Community Based Forest and Mangrove Management Project (CBFMMP) Panay and Negros Islands

DRAFT FINAL PROJECT REPORT

Dr. Jürgen Schade, CBFMMP Chief Adviser

2016 07 12

i

CONTENTS

Page LISTS OF TABLES AND FIGURES (ii+iii) ABBREVIATIONS AND ACRONYMS (iv) EXECUTIVE SUMMARY (v) 1 INTRODUCTION 1 2 PROJECT DESIGN 1 2.1 Chronology 1 2.2 Goal, Purpose and Beneficiaries 2 2.3 Intended Outcome, Outputs and Activities 4 2.3.1 Training and Capacity Building 4 2.3.2 Natural Resources Management 5 2.3.3 Rural Infrastructure and Livelihood Projects 5 2.3.4 Support in Value Adding and Marketing 5 2.3.5 Project Management 5 2.4 Project Organizational Structure and Management 6 2.4.1 Organizational Arrangements 6 2.4.2 Financial Management 7 2.4.3 Interrelation with other Projects and Programs 8 2.5 Cost Estimates and Financing Plan 9 2.6 Financial Management 9 2.6.1 Management of Loan Funds by LBP 10 2.6.2 Management of Loan and Grant Funds by DENR 10 2.7 Monitoring and Evaluation 11 2.7.1 FASPO Monitoring System 11 2.7.2 Monitoring of Project Results 11 2.7.3 Monitoring of Reforestation Success 11 2.8 Consulting Support 12 3 ADJUSTMENTS MADE DURING IMPLEMENTATION 13 3.1 Adjustment of the Number of Partner LGUs 13 3.2 Adjustment to Unfavorable EUR-PHP Exchange Rate 13 3.3 Adjustment of NRM Plan to Typhoon Yolanda 14 3.4 Adjustment of External M&E 14 3.5 Changed Policies on Co-management and Tenure 14 3.6 Monitoring and Payment Schedule 15 3.7 Additional Measures 2015 15 3.8 Adjustment of Consultancies 16 3.9 Adjustment of Phasing and Duration 17 3.10 Adjustment of Cost and Financing Plan 17 4 PROJECT ACHIEVEMENTS 18 4.1 Achievement of Objective and Outcome Indicators for BMZ Reporting 18 4.2 Achievement of Result Indicators for DENR Reporting 19 4.2.1 Development Goal Indicators 19 4.2.2 Outcome Indicators 21 4.2.3 Output Indicators 26

ii

4.2.3.1 Indicators Output 1 Capacity Building 26 4.2.3.2 Indicators Output 2 Forest Rehabilitation 29 4.2.3.3 Indicators Output 3 Rural Infrastructure and Livelihood 31 4.2.3.4 Indicators Output 4 Value Adding and Marketing 34 4.2.3.5 Indicators Output 5 Project Management 34 4.3 Financial Status of the Project 37 4.3.1 Actual Project Expenses 37 4.3.2 Special Audit Report for CY 2011-2014 40 5 EVALPROJECT IMPACT AND SUSTAINABILITY 41 5.1 Internal Evaluation Workshop and Summary of Results 41 5.2 Project Impacts 42 5.2.1 Environmental Impact 43 5.2.2 Socio-economic Impact 44 5.2.3 Organizational Impact, Knowledge Management and Upscaling 47 6 SUSTAINABILITY AND REQUIRED FOLLOW-UP ACTION 50 7 LESSONS LEARNED AND RECOMMENDATIONS 52 7.1 What Worked Well, and Why? 52 7.2 Approaches and Measures with Mixed Success 53 7.3 What did not Work as Expected, and Why? 53 7.4 Conclusions and Recommendations 54 List of Tables

Table 2-1: Financing Agreement Budget by Major Budget Line 9

Table 2-2: Initial Consultancy Services 12

Table 3-1:Adjusted Natural Resources Management Plan 14

Table 3-2:Adjustments Made to the Consulting Services 16

Table 3-3:Planned and Adjusted Budget Lines 17

Table 4-1:Achievement of Indicators for BMZ Reporting 18

Table 4-2:Fauna Biodiversity in Selected Project Sites 20

Table 4-3: Forest Cover Monitoring in the Project Provinces 22

Table 4-4: Impact of SWIP Bayawan on Household Income 23

Table 4-5: Impact of Aquaculture Project Bayawan on Household Income 24

Table 4-6: Number of Beneficiaries by LGU and Project Measure 26

Table 4-7: Training Measures Conducted and Participants 27

Table 4-8: Application Rates of Training Contents in Regions VI and VII 27

Table 4-9: Tenure Situation in Project NRM Sites 29

Table 4-10:NRM Accomplishments by LGU 30

Table 4-11:Infrastructure and Livelihood Improvement Measures 33

Table 4-12:Actual Project Cost and Financing 38

Table 4-13:Loan and Grant Disbursement by LGU 39

Table 4-14:Disbursements and Payables to LGUs as of 31 May 2016 40

Table 5-1:Results of Project Evaluation Workshop 42

Table 5-2: Calculation of Project Carbon Fixation 44

Table 5-3: CBFMMP Project Documents and Knowledge Products 48

iii

List of Figures

Figure 2-1: Map of the Project Regions and Municipalities 3 Figure 2-2: CBFMMP Organizational Chart 6 Figure 3-1: Fluctuation of the Euro-Peso Exchange Rate 13 Figure 3-2: Design for Underplanting of Acacia Monocultures 16 Figure 4-1: Number of Tree and Shrub Species before and after Project Planting 19 Figure 4-2: Shannon Biodiversity Index before and after Project Intervention 20 Figure 4-3: Comparison of Direct Planting in Cogon Grass and Under Pioneer Trees 31 Figure 4-4: Photo Documentation of Project Measures 36 Figure 4-5: Aquaculture Facility in Bayawan, Negros Oriental 37 Figure 5-1: Household Income in the Project Municipalities 2011 - 2015 45 Figure 5-2: Household Income from Forest Land 2011 - 2015 46 Figure 5-3: Use of Google Earth Images for Forest Monitoring 50 Annex

Annex 1 CBFMMP Logframe

Annex 2 Socio-economic Impact Study

Annex 2.1 Household Income in Project LGUs 2011 - 2015

Annex 2.2 Household Income from Forest Land 2011 - 2015

Annex 2.3 Source of Drinking Water 2011-2015

Annex 2.4 Access to Markets 2011 and 2015

Annex 2.5 Housing Materials and Household Assets 2011 - 2015

Annex 3 Status of PO Organizing and Issuance of CBFMAs

Annex 4 List of Training Events in Region VI and VII

Annex 5 List of Acquired Equipment Digital Annex (separate)

DA 1 MOREFORESTs EnRD Knowledge Product

DA 2 Project Natural Resources Management (NRM) Guidelines

DA 2.1 NRM Model Description and Subsidy Payment Schedule

DA 2.2 CBFMMP Reforestation Monitoring Guidelines

DA 2.3 Technical Guidelines on Forest Rehabilitation and Management

DA 2.4 Underplanting of Acacia Mangium Stands with Indigenous Species

DA 3 FLUP and GIS

DA 3.1 Project Guidelines for Forest Landuse Planning (FLUP)

DA 3.2 FLUP Example Valderrama

DA 3.3 GIS and Forest Data Banking Design

DA 4 Project Impact Assessments

DA 4.1 Socio- economic Impact Study in Region VI

DA 4.2 Socio- economic Impact Study in Region VII

DA 4.3 Training Impact Assessment

DA 4.4 CBFMMP Forest Cover Monitoring 2003-2010-2015

DA 4.5 Project Impact on Plant Biodiversity

DA 4.6 CBFMMP Faunal Biodiversity Assessment

DA 4.7 Quantification of Erosion in Reforestation Sites

DA 5 Other Project Reports

DA 5.1 Study on Maintenance and Cost Recovery of Rural Infrastructure

DA 5.2 CBFMMP Phasing-out and Sustainability Plan

iv

ACRONYMS CBFM Community-Based Forest Management CBFMA Community-Based Forest Management Agreement CBFMMP Community-Based Forest and Mangrove Management Project CENRO DENR Community Environment and Natural Resources Office(r) DENR Department of Environment and Natural Resources DFS Deutsche Forstservice GmbH EnRD (GIZ) Environment and Rural Development Program FASPS DENR Foreign Assisted and Special Projects Service (before FASPO) FC Financial Cooperation FLUP Forest Land Use Plan GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (German

Agency for International Cooperation) KfW Kreditanstalt für Wiederaufbau (German Development Bank) LBP Land Bank of the Philippines LFA Loan and Financing Agreement LGU Local Government Unit MENRO Municipal Environment and Natural Resource Officer NRM Natural Resource Management NSC National Steering Committee PEA Project Executing Agency PENRO DENR Provincial Environment and Natural Resources Office(r) PO People’s Organization PMU Project Management Unit RED DENR Regional Executive Director RPC Regional Project Management Committee SA Separate Agreement TA Technical Assistance

v

EXECUTIVE SUMMARY 1 INTRODUCTION The following report concludes the Final Report on the Community Based Forest and Mangrove Management Project (CBFMMP) in Panay and Negros, Philippines. It shall provide comprehensive information on the project planning, implementation, achievements, impact and lessons learned for the project stakeholders, especially DENR, LBP and KfW. Besides, this report shall function as Preparatory Study for KfW’s Project Completion Mission. 2 PROJECT DESIGN The project has been implemented over a period of 8.5 years from July 2008 to December 2016. In short the project phases can be defined as:

Phase I: 2-year project start-up and preparation phase, July 2008 - June 2010, supported by GIZ (then GTZ and DED).

Phase II: 6-year implementation phase, January 2009 - December 2014, mainly supported by KfW (overlap with Phase I).

Phase III: 1-year monitoring and disbursement phase, January to December 2015

Phase IV: 12-months completion of financial management, January to December 2016 The purpose of the project was the sustainable use of forests and mangroves and the increase of income of the participating families. This was to contribute to the sustainable management of forests and mangroves under Community Based Forest Management Agreements (CBFMAs) and other community-based tenure instruments and to the alleviation of poverty and improvement of livelihood in the rural areas of Panay and Negros. The following project activities have been financed from loan and grant contribution:

1) Natural resources management (NRM), EUR 2.27 million from loan and grant

2) Infrastructure and livelihood projects, EUR 2.415 million from loan

3) Training and capacity building, EUR 0.935 million from grant

4) Project management and operations, EUR 1.38 million from grant The NRM measures targeted the establishment and management of 9,000 ha of reforestation, ANR/enrichment planting, rattan enrichment, mangroves and agroforestry. The infrastructure and livelihood projects included farm-to-market roads, water supply, irrigation and rural markets. The project comprises the provinces of Aklan, Antique, Capiz, Iloilo (within Panay island), and Negros Occidental in Region VI (Western Visayas), and Negros Oriental in Region VII (Central Visayas). In 2016 the provinces of Negros Occidental and Oriental have been included in a new Region, the Negros Island Region or NIR. During project implementation 15 Local Government Units (LGUs) have been selected in a competitive and transparent process as recipients of project loan and grant funds: 11 LGUs in Region VI and four LGUs in Region VII. As agreed in the MoU of September 2006, DENR and LGU have been the two project implementing agencies. The LBP has administered all loan funds, and DENR all grant

vi

funds (both for capacity building and for investments). Loan and grant investment funds had to be paid to the same implementer, i.e. if a LGU takes the loan it also has received the corresponding grant portion. Grant and loan funds had to flow together. That means only LGUs who were willing and eligible to take a loan could receive grant funds. The LBP has decided who is eligible to access loan funds. The two DENR Project Management Units in Iloilo and Dumaguete have been assisted by a team of consultants from July 2008 to December 2015 (until June 2010 under GIZ). 3 ADJUSTMENTS MADE DURING IMPLEMENTATION The project has been implemented over a period of 8.5 years. During that period lessons were learned from field implementation, policies have been reviewed, feed-back and recommendations have been received from RPC, NSC and KfW missions. The overall project concept has remained unchanged, as well as the results and measures stipulated in the Separate Agreement. Only technical adjustments have been made to better accomplish the project objective and outputs:

In the SA a number of 20 municipalities had been targeted for inclusion in the project. At the start of project implementation in 2009 it became clear, however, that not so many LGUs can be supported and are eligible to access loan funds. So the project decided to allocated the available loan and grant funds to 15 LGUs who’s project proposals have been found eligible for project support.

Adjustment to the unfavorable development of the Euro-Peso exchange rate from the time of the SA until project implementation. The available loan and grant amounts in EUR were not sufficient to cover all Peso cost. The LBP financed the additionally needed loan amount from regular funds, and KfW realigned contingencies and savings from other positions to finance the NRM measures. The cost and financing plan has been adjusted accordingly.

In November 2013 typhoon Yolanda struck the Philippines including northern Panay and destroyed large areas of mangrove reforestation. As a consequence the reforestation plan had to be adjusted, reducing the target for mangroves and adding some areas of ANR/enrichment planting.

In 2011 the DENR clarified that a Co-Management Agreement does not constitute a land tenure (as anticipated before, at least in Region VII). So the project had to shift its focus on supporting People’s Organizations (POs) to obtain communal tenure rights (CBFMA).

As recommended by the KfW mission in February 2014, the project demonstrated as additional activity the enrichment of acacia monocultures with indigenous trees on 100 ha in Negros Oriental.

The original consulting contract provided TA support mainly until December 2013. Since the project implementation continued until December 2015, the consulting services have been increased and extended until this date.

The processing of NRM billing requests, their review and validation has been delayed and the DENR asked for extension of submission of the last withdrawal application and grace period of disbursement. KfW expressed its non-objection and extended the disbursement period until 31 October 2016 and the deadline for closing the books of account until 31 December 2016.

vii

4 PHYSICAL PROJECT ACHIEVEMENTS Forest Rehabilitation

The target was to establish 9,000 ha of reforestations, enrichment planting, rattan, mangrove and agroforestry areas. The partner LGUs planted reportedly 9,317 ha, from which 8,683 ha or 96.5 % of the target passed the first M&E after planting. A total of 8,393 ha passed the second monitoring after one year (93.2 %), and 7,860 ha the final M&E check after two years, equal to 87.3 % of the target. Agroforestry areas accounted for the largest portion with 2,829 ha, followed by multi-purpose reforestation (1,933 ha), ANR/enrichment planting (1,887 ha), rattan (1,094 ha) and mangroves (117 ha). For details please see the table below.

Modality Plan (ha)

Planted (ha)

1st M&E (ha)

2nd M&E (ha)

3rd M&E (ha)

3rd M&E %

planted

3rd M&E % of 1st

Reforestation 2,385 2,385 2,200 2,138 1,933 81.1 % 87.9 %

ANR/Enrichmt. 2,068 2,068 2,021 1,962 1,887 91.2 % 93.4 %

Rattan 1,146 1,146 1,143 1,143 1,094 95.5 % 95.8 %

Mangroves 393 393 230 190 117 29.7 % 50.6 %

Agroforestry 3,360 3,324 3,090 2,958 2,829 85.1 % 91.6 %

Totals 9,352 9,317 8,683 8,391 7,860 84.4 % 90.5 %

% of target 9,000 103.5 % 96.5 % 93.2 % 87.3 %

Rural infrastructure and livelihood improvement

The 15 partner LGUs have implemented 18 infrastructure and livelihood improvement project with a total cost of 157 million PhP. The biggest share of investments went to road maintenance equipment (seven LGUs, 70.2 million PhP), followed by drinking water systems (four LGUs, 30.8 million PhP), road rehabilitation measures(three LGUs, 25.3 million PhP), fish market (one LGU, 14.8 million PhP), small water impounding for irrigation (one LGU, 8.8 million PhP), inland aquaculture (one LGU, 5.1 million PhP) and a mini-sawmill (one LGU, 0.9 million PhP). All infrastructure and livelihood measures are fully operational (except the sawmill) and are being maintained by the LGUs. Capacity building

Over 7,000 participants (multiple trainings included, 59 % men and 41 % women) have been trained and capacitated in 260 training events and 12 exposure trips incl. an international study tour to Germany. The capacity building focused on project pro-cedures, IEC, conflict mitigation, EFLUP preparation, land use mapping, reforestation, forest resource management, PO orientation on CBFMA and CRMF, livelihood measures, value-chains, coffee/cacao, financial management, project management. Planned and Actual Expenditures

The overview of planned and actual project expenses and financial contributions is shown in the table below. Until June 2016 the DENR provided 40.5 million PhP GOP counterpart funds equal to 87 % of the calculated budget incl. contingencies. The partner LGUs contributed an estimated 68.5 million PhP counterpart budget (102 % of the plan), mainly in the form of MENRO staff and operation expenses plus equity in infrastructure rehabilitation. The KfW has released 100 % of the loan funds for infrastructure (2.415 million EUR) and forest rehabilitation (1.585 million EUR). From the 3 million EUR grant funds an amount of 2.261 million EUR has been released, leaving a remaining budget of 739,000 EUR. The largest share of this budget is required to pay the remaining labor subsidies for plantation maintenance and protection.

viii

DescriptionGerman

Contribution

GOP LGUs Euro Disbursed GOP Disbursed LGUs Actual/adjusted Disbursed

1 Investive measures 0 64.390.500 4.685.000 0 59.493.384 5.166.202 4.685.000

1.1 Afforestation etc. loan 36.900.000 1.585.000 36.900.000 1.585.000 1.585.000

Aforestation etc. grant 685.000 1.166.202 685.000

1.2 Rural infrastructure, livelihood 27.490.500 2.415.000 22.593.384 2.415.000 2.415.000

2 Vehicles 1.156.000 177.846 193.800 183.585 183.585

Equipment, project management, training 778.923 1)

566.127 432.792

3 Equipment and materials 700.000 43.077 131.138

4 Project management/operation 16.170.000 2.800.000 95.077 28.785.190 9.004.000

5 Training and extension 10.500.000 640.769 11.428.315

5.6 Techn. assistance incl. study tour 769.231 1.061.916 937.217

Mid-term review 22.170 22.170

Sub-total 28.526.000 67.190.500 6.411.000 40.538.443 68.497.384 7.000.000 6.260.764

6 Contingencies 17.949.002 589.000

TOTAL 46.475.002 67.190.500 7.000.000 40.538.443 68.497.384 7.000.000 6.260.764

Original exchange rate for planned cost: Euro/Peso = 1:65 Balance available for disbursement 739.2361)

Sum of positions 3, 4, 5.1-5.5

Planning Cost Actual Cost

GOP Contribution (PhP) GOP Contribution (PhP) German Contribution (EUR)

5 Evaluation of Project Impacts Environmental Impact

The main environmental impacts of the project can be summarized as follows:

Successful rehabilitation of 7,860 ha of degraded forest land through multi-purpose tree plantations, enrichment planting with tree and rattan species, planting of mangroves and establishment of agroforestry systems.

Reduction of deforestation rate in project provinces by 77 % compared to the pre-project rate (jointly with other actors and projects, such as NGP and GIZ-assisted projects).

Increase of plant and fauna biodiversity by 20 % to 80 % through transforming cogon grasslands and arable upland farms into species-rich tree plantations and agroforestry systems.

Reduction of soil erosion through improved vegetative cover below 10 t/ha/yr as observed in eight project compartments.

Improved water flow and quality through forest rehabilitation, as visually observed and reported by beneficiaries.

Sequestration of carbon dioxide through reforestation and agroforestry measures. The successful rehabilitation of 7,860 ha degraded forest land sequesters almost 47,800 tons of CO2 per year. This corresponds to the amount of CO2 released by 10,000 off-road vehicles in one year.

