Philippines: Agrarian Reform Communities Project II

Sovereign Project | 37749-013 Status: Active


The Project will support the Government's Medium Term Philippine Development Plan (MTPDP) 2004-2010. It will pursue a holistic approach to poverty reduction by promoting an agribusiness approach to rural development. It will assist the implementation of the Comprehensive Agrarian Reform Program (CARP) by addressing the most pressing requirements for support in 152 agrarian reform communities (ARCs) and ARC Clusters in 19 provinces in southern Philippines.

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Procurement Documents

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Project Name Agrarian Reform Communities Project II
Project Number 37749-013
Country Philippines
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2465-PHI: Agrarian Reform Communities Project II
Ordinary capital resources US$ 70.00 million
Loan 8238-PHI: Agrarian Reform Communities Project II
OPEC Fund for International Development US$ 30.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Partnerships
Sector / Subsector

Agriculture, natural resources and rural development - Agricultural production - Irrigation - Rural flood protection - Rural market infrastructure - Rural water policy, institutional and capacity development - Rural water supply services

Gender Equity and Mainstreaming Some gender elements

The Project will support the Government's Medium Term Philippine Development Plan (MTPDP) 2004-2010. It will pursue a holistic approach to poverty reduction by promoting an agribusiness approach to rural development. It will assist the implementation of the Comprehensive Agrarian Reform Program (CARP) by addressing the most pressing requirements for support in 152 agrarian reform communities (ARCs) and ARC Clusters in 19 provinces in southern Philippines.

The long-term impact of the Project is to enable ARB households and other sections of the rural poor in approximately 152 selected ARCs and ARC Clusters (ARC Clusters will include target ARCs and ARBs and other farmers in adjacent areas) in 19 provinces (the provinces to be covered include Romblon, Marinduque, Camarines Norte, Camarines Sur, Sorsogon, Negros Oriental, Leyte, Eastern Samar, Northern Samar, Western Samar, Zamboanga del Norte, Zamboanga del Sur, Zamboanga Sibugay, Shariff Kabunsuan, Maguindanao, Lanao Del Sur, Tawi Tawi, Basilan, and Sulu) to reduce their poverty, and have sustained improvements in their incomes and quality of life.

In order to achieve these impacts, the Project is expected to bring about long lasting improvements in the capabilities and well being of poor and marginalized groups in the target communities. In order to achieve the above outcomes of poverty reduction and sustainable livelihoods, the Project will support the following outputs: (i) strong participation of local communities in the development process by the (a) enhancement of social capital among target communities through the use of a CDD approach, (b) detailed participatory ARC planning based on participation by the rural poor, as well as (c) improved capacity of ARC organizations and LGUs, for better governance and convergence in the provision of support services to target communities; (ii) agri enterprise development (AED)including (a) transfer of technology, (b) greater entrepreneurship among ARC organizations, (c) linkages between the private sector and corporate entities and ARC organizations, for increased investments into rural areas for growth, (d) wider prevalence of community based savings and lending groups for setting up sustainable micro-finance services among communities, (e) Land Tenure Improvement to improve security of land titles, enable investments into productivity enhancements, (iii) improved access to rural infrastructure, designed to provide a boost to improved production and productivity, and crop intensification; and (iv) improved project management.

Project Rationale and Linkage to Country/Regional Strategy

Most of the rural poor in the Philippines are landless and land-poor households inhabiting rural areas in southern Luzon, Mindanao, and the Visayas. Their lack of equitable access to the means of production, including land, capital, irrigation, technology, information, employment opportunities, and markets, leads to deep poverty and low living standards. The Government's response to the widespread rural distress and unrest in the 1980s has been the CARP. CARP aims to acquire and redistribute all public and disposable alienable land suited to agriculture, as well as private agricultural lands above certain limits, irrespective of crops grown, to eligible ARBs. CARP includes support services to be provided to ARBs with a view to reducing their poverty and improving the sustainability of their landholdings. ADB has supported the implementation of CARP through its Agrarian Reform Communities Project (ARCP).

Under the ARCP, ADB assisted the development coverage of 165 ARCs in 35 provinces. The ARCP has been successful in achieving most of its targets with high rates of utilization of project financing. Targets for most of the components have been exceeded, especially for rural infrastructure, which has had far-reaching effects on the access of target ARCs to processing facilities and bigger markets. Technology transfer for improving productivity and rural enterprise development has shown results in terms of sustainable increases in incomes for ARBs and other farmers. The ARCP has demonstrated the need for ensuring regular budgetary releases for project implementation. It has also brought home to both ADB and the Government the need for mainstreaming project management and for ensuring high standards of governance and fiduciary responsibility all around.

Building on lessons learned from the ARCP, as well as the lessons emerging from the impact assessments done for CARP (in 2003 and 2007) and other externally assisted projects, and in support of the priorities of the Government, the ARCP II will cover about 152 ARCs and 11 ARC clusters (target ARCs and ARBs and other farmers in adjacent areas) in 19 provinces. It will provide targeted support in precisely those areas where it is necessary to bring about fundamental change to enable the transformation of CARP lands into agribusiness lands. It will thus contribute to pro-poor economic growth and lead to equitable sharing of the benefits of growth across regions and rural poor communities

Impact Agrarian reform beneficiaries (ARBs) and non ARBs in approximately 152 Agrarian Reform Communities (ARCs) and 11 ARC Clusters have reduced poverty and have sustained improvements in incomes and quality of life.

