Professional Documents
Culture Documents
by
Adviser:
October 2002
i
ACKNOWLEDGMENTS
The author wishes to express his appreciation and gratitude to the following
Prof. Ruperto P. Alonzo, my Economics 299 Adviser and Program Director of the
The Public Investment Program Division headed by Ms. Lerma G. Abesamis, for
My great wife, Dema, and our two kids, Jeyu and Gabriel, for the inspiration;
ii
ABSTRACT
Keywords
iii
TABLE OF CONTENTS
Page
Acknowledgements ii
Abstract iii
Table of Contents iv
I. Background 1
References 28
iv
LIST OF TABLES
TABLE TITLE Page
1 Investment Gap (Comparison of the AFPIP, NEP, and GAA) 8
LIST OF FIGURES
FIGURE TITLE Page
1 The PIP Process: A Stringent Variant (Recommended) 14
LIST OF ANNEXES
ANNEX TITLE Page
1 DA AFPIP Format 30
v
I. Background
resources (including both external and domestic funds) across strategic priorities. The
capacity to allocate resources across strategic priorities on the basis of both the desires
of the citizenry and opportunity costs of the resources expended is obviously crucial if a
Developing countries would benefit much with having a good Public Investment
Program (PIP). A good PIP is aimed at ensuring five functions: “improving economic
programs and projects; improving aid coordination and channeling external resources to
priority areas; strengthening the hand of the government in negotiating with external
resources over a multi-year framework; and strengthening the project cycle by providing
Other benefits that developing countries, especially the aid-dependent, can gain
from having good PIPs are that: the process of PIP preparation itself gives an
opportunity to review, and then integrate into the budget, aid-financed expenditures that
were previously non-budgeted; PIP exercises contribute also to extending the horizon of
1
financial programming and planning beyond the annual budget, and the perspective of
rigorously and with full participation, the process can be an invaluable capacity-building
tool, and a way to introduce financial discipline and the awareness of opportunity cost
into the informal rules of the bureaucracy; and a good PIP process can set the stage for
the eventual medium-term programming of all expenditure which is the optional way of
incorporating the needed multi-year perspective into the budget process (Schiavo-
The programs, activities and projects (PAPs), which are expected to be funded
by the national government or from Official Development Assistance sources, are then
proposals are reviewed for consistency with the Medium Term Philippine Development
Plan (MTPDP) and where domestic or external resource constraints are considered.
Investment prioritization criteria are used along with public consultations at the local and
The Philippines is also probably one of the few countries in the world whose
preference function by using an explicit set of weights for the different national
objectives. However, although the “current system appears smooth and systematic,
2
certain kinks still remain.” Agencies still complain that fund releases come too late.
There are also problems regarding the criteria for project selection and prioritization
Bank (1998) can also be found in the Philippines and should be looked at, such as:
“poor planning; no links between policy making, planning and budgeting; poor
accounting systems; unreliability in the flow of budgeted funds to agencies and to lower
(ODA)
The large amount of ODA funds flowing in calls for careful programming by the
programming system in place, the recipient country and the donors would both benefit.
external aid in the Philippines and its thrust to strengthen economic cooperation, a
public investment programming system that really works in its recipient countries is
3
Department of Agriculture (DA) and a high public demand for better performance
especially now that one of the main concerns of the Philippine government is
the DA;
resource requirements),
- comparing the DA‟s system with the recommended model (in Schiavo-
and
This study seeks to answer these objectives and hopes to contribute in the
improvement, specifically, in the selection of the DA‟s PAPs and generally, the DA‟s
resource allocation.