Socio-economic Impact

Improvement of livelihood conditions. The annual per capita income in the project municipalities has increased by 27 % from 2011 to 2015. The additional cash revenues came mainly from corn and rice farming and livestock raising. Newly planted agroforestry and forest crops are not harvestable yet but may significantly contribute in future. The housing material has improved and the number of household assets has increased.

Income from forest plantations. A survey within the 1,933 ha of successfully established timber plantations has confirmed the assumption of an annual wood

ix

increment of at least 7 m3/ha/yr. Assuming an average log price of 3,800 PhP/m3 (50 % of FMB statistics) this corresponds to a gross income of 25,900 PhP/ha/yr.

Income from agroforestry land. A mixed plantation of coffee or cacao with fruit trees or bananas yields a gross income of about 60,000 PhP. Assuming only 50 % of this revenue equal to 30,000 PhP per ha will increase the annual income of the 2,200 beneficiary households by 45 %.

Temporary income from grant subsidies. According to M&E results a total of around 52 million PhP shall be paid as labor subsidies to the participating 6,500 farmers. The average grant subsidy amounts to around 8,000 PhP per participant.

Income from livelihood measures. The introduced livelihood measures had a very positive economic impact on 1,044 beneficiary households. Their average annual income has been increased by 2,630 PhP from tilapia farming and almost 50,000 PhP from irrigated rice on a sustainable basis.

Uplifting living conditions. A big socio-economic impact of the project was the provision of piped drinking water to around 2,500 households. Another positive development in the uplands was the improvement of farm-to-market roads.

Land use rights. At the start of the project, only 1,758 ha out of the planted 8,684 ha (20.2 %) were covered with land use rights. As of June 2016, with project support additional CBFMAs for 3,166 ha of project sites have been approved, another 1,186 ha are pending and hopefully be awarded in 2016.

Organizational impact, knowledge management and upscaling

Capacity building. All 15 partner LGUs have now an operational Municipal Environ-ment and Natural Resources Management Office (MENRO, some designated), a forest land use plan (FLUP) and a Co-management Agreement resp. Partnership Agreement with DENR as basis for sustainable management of natural resources.

Knowledge management. The project has produced numerous studies, reports and has documented lessons learned and innovative approaches which are attached as digital annex to this report.

Upscaling of proven project approaches. Several successful project measures have already been introduced and accepted in other regions, projects and programs, e.g. a strict area monitoring and quality control system in reforestation projects as condition for subsidy payment, the use of GPS for mapping reforested sites, the enrichment of exotic monoculture pioneer forest with prime indigenous species.

Internal evaluation workshop and summary of results

During the project evaluation workshop in April 2016, a group of 30 participants from DENR, the 15 partner LGUs and consultants evaluated the project success, using the five KfW criteria relevance, effectiveness, efficiency, impact and sustainability.

The overall relevance of goal, objectives and outputs was rated 1.9, underscoring that the project really addressed important issues such as sustainable forest management and poverty reduction.

The effectiveness was rated 2.1, indicating that the objectives have mostly been achieved and match the expectations. Practically all planned infrastructure and livelihood projects have been implemented. The project LGUs established the targeted 9,000 ha of forest rehabilitation, and 87.3 % passed the final monitoring.

x

The efficiency of the project was assessed as 2.2, reflecting that the personnel and financial resources have been used in an economical way. Room for improvement was seen in the handling of financial matters, especially the disbursement of grant subsidies to the beneficiaries.

The impact rating of 2.2 shows that most project results match the expectations. The biggest impact was seen by the participants in the fields of capacity building and forest rehabilitation.

The sustainability was evaluated as 1.9, indicating the participants were convinced the project measures and impacts can be sustained.

The overall internal rating of the Project is 2.1 since the achievement of all major relevant outputs/objectives is good and matches with the expectation without major deficiencies. 5 Sustainability and Required Follow-up Action Even before the actual start of project investment measures, the following precautions were taken to ensure sustainability and a smooth phasing-out of project measures:

Establishment and capacity building of Municipal Environment and Natural Resource Officers (MENROs) in-charge of long-term management of natural resources.

Preparation of Forest Land Use Plans (FLUPs) for each partner LGU, jointly agreeing on the preferred land use, settling conflicts and issuing implementing ordinances.

Conclusion of Co-management Agreements and Partnership Agreements between DENR and LGUs, forging a joint management of forest resources.

Assistance to partner POs to obtain security of tenure / Community Based Forest Management Agreements.

In April 2016 a workshop was held with the PMUs, DENR representatives, partner LGUs and TA which agreed on the following measures to ensure project sustainability:

Follow-up security of tenure. The concerned DENR staff and respective MENROs are requested to follow-up the pending applications of seven POs for CBFMAs (1,186 ha). New CBFMA applications of 13 more POs shall be strongly supported.

Facilitate the legal utilization and marketing of forest products. The sustainable management and utilization of forest resources includes the legalized harvesting of timber and non-timber forest products. The application of the PO NUFA in Bindoy/ Negros Oriental for a CRMF/resource use permit and the mini-sawmill permit for the LGU Bindoy shall be approved.

Continue extension service and support to farmers. The existing Co-Management Agreements resp. Partnership Agreements between DENR and project LGUs shall be the basis for the joint management of forest resources. The LGUs shall include the required budget for the MENRO operation in their annual investment plans.

xi

6 Lessons Learned and Recommendations What worked well, and why?

The most successful components and measures included:

Extensive training and capacity building program, knowledge transfer and technical innovations, international study tour, training in conflict mitigation.

Large-scale effective forest rehabilitation, erosion control, regulation of water flow, improvement of environment and biodiversity.

Improvement of drinking water supply and livelihood schemes such as water impounding for irrigation, aquaculture and village market. An important environmental effect of these water-related measures was the motivation of LGUs and farmers to protect and rehabilitate the watersheds!

Introduction of agroforestry systems with high-value crops like coffee, cacao, abaca and bananas, partnering with private companies to provide seedlings, training and marketing guarantees.

The main reasons for positive project results were:

Close cooperation between DENR and LGUs, frequent meetings and visits, joint project implementation, creation of MENRO office in each LGU, assignment of DENR site coordinators to the LGUs.

Professional loan management by LBP.

Detailed project operational guidelines, NRM model technical descriptions, M&E standards and guidelines.

Strict monitoring of reforestation success as basis for payment.

Regular meetings of the Regional Project Committee and the National Steering Committee.

Close monitoring and steering by FASPS, regular visits of FASPS project officers and KfW representatives.

Approaches and measures with mixed success

Some project approaches and components had both positive and negative effects on the project impact, especially the condition that loan and grant funds must go together.

Combination of grant and loan funds. Only LGUs had access to grant funds for forest rehabilitation, which also took a loan for infrastructure and livelihood improvement. This favored richer LGUs eligible to access LBP loans and several poor upland LGUs in need to rehabilitate their degraded forest land were left out. The project impact on forest rehabilitation and protection could have been greater if the partner LGUs would have been selected according to size of forest area to be rehabilitated and commitment to support NRM. On the other hand the combination of loan and grant funds had also positive effects. LGUs which availed of loans for drinking water systems, irrigation and aquaculture had a strong interest to protect and rehabilitate the forest as their watersheds. And farmers engaged in agroforestry and forest rehabilitation appreciated very much that the roads have been improved.

What did not work as expected, and why?

Land use rights. At the start of the project only 20 % of the project sites were tenured. It was vital for sustainable resource management to facilitate land use rights for the remaining 80 %. Since Co-Management Agreements with LGUs have not been

xii

considered as tenure (as many LGUs, farmers and also the project staff have expected before), the project started in 2012 to support POs in obtaining communal tenure rights (CBFMA). It took until May 2016, however, before the first CBFMAs have been approved. So the rehabilitation measures have mostly been implemented by paid workers on open-access land, with little ownership feelings.

Sustainable income generation from plantation timber. It was expected that the beneficiaries can improve their income through sustainable plantation timber utilization. In 2013 the LGU Bindoy constructed a mini-sawmill to provide a marketing outlet for the local POs and to demonstrate the value-adding through lumber production. The site was supposed to become the demonstration area and showcase for the whole Visayas. Unfortunately the attempts of the PO to obtain a resource use permit and the application of the LGU for a sawmill permit were not successful, because of very restrictive requirements from the DENR Central Office.

Lessons Learned and Recommendations

The main lessons learned from the CBFMMP and recommendations for similar projects and activities in future can be summarized as follows:

The joint project implementation by DENR and LGUs has proven to be very successful. It requires both the technical expertise and oversight of DENR and the commitment and resources of the LGUs to manage and protect the forest resources.

Infrastructure measures and livelihood projects using water as important resource (drinking and irrigation water, aquaculture) have a very positive effect on watershed protection and forest rehabilitation.

Clear and comprehensive project guidelines have helped to implement all measures smoothly, effective and efficiently. Of great importance were the detailed technical guidelines for forest rehabilitation models, monitoring and payment criteria, monitoring guidelines, and a strict quantitative and qualitative monitoring of reforestation success.

A participatory forest land use planning before the actual start of planting activities has helped to identify and solve boundary conflicts between LGUs, mitigate land use conflicts within the LGU (e.g. grazing land vs. reforestation) and with other stakeholders (e.g. mining claims).

On degraded cogon grass sites the reforestation with fast-growing tree species has proven to be the most successful way to restore forest cover. After the pioneer trees have suppressed the cogon, reduced the fire risk and improved the soil and microclimate, the pioneer forest can be enriched with the desired final species.

The partnership with reputable private firms in the coffee, cacao and abaca sectors has proven to improve training, plantation management, post-harvest treatment and marketing opportunities for agroforestry farmers.

More emphasis should be given to the timely disbursement, liquidation and replenishment of grant subsidies.

Land use rights and harvesting permits for tree plantations are the basic require-ments for sustainable reforestation and plantation management. The DENR Central Office is kindly asked to review the present centralized and very restrictive approach to issuing land use rights and utilization permits and (re)introduce a regionalized, more supportive system

- 1 -

1 INTRODUCTION The following report concludes the Final Report on the Community Based Forest and Mangrove Management Project (CBFMMP) in Panay and Negros, Philippines. It shall provide comprehensive information on the project planning, implementation, achievements, impact and lessons learned for the project stakeholders, especially DENR, LBP and KfW. Besides, this report shall function as Preparatory Study for KfW’s Project Completion Mission. The Loan and Financing Agreement (LFA) from 24 December 2008 / 13 January 2009 and the resulting Separate Agreement (SA) from April 2009 are the basic guiding documents against which this assessment was made. The SA reflects the agreements made among DENR, LBP and KfW as stipulated in the Memoranda of Understanding signed during the project appraisal mission on 28 September and 19 November 2006. The Technical Assistance Team has worked closely with the DENR Project Management Units in Region VI and VII to collate information and prepare this summary document. 2 PROJECT DESIGN 2.1 Chronology The project is the result of a design and investigation process which started with a feasibility study prepared by a team of national and international consultants in 2006. Based on the design in this study, a KfW appraisal mission visited the Philippines and signed a Memorandum of Understanding for project implementation with DENR and LBP in September 2006. Subsequently the LFA for the project was signed in December 2008 (Philippines) and January 2009 (KfW). Further project details were outlined in the Separate Agreement from April 2009. In 2008 the DENR has established two Project Management Units, one for Region VI in Iloilo and one for Region VII in Dumaguete. KfW and GIZ (then GTZ and DED) agreed to support DENR in project preparation in the frame of the German Technical Assistance (EnRD CBFM) from July 2008 to June 2010. A team of consultants and DED development workers supported the two PMUs and potential partner LGUs in capacity building, forest land use planning and preparation of “capsule proposals” to avail of KfW loan and grant funds. While waiting for the KfW funds to arrive, GIZ has provided grant funds to eligible project LGUs to establish around 5,500 ha of forest plantations and agroforestry, following exactly the same design and cost norms used in the CBFMMP. Shortly after signing the LFA and SA, in April 2009 KfW downloaded the first loan and grant funds to LBP and DENR. The Regional Project Committee (RPC) and the National Steering Committee (NSC) selected 15 partner LGUs on the merits of their capsule proposals for project support and provided financial support and extension service. To continue the provision of consulting services after termination of the GIZ assistance, a technical and financial proposal was submitted in June 2010 by DFS Deutsche Forstservice GmbH and was accepted by DENR and KfW. The TA support to the two PMUs continued until December 2013, in Region VI it was extended until December 2015. The field implementation of forest rehabilitation measures, infrastructure and livelihood facilities was practically completed by December 2014. In 2015 the project activities focused on monitoring, quality checks and financial management. For completion of

- 2 -

disbursement and accounting work, KfW agreed to extended the disbursement period until 31 October 2016 and the deadline for closing the books of account until 31 December 2016 In short the project phases can be defined as:

Phase I: 2-year project start-up and preparation phase, July 2008 - June 2010, supported by GTZ and DED.

Phase II: 6-year implementation phase, January 2009 - December 2014, mainly supported by KfW (overlap with Phase I).

Phase III: 1-year monitoring and disbursement phase, January to December 2015

Phase IV: 1-year completion of financial management, January to December 2016 2.2 Goal, Purpose and Beneficiaries The following paragraphs describe the project design as outlined in the SA and revised in the project’s operation plan. It concerns the support for the Community Based Forest and Mangrove Management Project (CBFMMP) in Panay and Negros (“project”). The purpose of the project is the sustainable use of forests and mangroves and the increase of income of the participating families. This is to contribute to the sustainable management of forests and mangroves under Community Based Forest Management Agreements (CBFMAs) and other community-based tenure instruments and to the alleviation of poverty and improvement of livelihood in the rural areas of Panay and Negros. Consistent with the LFA executed between the Federal Republic of Germany and the Republic of the Philippines in January 2009, the project should originally be implemented for a period of seven years starting from the effectivity date of the LFA (i.e. from January 2009 to January 2016). Because of delays the project period has been extended until December 2016. Community-based natural resource management (NRM) shall be supported through NRM-focused loan and grant investment packages (EUR 3 million grant and EUR 4 million loan). The following project activities shall be financed from the loan and grant contribution:

1) Natural resources management (NRM), EUR 2.27 million from loan and grant

2) Infrastructure and livelihood projects, EUR 2.415 million from loan

3) Training and capacity building, EUR 0.935 million from grant

4) Project management and operations, EUR 1.38 million from grant The project comprises the provinces of Aklan, Antique, Capiz, Iloilo (within Panay island), and Negros Occidental in Region VI (Western Visayas), and Negros Oriental in Region VII (Central Visayas). During project implementation 15 Local Government Units (LGUs) have been selected in a competitive and transparent process as recipients of project loan and grant funds: 11 LGUs in Region VI and four LGUs in Region VII (please refer to Figure 2-1). Besides the mentioned participating families (target at least 7,000 families), the target beneficiaries also include the staff from the Project Management Units (PMUs), the involved PENRO, CENRO and LBP personnel, and the Environment and Natural Resources Office staff, engineers and financial management staff from partner LGUs.

- 3 -

Figure 2-1: Map of the Project Regions and Municipalities

- 4 -

2.3 Intended Outcome, Outputs and Activities As expressed in its operations plan, the project should achieve the following outcome and outputs.

Outcome:

Participating LGUs, POs and farmers in Panay and Negros manage forests and mangroves sustainably and improve their livelihood. Outputs:

1. DENR and LBP staff, participating LGUs and POs in Panay and Negros are capacitated in planning for and implementing CBFM project packages including dealing with conflicts

2. Forests and mangroves are rehabilitated through LGUs, POs and/or rural households

3. Rural infrastructure and livelihood projects that contribute to sustainable forest and mangrove management have been introduced and implemented.

4. CBFM beneficiaries supported in value-adding and marketing of forestry and agro-forestry products

5. Project steering, planning, management and M&E provided These outputs correspond to the four project components mentioned in the SA, namely:

Training and capacity building

Natural resources management (NRM)

Infrastructure and livelihood projects

Project management and operations Details of the corresponding activities and agreed indicators are shown in the attached logframe (Annex 1). Here a summary of the physical targets and main activities shall be presented. 2.3.1 Training and Capacity Building The physical targets included:

At least 200 persons from the DENR, LGU, LBP and POs have been capacitated to fulfil their functions.

At least 15 LGUs have been supported to avail of project funds and implement projects.

All partner LGUs have prepared Forest Land Use Plans (FLUP) and entered into Co-Management / Partnership Agreements with DENR for at least 50,000 ha

All 9,000 ha rehabilitated forest land are covered by tenure instruments The corresponding activities focused on training of project staff, support to partner LGUs in preparing and implementing project proposals, FLUP preparation and security of tenure.

- 5 -

2.3.2 Natural Resources Management NRM measures focused on

Establishment and management of 9,000 ha of reforestation, ANR/enrichment planting, rattan enrichment, mangroves and agroforestry.

The main activities in this context were support to LGUs in selecting, mapping and preparing the planting sites, seedling production and procurement, planting, protection and maintenance of NRM sites, quality checks and grant disbursement. 2.3.3 Rural Infrastructure and Livelihood Projects Under this loan-funded component, 15 partner LGUs were supported to plan, implement and maintain infrastructure and livelihood projects. The indicators included:

At least 80% of targeted beneficiaries (male and female) confirm that they receive at least 50% of intended benefits.

Procured road-construction equipment has been used at least 50% for the improvement of barangay roads.

The corresponding activities included assistance to LGUs in preparing and submitting technical and financing proposal, provision and administration of loan funds through LBP, facilitate issuance of environmental compliance certificates (ECC) and introduce maintenance and cost recovery schemes. 2.3.4 Support in Value Adding and Marketing This output was to provide tangible benefits to participating families from project measures. Among the indicators were:

Participating POs and households in selected sites have grown two rice crops for food security.

At least 80% percent of beneficiaries (male and female) are satisfied with the support provided.

The related measures included loan-funded irrigation projects (under the infrastructure component), training in production and value adding of selected agroforestry products (coffee, cacao) and linking to buyers, support income generating pilot measures in existing plantations (thinning and harvesting operations) and facilitate participation in trade fairs. 2.3.5 Project Management Among the indicators for good project management were.

All available investment funds have been released and the approved project packages have been implemented.

Proper project supervision, coordination and financial management ensured.

