financing RI sub projects with LGUs. When the project implementation reaches satisfactory status, the DA will request for the approval a level-2 restructuring from the NEDA which will involve i) certain changes in project outcome indicators, ii) a reallocation of funds from CFAD to RI should the former's disbursement performance not considerably improve by December 2011, and iii) project extension by at least one year. The DA is also expected to request for additional financing due to excess demand from participating LGUs (about PhP6.0 billion for RI sub-projects) and considerable exchange rate loss.

Restructuring History Level two Approved on 23-Dec-2009, Level two Approved on 23-Sep-2010

Related Projects P096836-Mindanao Rural Development Program (MRDP) Phase II - Natural Resource Management Component, P122152-TA for Investments in Governance Reform under MRDP2 Public Disclosure Copy

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