The DA has only recently (starting in year 2000) institutionalized the formulation
of its Agriculture and Fisheries Public Investment Program (AFPIP) using the NEDA-
prescribed three-year rolling format. (see Annex 1) The AFPIP translates the goals and
4
strategies of the Agriculture and Fisheries Modernization Program (AFMP) into PAPs
programmed for three years. The DA formulates its MTPIP or AFPIP based on the
investment programs submitted by its central office units, bureaus, attached agencies,
and corporations. The submitted PAPs are then prioritized using the NEDA-prescribed
At this stage, there is no budget constraint imposed yet. The AFPIP thus
represents the total public resource requirement of the agriculture sector, assuming that
In past years, this AFPIP-first pass (without budget ceilings) is the one officially
endorsed to the NEDA since it includes the pipeline PAPs which may not yet have firm
funding commitments but may still be immediately activated. These PAPs do not have
budget cover for the first year of the AFPIP but should be included in the AFPIP not only
to show the total public resource requirement of the agriculture sector but also to ensure
that when these are activated, they are already included in the list and as such, have
already been endorsed by the DA. But with this long list, the line agency is basically
budget ceilings. The original AFPIP is scaled down by pro-rated reduction and also by
considering the past budget allocation of each unit (i.e., regional field units or bureaus,
attached agencies, and central office), and each unit‟s budget utilization. Pro-rated
The budget allocations of some PAPs, however, are considered fixed and therefore are
5
not reduced if they are considered already at a minimum or are considered top priority.
management. The DA-approved scenario is the one presented to the NEDA ICC for
approval.
However, the present system of relying so much on past allocation and budget
the Department‟s resources and maximize the impact of its programs and projects. The
scheme would also include an assessment of investment gaps and potentials both at
the sectoral and spatial (regional) levels. The DA also hopes to develop quantitative
Under the Implementing Rules and Regulations (IRR) of the Agriculture and
Program Division tasked not only to oversee the development and installation of the
said scheme but also to oversee the whole public investment programming process.
Proposed PAPs are submitted by DA units to the PIPD. At this stage, there is no
budget ceiling imposed yet. These PAPs were selected by the DA units based on their
6
Pipeline foreign-assisted projects (FAPs), however, pass through the Project
Development Service for its review and subsequent endorsement to the PIPD.
However, some pipeline FAPs have been directly submitted to the PIPD by the
proponent DA units as part of their respective PIPs. Some of these pipeline FAPs did
not undergo screening by the PDS. Thus, the PIPD endorses this pipeline FAPs to the
The submitted PAPs are consolidated using the AFPIP format (discussed below).
All PAPs are also assessed by the PIPD using the NEDA Enhanced Prioritization
scenarios for the AFPIP CY 2003-2005. This required scaling down of budget allocation
per PAP and removal of some PAPs from the priority list.
For the final AFPIP, the DA budget in the National Expenditure Program (NEP)
was used as the budget ceiling. This proposed NEP ceiling was initially recommended
by DBM. The included PAPs were based from an earlier submission of the DA (which
unfortunately was not based from the AFPIP-first pass prepared by the PIPD) but were
President‟s Budget”). Finally, the DBM releases a final DA budget which is a part of the
NEP.
The final AFPIP mirrored the NEP ceiling for its priority projects but also included
7
Note, however, that the results of the NEDA‟s Prioritization Criteria were never
used for PAP prioritization and eventual selection. As long DA worked within the NEP
ceiling for its priority projects, DBM has no questions. This was unlike before wherein
DBM looked carefully at the list of PAPs and their specific allocations.
requirements with the GAA. Table 1 below demonstrates this analysis. The National
Expenditure Program (NEP) budget requirements for the DA were also included as
additional comparator.
Table 1 shows that the unconstrained demand requirement (AFPIP) is not being
8
The DA is also conducting calculations of the ideal budget allocation by
commodity using the Gross Value Added analysis recommended by the PLANADES
study (see Annex 3). This analysis requires that the budget ceiling has already been
determined and is then allocated for each of the major commodities (rice and corn, high
value commercial crops (HVCC), livestock, and fisheries) using GVA contribution as the
basis. It should be noted, however, that the method has the added feature of assigning
75% of the allocable DA budget for distribution by commodity using the GVA shares
Annex 3 shows that there is over-allocation for rice and corn and under-
allocation for HVCC, livestock and fisheries using the 2003 NEP as basis. Note that
study. This study proposes at least three methods to determine investment gaps: 1)
have the highest returns, and 3) comparing benchmarks against actual performance
indicators.