M&E system operationalized for project progress, afforestation success, socio-economic and ecological impacts

- 6 -

Necessary activities were preparation and implementation of work and financial plans, preparation of operational guidelines, supervision of project implementation, regular M&E and quality control, financial management, conduct of baseline and impact studies. 2.4 Project Organizational Structure and Management 2.4.1 Organizational Arrangements The project organizational structure and management procedures have been described in detail in the Project Operational Guidelines from 2010. The following paragraphs are excerpts from the operations guide. As agreed in the MoU of September 2006, DENR and LGU shall be the two project implementing agencies. The LBP shall administer all loan funds, and DENR all grant funds (both for capacity building and for investments). Loan and grant investment funds shall be paid to the same implementer, i.e. if a LGU takes the loan it also shall receive the corresponding grant portion. Grant and loan funds have to flow together. That means only LGUs who are willing and eligible to take a loan can receive grant funds. The LBP will decide who is eligible to access loan funds. The DENR and LBP shall jointly deliver the project through their respective regional/ provincial/ municipal offices/branches in coordination with the Local Government Units (LGUs). Project implementation shall be assisted by a Technical Assistance Team financed/ provided by German Development Organizations (KfW, GTZ and DED). The project delivery structures and the co-operation between different institutions are depicted in the CBFMMP delivery chart in Figure 2-2. Figure 2-2: CBFMMP Organizational Chart

- 7 -

The DENR, through FASPS, act as the lead project executing agency to oversee the overall implementation of the project and shall serve as the central project coordinating office. It shall perform the following oversight functions: (1) review and submission of pertinent documents as required by KfW and oversight agencies, (2) M&E of progress of accomplishment and loan/grant conditionalities, (3) document lessons learned and (4) provide secretariat support to NSC. The Project Accounts Management Division (PAMD) of FASPO shall manage the Special Project Account, transfer funds to the two DENR Project Management Units and its counterpart at the regional level. The LBP Lending Center in Iloilo will act as LBP PMU, supported by the Lending Centers Bacolod and Dumaguete as Sub-PMUs. The tasks include (i) operational planning, (ii) financial (LBP) capacity building, (iii) extending support to implementation partners in developing and delivering the development plan in the municipalities and barangays, (iv) the financial management of loan disbursements. Project Management Units (PMU). DENR shall designate the existing Regional CBFM Office in Iloilo and the PENRO in Dumaguete as the two PMUs who shall be responsible in ensuring the smooth implementation of the project. They shall be under the direct supervision of the DENR Regional Executive Directors of Region VI and VII, who are both authorized to sign the financing agreements with LGUs/accredited organizations. The PMUs shall be supported by one Technical Assistance Team each in their responsibilities. By DENR Special Order a National Steering Committee (NSC) has been created, chaired by the DENR Assistant resp. Undersecretary for FASPO (now FASPS) and co-chaired by the First Vice President, Program Management Group, LBP. The NSC shall provide overall policy guidance and directions to project implementation. The associated secretariats POMS-FASPO (DENR) and PMD (LBP) will issue replenishment requests to KfW. The Regional Project Committee (RPC) shall be responsible for overall project planning and supervision at regional level, coordination between Regions VI and VII, policy guidance at local level, approval of package of measures for project funding, supervision of implementation and arbitration of conflicts. In each municipality participating in the project Technical Working Groups shall be developed, with representatives from the municipal / city LGUs, DENR CENRO, involved POs and assisting organizations. The M/CTWGs shall develop project proposals and assist the project holders in implementing the individual projects approved by the RPC. On the DENR field level, PENROs/ CENROs will be strengthened by the project to support NRM-related project implementation. Project Holders shall comprise participating LGUs, in cooperation with POs, community groups and individual households as sub-project holders. Since only LGUs are eligible to access loan funds from LBP, the primary project holders can only be municipalities. The LGUs shall pass on grant funds for labor subsidies to POs or individual households in full, however. 2.4.2 Financial Management The total provided investment budget of EUR 4.685 million consists of EUR 2.270 million for NRM measures (EUR 685,000 grant and EUR 1.585 million loan funds) and EUR

- 8 -

2.415 million for infrastructure and livelihood measures (loan funds). All loan funds for infrastructure and livelihood shall be administered by LBP, all grant funds by DENR. The portion of the loan funds for NRM shall be accessed by DENR and be passed on to project holders as grant. All grant funds shall be deposited into a special project account. Grant funds shall be disbursed through DENR Central Office to the PMUs Iloilo and Dumaguete. These offices will release funds for NRM measures to partner LGUs. The payment to LGUs will be in the form of a 15% mobilization fee as disposition fund/cash advance and subsequent replenishments according to work progress, meeting monitoring criteria and the liquidation of expenses. All payment for capacity building, which includes training and procurement, shall be directly handled by the PMU through the Finance Division of the DENR Regional Office. Additional grant funds for capacity building and the payment for monitoring and auditing services shall be disbursed directly to assisting organizations. Loan funds will be downloaded by the LBP Manila Office to the respective Lending Centers in Iloilo, Bacolod and Dumaguete. LBP will onlend the loans at standard terms to eligible LGUs after approval of project packages. The loan and grant investment funds shall be paid to the same implementer in accordance with Item No. 11 of the MOU signed by DENR, LBP and KfW in November 2008. It follows that whoever among the target groups shall take the loan; it shall also be the same group that shall receive the corresponding grant portion. If cases where the LGUs are the borrowers, they can pass on part of the grant funds to POs, NGOs, cooperatives or individual households for the development of NRM projects and to some extent for the implementation of infrastructure and livelihood projects. Subsequently, LGUs shall remain responsible to repay the loan (Item No. 20 of the MOU signed by DENR, LBP and KfW in November 2008). For both NRM and infrastructure / livelihood improvement, the LGUs and beneficiaries shall provide equity in cash or kind as follows:

Investment Grant Loan Equity

Forest/mangrove rehabilitation, agroforestry (50%)

80% 0% 20%

Rural infrastructure in support of NRM, poverty reduction Income generating livelihood measures (together 50%)

0%

85%

15%

Average 40% 42.5% 17.5%

2.4.3 Interrelation with other Projects and Programs The CBFMMP made use of valuable synergies with other German-assisted forestry projects in the Philippines, especially the

Community Based Forest Management Component of the GIZ Environment and Rural Development Program (EnRD CBFM), supported by BMZ, active in Panay and Negros from July 2008 to June 2014. The CBFM component applied the very same approach to forest land use planning (FLUP) and NRM as the CBFMMP and assisted during the preparation phase by providing vehicles, technical assistance, capacity building and grant subsidies for 5,500 ha of forest rehabilitation in Panay and Negros.

- 9 -

The CBFM Component facilitated the preparation of all 11 FLUPs for CBFMMP partner LGUs in Region VII.

Forest and Climate Protection (ForClim) Project Panay, supported by GIZ with funds from BMUB, active in Panay from October 2010 to February 2018 (Phase I and II). Also the ForClim Project has applied the same approach and standards to FLUP and NRM and helps to increase the “critical mass” for project impacts. The project has provided grant subsidies to establish 1,680 ha reforestations, enrichment planting and agroforestry in Panay during Phase I, and for additional 2,500 ha in Phase II. In addition, the project assisted in preparing five FLUPs and strengthening 20 MENROs in Panay.

The CBFMMP (as well as the other German-assisted forestry projects) is contributing to the targets of the National Greening Program (NGP). The NGP is also supporting POs to obtain tenure rights and complements the CBFMMP in this aspect. Besides, the NGP has been extended until 2028 and the areas rehabilitated under CBFMMP can hopefully be integrated in the future NGP maintenance program. 2.5 Cost Estimates and Financing Plan The project budget was jointly funded by the German and Philippine sides with the Philippine counterpart funds coming from the Government (GOP funds) and the participating municipalities and cities (LGUs). The project cost were calculated as 568.75 million PhP, with 46.475 million PhP coming from GOP (equal to 8.2 %), 67.275 million PhP from the LGUs (11.8 %) and 455 million PhP German contribution (7 million EUR at an exchange rate of 1:65, equal to 80 % of total cost). The overall budget as stipulated in the Financing Agreement is shown in Table 2-1. Table 2-1: Financing Agreement Budget by Major Budget Line

Mayor Budget Line Total Budget GOP

Contribution

LGU

Contribution

PhP PhP PhP EUR PhP 1)

1. Investive Measures

Afforestation/rehab., agroforestry 184.500.000 36.949.985 2.270.000 147.550.000

Rural infrastructure, livelihood 184.500.000 27.525.013 2.415.000 156.975.000

2. Vehicles 12.716.004 1.156.000 177.846 11.560.000

3. Equipment and materials 3.500.000 700.000 43.077 2.800.000

4. Project management/operation 56.050.000 16.170.000 2.800.000 570.462 37.080.000

5. Training and extension 71.250.000 10.500.000 934.615 60.750.000

6. Contingencies 56.233.996 17.949.002 589.000 38.285.000

Total 568.750.000 46.475.002 67.274.998 7.000.000 455.000.0001)

based on the calculatory exchange rate 1 EUR = 65 PhP

German Contribution

2.6 Financial Management Annex 7 to the Separate Agreement specifies the disbursement procedures to be applied as follows:

The loan funds assigned to “Infrastructure and/or Livelihood Programs (Investment Packages” administered by LBP for an amount of EUR 2,415,000 shall be disbursed according to the Reimbursement Procedure.

The grant funds assigned to “Technical Assistance for PM and Training” administered by DENR shall be disbursed according to the Direct Disbursement Procedure (Consultant).

- 10 -

The grant funds assigned to “Vehicles and Pickups” administered by DENR shall be disbursed according to the Direct Disbursement Procedure.

The grant and loan funds assigned to “Afforestation/Rehabilitation, Agroforest (Investment Packages) up to EUR 2,270,000 administered by DENR shall be disbursed according to the Disposition Fund Procedure (Special Account).

All other grant funds assigned to goods and services as specified in the Separate Agreement paragraph I and Annex 3 Cost and Financing Plan up to EUR 1,382,693 administered by DENR shall be disbursed according to the Disposition Fund Procedure (Special Account).

2.6.1 Management of Loan Funds by LBP Loan funds have been channeled from DoF to the LBP Manila Office, which downloaded the funds to the Lending Centers in Iloilo, Bacolod and Dumaguete. LBP has onlended the loans at standard terms to eligible LGUs, after approval of project packages. The implementation of the loan component of the project was based on the Subsidiary Loan Agreement signed by LBP and the LGU, as witnessed by DENR. The interest rate followed the prevailing market rate at the time of availment and was fixed for the duration of the loan. Loan release for civil works and construction followed the progress of work / work accomplishment. The actual amount of loan for release was based on LBP Lending Center’s Progress Monitoring / Appraisal Report. The loan management followed standard LBP procedures. 2.6.2 Management of Loan and Grant Funds by DENR The direct disbursement of grant funds followed standard GOP and KfW procedures. Here only the disbursement and replenishment of the disposition fund shall be further explained. For the purpose of the disposition fund two special accounts have been opened in the name of DENR. One special account is for the processing of the loan part of EUR 1,585,000 and a second special account for the processing of the grant part of EUR 2,067,693 (i.e. EUR 685,000 for investment packages and EUR 1,382,693 for goods and services). Replenishments of the special accounts are applied for by FASPO at DENR, after expenditures of at least 50% of the initial deposit actually spent can be evidenced. In any case evidence of the use of funds is to be presented at least four months after the preceding payment irrespective whether the aforementioned minimum sum of expen-ditures has been reached. According to Annex 7 to the Separate Agreement every four months after the preceding payment documentary evidence of the use of funds should be presented by FASPO to KfW so that these documents and the current account balance for the loan part and the grant part are decisive for replenishment of funds. The DENR has passed on both the grant and loan portion of the investment funds for forest rehabilitation to the LGUs in form of a grant. The disbursements were based on a subsidiary MOA defining the terms and conditions for the development of the target NRM areas and the manner of payment. The financial contribution was disbursed according

- 11 -

to work progress and upon reaching the milestones and meeting the monitoring criteria for each specific reforestation model mentioned in the Annex to the MOA. 2.7 Monitoring and Evaluation 2.7.1 FASPO Monitoring System The basis for monitoring and reporting of all foreign assisted and special projects within DENR are the FASPO Tracking Forms (FTF) in the version of October 2009. These forms compile all project progress information required by FASPO for the quarterly reports. The following five FTF shall be completed by the PMUs every quarter:

FTF 1: Integrated Project Progress Report (for loan and grant projects)

FTF 2: Procurement Progress Monitoring (for goods / civil works)

FTF 3: Procurement Progress Monitoring (for consulting services)

FTF 4: Contract Performance Monitoring

FTF 5: Legal Covenants Monitoring The contract monitoring and consultant evaluation are also governed by the respective FASPO guidelines from October 2010. Based on the monitoring results, a Project Status Report or PSR shall be prepared on a quarterly basis, within 30 days after the end of each quarter. In addition, FASPO has monitored the financial management and reviewed the statements of expenditures (SOE) prepared by the two LGUs. 2.7.2 Monitoring of Project Results The Regional Project Committee (RPC) has taken the lead in monitoring project activities, outputs and impacts / use of outputs, in order to assure the achievement of intended results. In the quarterly RPC meetings, the two DENR PMUs and the LBP Lending Centers reported the recent and cumulative project accomplishments, as basis for project evaluation and steering by the RPC. In addition, the TA team presented in its semi-annual progress reports the accomplishment of result indicators mentioned in the logical framework, for result-based project monitoring by FASPO and KfW. For socio-economic impact monitoring, two baseline studies have been carried out in Region VI and VII in 2010. Control studies in 2015/2016 referring to the same beneficiaries allow the assessment of project impacts on the target groups. 2.7.3 Monitoring of Reforestation Success The two PMUs have assigned two teams of technical staff from DENR to conduct quality checks of the established plantations and other forest rehabilitation measures. These checks were the basis for the disbursement of grant subsidy payments to the LGUs and included the following elements:

Verification of basic requirements for the release of the mobilization fund

Seedling check as basis for release of material subsidies

First survival check three months after planting, as basis for planting labor subsidy

Second survival check after one year, as basis for first maintenance subsidy

Third survival check after two years, as basis for second maintenance subsidy

- 12 -

The DENR monitoring teams have been accompanied by one TA M&E adviser for coaching and to ensure adherence to agreed procedures and standards. 2.8 Consulting Support In line with the project design an international consulting firm was commissioned as advisory and training consultant. The consultant’s tasks was to support the Project Implementing Agencies in the project’s planning and implementation processes and the achievement of the intended results. One technical assistance team has been assigned to each of the two PMUs, to strengthen their organizational, management and technical capacity and to support them in their responsibilities. Each TA team consisted of two national long-term advisers, a pool of national and international short-term advisers, one adviser from the DED (later GIZ), and was supervised by one international Chief Technical Adviser for both PMUs. As already mentioned in chapter 2.1, the consulting support to the CBFMMP was first provided under German technical assistance (EnRD CBFM) from July 2008 to June 2010. Starting July 2010 the TA support has been included in the German financial contribution, and the DENR has awarded a consulting contract to the firm DFS after accepting its technical and financial proposal. Initially 104 person-months of consultancies were agreed for a project duration of five years (July 2010 until June 2015) including 15 PM of international and 89 PM of national consultancies (see Table 2-2). The original term of the national long-term advisers and of the local support staff was only until December 2013, however. In the Contract Addendum No. 1 from 13 August 2014 the TA to the PMU Region VI was extended until December 2015. For details pls. refer to chapter 3.8. In addition to deploying experts on site, the consultant was commissioned to organize an international study tour to Germany on project relevant topics for a maximum of 10 participants and 10 days. Participants consisted of project management staff from DENR and LBP. Table 2-2: Initial Consultancy Services

Months

Position

International Advisers 15,00

Chief Adviser 15,00

National Long-Term Experts 84,00

Project Coordinator Iloilo 42,00

Project Coordinator Dumaguete 42,00

National Short-Term Experts 5,00

5,00

Local Support Staff 168,00

Secretary Iloilo 42,00

Secretary Dumaguete 42,00

Driver Iloilo 42,00

Driver Dumaguete 42,00

2011 2012 2013 2014 2015

II II III IV I II IIIII IV IIII IV I II

2010

As required, e.g. GIS, Socio-

economy, M&E, impact analysis

III IV IIII IV I

- 13 -

3 ADJUSTMENTS MADE DURING IMPLEMENTATION The project has been implemented over a period of eight years. During that period lessons were learned from field implementation, policies have been reviewed, feed-back and recommendations have been received from RPC, NSC and KfW missions. The overall project concept has remained unchanged, as well as the results and measures stipulated in chapter 1.8 of the Separate Agreement. Only technical adjustments have been made to better accomplish the project objective and outputs. The planning targets of the Memorandum of Understanding from September 2008 and the Separate Agreement from January 2010 have served as planning reference. 3.1 Adjustment of the Number of Partner LGUs In the Separate Agreement the number of 20 municipalities had been targeted for inclusion in the project. After submission of 22 capsule proposals of interested LGUs in 2008 the overall budget request reached already 460 million PhP or 50 % more than the available loan and grant budget. In addition, during the KfW progress review in November 2008 a strict set of criteria has been elaborated for the selection of eligible LGUs. As a consequence of limited budget and strict criteria only 15 LGU proposals were selected by the Screening Committee for project support. So the RPC and NSC decided in 2009 that it is not possible to include 20 LGUs and allocated the available loan and grant funds to 15 LGUs who’s financing proposals have been accepted. 3.2 Adjustment to Unfavorable EUR-PHP Exchange Rate The total target area under the NRM component of the project was approximately 9,000 ha of forest, agroforest and mangroves. Based on the experience that not all planned reforestation areas will pass the monitoring checks and can be paid, the project accepted project proposals from the 15 participating LGUs amounting to 9,650 ha, to ensure meeting the target of 9,000 ha. At the calculated exchange rate EUR to PhP of 1:65 in the SA the German contribution of 2.27 million EUR seemed sufficient to cover the Peso cost. When the exchange rate dropped in 2010 to 1:60 and below (see Figure 3-1), the consultant informed DENR and KfW on the expected financing gap of close to 400,000 Euro. KfW has thus increased the amount of grant subsidies by 481,202 EUR from to 1,166,202 EUR, using contingencies and savings from other budget positions. Figure 3-1: Fluctuation of the Euro-Peso Exchange Rate

- 14 -

3.3 Adjustment of NRM Plan to Typhoon Yolanda In November 2013 typhoon Yolanda struck the Philippines including northern Panay. Especially the two municipalities Altavas and Carles were hit hard. In Altavas most of the established mangrove plantations did not survive the storm surge. As a consequence the reforestation plan had to be adjusted, reducing the target for mangroves and adding some areas of ANR/enrichment planting. In Carles the area targets for ANR/enrichment planting and for agroforestry had to reduced. Table 3-1 shows the details. The overall project NRM target was reduced by 298 ha to 9,352 ha, and the required budget by 4.64 million PhP. Table 3-1: Adjusted Natural Resources Management Plan

Municipality Category

ha PhP ha PhP ha PhP

Altavas ANR/Enrichment 0 0 45 540.000 45 540.000

Mangroves 218 3.139.200 73 1.051.200 -145 -2.088.000

Agroforestry 219 3.854.400 210 3.696.000 -9 -158.400

Sub-total 437 6.993.600 328 5.287.200 -109 -1.706.400

Carles Reforestation 130 2.600.000 130 2.600.000 0 0

ANR/Enrichment 100 1.200.000 30 360.000 -70 -840.000

Rattan 210 2.520.000 210 2.520.000 0 0

Mangroves 20 288.000 20 288.000 0 0

Agroforestry 420 7.392.000 301 5.297.600 -119 -2.094.400

Sub-total 880 14.000.000 691 11.065.600 -189 -2.934.400

Total change 1.317 20.993.600 1.019 16.352.800 -298 -4.640.800

Operations Plan 2010

(ha)

Adjusted 2014 (ha) Change

3.4 Adjustment of External M&E The original project budget includes an amount for external M&E under budget line 4.4. The MoM during the KfW project review mission in February 2014 stressed the need for an external monitoring and suggested to DENR to either contract directly an international monitoring consultant or through a contract addendum with DFS. The DENR decided in 2015 to extend the services of a national M&E consultant for 12 months under DFS contract, since it was better that a national consultant accompanies and coaches the DENR teams for 12 months than an international expert for one month (at the same cost). KfW sent its non-objection to this approach on 28 October 2015. The national M&E adviser took turns to accompany all 15 DENR M&E staff during field work, ensured adherence to agreed procedures and standards, and submitted monthly reports to the PMU with findings, issues and suggestions. 3.5 Changed Policies on Co-management and Tenure Chapter 1.7 of the Separate Agreement states that “LGUs shall be the primary integration point for investments through co-management agreements to ensure that the project measures are embedded and integrated into the medium-term plan for the communities”. Both in the feasibility study and the appraisal mission high expectations were raised by the co-management approach as stipulated in the DENR-DILG Joint Memorandum Circular 2003-01. Section 6 says: “Based on the LGU FLUPs, and given the urgency to protect, develop and manage certain forests and forestlands that by law have been reposed on DENR or other agencies, concerned LGUs may enter into co-management agreements over said areas”. Also Section 4 of the DENR Administrative Order (DAO)

- 15 -

2010-07 on the Phased Devolution of Environment and Natural Resources (ENR) Functions provides that “the phasing-in phase shall include the adoption of applicable strategies and approaches on DENR-LGU partnership such as co-management”. The project considered FLUP and co-management as vital elements of a joint resource management by DENR and LGUs. Region VII had already very positive experiences with FLUP and co-management. The Co-management Agreement (CMA) and the resulting sub-agreements with farmers provided a sense of ownership and encouraged both LGU and farmers to protect and manage the resources. So the project assisted also the LGUs in Region VI to prepare FLUPs and conclude Co-Management Agreements with DENR (total of 11 FLUPs and 10 CMAs). In 2011 the DENR discontinued to enter into CMAs and did not consider them as tenure (as many LGUs and farmers have expected before). As a consequence, in 2012 the project shifted to support people’s organizations (POs) in applying for Community Based Forest Management Agreements (CBFMA) as tenure. This approach is much slower, however, and it took until May 2016 that the first CBFMA application was approved. 3.6 Monitoring and Payment Schedule The Regional Project Committee (RPC) during the 8th meeting in October 2011 has resolved for the adoption of the Progress Billing scheme for the accomplishment done by LGUs. The resolution was approved by the National Steering Committee. The RPC further resolved that recoupment of the mobilization fund shall be made by deducting 15% in every progress billing, and that other 10% shall be retained as retention fee and will be released upon reaching the agreed survival rate of different measures specified in the CBFMMP Manual of Operation. The RPC also proposed to carry out an additional M&E check and labor subsidy payment 12 months after planting. The KfW mission in February 2014 agreed that such an additional interim payment would help to maintain the motivation of beneficiaries to continued tending and protection. The PMU Iloilo has hired additional nine monitoring staff, and completed all monitoring tasks before December 2015. 3.7 Additional Measures 2015 Large barren areas in the project sites have been reforested with Acacia mangium as pioneer species. The KfW mission in February 2014 agreed that planting of Acacia mangium is a very cost efficient and effective way to establish plantations on areas covered by dense cogon grass and accepts them as a nurse crop for mixed, less hardy and competitive species. In order to meet the project standard of mixed plantations, it has been agreed that all Acacia mangium monocultures shall be underplanted with preferably indigenous species before project termination. Following this advice, the PMU Dumaguete has facilitated two underplanting demonstrations of 50 ha each in Bayawan and Sta. Catalina (Negros Oriental) in 2015. The underplanting demonstration was subsidized with grant funds of 21,500 PhP/ha (16,000 PhP for potted dipterocarp wildlings and 5,500 PhP/ha labor subsidy for planting). The total measure costed 2.15 million PhP. With funds from the National Greening Program, the DENR PENRO established another 400 ha of underplanting of acacia stands with indigenous species in Negros Oriental – a successful example of upscaling.

- 16 -

Figure 3-2: Design for Underplanting of Acacia Monocultures

3.8 Adjustment of Consultancies The original consulting contract provided TA support mainly until December 2013 (see Table 3- 2). Since many project activities had not yet been finished, the PMU Region VI requested the continuation of consulting services until the project end in December 2015. The adjustment was formalized in Contract Addendum No. 1 and covered the extension of the national project coordinator in Region VI and the support staff by two years, the extension of support staff in Region VII by six months, additional 12 month for a national M&E adviser (extended by another six months from consulting contingencies) and three months each for the CTA and national short-term consultants. For details pls. refer to Table 3-2. The addendum increased the consulting cost from 814,320 EUR by 247,596 EUR (or 30.4%) to 1,061,916 EUR. These cost include the international study tour for 45,100 EUR. All consultancy services have been provided as scheduled. Table 3-2: Adjustments Made to the Consulting Services

Position

PM in

original

contract

PM in

adden-

dum

Total PM

in con-

tract

International Advisers 15,00 3,00 18,00

Chief Adviser 15,00 3,00 18,00

National Long-Term Experts 84,00 42,00 126,00

Senior Adviser loilo 42,00 24,00 66,00

Senior Adviser Dumaguete 42,00 42,00

M&E Adviser Iloilo 1)

18,00 12,00

National Short-Term Experts 5,00 3,00 8,00

As required, upon approval 5,00 3,00 8,00

Local Support Staff 168,00 60,00 228,00

Admin. Officer Iloilo 42,00 24,00 66,00

Admin. Officer Dumaguete 42,00 6,00 48,00

Driver Iloilo 42,00 24,00 66,00

Driver Dumaguete 42,00 6,00 48,00

1) for the national M&E adviser 12 PM have been provided under Contract Addendum No. 1, plus additional 6 PM from consulting contract contingencies

in original contract in Addendum No. 1

20152010 2011 2012 2013 2014

- 17 -

3.9 Adjustment of Phasing and Duration In November 2015 DENR has informed KfW that the quality check of forest plantations had just been finished in October 2015 and the processing of billing requests, their review and validation may be delayed. So the DENR requested the extension of submission of the last withdrawal application and grace period of disbursement. KfW expressed its non-objection to the request and extended the disbursement period until 31 October 2016 and the deadline for closing the books of account until 31 December 2016. 3.10 Adjustment of Cost and Financing Plan Table 3-3 gives an overview of planned and actual expenses and financial contributions for the major budget lines. The GOP counterpart funds and the LGU contributions for budget position 1 to 3 (investive measures and equipment) corresponded more or less to the planning cost. Both DENR and LGUs increased substantially their budgets for project management and operation, especially the staff budgets. The DENR has increased the management position from the planned 16.2 million PhP to 28.8 million PhP, and the LGUs from the estimated 2.8 million PhP to 9 million PhP. KfW has increased the grant funds for NRM subsidies from 685,000 EUR by 481,000 EUR to 1,166,000 EUR, to compensate the EUR exchange rate losses. In addition, an amount of 292,000 EUR was added to the budget for consulting services (originally 769,000 EUR). The additional funds were sourced from contingencies and savings. Table 3-3: Planned and Adjusted Budget Lines

DescriptionGerman

Contribution

GOP LGUs Euro Disbursed GOP Disbursed LGUs Actual/adjusted Disbursed

1 Investive measures 0 64.390.500 4.685.000 0 59.493.384 5.166.202 4.685.000

1.1 Afforestation etc. loan 36.900.000 1.585.000 36.900.000 1.585.000 1.585.000

Aforestation etc. grant 685.000 1.166.202 685.000

1.2 Rural infrastructure, livelihood 27.490.500 2.415.000 22.593.384 2.415.000 2.415.000

2 Vehicles 1.156.000 177.846 193.800 183.585 183.585

Equipment, project management, training 778.923 1)

566.127 432.792

3 Equipment and materials 700.000 43.077 131.138

4 Project management/operation 16.170.000 2.800.000 95.077 28.785.190 9.004.000

5 Training and extension 10.500.000 640.769 11.428.315

5.6 Techn. assistance incl. study tour 769.231 1.061.916 937.217

Mid-term review 22.170 22.170

Sub-total 28.526.000 67.190.500 6.411.000 40.538.443 68.497.384 7.000.000 6.260.764

6 Contingencies 17.949.002 589.000

TOTAL 46.475.002 67.190.500 7.000.000 40.538.443 68.497.384 7.000.000 6.260.764

Original exchange rate for planned cost: Euro/Peso = 1:65 Balance available for disbursement 739.2361)

Sum of positions 3, 4, 5.1-5.5

Planning Cost Actual Cost

GOP Contribution (PhP) GOP Contribution (PhP) German Contribution (EUR)

- 18 -

4 PROJECT ACHIEVEMENTS 4.1 Achievement of Objective and Outcome Indicators for BMZ Reporting According to the KfW reporting format to BMZ, the objective and outcome indicators for the project listed below shall be achieved (Table 4-1). The table gives just an overview on the achievement. More details are presented in chapter 4.2. Table 4-1: Achievement of Indicators for BMZ Reporting

Indicators for the Objectives of the FC

Measure

Status at Project Appraisal in 2007

resp. before Project Interventions

Target Status at Project Completion

(by June 2016)

(1) Reduction of loss of natural forest in the provinces of the project area by 50%, i.e. from 3.400 ha (2006) to 1.700 ha p.a

3,400 ha according to appraisal report, but 12,818 ha/yr according to NAMRIA maps 2003 and 2010

Reduction by 50%

Comparison of NAMRIA maps 2010 with Google Earth images 2015 indicates an-nual forest loss of 2,900 ha in project provinces, i.e. reduc-tion by 77.4%

(2) The social and economic development indica-tors (livelihood conditions) in the region have improved signifycantly

Baseline data collected in 2011: average in-come 12,562 PhP, only 1.7% have access to tap water, travel time to village market 1 h 20 min

At least 67% confirm that the conditions have improved

The average per capita income increased by 27.2 % to 15,514 PhP, 16 % have access to tap water, travel time to market decreased by 10-30 minutes. 70% of inter-viewed beneficiaries have confirmed their condition has improved

Indicators for the Outcomes of the FC

Measure

Status at Project Appraisal in 2007

resp. before Project Interventions

Target Current Status

(by June 2016)

(1) Income from lively-hood measures of participating households increase by 30% on average.

Baseline study 06/2011: average per capita income 12,562 PhP,

30% increase The overall per capita income has increased by 27.2 % to 15,514 PhP, the income for beneficiaries from livelihood measures increased between 60 % and 360 %

(2) Returns from forest use increase signify-cantly the monetary income of the families.

Farm income from forest land (baseline 06/2011) is 17,085 PhP per family, or 4,864 PhP per ha

30% increase Farm income from forest land increased by 25 % to 21,365 PhP per household. The increase comes mainly from corn, rice and vegetables; agroforestry/forestry crops do not produce much yet

(3) The increase in volume and value of the plantations corresponds to the estimations in the project proposal (at the time of the final evaluation) in at least 75% of the cases

Assumption: net timber production of 7 m3/ha and year, yielding an average financial gross margin of 23.600 PhP per year.

75% of esti-mates

Inspection of 8 reforestation compartments confirmed that the average timber increment for all species is above 7m3/ha /yr. With log prices around 7,400 PhP/m3 this corresponds to a value increment of 51,800 PhP/ ha/yr

- 19 -

(4) 70% of the provided infrastruc-ture is still maintained 6 years after provision and a cost recovery system in place

None yet 70% after 6 years

A survey in Nov. 2015 con-firmed maintenance and cost recovery for practically all infrastructure, except sawmill in Bindoy

4.2 Achievement of Result Indicators for DENR Reporting As basis for the result monitoring, the latest version of the CBFMMP logframe from August 2013 has been used (including the six indicators for BMZ reporting). The achievement of development goal indicators, outcome indicators and output indicators is outlined below. Unless mentioned otherwise, the accomplishments refer to the status as of June 2016. 4.2.1 Development Goal Indicators Goal indicator (1): Biodiversity and water quality have improved, soil erosion has been reduced from 25 tons/ha to 10 tons/ha. Biodiversity. In 2016 two biodiversity studies have been carried to assess the achieve-ment of this indicator, one on flora and one on fauna biodiversity. Since no biodiversity baseline study had been carried out (was not foreseen), the study team compared the biodiversity in eight project sites at different succession stage and two adjacent sites without project intervention. Figure 4-1 and 4-2 plus Table 4-2 document the significant increase of both flora and fauna biodiversity through the project measures. Figure 4-1: Number of Tree and Shrub Species before and after Project Planting

14

20

5

13

1

5

87

16

24

9

15

76

17

14

0

5

10

15

20

25

30

Site 1a MixedRefo Dumarao

Site 1b MixedRefo Sebaste

Site 2 Mixed RefoValderrama

Site 3aMonoculture

Bayawan

Site 3b Mono &Enrich Sta.

Catalina

Site 4Monoculture

2015 Sta. Catalina

Site 6aAgroforestry

Dumarao

Site 6bAgroforestry

Bayawan

Tree and Shrub Species before and after Planting 1)

Species before Species + planted

1) without natural regeneration, because it is difficult to assess when it appeared

Depending on the forest rehabilitation model and site conditions, between one (monoculture) and nine (agroforestry) species have been planted. As illustrated in Figure 4-1, the existing tree cover before planting varied considerably between the sites, ranging from one to 20 existing species. Accordingly the number of tree species increased by around 15 % to 20 % on sites with existing tree cover and few planted species, and by 80% and more in multi-species reforestation and agroforestry areas. The

- 20 -

biodiversity in exotic monoculture plantations has been significantly improved by under-planting indigenous trees (see site 3b enriched monoculture Sta. Catalina). The biodiversity increase on all project sites becomes even more obvious when including the assisted natural regeneration (ANR) through forest fire protection on cogon sites. The ANR data are included in the site profiles in chapter 3, but not in Figure 4-1 because it is hard to determine if the regeneration grew before or after the project measures. Figure 4-2: Shannon Biodiversity Index before and after Project Intervention

1,73

2,43

1,55

2,40

0,00

1,581,77 1,78

2,29

2,92

2,092,26

1,341,17

2,772,94

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

Site 1a MixedRefo Dumarao

Site 1b MixedRefo Sebaste

Site 2 Mixed RefoValderrama

Site 3aMonoculture

Bayawan

Site 3bMonoculture Sta.

Catalina

Site 4Monoculture

2015 Sta. Catalina

Site 6aAgroforestry

Dumarao

Site 6bAgroforestry

Bayawan

Shannon Biodiversity Index before and after Project Intervention

Shannon H before Shannon H after

The Shannon biodiversity index characterizes the species diversity and distribution, and does not necessarily increase when the number of species increases. So the Shannon index increased by 20 % to 30 % for mixed reforestation, by around 60 % for agroforestry, but decreased by 5 % to 25 % in monocultures (more species but not very diverse). The Shannon index for the under-planted monoculture (Site 3b) increased significantly from 0 to 1.34, but this cannot be expressed in %. Proportional to the increase of plant biodiversity from cogon grassland via young reforestations to older reforestations and from arable upland farming to agroforestry also the fauna biodiversity has increased. While on cogon grassland and in the young mono-culture site only around 10 different animal species have been recorded, in older mono-culture plantations between 24 and 28 different species were observed, and between 36 and 49 species in mixed plantations. A similar increase has been documented for the transition from arable upland agriculture to agroforestry: the number of animal species has more than doubled from 15 to 31 resp. 36. For details please refer to Table 4-2. Table 4-2: Fauna Biodiversity in Selected Project Sites

Study Sites Birds Mammals Herps Dragon flies

Total

Mixed reforestation 2013

Site 1a 34 2 5 0 41

Site 1b 25 4 7 0 36

Mixed refo 2014-15 Site 2 33 4 12 4 49

Monoculture refo 2013 Site 3a 22 2 4 0 28

Site 3b 17 4 3 0 24

Monoculture refo 2015 Site 4 6 1 2 0 9

Cogon grassland Site 5 9 0 2 0 11

Agroforestry Site 2013-2014

Site 6a 30 1 5 0 36

Site 6b 25 3 3 0 31

Arable sloping agriculture

Site 7 10 3 2 0

15

- 21 -

Water quality. The impact of project reforestation measures on water quality and flow has been assessed in in a sample of eight reforestation compartments in six LGUs. The methods used included ocular inspection and interviews with farmers adjacent to projects sites. More than 70 % of the respondents declared that through CBFMMP reforestation the water quality has improved. They fetch now water from the same streams with considerable less sediments. The survey also indicates that 66 % of the respondents believe that after reforestation water is available for a longer period than before, throughout the year. The ocular inspection confirmed that soil erosion is minimal (see also next paragraph) and no siltation or pollution of the nearby creeks and streams have been observed. So interviews and inspection suggest that the project reforestation measures have improved water quality and flow. These TA study results have been confirmed by an independent socio-economic survey: in Negros Oriental 87 % of the interviewed farmers expressed the opinion that project measures have contributed to a stable water supply and clean water. Soil erosion. For calculation of the soil erosion in a sample of eight reforestation compartments in six LGUs the “Water Erosion Prediction Project Model Calculator (WEPP)” has been applied. This tool has been developed by the USDA-ARS National Soil Erosion Research Lab, W. Lafayette, IN, in collaboration with numerous agencies and universities. It is also used by FAO. The purpose of the WEPP model is to estimate erosion and sediment processes on hillslopes and small watersheds, taking into account the slope inclination, slope length, climate, land use, site disturbances, vegetation, and soil properties. The results showed low to moderate soil erosion in all inspected plantations, with average soil loss of 2.04 t/ha/yr and maximum values of 7.38 t/ha/yr. So the indicator for reduction of soil erosion to 10 t/ha/yr or less has been achieved. The calculation is shown in Digital Annex 4.7. To better assess the influence of the vegetation cover, the erosion values for the same compartments have been simulated comparing the land cover types bare soil, grass, shrubs and forest (DA 4.7a). For the steep site Passi II a soil erosion of 60 t/ha/yr has been calculated for bare soil, 31 t/ha/yr for grass, 10 t/ha/yr for shrubs and 3 t/ha/yr for forest. So if a project wants to maximize the impact on erosion control it is best to convert arable farming on steep slopes into agroforestry. Goal indicator (2): At least 67% of participating LGUs and households confirm that the socio-economic conditions have improved (poverty threshold in the program area reduced from 33% to 20%) Status as of June 2016: During the socio-economic survey, 70 % of the interviewed households confirmed that their economic situation has improved. The overall per capita income increased by 27.2 % from 12,200 PhP in 2011 to 15,514 PhP in 2015. Based on the original poverty threshold of 16,841 PhP per capita income in 2011, poverty incidence among beneficiaries has been reduced from 74 % in 2011 to 61 % in 2015 (minus 18 %). Since the Philippine Statistics Authority increased the poverty threshold in 2015 to 21,640 PhP (28.5 % higher), however, the additional income of 27.2 % was not enough to lift more households statistically out of poverty. The socio-economic survey revealed, however, that the living conditions have significantly improved (see Chapter4.2.2). 4.2.2 Outcome Indicators Outcome indicator (1): Reduction of loss of natural forest in the provinces of the project area by 50 %, i.e. from 3.400 ha (2006) to 1.700 ha p.a At the time of project appraisal, the annual forest loss in the six project provinces has been estimated at 3,400 ha. A comparison of NAMRIA forest maps based on satellite

- 22 -

images from 2003 and 2010 suggests, however, a forest loss of 12,800 ha/yr in Panay and Negros equal to 4.24 % annually. A control check of 2,128 coordinate points classified as forest in 2010 on the NAMRIA map with Google Earth images from (mainly) 2015 revealed an annual forest loss of 2,900 ha during the project period or 77 % less than between 2003 and 2010. Of course this reduction is not only the merit of the CBFMMP, since also the NGP and other projects (among them the GIZ-assisted CBFM and ForClim projects) contributed to forest protection and reforestation in Panay and Negros. For further details pls. refer to Table 4-3 and the report in Digital Annex 4.4. Table 4-3: Forest Cover Monitoring in the Project Provinces Provinces 2003 NAMRIA 2010 NAMRIA 2010

CBFMMP dot

count 1)

Diff. NAMRIA

2003-10

Diff 2003-10

per year

2015

CBFMMP dot

count 2)

Diff CBFMMP

2010-15

Diff 2010-15

per year

Aklan 64.509 36.398 33.800 28.111 4.016 32.700 1.100 220

Antique 80.272 52.395 50.600 27.877 3.982 48.500 2.100 420

Capiz 24.637 22.992 24.700 1.645 235 23.800 900 180

Iloilo 41.875 25.667 28.900 16.208 2.315 21.400 7.500 1.500

Panay 211.293 137.452 138.000 73.841 10.549 126.400 11.600 2.320

Negros Occidental 52.815 49.091 50.700 3.724 532 48.500 2.200 440

Negros Oriental 38.030 25.866 24.100 12.164 1.738 23.400 700 140

Negros 90.845 74.957 74.800 15.888 2.270 71.900 2.900 580

Total 302.138 212.409 212.800 89.729 12.818 198.300 14.500 2.900

4,24% 1,36%1) equal to 2,128 coordinate points at 1 x 1 km falling on forest land2) visual interpretation of the same 2,128 coordinate points on Google Earth images

211.293

137.452126.400

90.84574.957 71.900

0

50.000

100.000

150.000

200.000

250.000

2003 2010 2015

Forest Cover Change 2003 - 2010 - 2015

Panay Negros

Outcome indicator (2): The social and economic development indicators (livelihood conditions) in the region have improved significantly

Status as of June 2016: According to the socio-economic study in 2015/2016, the average annual per-capita income of all respondents has increased from 12,200 PhP in 2011 to 15,514 PhP in 2015, by 27.2 %. The project measures and the additional income resulted in improved living conditions, for example

2,500 households have been connected to in-house tap water. Now 22 % of the beneficiaries have access to safe drinking water, before only 1.7 %.