Marginal projects across sectors are compared and the inferior ones are scrapped until
the “optimum” (marginal projects are on the same plane of acceptability) is reached.
This method could also be possibly used for allocation across commodity sectors
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III. Strengths and Weaknesses
The strengths and weaknesses of the DA public investment programming system can
The specific question here that should be answered is: Is the AFPIP consistent
with the sector (Agriculture, Agrarian Reform and Natural Resources Sector) goals
The scoring results using the NEDA Enhanced Prioritization Criteria (NEDA-
EPC) could be used to answer this question. This approach considers as parameters
the AARNR sector outcomes, the recommendations of the Sector Effectiveness and
Efficiency Review, as well as the DA‟s Major Final Outputs. Thus, a high score
Number of PAPs
NEDA-EPC
Scores Prioritized Not Total in %
Prioritized
0-35 1 4 5 2.19%
36-70 10 29 39 17.11%
71-105 29 109 138 60.53%
106-150 32 14 46 20.18%
Table 2 shows that the DA AFPIP is generally consistent with the sector goals
since most of the PAPs scored high (61% are in the 71-105 range and 20% are in the
106-150 range).
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We should note, however, that the NEDA EPC itself is not without flaws. First,
proposed PAPs which may not be economically feasible can still get good scores.
The NEDA EPC also does not discriminate PAPs which should not be provided
One factor that the NEDA EPC does not consider is the location of the proposed
PAP. Location is very important for the DA because of the AFMA provision that it
should focus its resources on Strategic Agriculture and Fisheries Zones (SAFDZs)2 and
also on the establishment of Model Farms. This is akin to the recommendation from a
Another factor not included in the NEDA EPC is PAP performance (for ongoing
projects). Thus, projects which have low physical and financial accomplishments can
emphasized. Although Category III, no. 3 in the NEDA EPC has the criterion “Increase
points to PAPs wherein counterpart resources are clearly provided. With resource
(O & M) plans. PAPs with provisions on how to continue the project activities/gains
after the project life ends should be given more points. The NEDA EPC does not
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The NEDA EPC also exhibits inconsistency. Whereas it positively discriminates
on “high value commodities” (Category I, A, no. 4 and Category III, no. 1), it supports
It should be noted, however, that the NEDA EPC is still being improved or is still
Table 3 shows that the AFPIP is much higher than the AFMP by a total of P105
AFPIP
35.73 32.73 58.54 70.34 44.08 42.94 53.00 337.36
AFMP
35.73 32.73 32.73 32.73 32.73 32.73 32.73 232.12
Difference
- - 25.81 37.61 11.35 10.21 20.27 105.24
Source: DA AFPIP (various years), AFMA IRR
An AFPIP with higher resource requirements could mean the prioritization should
be improved to be able for the AFPIP to approximate the AFMP resource requirement.
However, a big assumption here is that the resource requirements identified for the
Recently, the DA has tried to “close the gap” for the AFPIP CY 2003-2005 not
just between the AFPIP and the AFMP but between the AFPIP and the estimated
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ceilings. Note that the AFPIP budget figures (for CY 2003 to 2005) in Table 3 are large
because they are based from the first submissions (without budget ceiling). Other
budget scenarios used were P34, P32, and P26 billion as the base budgets for CY 2003
(Table 4). In fact, the final AFPIP CY 2003-2005 (which is P24 billion for CY 2003)
uses the Regular (P3.12 billion) and AFMA (14.37 billion) budget figures from the NEP
programming system and comparing it with the recommended model (in Schiavo-Campo
13
Figure 1. The PIP Process: A Stringent Variant Recommended).
14
Figure 2. The Traditional PIP Process.