Improved farm-to-market roads enable now motorbikes (habal-habal) and jeepneys to reach the farms, improving access to markets, hospitals and schools

25 % of beneficiaries have now a house with stone resp. concrete walls compared to 12 % in 2011

83 % of participants cover their roof with GI sheets, compared to 54 % before

34 % of households own a motorbike, before only 21 %

54 % have a TV, before only 40%

82 % of beneficiaries own a mobile phone, compared to 53 % in 2011

- 23 -

Annex 2 and Chapter 5.2.2 provide more details on the socio-economic project impacts. According to the studies, the income from forest land increased by 26 % (mainly from arable farming, but not from agroforestry or forest products). The most significant improvement of household income came from livestock raising, plus 11,550 PhP or 130 % annually. The income from other sources such as labor, fishing, transmittances etc. declined compared to 2011. Some of the study respondents rated the economic improvements only as “fair”, however. They felt that the project was not able to realize its target to improve the economic condition of the beneficiaries. The reasons include management problem such as delay in the project implementation and release of subsidy funds. As of June 2016, labor subsidies of 17 million Peso have not yet been paid to the beneficiaries, although they were due in 2015. Outcome indicator (3): Income from livelihood measures of participating households increased by 30% on average

Among the livelihood measures specially designed to improve the income of participating households are the fish market in Carles, the small water impounding system and the aquaculture facility in Bayawan, and the mini-sawmill in Bindoy. With exemption of the sawmill in Bindoy (no permit obtained) all livelihood measures have increased the income of participating households significantly, between 25 % to over 300 %. Fish market Carles. The municipality of Carles has built a fish market hall with 20 market stalls, which has significantly increased the income for small fishermen. Before the vendors bought the fish individually at low prices. Now the catch is concentrated and the fish is being auctioned to the highest bidder. The improved marketing and the bidding procedure has increased the price for the fishermen by 50% from around 80 PhP/kg to 120 PhP/kg. Considering a catch of 351 t/month that means an increased gross income for the fisherfolks of 14 million PhP per month! Small water impounding project (SWIP) Bayawan. With project loans the City of Bayawan constructed 15 individual SWIPs and increased the rice growing area from 54.5 ha to 132.6 ha. Before the farmers could only grow one rice crop per year, but now with irrigation all farmers can grow two crops and some even three (average 2.3 crops per year). The project measures have increased the average rice production and the annual income for 205 households by 363 % from 13,718 PhP per household to 63,582 PhP. For details please see Table 4-4. Table 4-4: Impact of SWIP Bayawan on Household Income

Criteria Before SWIP After SWIP Increase

Rice production area (ha) 54,5 132,6 143%

Average irrigated area per

household (in ha, 205 households)

0,27 0,65 143%

Crops per year 1 2,3 130%

Annual rice production per ha (kg) 1.720 3.277 91%

Annual rice production per

household (kg)

457 2.119 363%

Average annual income from rice

per household (30 PhP/kg)

13.718 63.582 363%

- 24 -

Aquaculture facility Bayawan. As second livelihood measure the City of Bayawan constructed an inland aquaculture facility to produce tilapia fries for fish farmers in the area. In 2015 the facility sold almost 300,000 tilapia fingerlings to pond owners in Bayawan, increasing the freshwater fish production and the gross income of fish farmers in Bayawan by 66 %. The improved supply of fish fries has created an additional livelihood source for 84 households and increased the income of 339 fish farmers by an average of 25 % (see Table 4-5). Table 4-5: Impact of Aquaculture Project Bayawan on Household Income

Criteria Before Aquaculture

Project 2012

After Aquaculture

Project 2015

Increase

Number of tilapia farmers 255 339 33%

Fish pond area (ha) 12,9 14,4 12%

Number of fish fries dispersed 434.760 722.631 66%

Estimated fish production (tons/year) 37,0 61,4 66%

Average fish production per farmer (in

kg)

145 181 25%

Total value of annual freshwater fish

production (72.5 PhP/kg)

2.678.875 4.452.659 66%

Aver. annual income from freshwater

fish per household (72.5 PhP/kg)

10.505 13.135 25%

Sawmill Bindoy. In Bindoy tree farmers had established more than 800 ha of Acacia mangium plantations, which are now mature and harvestable. In 2013 the LGU constructed a mini-sawmill with a project loan of 900,000 PhP and intended to buy plantation wood from local POs. This would have significantly improved the livelihood of poor upland farmers, created jobs in the sawmill and could have been an example for sustainable plantation timber harvesting and value-adding in the whole Visayas. With GIZ support a training for sustainable plantation timber harvesting has been conducted for the PO and environmentally friendly logging equipment has been provided to the LGU (including a cable winch). The DENR PENRO Negros Oriental and the Office in Region VII fully supported the PO application for a tree harvesting permit and the LGU application for a sawmill permit. Unfortunately the PO, LGU, the CBFMMP project and the DENR in Region VII did not succeed in meeting the very demanding administrative requirements from DENR Manila to obtain these permits before the end of the project. Outcome indicator (4): Returns from forest use increased significantly the monetary income of the families

According to the socio-economic studies, the average income from forest land in the project municipalities increased from 16,996 PhP by 4,370 PhP or 26 % to 21,365 PhP. As illustrated in Annex 2 and Figure 5-2, the additional income on forest land came from (expanded) corn, rice and vegetable farming and not from agroforestry or forest products. The income from agroforestry stayed more or less the same (the newly planted agroforestry crops did not produce much in 2015). The income from forest products even declined by 17 %, because no permits to use plantation timber or operate the sawmill have been granted and the only plywood plant in Panay (important market for tree farmers) had to close down.

- 25 -

Outcome indicator (5): The increase in volume and value of the plantations corresponds to at least 75% of the estimates (7m3/ha)

In the Feasibility Study, a net timber production of 7 m3/ha and year was assumed over a 20 year period, yielding an average financial gross margin of 23.600 PhP per year. The survey of three year old plantations in November 2015 showed that fast growing tree species (mahogany, acacia) reached already a height of 2 m to 5 m and a dbh of 2 cm to 5 cm. This is within the usual range of these species and indicates that also their usual volume increment of 10 m3 to 20 m3/ha/yr will be reached (more than the expected average of 7 m3/ha/yr). Slow growing endemic species like narra had problems with competing weeds and reached only a height of 0.7 m to 1 m after three years. It remains to be seen how much will be their volume increment in the coming years. The average log volume increment of all project plantations reaches surely the rather conservative assumption of 7 m3/ha/yr. According to the FMB Forestry Statistics for 2013 (latest national statistics) the price for sawlogs averaged around 7,400 PhP/m3. This corresponds to a gross value of 51,800 PhP/ha/yr and surpasses the assumption in the FS of 23,600 PhP/ha/yr – provided the beneficiaries will receive a resource use permit at harvesting time. Outcome indicator (6): 70% of the provided infrastructure is still maintained six years after provision and a cost recovery system in place

A survey in November 2015 has confirmed that all created infrastructure is still fully operational and being maintained. The roads and road equipment are being maintained from LGU regular budget and inspections found everything operational and in use. The village market stalls in Carles are rented out to farmers, fisherfolks and small-scale business people (mainly women). After the damages to the market hall and to fishing boats by typhoon Yolanda have been repaired, the revenues for the LGU have reached again the previous level of 90,000 PhP. The LGU Carles carried out the repair of the market roof with own funds. From the drinking water users the LGUs collect a fee based on actual consumption and provide a regular budget to maintain the water system. The maintenance of small water impounding dams and cannals in Bayawan shall be the task of the concerned households, no water fee is being collected by the LGU (this may lead to uneconomical water use!). The aquaculture facility is professionally managed, tilapia fingerlings and mature fish are sold at market price. The sawmill in Bindoy is supposed to be operated as self-liquidating commercial enterprise, but the LGU was not able to meet the administrative requirements for a sawmill permit from DENR as of June 2016. Outcome indicator (7): At least 35,000 people in 7,000 households have benefited from the Project through NRM, infrastructure or livelihood projects

Status as of June 2016: In Region VI around 4,600 households have benefitted from forest rehabilitation and agroforestry measures, plus 1,870 in Region VII. An estimated 2,700 farmer families have benefitted from improved farm-to-market roads, 2,500 households from better water supply, 500 fisherfolks from the fish market in Carles, and around 540 families from the SWIP and aquaculture in Bayawan. Even if some project participants benefitted from several measures, for sure more than 7,000 households with over 35,000 people have benefitted from the project. For details please see Table 4-6

- 26 -

Table 4-6: Number of Beneficiaries by LGU and Project Measure

Refo ANR Rattan Mangrov

e

Agro Roads Water Market SWIP Aquacult

ure

Sawmill

Aklan

Altavas 23 45 95 200 363

Libacao 250 130 180 315 300 1.175

Antique

Anini-y 26 23 20 30 121 220

Valderama 280 150 120 130 745 1.425

Sebaste 55 88 41 67 1.453 1.704

Capiz

Dumarao 331 221 151 245 100 1.048

Iloilo

Carles 1)

73 55 149 52 500 829

Passi 69 81 213 387 750

Negros Occidental

Candoni 63 24 40 143 200 470

Ilog 38 7 69 111 200 425

Kabankalan 127 24 25 214 200 590

Total Region 6 1.286 829 729 134 1.615 1.587 2.319 500 0 0 0 8.999

Negros Oriental 1)

Bayawan 145 136 42 314 205 339 1.181

Bindoy 171 72 74 400 716

La Libertad 171 128 52 400 750

Sta. Catalina 104 240 3 3 221 300 205 1.076

Total Region 7 590 575 45 3 661 1.100 205 0 205 339 0 3.723

Grand Total 1.876 1.404 774 137 2.276 2.687 2.524 500 205 339 0 12.7221)

Beneficiaries of NRM measures in Negros Oriental tentative

Province/

Municipality

NRM Infra Grand

total

4.2.3 Output Indicators 4.2.3.1 Indicators Output 1 Capacity Building Output 1: DENR and LBP staff, participating LGUs and POs in Panay and Negros are capacitated in planning for and implementing CBFM project packages including dealing with conflicts Output indicator 1.1: By 12/2010 at least 15 LGUs have been enabled to submit acceptable project and financing proposals and have access to program funds.

Status as of June 2016: All 15 accepted LGUs are implementing their projects according to plan. All 15 partner LGUs have had access to loan funds for infrastructure and livelihood projects, but are still waiting for the release of remaining grant funds for forest rehabilitation measures (ca. 17 million PhP). Output indicator 1.2: All 15 participating LGUs have prepared FLUPs, obtained Co-management Agreements and concluded sub-agreements.

Status as of June 2016: All 15 participating LGUs have an approved FLUP and signed a Co-management Agreement (CMA) resp. a MoA with DENR. In Negros Oriental an additional six LGUs have been supported in preparing FLUPs and having them affirmed. Output indicator 1.3: At least 200 persons from the DENR, LGU, LBP and POs have been capacitated to fulfill their functions, improved awareness and at least 80% of them are satisfied with the training by 12/2013

Status as of June 2016: Over 7,000 participants (multiple trainings included, 59 % men and 41 % women) have been trained and capacitated in 260 training events and 12 exposure trips incl. an international study tour (Table 4-7). The capacity building focused on project procedures, IEC, conflict mitigation, EFLUP preparation, land use mapping,

- 27 -

reforestation, forest resource management, PO orientation on CBFMA and CRMF, livelihood measures, value-chains, coffee/cacao, financial management, project management. Details of the training events are given in Annex 4. Table 4-7: Training Measures Conducted and Participants

Number of

training events

Male

participants

Female

participants

Total Person-days

Region 6 75 1.718 1.235 2.953 4.706

Region 7 185 2.458 1.671 4.129 5.939

Total 260 4.176 2.906 7.082 10.645

59,0% 41,0%

The DENR training analysis indicate an average satisfaction rate of around 98% among the trainees. The results of a training impact assessment in 2014 show that 103 out of 115 interviewed participants (equivalent to 89.6%) are still occupying their position and working with the project. The interviewed trainees confirmed in 92% of all questions that they have applied the demonstrated techniques and knowledge (Table 4-8). Table 4-8: Application Rates of Training Contents in Regions VI and VII

1 Proposal writing 85%

2 FLUP, RMP 83%

3 NRM 97%

4 Value adding 85%

5 Refo M&E 86%

6 GIS, databank 90%

7 Financial mgnt. 100%

8 Conflict res. 100%

9 Project mgnt. 100%

10 IEC, extension 97%

Average 92%

Training content applied

0

5

10

15

20

25

30

35

40

1 2 3 4 5 6 7 8 9 10

yes

no

Output indicator 1.4: By 12/2012 at least 80% of the DENR and LGU personnel involved in the project and POs are trained and able to constructively deal with conflicts in CBFM areas, a systematic way of resolving resource-related conflicts is in place and at least 30% of recorded conflicts have been resolved by 06/2014.

Status as of June 2016: Six conflicts have been recorded in the participating municipalities: two land use-related conflicts and four boundary-related conflicts. One escalated land use conflict on Calagnaan island (LGU Carles) over mining claims caused the temporary suspension of reforestation activities. As an outcome of interventions by the PMU Iloilo and DENR Region VI, the mining firm and DENR agreed in 2014 to continue reforestation activities in selected areas. Another escalated conflict on Sicogon island (also LGU Carles) over land use claims of a resort company has also calmed down after several conflict mitigations by DENR and the local government (deployment of policemen to the island). Reforestation and rattan enrichment has been completed in the meantime. One boundary-related conflict has been solved (remapping of CBFMA of DECCA by DENR). The other three boundary-related conflicts between LGUs concern

- 28 -

municipal boundaries and have been addressed during the FLUP process. During the training impact study, all trainees who attended a conflict mitigation course confirmed that they have applied their knowledge in practice. Output indicator 1.5: At least 15 participating LGUs are implementing Co-Management Agreements with a total area of at least 50,000 ha by 2013

Status as of June 2016: In Region VI (Panay and Negros Occidental), 10 Co-management Agreements and one MoA have been signed covering well above 120,000 ha forest lands. In Region VII (Negros Oriental) four municipalities have already entered into Co-management Agreements, with a combined forest land area of about 42,000 ha, bringing the total to over 160,000 ha. Output indicator 1.6: All 9,000 ha rehabilitated forest land are covered by tenurial instruments by 2015

Status as of June 2016: From the established plantations, 8,684 ha were accepted in the M&E check three months after planting. Out of these sites, a total of 4,924 ha (56.7 %) are covered by tenure instruments such as CBFMA, CSC or CADT (see Table 4-9). For another 1,186 ha (13.7 %) applications for CBFMAs are pending. It is expected that they will be approved within the next months. The rest of 2,574 ha or 29.6 % is still open access and tenure is not secured. As part of the project sustainability plan it is suggested to assist the beneficiaries without tenure to obtain land use rights for the established plantations.

- 29 -

Table 4-9: Tenure Situation in Project NRM Sites

LGU NRM accepted

in planting M&E

(ha)

With tenure

(CSC, CBFMA,

CADT) 1)

Pending

CBFMA

application 1)

Open access

(ha)

Aklan

Altavas 328 328 0

Libacao 860 375 485

Antique

Anini-y 166 53 113 0

Valderama 630 0 630

Sebaste 934 531 403

Capiz

Dumarao 611 611 0

Iloilo

Carles 395 98 297

Passi 595 595 0

Negros Occidental

Candoni 600 248 352

Ilog 502 95 407

Kabankalan 574 574 0

Total Region 6 6.195 3.508 113 2.574

Negros Oriental

Bayawan 854 235 619 0

Bindoy 404 404 0

La Libertad 454 454 0

Sta. Catalina 777 777 0

Total Region 7 2.489 1.416 1.073 0

Grand Total 8.684 4.924 1.186 2.5741)

covering CBFMMP project sites 56,7% 13,7% 29,6% 4.2.3.2 Indicators Output 2 Forest Rehabilitation Output 2: Forests and mangroves are rehabilitated through LGUs, POs and/or rural households.

Output indicator 2.1: Additional 9,000 ha of forests, mangroves, rattan enrichment, ANR and agroforestry have been established and managed by LGUs, POs and/or households according to the work plans.

Status as of June 2016: A total of 9,317 ha of NRM areas have been planted according to LGU reports. From this area, 8,683 ha or 96.5 % of the indicator have passed the M&E check after planting and were eligible for payment: 2,200 ha reforestation, 2,021 ha ANR/enrichment planting, 1,143 ha rattan, 230 ha mangroves and 3,090 ha agroforestry. A total of 8,391 ha have been accepted by the second M&E one year after planting, and 7,680 ha by the final M&E after two years. This corresponds to 87.3 % of the target area of 9,000 ha. Table 4-10 provides a detailed overview on the forest rehabilitation achievements, the photographs in Figure 4-4 show some field sites.

- 30 -

Table 4-10: NRM Accomplishments by LGU

Target

(ha) Planted

Planting

M&E

1 yr

M&E

2 yr

M&E

Target

(ha) Planted

Planting

M&E

1 yr

M&E

2 yr

M&E

Target

(ha) Planted

Planting

M&E

1 yr

M&E

2 yr

M&E

Target

(ha) Planted

Planting

M&E

1 yr

M&E

2 yr

M&E

Target

(ha) Planted

Planting

M&E

1 yr

M&E

2 yr

M&E

Target

(ha) Planted

Planting

M&E

1 yr

M&E 2 yr M&E

Aklan

Altavas 45 45 45 45 41 73 73 73 73 0 210 210 210 210 150 328 328 328 328 191

Libacao 250 250 250 250 250 130 130 130 130 130 180 180 180 180 180 300 300 300 300 300 860 860 860 860 860

Antique

Anini-y 62 62 62 62 62 50 50 50 50 50 5 5 5 5 5 49 49 49 49 49 166 166 166 166 166

Valderama 233 233 233 233 233 120 120 120 120 120 175 175 175 175 175 102 102 102 102 102 630 630 630 630 630

Sebaste 195 195 195 195 195 255 255 255 255 255 264 264 264 264 264 220 220 220 220 220 934 934 934 934 934

Capiz

Dumarao 176 176 176 174 174 160 160 160 160 160 50 50 50 50 50 225 225 225 225 225 611 611 611 609 609

Iloilo

Carles 1)

130 130 63 31 31 30 30 30 30 30 210 210 210 210 210 20 20 8 0 0 301 265 84 37 37 691 655 395 307 307

Passi 150 150 150 150 150 149 149 149 149 149 296 296 296 296 296 595 595 595 595 595

Negros Occidental

Candoni 172 172 172 172 100 80 80 80 80 80 100 100 100 100 56 250 250 248 248 248 602 602 600 600 484

Ilog 215 215 102 75 75 123 123 81 23 23 290 290 140 107 107 230 230 179 95 95 858 858 502 299 299

Kabankalan 172 172 166,9 166,9 33,57 86 86 81 81 10 50 50 46,67 46,66 42,42 280 280 280 280 210,8 588 588 574 574 296

Total Region 6 1.693 1.693 1.508 1.446 1.241 1.240 1.240 1.193 1.134 1.059 1.079 1.079 1.076 1.076 1.027 388 388 225 185 112 2.463 2.427 2.193 2.061 1.932 6.863 6.827 6.194 5.902 5.371

Negros Oriental

Bayawan 170 170 170 170 170 195 195 195 195 195 62 62 62 62 62 427 427 427 427 427 854 854 854 854 854

Bindoy 200 200 200 200 200 104 104 104 104 104 100 100 100 100 100 404 404 404 404 404

La Libertad 200 200 200 200 200 184 184 184 184 184 70 70 70 70 70 454 454 454 454 454

Sta. Catalina 122 122 122 122 122 345 345 345 345 345 5 5 5 5 5 5 5 5 5 5 300 300 300 300 300 777 777 777 777 777

Total Region 7 692 692 692 692 692 828 828 828 828 828 67 67 67 67 67 5 5 5 5 5 897 897 897 897 897 2.489 2.489 2.489 2.489 2.489

Grand Total 2.385 2.385 2.200 2.138 1.933 2.068 2.068 2.021 1.962 1.887 1.146 1.146 1.143 1.143 1.094 393 393 230 190 117 3.360 3.324 3.090 2.958 2.829 9.352 9.317 8.683 8.391 7.860

(6) Total Forest RehabilitationProvince/

Municipality

(1) Tree Plantation (2) ANR/Enrichment Planting (3) Rattan Enrichment (4) Mangroves (5) Agroforestry

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

Refo ANR Rattan Mangroves Agroforestry Total

Summary of NRM Accomplishments

planted 1st M&E 1 yr M&E 2 yr M&E

- 31 -

The project objective was to establish ecologically stable mixed tree plantations. A direct planting of prime indigenous species such as narra or dipterocarps on degraded cogon grassland is usually not successful, however. The young seedlings are overgrown by the cogon grass or get burned in frequent grass fires. The only way to successfully establish tree plantations on difficult sites and to ensure the plantations pass the M&E checks was to establish a pioneer forest with fast growing species such as Acacia mangium. As soon as the crowns have closed, the cogon has been suppressed and the fire hazard has been reduced, the final species can be inter-planted. For demonstration purpose 100 ha of A. mangium plantations in Negros Oriental have been under-planted with dipterocarp seedlings in 2015 (see Figure 4-3). Figure 4-3: Comparison of Direct Planting in Cogon Grass and Under Pioneer Trees

3-year old narra seedling planted in cogon grass, 0.8 m high, survival rate below 50%

3-year old acacia planted in cogon grass, 3 m high, survival rate 90%, underplanted with dipterocarp wildling 6 months old

Output indicator 2.2: Sustainable and productive cropping systems on forest land adopted by at least 60% of households involved in the agro forestry model by 2015

Status as of June 2016: A total of 2,829 ha agroforestry areas have been accepted by the final monitoring, out of 3,324 ha originally planted. That means 85% of established agroforestry cropping systems have been maintained and sustainably managed by the involved households. 4.2.3.3 Indicators Output 3 Rural Infrastructure and Livelihood Output 3: Livelihood projects/rural infrastructure that contribute to sustainable forest and mangrove management have been introduced and implemented. The 15 partner LGUs have implemented 18 infrastructure and livelihood improvement project with a total cost of 157 million PhP. The biggest share of investments went to road maintenance equipment (7 LGUs, 70.2 million PhP), followed by drinking water

- 32 -

systems (4 LGUs, 30.8 million PhP), road rehabilitation measures(3 LGUs, 25.3 million PhP), fish market (1 LGU, 14.8 million PhP), small water impounding for irrigation (1 LGU, 8.8 million PhP), inland aquaculture (1 LGU, 5.1 million PhP) and a mini-sawmill (1 LGU, 0.9 million PhP). Table 4-12 provides the details. All infrastructure and livelihood measures are fully operational (except the sawmill) and are being maintained by the LGUs. Output indicator 3.1: At least 80% of targeted beneficiaries (male and female) confirm that they receive at least 50% of intended benefits from infrastructure and livelihood projects by 2015

Status as of June 2016: Livelihood projects. The socio-economic baseline study from 2015/16 confirmed that 95 % of targeted beneficiaries for livelihood projects received the intended benefits in full. Around 500 fishermen benefit from the fish market in Carles and increased their income by 50 %. From the SWIP Bayawan 205 families benefit and increased their annual rice production and income by 360 %. Also in Bayawan, 339 tilapia growers benefit from improved dispersal of fish fries. The total production increased by 60 % and the individual household income by 26 %. Only around 50 households in Bindoy, who hoped to improve their livelihood through plantation timber sale to the mini-sawmill were not able to receive the expected benefits. Infrastructure projects. All of the targeted ca. 2,500 households have received the promised benefits and were connected to a level-3 drinking water system (in-house water fosset). They receive year-round safe drinking water right in their home. Around 2,800 households benefitted from improved farm-to-market roads. The average travel time to village markets and the next municipality has been reduced by 10 to 30 minutes. Output indicator 3.2: Starting in the 3rd year of program implementation access to markets has improved through construction of barangay markets and improved rural roads Status as of June 2016: All 10 farm-to market road projects (road construction and purchase of road equipment) and one rural market have been completed and have improved the access for the concerned population. According to the respondents of the socio-economic study, the average travel time from their farm to the next village market decreased from 63 minutes to 50 minutes, and the travel to the next municipality from 90 minutes to 57 minutes. The biggest improvement was felt in areas which were only accessible on foot before. Now they can be reached by motorbikes and sometimes even jeepneys, This improves significantly the access of these farmers to markets, hospitals and government services. Output indicator 3.3: Procured road-construction equipment has been used at least 50% for the improvement of barangay roads by Dec, 2014

Status as of June 2016: Seven LGUs have acquired road construction equipment, and all seven are using it almost exclusively to improve/maintain barangay roads. All LGUs are providing a regular budget for operation and maintenance.

- 33 -

Table 4-11: Infrastructure and Livelihood Improvement Measures

Province/

Municipality

Intended Infrastructure Loan reques-

ted (PhP)

Loan released

(PhP)

in % of

request

Implementation Status / M&E

Observations

Aklan

Altavas Road grader 7.000.000 7.000.000 100,0%Equipment already delivered

and in use

Libacao Road equipment 14.875.000 14.875.000 100,0%1 multi-purpose loader/ ex-

cavator purchased and in use

Antique

Anini-y Water system 2.300.000 2.300.000 100,0%

Project completed and

operational, 943 households

connected

Valderrama Water system 10.700.000 9.999.896 93,5%Water system completed, 721

households connected

Sebaste

Pipeline Expansion of

Level III Water System,

inland resort

14.875.000 14.875.000 100,0%

Project completed and

operational, 704 households

connected

Capiz

Dumarao Road equipment 10.700.000 10.700.000 100,0%1 excavator, 1 dumptruck

purchased and in use

Iloilo

Carles Rural market 14.875.000 14.875.000 100,0%Market finished and being

operated

Passi FM road 10.625.000 10.625.000 100,0%Project completed and

operational, road 4.4 km

Negros Occidental

Candoni Road equipment 11.165.000 11.140.000 99,8%Equipment purchased and in

use

Ilog Road equipment 15.755.413 15.755.413 100,0%1 road roller, 1 dumptruck

purchased and in use

Kabankalan FM road 10.600.000 9.885.976 93,3%Road completed, length of

improved road 6.36 km

Negros Oriental

Small water impounding 9.775.000 9.775.000 100,0%

15 SWIP units constructed and

operational (13 loan financed,

2 SWIPs by LGU)

Inland aqua culture facility 5.100.000 5.100.000 100,0%Aquaculture completed and

operational

Road equipment 6.500.000 6.426.000 98,9%Procured 5 units road

equipment,

Mini-sawmill 900.000 900.000 100,0%Sawmill completed, waiting for

DENR operation permit

La Libertad Road equipment 7.650.000 4.353.333 56,9%

Procured 5 units road

equipment. One road roller

expected in Aug. 2016

FM road 6.417.000 4.812.750 75,0%

FM road 4.5 km, one multi-

purpose loader. LBP awaits

LGU request for inspection

Water system 5.874.000 3.650.000 62,1%Pipes etc. purchased, pipe

laying ongoing

Total 165.686.413 157.048.367 94,8%

Bayawan

Bindoy

Sta. Catalina

- 34 -

4.2.3.4 Indicators Output 4 Value Adding and Marketing Output 4: CBFM beneficiaries supported in value-adding and marketing of forestry and agro-forestry products Output indicator 4.1: By the end of project participating POs and HH in selected site have grown two rice crops for food security and income increased through establishment and improvement of irrigated agriculture

Status as of June 2016: The City of Bayawan has constructed 15 small water impounding and irrigation projects (SWIP), to improve rice harvests and food security. The rice growing area has been increased from 54.5 ha to 132.6 ha, benefitting 205 households. Before irrigation the farmers grew only one rice crop, now all grow two crops and some even three (average 2.3 rice crops per year). The annual rice harvest per household has increased from 457 kg to 2,119 kg, the annual gross income from 13,718 PhP to 63,582 PhP. This corresponds to an increase of 362 %.

Output indicator 4.2: At least 80% percent of CBFM beneficiaries (male and female) are satisfied with the support provided in improved agroforesty farming systems, value-adding and marketing of forestry and agro-forestry products by 12/2015

Status as of June 2016: 23 workshops and trainings were held up to now on value-adding and livelihood projects with around 700 participants. In cooperation with the PPP firms Nestle Philippines, Aklan Cacao Plantation and CocoaPhil nine seminars were held for farmers re. value-adding through coffee and cacao production. The PMUs in Region VI and VII conducted training courses in coffee growing and cross visits to the Nestle demo farm in Cagayan de Oro, in furniture making (Region VII) and in cacao management (Region VI). Practically all participants were satisfied with the given support. This has been confirmed in the socio-economic study, where the provided extension support has been generally rated with “good”. 4.2.3.5 Indicators Output 5 Project Management Output 5: Project Management

Output indicator 5.1: All available investment funds have been released and the approved project packages have been implemented. Sufficient counterpart funds from the KfW, DENR and LGUs for operational expenses and contribution to project measures are available for 12 months each year until 12/2015

Status as of June 2016: All the available KfW loan funds of 2.415 million EUR have been released to the LGUs through LBP and used for infrastructure and livelihood improve-ment. Additionally required loan funds to bridge the financing gap due to the unfavorable Euro-Peso exchange rate were provided by LBP from regular funds. From the eligible NRM grant subsidies of 140.64 million PhP (based on monitoring results), an amount of 123.75 million PhP has been released to the partner LGUs as of June 2016 (88 % of obligations). The remaining amount of 16.9 million PhP shall be released to the LGUs (and farmers!) as soon as KfW / DoF / DENR have downloaded the required funds to the PMUs. The committed counterpart funds by DENR and LGUs have largely been provided. For details pls. refer to Table 4-12 and 4-13. Output indicator 5.2: Project offices have been established within existing structures and sufficient qualified staff has been provided.

- 35 -

Status as of June 2016: The project offices have been fully operational until the foreseen project end in December 2015. Sufficient qualified staff has been provided for the DENR PMUs incl. site coordinators and the LBP Lending Centers. In the extension phase until Dec. 2016 only the PMU core staff is being maintained. The procurement of vehicles was completed in April 2012. All participating 15 LGUs have established a Municipal/City Environment and Natural Resource Office with qualified staff. Output indicator 5.3: Proper project supervision, coordination and financial management has been ensured.

Status as of June 2016: The implementing agencies DENR and LBP have fully ensured proper project supervision, coordination and financial management. Output indicator 5.4: Advisory support and training for project planning, management and monitoring has been provided.

Status as of June 2016: The TA team (one short-term international chief adviser, one full-time national senior and one M&E adviser, national short-term experts, admin. officer and driver) have assisted the partners DENR, LGUs and local households as agreed, and provided advisory support and training for project planning, management and monitoring. The contractually agreed consulting inputs ended in December 2015, but the chief adviser has still provided (voluntary) inputs until June 2016. Output indicator 5.5: M&E system operationalized for project progress, afforestation success, socio-economic and ecological impacts

Status as of June 2016: The M&E system for project progress, financial management and afforestation success is operational. The format for additional local level financial monitoring of NRM measures has been prepared by the PMUs and TA team and is being applied. A socio-economic baseline study plus specific studies on the beneficiaries of the livelihood projects in Negros Oriental have been carried out. The socio-economic effects and the ecological impacts on biodiversity, soil erosion and water quality have been assessed at the project end (see Chapter 5 and the Digital Annex 4).

Output indicator 5.6: At least two DENR and LGU personnel in each regional, provincial and CENRO/municipal office are available full-time

Status as of June: The DENR in both Region VI and VII provided sufficient staff for project implementation until December 2015 (at the PMU in Iloilo up to 20 staff, PMU Dumaguete between 5 and 10 staff, plus site coordinators). All LGUs have assigned one MENRO, in most cases with support staff. The following photographs in Figure 4-4 and 4-5 shall illustrate the various project measures described in the previous paragraphs.

- 36 -

Figure 4-4: Photo Documentation of Project Measures

Multi-purpose tree plantation Rattan enrichment Agroforestry

Small water impounding dam / irrigation canal Service area, rice and fish culture

Road maintenance equipment Improved farm-to-market road

- 37 -

Study tour to Germany Training in environmentally friendly plantation

timber harvesting

Figure 4-5: Aquaculture Facility in Bayawan, Negros Oriental

Source: PMU Dumaguete

4.3 Financial Status of the Project 4.3.1 Actual Project Expenses Table 4-12 presents the overall cost and financing status of the project. As of June 2016 the DENR has spent counterpart GOP funds in the amount of 40.5 million PhP (planned were 28.5 million PhP plus 17.9 million PhP contingencies). The biggest budget positions were project management and operation (28.8 million PhP), training and extension (11.4 million PhP) and the shouldering of taxes on vehicles and equipment (325,000 PhP). The remaining contingencies of 5.9 million PhP will be used to continue vital project activities until December 2016 (disbursement, accounting). The 15 partner LGUs have provided an estimated 68.5 million of counterpart services (plan 67.2 million PhP), mainly in the form of MENRO staff and operation expenses and counterpart funding of equipment and infrastructure.

- 38 -

KfW has disbursed a total of 6.26 million EUR, out of the available 7 million EUR. All of the available 2.415 million EUR loan funds for infrastructure and 1.585 million loan funds for forest rehabilitation have been disbursed. From the available 3 million EUR grant funds, an amount of 2.261 million EUR has been spent. The remaining 739,000 EUR will be used to pay the remaining labor subsidies for reforestation maintenance and protection (estimated at 17 million PhP or 340,000 EUR), the final consultancy invoice (100,000 EUR) and other cost still liquidated by DENR. Table 4-12: Actual Project Cost and Financing

Description

German

Contribution

GOP LGUs Euro Disbursed GOP Disbursed LGUs Actual/adjusted Disbursed

1 Investive measures 0 64.390.500 4.685.000 0 59.493.384 5.166.202 4.685.000

1.1 Afforestation etc. loan 36.900.000 1.585.000 36.900.000 1.585.000 1.585.000

Aforestation etc. grant 685.000 1.166.202 685.000

1.2 Rural infrastructure, livelihood 27.490.500 2.415.000 22.593.384 2.415.000 2.415.000

2 Vehicles 1.156.000 177.846 193.800 183.585 183.585

2.1 4WD Vehicle 1.060.000 163.077 153.300 183.585 183.585

2.3 Motor cycles 96.000 14.769 40.500

Equipment, project management, training 778.923 1)

566.127 432.792

3 Equipment and materials 700.000 43.077 131.138

3.1 Office, training, extension, sat images 700.000 43.077 131.138

4 Project management/operation 16.170.000 2.800.000 95.077 28.785.190 9.004.000

4.1 DENR 15.750.000 0 28.345.190

4.2 LGUS 0 2.800.000 0 9.004.000

4.3 External audits 23.077

4.4 External monitoring 46.154

4.5 Baseline, progress/impact M&E 420.000 25.846 440.000

4.6 Techn. Assistance for PM incl. in 5.6

5 Training and extension 10.500.000 640.769 11.428.315

5.1 Capacity build. DENR, LGUs, POs 0 356.154

5.2 Awareness campaign 0 46.154

5.3 FLUP 0 192.308

5.4 Extension of DENR/LGU to benef. 10.500.000 0 11.428.315

5.5 In-country study tours 0 46.154

5.6 Techn. Assistance incl. study tour 769.231 1.061.916 937.217

Mid-term review 22.170 22.170

Sub-total 28.526.000 67.190.500 6.411.000 40.538.443 68.497.384 7.000.000 6.260.764

6 Contingencies 17.949.002 589.000

TOTAL 46.475.002 67.190.500 7.000.000 40.538.443 68.497.384 7.000.000 6.260.764

Original exchange rate for planned cost: Euro/Peso = 1:65 Balance available for disbursement 739.2361)

Sum of positions 3, 4, 5.1-5.5

Planning Cost Actual Cost

GOP Contribution (PhP) German Contribution (EUR)GOP Contribution (PhP)

Release of loan and grant funds to project LGUs. The LBP has released loan funds in the amount of 157.048 million PhP for infrastructure and livelihood measures (details see Table 4.13). At the average EUR/Peso exchange rate of 1:55 during the last years this corresponds to approx. 2.855 million EUR or 440,000 EUR more than the available 2.415 million EUR from KfW. The LBP financed that difference from own regular funds. The DENR has disbursed the amount of 123.75 million PhP for material and labor subsidies in support of forest rehabilitation. Based on PMU records another 16.9 million PhP have still to be paid to the partner LGUs (and farmers!) for plantation maintenance and parts of the retention fee (Table 4-14). The PMU in Region VI has still to disburse 14.2 million PhP to the beneficiaries, the PMU in Dumaguete still 2.7 million PhP.