15
Schiavo-Campo and Tommasi (1999) states that “concerning the projects to be included in
the PIPs a more stringent approach for the second and third year would be preferable,
by including only projects for which a decision has been firmly made and the source of
The DA AFPIP does not adhere to the stringent variant but to the traditional
variant. Many DA PAPs which are still indicative in terms of decision and payment
(financing) are included in Year 2 (t+2). In fact, some PAPs which are still indicative in
terms of payment even enter Year 1 (t +1) although these are of course not included in
This shows that the DA AFPIP process needs more improvement in the selection
Comparing current practices used by DA with the good practices could help us assess
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Investment program The AFPIP process is not appropriate to the
appropriate to the economic economic and social environment since it still
and social environment; lacks a rational allocation and PAP prioritization
compatible with scheme.
macroeconomic framework
Ranking a set of projects The DA still ranks PAPs in a straightforward
depends on the total financial manner without considering the financial
envelope granted to the set envelope/s granted to each set of projects.
of projects and not vice versa
the use of simple The DA is still in the process of developing
methodology resource allocation and PAP prioritization
methodologies
that projects entering the The DA does not yet discriminate economically
public investment program feasible PAPs
must be economically
justified
stringent rule for including The DA does not have stringent rules for
PAPs including PAPs. However, it follows the NEDA-
ICC guidelines for foreign-assisted projects
(FAPs) and locally-funded projects (LFPs) which
pass the said committee.
The use of prioritization The DA is still in the process of PAP
procedures (e.g., scrapping prioritization methodologies which hopefully
of marginal projects) to would be towards optimal allocation.
achieve “optimum” allocation
The application of the The DA is weak in terms of applying this
subsidiarity principle to principle as many PAPs are still “processed”
investment decisions from the national level (top-down planning). Big
PAPs may actually be local level PAPs which
have little externalities.
The use of a “Red Flag” The DA is still in the process of developing
system- e.g. minimum resource allocation and PAP prioritization
requirements methodologies which hopefully would
incorporate red flags
The anchoring of the The AFPIP has not yet incorporated the SAFDZ
investment program on a as a framework because the DA has not yet
physical framework plan developed nationwide SAFDZ integrated
development plans.
Sources: Alonzo, 1994 and 1994; Schiavo-Campo and Tommasi, 1999; and The
World Bank, 1998.
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IV. Towards an Improved Public Investment Program for the DA
be included in the prioritization criteria to help ensure that PAPs support said
policies.
infrastructure such as roads and ports but “with coordination.” He also qualifies
gravity irrigation. Other areas mentioned are technical education and skills
development in rural areas, and capacity building for microfinance providers and
LGUs. The areas to spend less include postharvest facilities, since these are
She, however, argues that the issue is not just underspending on the sector but
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B. Although a longlist of PAPs may not be avoided, what should be ensured is that
PAPs should be properly evaluated before inclusion in the AFPIP. Thus, the DA
should use red flags which consider criteria such as a list of public and private
These methodologies should take into account economic feasibility and other
relevant factors.
then ranking similar projects to see which would be included in the financial
plans and also model farms 3 as these would help provide the anchor (physical
F. The DA should develop participatory processes which would ensure that more
and projects (PAPs) to weed out “undesirable” projects (Alonzo, 1993 and 1994). For
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1. First Step
After the DA units have submitted their respective PAPs (wherein budget
ceilings are not yet applied), we could already screen these by instituting “red flags”.
A “red flag” indicates that “a project fails to meet some minimum requirement with
respect to a given criterion, and should therefore be sent back to the drawing board or
The DA should form a list of goods (both public and private) which it should
provide or support. For example, should it provide small postharvest facilities which
(PLANADES, 2000)
With a clear policy, we could already screen out PAPs which are not included in
the list.
b. Economic Efficiency
Only PAPs which are economically feasible should be considered in the MTPIP.