- 39 -

Table 4-13: Loan and Grant Disbursement by LGU

Total FC PhP

KfW Loan

PhP

KfW Loan

released 1)

Grant PhP 2)

Grant 2)

released

NRM planted

(ha) Infra-loan for

Altavas 13.993.600 7.000.000 7.000.000 6.993.600 5.388.675 328 road equipment

Libacao 28.875.000 14.875.000 14.875.000 14.000.000 12.033.833 860 road equipment

Anini-y 4.578.400 2.300.000 2.300.000 2.278.400 1.834.657 166 water system

Sebaste 28.875.000 14.875.000 14.875.000 14.000.000 11.835.811 934 water system

Valderama 20.695.200 10.700.000 9.999.896 9.995.200 8.391.042 630 water system

Capiz Dumarao 20.700.000 10.700.000 10.700.000 10.000.000 9.185.638 611 road equipment

Carles 28.875.000 14.875.000 14.875.000 14.000.000 8.108.965 691 fish market

Passi 20.622.600 10.625.000 10.625.000 9.997.600 8.376.003 595 FMR, rural market

Candoni 21.165.000 11.165.000 11.140.000 10.000.000 8.017.088 602 road equipment

Ilog 29.755.413 15.755.413 15.755.413 14.000.000 7.701.151 858 road equipment

Kabankalan 20.600.000 10.600.000 9.885.976 10.000.000 5.290.059 588 FMR, rural market

Bayawan 28.874.200 14.875.000 14.875.000 13.999.200 13.394.591 854 water, aquaculture

Bindoy 14.408.000 7.400.000 7.326.000 7.008.000 6.708.050 404 road equip., saw mill

La Libertad 14.850.000 7.650.000 4.353.333 7.200.000 6.847.825 454 road equipment

Sta. Catalina 24.283.000 12.291.000 8.462.750 11.992.000 10.637.829 777 water system, FMR

Total 321.150.413 165.686.413 157.048.367 155.464.000 123.751.217 9.352

1 EUR = PhP 3)

55 3.012.480 2.855.425 2.826.618 2.250.022

2.415.000 94,8% 2.270.000 79,6%

1) based on LBP data

2) the term grant includes a portion of the loan proceeds passed on as grant to the LGUs

3) average exchange rate from 2010 to 2016

as of June 2016

Iloilo

Negros

Oriental

KfW Assistance

Province LGU

Aklan

Antique

- 40 -

Table 4-14: Disbursements and Payables to LGUs as of 31 May 2016

Province/

Municipality

Contract

cost (PhP)

Loan proceeds Grant proceeds Total Loan proceeds Grant proceeds Total

Aklan

Altavas 6.993.600 3.730.718 1.657.957 5.388.675 42.398 42.398

Libacao 14.000.000 9.113.653 2.920.180 12.033.833 472.756 1.222.839 1.695.595

Antique

Anini-y 1)

2.278.400 1.324.095 510.562 1.834.657 105.943 107.467 213.410

Sebaste 14.000.000 8.675.642 3.160.169 11.835.811 712.345 897.098 1.609.442

Valderama 9.995.200 2.322.571 6.068.471 8.391.042 258.063 489.171 747.234

Capiz

Dumarao 10.000.000 6.413.762 2.771.877 9.185.638 514.863 222.511 737.374

Iloilo

Carles 14.000.000 5.757.654 2.351.310 8.108.965 529.910 366.027 895.937

Passi 9.997.600 6.247.159 2.128.844 8.376.003 490.816 783.150 1.273.966

Negros Occidental

Candoni 10.000.000 5.399.216 2.617.872 8.017.088 971.419 135.366 1.106.785

Ilog 14.000.000 5.678.998 2.022.153 7.701.151 1.301.620 994.706 2.296.326

Kabankalan 10.000.000 3.693.720 1.596.339 5.290.059 2.506.572 1.083.281 3.589.853

Total Region 6 115.264.800 58.357.188 27.805.734 86.162.922 7.864.307 6.344.014 14.208.321

Negros Oriental

Bayawan 13.999.200 9.170.165 4.224.427 13.394.591 644.431 644.431

Bindoy 7.008.000 4.893.252 1.814.798 6.708.050 0 299.951 299.951

La Libertad 7.200.000 4.781.412 2.066.413 6.847.825 17.988 411.698 429.686

Sta. Catalina 11.992.000 7.427.537 3.210.293 10.637.829 703.086 607.585 1.310.671

Total Region 7 40.199.200 26.272.365 11.315.930 37.588.295 1.365.506 1.319.234 2.684.740

Grand Total 155.464.000 84.629.552 39.121.664 123.751.217 9.229.814 7.663.247 16.893.061

Disbursed PhP

(as of 31 May 2016)

Payables PhP

(as of 31 May 2016)

As shown in Table 4-14, an amount of 16.9 million PhP has still to be disbursed to the project LGUs as of June 2016. 4.3.2 Special Audit Report for CY 2011-2014 In 2015 independent auditors from COA audited the CBFMMP Statements of Expenditures, Statement of Financial Position, Statement of Financial Performance, Statement of Cash Flows, Statement of Changes in Net Assets / Equity and Notes to Financial Statements for calendar years 2011 to 2014. In the opinion of the auditors, the Statement of Expenditures of the CBFMMP loan proceeds for the period June 2011 to December 2014 present, in all material aspect, accurately the expenditures actually incurred and the amount agreed for the project, in conformity with the relevant Loan and Financing Agreement and its Separate Agreement, except for the 299,135 PhP net overstatement of expenditures due to cancelled check and error in reflecting the accurate amount of expenditures in Region VI of 412,179 PhP and understatement of expenditures in Region VII of 113,044 PhP. With regard to the observations on grant proceeds, the auditors recommended and DENR agreed that PENRO Dumaguete

Consider the amounts of overpayment and underpayment in processing the final payments to the concerned LGUs and impose refund by the LGUs, if any

Observe diligence in documenting as well as in monitoring to enable prompt review and decision making

- 41 -

Ensure that all proceeding progress payments are reviewed and evaluated such that only actual accomplishments are paid, and

Strictly adhere to the guidelines contained in the Agreement on Grant Reforestation Subsidies and the CBFMMP Project Operational Guidelines

DENR Regional Office No. VI

Require and monitor the submission of the List of Expenditures by the LGUs

Require the Accounting Office to review documents and see to it that these are proper, complete and in order

Adhere with the requirements of RA 9184 and observe the proper procedures in the procurement process to ensure that efficiency and economy in the conduct of procurement activities for future projects are achieved, and

Require personnel concerned to submit a written explanation / justification on the deficiencies noted.

In July 2016 another special audit for CY 2015 shall be carried out. 5 EVALPROJECT IMPACT AND SUSTAINABILITY 5.1 Internal Evaluation Workshop and Summary of Results During the project evaluation workshop on 19 April 2016 in Bacolod, a group of around 30 participants from DENR, the 15 partner LGUs and consultants evaluated the project success, using the five KfW criteria relevance, effectiveness, efficiency, impact and sustainability. The evaluation summary is presented in Table 5-1. The overall relevance of goal, objectives and outputs was rated 1.9, underscoring that the project really addressed important issues such as sustainable forest management and poverty reduction. Especially Output 1 (capacity building), Output 2 (forest rehabilitation) and Output 4 (value adding) were seen as very relevant. The effectiveness was rated 2.1, indicating that the objectives have mostly been achieved and match the expectations. Practically all planned infrastructure and livelihood projects have been implemented and serve the intended purpose. The project LGUs were able to establish the targeted 9,000 ha of forest rehabilitation measures, and 87.3 % passed the final monitoring after two years. The rating of 1.9 may be a bit too good for this achievement, but nevertheless the project accomplishments meet the expectations. Some participants wished the project would have been more effective in improving the livelihood of participants and raising their income. The efficiency of the project was assessed as 2.2, reflecting that the personnel and financial resources have been used in an economical way and all intended measures were carried out in the given time and with the available budget. Room for improvement was seen in the handling of financial matters, especially the disbursement of grant subsidies to the beneficiaries.

- 42 -

Table 5-1: Results of Project Evaluation Workshop

Relevance Effectiveness Efficiency Impact Sustainability Overall

Development Goal: Contribute to the sustainable

management of forests and mangroves under CBFMAs

and other community-based tenurial instruments and to

the alleviation of poverty and improvement of livelihoods

in the rural areas of the Project area in Panay and

Negros.

2,0 2,2 2,4 2,4 1,9 2,2

Purpose/Outcome: Participating LGUs, POs and

farmers in Panay and Negros managed forests and

mangroves sustainably and improve their livelihood1,9 2,3 2,2 2,2 2,0 2,1

Output 1: DENR and LBP staff, participating LGUs and

POs in Panay and Negros are capacitated in planning

for and implementing CBFM project packages including

dealing with conflicts

1,8 2,0 2,0 2,0 1,8 1,9

Output 2: Forests and mangroves are rehabilitated

through LGUs, POs and/or rural households1,7 1,9 2,1 1,9 1,8 1,9

Output 3: Livelihood projects/rural Infrastructure that

contribute to sustainable forest and mangrove

management have been introduced and implemented.

2,0 2,2 2,3 2,2 2,0 2,1

Output 4: CBFM beneficiaries supported in value-

adding and marketing of forestry and agro-forestry

products

1,8 2,2 2,4 2,4 2,1 2,2

Output 5: Project Management 2,0 2,1 2,2 2,1 1,9 2,1

Average 1,9 2,1 2,2 2,2 1,9 2,1

The impact rating of 2.2 shows that most project results match the expectations. The biggest impact was seen in the fields of capacity building and forest rehabilitation. Further details on project impact are presented in Chapter 5.2. Some LGUs did not notice much visible impact yet from forest rehabilitation and agroforestry (just finished barely one year ago). Some critical comments were made on the impact on land tenure (all applications still pending during the workshop in April 2016) and the effect on livelihood improvement (overall situation has not changed much). The sustainability was evaluated as 1.9, indicating the participants were convinced the project measures and impacts can be sustained. This is surely true for the infrastructure and livelihood components, where maintenance and cost-recovery systems are in place. During the time of the workshop the participants from LGUs and DENR were also positive for the sustainability of forest rehabilitation measures. This opinion has changed a bit in in the meantime, as further explained in Chapter 5.3. The overall internal rating of the Project is 2.1 since the achievement of all major relevant outputs/objectives is good and matches with the expectation without major deficiencies. Positive ratings were given for the overall accomplishment of infrastructure and forest rehabilitation measures and the extensive capacity building program. A few negative comments were made on lower-than-expected economic improvements, late payment of subsidies, insecure land tenure and already deteriorating roads. 5.2 Project Impacts The PMUs and the TA team put a lot of emphasis on the assessment of project impacts. The impact assessment has been based both on quantitative studies and the perception of project beneficiaries. The following studies have been carried out to evaluate the various project impacts:

Environmental impact studies - Forest cover monitoring 2010 to 2015

- 43 -

- Biodiversity impact studies on flora and fauna - Assessment of project impact on soil erosion - Assessment of project impacts on water quality and flow - Assessment of tree growth in established plantations

Socio-economic impact studies - Socio-economic baseline studies in Region VI and VII - Socio-economic impact studies in Region VI and VII - Impact assessment of livelihood measures in Negros Oriental

Training impact study

Maintenance and cost-recovery systems for infrastructure and livelihood measures 5.2.1 Environmental Impact The project impact on forest rehabilitation and protection, biodiversity, soil erosion and water flow has already been discussed in Chapter 4. Here only the highlights shall be summarized:

Successful rehabilitation of 7,860 ha of degraded forest land through multi-purpose tree plantations, enrichment planting with tree and rattan species, planting of mangroves and establishment of agroforestry systems.

Reduction of deforestation rate in project provinces by 77 % compared to the pre-project rate (jointly with other actors and projects, such as NGP and GIZ-assisted projects).

Increase of plant and fauna biodiversity by 20 % to 80 % through transforming cogon grasslands and arable upland farms into species-rich tree plantations and agroforestry systems.

Reduction of soil erosion through improved vegetative cover below 10 t/ha/yr as calculated for eight project compartments.

Improved water flow and quality through forest rehabilitation, as visually observed and reported by beneficiaries.

In addition to quantitative environmental impact studies, also the perceived environmental impacts have been assessed in interviews with project beneficiaries within the frame of the socio-economic impact studies. The feed-back from interviews in Region VI and VII is as follows: Reported positive environmental impacts

Restoration of forest cover

Improvement of micro-climate, such as cooler temperatures in summer and fresh air

Reduced soil erosion and land slides

Protection against strong winds and typhoons

Improved water flow and quality, more and clearer water from springs

Rehabilitation of mangrove areas contributed to the increase the fish and other aquatic resources production

Restoration of forest vegetation was able to increase forage production for livestock

Improvement of forest vegetation increased the wildlife population

- 44 -

Negative environmental observations:

Reduction of available area for grazing through reforestation

Not much improvement noted

Still water shortage in summer

Still land slides Another important environmental impact of the project is the sequestration of carbon dioxide through reforestation and agroforestry measures. As the calculation in Table 5- 2 shows, the successful rehabilitation of 7,860 ha degraded forest land sequesters almost 47,800 tons of CO2 per year. This corresponds to the amount of CO2 released by 10,000 off-road vehicles in one year. The release of a similar amount of green house gases may have been avoided through forest protection measures, but cannot be quantified. Table 5-2: Calculation of Project Carbon Fixation

Project measure Area (ha) 1) Wood in-

crement per ha

and year (m3)

Total woood

increment/yr

(m3)

Conversion

factor to

biomass

Annual

biomass

increment (t)

Equivalent

carbon fixation

(factor 0.5)

Conversion

factor to CO2

Annual CO2

fixation (t)

Reforestation 1.933 8,0 15.464 0,57 8.814 4.407 3,67 16.175

ANR/enrichment 1.887 8,0 15.096 0,57 8.605 4.302 3,67 15.790

Rattan enrichmt. 1.094 5,0 5.470 0,57 3.118 1.559 3,67 5.721

Agroforestry 2.829 3,0 8.487 0,57 4.838 2.419 3,67 8.877

Mangroves 2)

117 10,0 1.170 0,57 667 333 3,67 1.224

Total 7.860 45.687 26.042 13.021 47.7861)

accepted by the final M&E2)

including carbon storage in root system The annual biomass increment figures for ANR/enrichment and rattan enrichment include also the increment of the protected natural regeneration.

5.2.2 Socio-economic Impact The project was supposed to achieve the following socio-economic impacts: (1) Significantly improve the social and economic development indicators (livelihood

conditions) in the region (2) Increase of annual household income from forest land (3) Temporarily increase household income through grant subsidies (4) Increase of annual household income through livelihood measures (5) Uplift living conditions through provision of drinking water and access to markets (6) Improve living conditions through value-adding and better marketing (7) Secure land use rights for rehabilitated areas To (1) Improved livelihood conditions The average household income in the project municipalities has increased from 64,787 PhP in 2011 by 12,735 PhP or 20 % to 77,522 PhP in 2015. Since the average household size decreased by 4 %, the per capita income increased by 27 %, close to the targeted 30 %. The income from forest land has increased by 26 %, the income from private land remained more or less the same, the income from livestock in creased by 130 %, and the cash revenues from other sources declined by 9 %. Figure 5-1 illustrates these figures, Annex 2 provides additional details.

- 45 -

Figure 5-1: Household Income in the Project Municipalities 2011 - 2015

Income from forest landIncome from private land/A&DIncome from livestock productionFrom other sourcesTotal annual average income per HH

2011 16.996 8.651 8.862 30.278 64.787

2015 21.365 8.276 20.413 27.468 77.522

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

90.000

Income from forest land Income from privateland/A&D

Income from livestockproduction

From other sources Total annual averageincome per HH

Household Income 2011 - 2015

2011 2015

Other parameters to assess the improvement of livelihood conditions are the kind of housing materials and household assets, as already presented in Chapter 4.2.2 Outcome Indicators. Between 2011 and 2015 a significant improvement of both building materials and household assets has been observed. To (2) Income from forest land Although the overall income from forest land has increased by 26 %, the additional revenues came mainly from traditional agricultural crops like sugar cane (+ 4%), corn (+ 40 %), rice (+ 57 %) and vegetables (+ 49 %). Especially in Panay large parts of forest land have been converted into arable farms (see report on forest cover change, Digital Annex 4.4). The income from agroforestry increased only by 3 % and the income from forest products even declined by 17 %, see Figure 5- 2. These figures illustrate that farmers are still expanding corn and rice cropping on forest land, because it provides a fast and sure income. The improved income from agroforestry crops was not yet obvious in 2015, but is expected to significantly increase within the coming years. Due to the absence of land use rights, no timber harvesting permits and the closure of wood processing plants (e .g. the plywood plant in Dumarao) the already small income from forest products declined even further. From the sale of plantation timber a really significant and sustainable income can be expected, however. A survey within the 1,933 ha of successfully established timber plantations has confirmed the assumption of an annual wood increment of at least 7 m3/ha/yr. According to the FMB Forestry Statistics for 2013 (latest national statistics) the price for sawlogs averaged around 7,400 PhP/m3. Even assuming only 50 % of this value this corresponds to a gross value increment of 25,900 PhP/ha/yr and would mean an increase of the family income for a 1 ha woodlot in the range of 38 % - provided the farmer or PO can get a resource use permit from DENR. For the whole project timber plantations (without enrichment and rattan) this corresponds to 50 million PhP per year. A similar economic impact is expected from the 2,829 ha of agroforestry plantations. A mixed plantation of coffee or cacao with fruit trees or bananas yields a gross income of about 60,000 PhP. Again only assuming only 50 % of this revenue equal to 30,000 PhP per ha will increase the annual income of the 2,200 beneficiary households by 45 %. Although most crops are not in the productive stage yet, the first farmers enjoy already an income of several thousand Peso from the sale of bananas and cacao.

- 46 -

Figure 5-2: Household Income from Forest Land 2011 - 2015

0

5.000

10.000

15.000

20.000

25.000

Sugarcane Corn Rice Vegetables Agroforestry Forestry Total forest land

Income from Forest Land 2011 - 2015

2011 2015

To (3) Temporary income from grant subsidies The grant subsidies for forest rehabilitation were supposed to temporarily compensate the foregone income from other activities, while establishing the forestry and agroforestry plantations. According to M&E results a total of around 52 million PhP shall be paid as labor subsidies to the participating farmers. The LGUs distributed the subsidies to almost 6,500 beneficiaries (in many cases laborers). The average grant subsidy amounts to around 8,000 PhP per participant. Since 16.9 million PhP have not been released yet, the actual subsidy was only ca. 6,000 PhP on the average. Distributed over three years of planting, maintenance and monitoring, the annual subsidy of 2,000 PhP corresponds to 3 % of the average household income in 2011. Many beneficiaries stated, therefore, that they did not feel much economic improvement. To (4) Income from livelihood measures As already reported in Chapter 4, the introduced livelihood measures had a very positive economic impact on 1,044 beneficiary households. Their average annual income has been increased by 2,630 PhP from tilapia farming and almost 50,000 PhP from irrigated rice on a sustainable basis. This corresponds to an increase of 4.1 % (tilapia) resp. 77.2 % (rice) from the average household income in Bayawan in 2011. To (5) Uplifting living conditions A big socio-economic impact of the project was the provision of piped drinking water to around 2,500 households. They can now avail of year-round safe drinking water. Another socio-economic impact in the uplands was the improvement of farm-to-market roads. The fact that now public-transport motorbikes (habal-habal) and even jeepneys can reach the upland barangays has reduced travel time between 10 minutes and 30 minutes, improved the marketing opportunities and the access to health facilities. To (6) Value-adding Besides the provision of forestry and agroforestry seedlings the farmers also need support in marketing and value-adding of their crop. One approach to create added value to POs with harvestable timber plantations was the construction of a mini-sawmill by the LGU Bindoy. Instead of just receiving 5 PhP per boardfoot as stumpage value the PO and LGU would have tripled their revenue from converting logs into lumber. The LGU still hopes to receive the sawmill permit in 2016 and the PO a tree harvesting permit, to demonstrate he potential of value-adding through lumber production.