However, since not all PAPs undergo feasibility studies or fullblown economic analysis,
covering the social, financial, and economic aspects may not be warranted for „small‟
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2. Second Step
After the PAPs have been screened using the red flags, they can be prioritized
using the NEDA-prescribed Enhanced Prioritization Criteria (EPC). The NEDA EPC
would not only be used for compliance with NEDA‟s requirements but because it is a
good measure of consistency with the AARNR sector outcomes, the recommendations
of the Sector Effectiveness and Efficiency Review, as well as the DA‟s Major Final
Outputs.
However, we can add other criteria not covered by the NEDA EPC such as:
a. Location – PAPs located in the model farms and SAFDZs should have higher
should be given higher points. For Pipeline PAPs, economic analysis should be
applied. Pipeline PAPs with higher net returns should have higher points.
beneficiaries, should be given points. From the start, it is imperative that all
major players during project implementation should share the burden to achieve
Counterpart schemes with the LGUs, POs, NGOs and other private group should
should be prepared to enable the project evaluator and implementor to see how
the project activities, gains and investments will be sustained after the project life
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cycle. The scheme shall identify who shall continue the project activities/gains
and how will the project be continued after the project life ends.
It should be emphasized that the weights and even the factors in the criteria are
not fixed. These weights should be finalized by DA management preferably with the
3. Third Step
Given a budget ceiling, the budget shares across sectors (e.g., rice and corn,
HVCC, livestock and poultry, and fisheries) should be determined. These shares can
be determined using the Gross Value Added (GVA) Analysis explained in the
22
Given the budget shares and the list of PAPs prioritized per sector, we could
already scrap the PAPs (under each sector) which do not make the cut. However, it
would also be better if budget envelopes (which are percentage shares from the budget
shares per sector) be determined for specific interventions like irrigation, R & D, farm-to-
market roads, extension, and other. The estimation of budget envelopes per
PAPs with low scores but are considered “necessary” by DA can be excluded
from the prioritization in Step 2 and are automatically included in the MTPIP priority list
of PAPs.
units such as the National Irrigation Administration (NIA). All of its proposed PAPs
would first be assessed using the economic efficiency red flag. The “goods to be
supported” red flag does not apply since irrigation is considered a public good unless
DA has specific policies such as focusing on national irrigation systems and not
PAPs not passing the red flag should be dropped. However, the list of PAPs
which failed should be presented to DA management for final decision. This is not only
in consideration to ongoing and pipeline PAPs which have or will have foreign funding
foreign-funded PAPs and large pipeline locally-funded PAPs since these would be
reviewed by the NEDA ICC. However, small locally-funded PAPs (ongoing and
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The PAPs which pass the first step would undergo the second step. The
information we would be needing are the location of the PAPs, their respective physical
After scoring them, the NIA PAPs would be included in the total list of PAPs under the
Rice and Corn sector. Given a budget ceiling for the first year and the specific budget
envelope for irrigation, the NIA PAPs which do not make the cut are scrapped from the
priority list and included in the non-prioritized list which is subject for DA management
However, this s easier said than done. For the AFPIP CY2003-2005, NIA
P9.96, P11.37, P12.98 (in billions) for years 2003, 2004, and 2005, respectively. Given
a budget envelope of about P5.7 billion (includes government counterpart and loan
proceeds) for CY2003, many NIA PAPs for CY 2003 would be cut. The ongoing
foreign-funded PAPs (also about P5.7 billion) alone will eat up the said budget
envelope.
What NIA did was to extend the project life of the PAPs and thus reducing its
annual budget allocations especially for 2003-2005. Further, pipeline PAPs had to be
slid down to later years. In effect, NIA spread its resources to cover, though partially, all
or almost all its PAPs. There is a problem with this approach because project impacts
are reduced and scarce resources are spread too thinly. The PAPs may already be not
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However, there is still room for PAP prioritization here especially for the next
years. Budget allocation should be based on the scores of the PAPs using the
proposed criteria. Thus, the rationing of budgets could be prorated based on the
scores.
H. PAPs Selection
However, even before DA units such as NIA submit their proposed PAPs, they
should be able to select the optimal set of PAPs on their own. This can be done by
irrigation system by just comparing the Net Present Values (NPV) of the two options.
(See Annex 4.) Note that even though the investment cost for construction is high, the
very high NPV justifies going for said option as compared to rehabilitation.
The same test could be used for road rehabilitation and road regravelling. (See
Annex 5.) Though the cost for rehabilitation is higher, the higher NPV justifies choosing
the rehabilitation project. Notice that the IRR for regravelling (103.7%) is very much
higher but the NPV is lower. This shows that IRR is not the correct criterion for
assessing efficiency. (The NEDA Manual (2000) explains the strengths of the NPV as
End Note
This paper has identified the strengths and weaknesses of the DA‟s public
investment programming system and has provided recommendations to improve it. The
assessments show that there is indeed a long way to go before achieving optimal
resource allocation.
25
We also have to emphasize here that the public investment program is just one
of the ways for government intervention in the development process (Alonzo, 1994).
Another option is through policy changes. This is precisely why the proposed
The DA‟s public investment programming system would only achieve optimal
resource allocation if the right policies are used along with a focus on economic
efficiency. Again, political will is needed. But, to paraphrase one DA official, “we have
to start somewhere.”
Notes:
2. The Strategic Agriculture and Fisheries Zones (SAFDZs) refers to the areas within
the Network of Protected Areas for Agriculture and Agro-industrial Development
(NPAAAD) identified for production, agro-processing and marketing activities to
help develop and modernize, with the support of government, the agriculture and
fisheries sectors in an environmentally and socio-culturally sound manner
(Department of Agriculture, 1998 and 2000).
26
dominant presence of agrarian reform communities (ARCS) and/or small owner-
cultivators and amortizing owners/agrarian reform beneficiaries and other small
farmers and fisherfolks in the area (Department of Agriculture, 1998).
SAFDZ are "special enclaves for production and processing and take-off points
for an aggressive export offensive." This special enclaves shall be linked to major
roads, seaports and airports to make sure the shipment and movement of
agricultural and fishery products to domestic and export markets is smooth and
cost-efficient. (Department of Agriculture, 2000)
27
References:
Department of Agriculture. High growth areas for agriculture: future sites for SAFDZs. A
news article (September 12, 2000). (www.da.gov.ph) 2000.
28
The National Economic Development Authority. The NEDA Enhanced Prioritization
Criteria for the AARNR Sector. 2002.
Tenth Congress of the Philippines. Agriculture and Fisheries Modernization Act of 1997.
Republic Act No. 8435. July 28, 1997.
Timmer, C. Peter, (ed.). Agriculture and the State: Growth, Employment, and Poverty in
Developing Countries. 1994.
29
Annex 1
DA AFPIP Format
CY 2003 CY 2004
I. Regular
A. General Administration and Support Services
B. Operations
C. Support to Operations
II. AFMP
A. OSEC + Attached Agencies & Corporations
Foreign-assisted Projects (on-going and
pipeline)
Locally-funded Projects (on-going and pipeline)
III. ALLOCATION TO LGUs (where applicable)
A. LGEF
Foreign-assisted Projects (on-going and
pipeline)
Locally-funded Projects (on-going and pipeline)
B. MDF
Foreign-assisted Projects (on-going and
pipeline)
Locally-funded Projects (on-going and pipeline)
TOTAL
Source: Public Investment Program Division, Department of Agriculture.
30
CY 2005 TOTAL CY 2003-2005
PROGRAMS/ACTIVITIES/PROJECTS
LOAN LOAN SCORE
GOP GRANT TOTAL GOP GRANT TOTAL
PROCEEDS PROCEEDS
Regular
I.
A. General Administration and Support Services
B. Operations
C. Support to Operations
AFMP
II.