- 47 -

A big challenge for farmers is to process and sell their agroforestry produce. The project facilitated public-private partnerships with three companies in the coffee, cacao and abaca sector. The farmers received training in plantation management, post-harvest treatment and obtained marketing guarantees for their produce. The first plantations have just started to produce and not much additional value has been created yet, but the foundation has been prepared for a significantly higher income from agroforestry products in future. To (7) Land use rights. At the start of the project, 1,758 ha out of the planted 8,684 ha (20.2 %) were covered with land use rights. From 2013 to 2016 the project assisted 18 POs to obtain communal land use rights (CBFMA). As of June 2016, additional CBFMAs for 3,166 ha of project sites have been approved, another 1,186 ha are pending and hopefully be awarded in 2016. So the project was able to facilitate secure tenure for additional 18 POs with together 4,352 ha or 50 % of the rehabilitated sites. During the socio-economic survey in Region VII the beneficiaries have been asked “How do you rate the improvement of your economic condition during the first five years of CBFMMP implementation?” From the respondents 20 % answered “very good”, 50 % “good”, 24 % “fair” and 4 % “poor”. The reasons for a positive assessment included:

Project provided employment, income and food (51 %),

Measures protect and improve environment and farms (15 %)

Technical and financial support (7 %) Reasons for negative assessment were:

Low production, just enough for household needs (13 %)

No project effects yet (7 %)

Plantation destroyed by fire or typhoon (3 %)

Discouraging paper work for tree harvesting permit (1 %) On the question on food production and food security 68 % of farmers answered they felt an improvement of farm production and livelihood through project measures. 14 % stated they have received technical and financial support, but it is still too early to judge. 9 % did not see much improvement, 5.2.3 Organizational Impact, Knowledge Management and Upscaling Capacity building. The project conducted a very extensive capacity enhancement and training program for DENR and LGU partners, for POs and key farmers. In 260 events, a total of 7,000 persons have been trained in project procedures, project management, IEC, conflict mitigation, FLUP preparation, landuse mapping, reforestation, forest resource management, PO orientation on CBFMA and CRMF, livelihood measures, value-chains, coffee/cacao growing and financial management. All 15 partner LGUs have now an operational Municipal Environment and Natural Resources Management Office (MENRO, some with assigned staff), a forest landuse plan (FLUP) and a Co-management Agreement resp. Partnership Agreement with DENR. This is the basis for sustainable management of natural resources by the LGU in partnership with DENR. Practically all DENR staff benefitting from the capacity enhancement are still with DENR, often in higher positions and apply their knowledge. 18 POs have been strengthened and enabled to obtain tenure rights. The organizational impact of the project can thus be

- 48 -

rated as good and sustainable. Of special importance is the enhanced cooperation between DENR and LGUs, which grew and developed in seven years of project implementation. Knowledge management and up-scaling. The project has produced numerous studies, reports and has documented lessons learned and innovative approaches. Some of them have been included in the GIZ/KfW-DENR knowledge product “MOREFORESTS”, which is included in Digital Annex 1 of this report. In addition the CBFMMP has elaborated the following documents and knowledge products in Table 5-3. Table 5-3: CBFMMP Project Documents and Knowledge Products

Title Content

Project natural resources management (NRM) guidelines

NRM model description and subsidy payment schedule

Technical details on tree plantation, ANR/enrichment, rattan, mangrove and agroforestry model, M&E criteria, subsidy installments

CBFMMP reforestation monitoring guidelines

Describes the step-by-step procedure in the conduct of field project monitoring and the conduct of area and quality checks

Technical guidelines on forest rehabilitation and management

This guideline describes the different models, objectives, processes to follow, and silvicultural practices to ensure success in implementing forest rehabilitation and agroforestry systems

Underplanting of Acacia mangium stands with indigenous species

Explains the approach of pioneer forest on degraded cogon sites and the enrichment with prime species as soon as the site conditions have improved

FLUP and GIS

Project guidelines for forest land use planning (FLUP)

Field guide for LGUs and FLUP support staff on how to prepare a forest land use plan

FLUP Valderrama Example of comprehensive FLUP including risk and hazard mapping and adaptation to climate change

GIS and forest data banking design

Findings and recommendations to improve the GIS and databank for forest land use planning and reforestation projects in DENR Region VI and VII

Project impact assessments

Socio-economic impact study in Region VI

Comparison of social and economic characteristics of the targeted beneficiaries in Panay and Negros Occidental in 2011 and 2015, assessment of project impacts

Socio- economic impact study in Region VII

Comparison of social and economic characteristics of the targeted beneficiaries in Negros Oriental in 2011 and 2015, assessment of project impacts

Training impact assessment Analysis of capacity building measures from 2009 to 2013, how many trainees apply knowledge, how many are still in position, which trainings had high impact

Forest area comparison 2003-2010-2015

Forest cover monitoring in the six project provinces and 15 municipalities from 2003 to 2010 and 2010 to 2015

Project impact on plant biodiversity

Study of tree and other plant biodiversity in eight project sites and two near-by untreated sites, evaluation of tree biodiversity before and after planting, assessment of biodiversity improvement through reforestation of barren sites and transformation of upland arable farming into agroforestry

CBFMMP faunal biodiversity assessment

Presents the faunal survey results in eight project sites and two near-by untreated sites, focusing on birds, mammals and reptiles

- 49 -

Quantification of erosion in reforestation sites

Calculation of erosion values based on the “Water Erosion Prediction Project Model Calculator (WEPP)” developed by the USDA-ARS National Soil Erosion Research Lab, W. Lafayette, IN

Other project reports

Study on maintenance and cost recovery of project-supported rural Infrastructure

The purpose of this study was to assess the sustaina-bility of infrastructure and livelihood measures, espe-cially if regular funds for maintenance are assured and – where applicable- if a cost recovery system is in place.

CBFMMP phasing out / sustainability plan

Presents the agreed activities to complete all project activities as planned, to integrate the project measures into DENR national programs and LGU budget, activities to ensure protection and maintenance of established plantations

All documents are included in the separate digital annex to this report. Upscaling of proven project approaches. Several successful project measures and innovations have already been introduced and accepted in other regions, projects and programs:

The CBFMMP introduced a strict area monitoring and quality control system in reforestation projects as condition for subsidy payment, using the compartment (management unit with one specific reforestation model planted at the same time) as basis for monitoring and payment. This approach has been discussed with the FMB management and has been considered in designing the M&E system for the National Greening Program (NGP).

The CBFMMP has used GPS mapping of reforested sites since 2010 as standard procedure for area monitoring. The DENR has adopted and perfected this system shortly afterwards in the NGP.

On degraded cogon grass sites the reforestation with fast growing (often exotic) pioneer species is the most successful method for forest restoration. This approach leads at least initially to monocultures, however. In Negros Oriental the project has demonstrated the enrichment of exotic monoculture pioneer forest with prime indigenous species on 100 ha. Convinced by the successful under-planting with dipterocarp species the DENR PENRO in Negros Oriental adopted the same approach on 600 ha under the NGP.

The monitoring of forest cover changes in the Philippines is often difficult – as in any tropical country – because recent cloud-free satellite images are not always available. As a practical and low-cost way out, the project has over-laid a 1 km x 1 km UTM coordinate grid on the NAMRIA land cover map from 2010 and identified all grid points falling on open forest, closed forest and mangroves. The same coordinate points have then be transferred onto Google Earth images mainly from 2015 and were re-interpreted. The comparison of classification results in 2010 and 2015 allows the statistical calculation of forest cover changes. The approach has been tested and described in the forest cover monitoring report in Digital Annex 4.4. Encouraged by the positive results, also the ForClim II project in Panay and the REDD+ pilot projects in Albay, Eastern Samar and Davao Oriental are currently using this approach for forest cover monitoring. Figure 5-3 gives a short illustration of the method.

- 50 -

Figure 5-3: Use of Google Earth Images for Forest Monitoring

Classification of 1 km x 1 km dot grid on the NAMRIA land cover map from 2010

Transfer and re-interpretation of forest points on Google Earth images from (mostly) 2015

6 SUSTAINABILITY AND REQUIRED FOLLOW-UP ACTION Plans and strategies for the sustainability of project measures and results must be formulated at the earliest time possible. Therefore even before the actual start of project investment measures, the following precautions were taken to ensure sustainability and a smooth phasing-out of project measures:

Establishment and capacity building of Municipal Environment and Natural Resource Officers (MENROs) in-charge of long-term management of natural resources.

Preparation of Forest Land Use Plans (FLUPs) for each partner LGU, jointly agreeing on the preferred land use, settling encountered conflicts and issuing implementing ordinances.

Conclusion of Co-management Agreements and Partnership Agreements between DENR and LGUs, forging a joint management of forest resources.

Assistance to partner POs to obtain security of tenure / Community Based Forest Management Agreements.

In April 2016 a workshop was held with the PMUs, DENR representatives from Central, Regional and PENRO Offices, partner LGUs and TA to agree on measures to ensure project sustainability. The maintenance and sustainable operation of infrastructure and livelihood measures is guaranteed by providing an annual budget by the LGUs (for roads

- 51 -

and road equipment) resp. applying a cost-recovery system for drinking water, aquaculture and market stalls. The more difficult issue is the further protection, mainte-nance and management of reforestations, enrichment plantings and agroforestry systems after phasing out of project support. The workshop participants agreed on the following measures to ensure sustainability of NRM projects (adjusted to the situation in June 2016): Follow-up security of tenure For the sustainable management of forest resources the security of tenure is indispensable. With project assistance, a total of 8,683 ha of forest rehabilitation and agroforestry measures have been established (accepted by first M&E). For an area of 4,924 ha (56.7 %) the POs and farmers have obtained land use rights. The applications of seven other POs for CBFMAs are still pending (two in Region VI for 113 ha, five in Negros Oriental for 1,073 ha of project plantations). The concerned DENR staff and respective MENROs are requested to follow-up the final approval by DENR Central Office. Upon signing of the five applications in Negros Oriental, all project sites in this province are under tenure. In Region VI an area of 2,574 ha of project plantations will remain open access, without tenure. Presently 13 more POs in Region VI and VII are preparing their CBFMA applications. To ensure the sustainable management of all project sites, these applications shall be strongly supported. Facilitate the legal utilization and marketing of forest products The sustainable management and utilization of forest resources includes the legalized harvesting of timber and non-timber forest products. Farmers will only be motivated to protect and maintain their forest plantations when they have legal access to the products. Therefore the sustainability workshop has recommended to facilitate the approval of resource use permits / CRMF and sawmill permit as incentive to manage and protect the forests. By end of 2016, at least the CRMF/RUP application of the PO NUFA in Bindoy/Negros Oriental and the mini-sawmill permit for the LGU Bindoy shall be approved. The PMU Dumaguete will follow-up the additional requirements from FMB. Continue extension service and support to farmers As a built-in provision to ensure the continued extension service to partner LGUs, POs and farmers, the DENR entered into Co-Management Agreements resp. Partnership Agreements with project LGUs. These agreements shall be the basis for the joint management of forest resources, including the maintenance of CBFMMP plantations. A very important measure for sustained extension support to forest farmers is the continued operation of MENROs with sufficient staff and annual budget. The LGUs shall include the required budget in their annual investment plans. It is expected that the LGUs will provide a regular budget to continue the extension service to farmers and to support urgently needed protection measures, e.g. against forest fires. In Region VI, for plantation protection, maintenance and coordination of DENR and LGU support, a MoU template has been prepared. The MoU shall regulate the respective commitments of LGUs and DENR re. protection and maintenance of NRM plantations, security of tenure, MENRO offices and budget allocations. In Region VII, the continuing support shall be provided under the existing Co-Management Agreements. Further risks and mitigating measures During the remaining phasing-out period of the project (until December 2016) the major risks for project sustainability shall be addressed and mitigating measures initiated. The risks to the long-term sustainability of ecological and socio-economic benefits include:

- 52 -

Risk Mitigating Measures Status

Large project areas remain open access, without land use rights

Issuance of long-term land use rights (CBFMAs) to participating POs (seven applications pending, 13 new ones prepared)

POs being sup-ported to obtain CBFMAs

Insufficient extension support to beneficiaries

Integration into DENR regular programs, continuation and LGU funding of MENRO operation, PPPs for selected agroforestry crops

MoU drafted for DENR and LGUs cooperation, PPP concluded

Fire, pests and diseases threaten young plantations

Mobilize forest guards, maintain fire breaks, IEC to animal husbandry farmers

Ongoing, with assistance from ForClim project 1)

Poor management of established plantations

Distribute extension materials, conduct training, continue extension by DENR and LGUs

Ongoing, with assistance from ForClim project 1)

Farmers get increasingly frustrated because of delayed subsidy payments

Download remaining grant funds as soon as possible and pay LGUs and farmers

Disbursement request submitted

1) in 3 LGUs around the Panay Mountain Range

7 LESSONS LEARNED AND RECOMMENDATIONS In this chapter an evaluation of the different project components shall be presented: what worked well, what not? What are the main reasons for success or failure? On the basis of this analysis, what are the main lessons learnt? What kind of (conceptual) changes would we plan if we had to design a new project of similar nature? 7.1 What Worked Well, and Why? Generally all stakeholders gave a positive evaluation of the project, as expressed in workshops, surveys and studies. The most successful components and measures included:

Extensive training and capacity building program, knowledge transfer and technical innovations, international study tour, training in conflict mitigation

Large-scale effective forest rehabilitation, erosion control, regulation of water flow, improvement of environment and biodiversity

Improvement of drinking water supply and livelihood schemes such as water impounding for irrigation, aquaculture and village market. An important environmental effect of these water-related measures was the motivation of LGUs and farmers to protect and rehabilitate the watersheds!

Introduction of agroforestry systems with high-value crops like coffee, cacao, abaca and bananas, partnering with private companies to provide seedlings, training and marketing guarantees.

The main reasons for positive project results were:

Close cooperation between DENR and LGUs, frequent meetings and visits, joint project implementation, creation of MENRO office in each LGU, assignment of DENR site coordinators to the LGUs

Professional loan management by LBP

- 53 -

Detailed project operational guidelines, NRM model technical descriptions, M&E standards and guidelines.

Strict monitoring of reforestation success as basis for payment.

Regular meetings of the Regional Project Committee and the National Steering Committee.

Close monitoring and steering by FASPS, regular visits of FASPS project officers and KfW representatives.

7.2 Approaches and Measures with Mixed Success Some project approaches and components had both positive and negative effects on the project impact. Two of them shall be further discussed. Combination of grant and loan funds. A controversial issue – at least in the beginning of the project – was the condition that only LGUs shall get access to grant funds for forest rehabilitation, which also take a loan for infrastructure and livelihood improvement. Many poor upland LGUs were in need to rehabilitate their degraded forest land, especially around the Panay mountain range. But they did not have the capacity to access a loan of 10 – 15 million PhP at commercial terms. At the start of the project in 2008/2009 it was not sure, if enough LGUs can be found to avail of the offered 2.415 million EUR loan funds (at that time around 157 million PhP). So often LGUs have been included in the project because they agreed to take a loan from LBP and not because they had large forest areas in need of rehabilitation. The project impact on forest rehabilitation and protection could have been greater if the partner LGUs would have been selected according to size of area to be rehabilitated and commitment to support NRM. On the other hand the combination of loan and grant funds had also positive effects. LGUs which availed of loans for drinking water systems, irrigation and aquaculture had a strong interest to protect and rehabilitate the forest as their watersheds. And farmers engaged in agroforestry and forest rehabilitation appreciated very much that the roads have been improved. Loans for road equipment and road concreting. Around 61 % of all loan funds were used to buy road equipment like trucks, graders, excavators, payloaders etc. or to concrete parts of the road. This was the most attractive component for many LGUs and the reason they participated in the project. In many cases these measures really improved the access to markets, schools, hospitals etc. for the rural population. Often the road improvement focused only on earth movements and grading, without the proper road profiling, coating and drainage. So after a short while many roads started to deteriorate again. Already during the feasibility study technical designs for road improvement have been prepared, and were given to the LGUs. Many LGUs, however, continued with their traditional road work. 7.3 What did not Work as Expected, and Why? Land use rights. The initial assumption of the project was to support POs and farmers with land use rights in improving and sustainably managing their forest resources, and to enhance their income from sustainable utilization of forest products. Unfortunately at the start of the project only 20 % of the project sites were tenured. The initial understanding was that each LGU can enter into a Co-management Agreement (CMA)

- 54 -

with DENR, based on the FLUP, as stipulated in the JMC 2003-01 between DENR and DILG. This CMA was seen by several DENR Regional Offices - including Region VII – as a form of tenure and basis to enter into sub-agreements with farmers. In 2011 the DENR discontinued to enter into CMAs and did not consider them as tenure (as many LGUs and farmers have expected before). The project started to support POs in obtaining communal tenure rights (CBFMA) but it took until May 2016 before the first CBFMAs have been approved. So the rehabilitation measures have basically been implemented by paid workers on open-access land, with little ownership feelings. Since the subsidy payments came often very late (16.9 million PhP are still unpaid by June 2016), the maintenance and protection of the plantations did not always meet the expectations. The project hopes that after most areas are tenured and the remaining subsidies are paid the POs will take care of the plantations. Sustainable income generation from plantation timber. Another expectation was that the beneficiaries can obtain an improved income from sustainable plantation timber harvesting. Several thousand ha of mature timber plantations in Panay and Negros are harvestable and can substantially increase the income of the farmers, who have planted them years ago. This would also motivate the project beneficiaries to care for their plantations, to protect and maintain them. In 2013 the LGU Bindoy constructed a mini-sawmill to provide a marketing outlet for the local POs and to demonstrate the value-adding through lumber production. With GIZ support environmentally friendly harvesting tools have been donated to the LGU and the PO was trained in sustainable harvesting of plantation wood. The site was supposed to become the demonstration area and showcase for the whole Visayas. Unfortunately the attempts of the PO to obtain a resource use permit and the application of the LGU for a sawmill permit were not successful, because of very restrictive requirements from the DENR Central Office. A great chance was lost to showcase and introduce sustainable plantation timber harvesting. 7.4 Conclusions and Recommendations The main lessons learned from the CBFMMP and recommendations for similar projects and activities in future can be summarized as follows:

The joint project implementation by DENR and LGUs has proven to be very successful. It requires both the technical expertise and oversight of DENR and the commitment and resources of the LGUs to manage and protect the forest resources. The concept of co-management and partnership between these two government organizations/units should be maintained and further strengthened in future.

Infrastructure measures and livelihood projects using water as important resource (drinking and irrigation water, aquaculture) have a very positive effect on watershed protection and forest rehabilitation. Future grant and loan projects may focus on the combination of forest protection/rehabilitation and water-based infrastructure and livelihood.

Clear and comprehensive project guidelines have helped to implement all measures smoothly, effective and efficient. Of great importance were the detailed technical guidelines for forest rehabilitation models, monitoring and payment criteria, monitoring guidelines, and a strict quantitative and qualitative monitoring of reforestation success.

A participatory forest land use planning before the actual start of planting activities has helped to identify and solve boundary conflicts between LGUs, mitigate land use conflicts within the LGU (e.g. grazing land vs. reforestation) and with other

- 55 -

stakeholders (e.g. mining claims). Of special importance was the coordination with other projects (especially the NGP) in selection of reforestation areas and avoiding overlaps. It is recommended to continue the entering of all intended and actual project sites in a forest GIS and to maintain this on DENR PENRO and regional level.

On degraded cogon grass sites the reforestation with fast-growing (even exotic) tree species has proven to be the most successful way to restore forest cover. After the pioneer trees have suppressed the cogon, reduced the fire risk and improved the soil and microclimate, the pioneer forest can be enriched with the desired final species incl. prime indigenous trees. The enrichment of pioneer monocultures with indigenous trees incl. dipterocarps may be a worth-while component of the NGP, especially when less areas for new reforestations are available.

The provision of agroforestry seedlings and planting subsidies is not enough to ensure the long-term management of these plantations and the uplifting of livelihood conditions. The farmers have to be capacitated to process, add value and market their produce. The partnership with reputable private firms in the respective sectors has proven to improve training, plantation management, post-harvest treatment and marketing opportunities for the farmers.

Although not directly supported by the project, livestock raising has contributed substantially to the household income (increase by 130 % from 2011). This is an indication that farmers are convinced and invest their own resources. In future projects it is suggested to consider a livestock component to improve the livelihood of farmer beneficiaries (already included in ForClim Phase II).

It leads to frustration and even sabotage among the beneficiaries when the agreed and promised subsidy payments come too late or not at all. The remaining 16.9 million PhP of labor subsidies should be downloaded as soon as possible, to contain the disappointment and frustration among LGUs and farmers. In future projects more emphasis should be given to the timely disbursement, liquidation and replenishment of grant subsidies.

Land use rights and harvesting permits for tree plantations are the basic requirements for sustainable reforestation and plantation management. The DENR Central Office is kindly asked to review the present centralized and very restrictive approach to issuing land use rights and utilization permits and (re)introduce a regionalized, more supportive system