A. OSEC + Attached Agencies & Corporations
A. LGEF
B. MDF
TOTAL
31
DA AFPIP Format
period. The first column contains the PAPs. They are categorized first by major source,
since the two major categories are separated, it should be given twenty billion pesos in
the first year of the AFMA implementation and seventeen billion pesos annually up to
2005, over and above the 1998 budget. The DBM interprets differently. It contends that
the regular funds should form part of the suppose allocation for the AFMA. For
example, instead of the DA receiving thirty-five billion plus (P20 billion AFMA fund plus
the 1998 budget of P15.7 billion) for CY 1999, it would be receiving about twenty-four
billion only (P20 billion AFMA fund plus the regular funds of about P4 billion).
The second column contains the type of Major Functional Outputs (MFOs) for
each PAP. These MFOs are described in Category II of the NEDA Enhanced
functional grouping (e.g., irrigation, R & D, etc.) using this AFPIP format. However, the
32
Annex 2
RAW SCORES
RANGE SECTOR OUTCOMES
A. Increased Rural Incomes and Employment
33
CATEGORY I (continued)
RAW SCORES
RANGE SECTOR OUTCOMES
D. Empowerment of Rural Communities/Human Capital
34
CATEGORY II Alignment with committed/agreed agency output (total 50 points)
(Perfect Score will depend on the number of MFOs identified and sub-
MFOs Per Agency)
4 5. Regulatory Services
4 • Regulatory services – such as the issuance of licenses, import/export
permits, certificates of standards and quality control, etc., to clients
35
CATEGORY III: Consistency with the Recommendations of the Sector Effectiveness
and Efficiency Review (SEER) (60pts.)
10 1. Increase intervention/allocation to
High value commodities
Demand side strategies (i.e. marketing, information, credit,
postharvest)
Private land distribution
Public land distribution
10 6. Commodity-neutral/functional/integrated development
interventions/watershed and ecosystems approach
36
Annex 3
37
1
Based on three-year average (from 1999-2001).
2
Weighs to distribute budget of several DA agencies have been assumed.
3
GVA value on agricultural activities and services refer to agricultural services on fee
or contract basis such as operation of irrigation systems, pest and disease control,
harvesting, grading and packing crops, artificial insemination services, and the
provision of agricultural equipment together with operators. It also includes
processing in the farm like copra and cassava drying and shelling of copra nuts, and
processing of milk into butter and cheese, and fruits into wine are classified as part of
agricultural activities. Further, it includes horticulture and landscape gardening.
4
For simplicity, the corresponding GVA value for agricultural activities and services
has been distributed/allocated to the four major sub-sectors using the same (i.e.,
corresponding “GVA share” to total GVA in Agriculture and Fishery.
5
Includes 2003 DA NEP Budget allocated for MOE (except “regular”) and CO of all
GMA programs, agencies/bureaus and RFUs (only those specified as “regional
activities to support the sub-sector).
Applying the GVA analysis to the 2003 DA Budget from the National Expenditure
Program, we get these results:
We have an over-allocation for the Rice and Corn Sector. Instead of P8.77 Billion, we
should only be allocating P2.97 Billion for this sector.
Livestock and Poultry – instead of only P.88 Billion, we should allocate P3.08 Billion;
and
38
Annex 4
Rehabilitation
Without
Unit Project With Project With - Without
39
Construction
Without
Unit Project With Project With - Without
40
Annex 5
Assumptions:
1. Length of road project is 3.0 km.
2. Influence area is two km on either side, divided by two for average distance.
I.e., 500 hectares = (4 km x 2.5 km)x(100 hectares/km)/2
3. For conservatism, yield & CII are assumed to be the same with and without project.
4. Saving in transport cost is P1.00/kg for rehabilitation, P0.75/kg for regravelling.
5. O&M cost is 2.5% of capital cost for rehabilitation and 4.5% for regravelling.
6. For simplicity, full development is assumed at year 1.
41