Project Outcome

Description of Outcome Well-being of poor and marginalized groups in the target communities improved.
Progress Toward Outcome The EA advised that the Government will submit to ADB a request for loan closing extension.
Implementation Progress
Description of Project Outputs

Output 1: CDD approach used by ARCs

Output 2: Agricultural productivity and incomes improved.

Output 3: Access to irrigation and markets improved.

Output 4: Project implementation and management.

Status of Implementation Progress (Outputs, Activities, and Issues)

214 agrarian reform clusters (ARCs) were mobilized

458 self-help groups (SHGs) and people's organizations (POs) were formed; 152 agrarian reform cluster working groups (ARCWGs) and rural infrastructure teams formed and organized.

437 trainings and development plans were implemented.

155 agrarian reflorm cluster development plans (ARCDPs) were formulated through E-PAP

445 trainings conducted for LGUs and DAR; 152 functional community-based M&E installed

152 ARCDPs mainstreamed in AIP and Medium-term Development Plans for LGUs

437 training and development plans implemented; 148 function al organizations engaged in sustainable agri-enterprise

96 techno farms established for various crops; 155 technical training on natural farming systems conducted

96 techno farms established for various crops; 33 technical training on agro-forestry conducted; 19 technical training on plantation development conducted

96 techno farms established for various crops;

96 techno farms established for various crops;

36 technical training on fishery and livestock conducted

77 technical training on high value crop conducted; 4,005 farmers engaged in diversified natural farming. Besides the marketing agreeement between S.C. Global Corporation and ARBOs in region VIII for banans and coconuts, a cacao production and purchase agreement was forged between Kennemer Foods International and MIFAMCO in Midsalip for cacao production. A total of 5,607 ha. targetd for cacao production in region IX.

For high-value vegetable producing ARCs in Romblon, initial link with the Boracay Chamber of Commerce (BCCI) was conducted and waiting for the production. Additional link with the Association of Resort Owners in Puerto Galera will be initiated for Oriental Mindoro.

9,622.22 ha of ongoing surveys; 8,510,59 ha of approved survey plans; 2,341 ha of ongoing procurement. As of 30 June 2014, a total of 1,828 ha had been distributed with individual titles benefiting 1,220 ARBs

14 microfinance institutions assisted for micro-agri loan products in the ARCs.

The Agri-enterprise Credit and Agri-finance Service (Agri-CASH) accomplished a total of 8,717 ARB and non-ARB borrowers to enable access to credit. Another window for credit initiated by DAR was ghte Agrarian Production Credit Program (APCP), wherein about P8.9 million was accessed by the ARBOs in the ARCP II areas. Initial talk with the Development Bank of the Philippines (DBP) for rubber producers in Zamboanga Sibugay, particularly for the smallholders' credit access

As of 31 March 2015, the Project has approved 596 subprojects, of which 46 were delisted/withdrawn. Total number of subprojects is 550, of which 296 are rural access infrastructure with a total length of 1,064 km.

There are 23 communal irrigation facilities with a total service area of 6,828 ha and 18 units of level II potable water sytem.

There are 30 post-harvest facilities covering 51 units and 175 social infrastructure subprojects, covering 243 units.

Being assessed.

Established project offices.

Established local project offices and the subproject approval committees, both regional and national.

Ongoing procurement.

The Special Management Team for ARMM contract has been signed on 29 June 2011; ongoing procurement for NGO contracting services, land tenure improvement survey services.

Geographical Location Eighteen (18) provinces in Southern Philippines

Safeguard Categories

Environment B
Involuntary Resettlement B
Indigenous Peoples A

Summary of Environmental and Social Aspects

Environmental Aspects

132 ESS compliance certificates were issued to 132 subprojects as a requirement for the first trance of loan proceeds.

ADB conducted a safeguards review mission in February 2016 to check on potential deficits of the environmental and social safeguards (ESS) and monitoring system. An action plan was developed on how to ensure safeguards compliance with the remaining timeframe of the project, and to improve monitoring and quality of reporting in preparation for project completion.

Involuntary Resettlement The following are being maintained by the local government units : (i) inventory of project-affected persons (PAPs), (ii) short resettlement plans, (iii) summary of affected assets, and (iv) legal documents executed by the PAPs.
Indigenous Peoples Project areas with indigenous peoples are in Palawan and Basilan.
Stakeholder Communication, Participation, and Consultation
During Project Design Target area selection was based on both poverty and identifiable economic potential-based criteria. At the provincial level, the lesson of ARCP to keep the geographical spread manageable was kept in mind. Poverty assessments showed that three quarters of the poor are in the Mindanao and the Visayan regions. Targeting these regions is essential to address resource inequalities as well as provision of necessary infrastructure and support services for the rural poor. As agreed by DAR and ADB and in consultation with the DAR regional and provincial officials, the selection of the eligible provinces was based on the following criteria: (i) Provinces with the highest rural poverty incidence, (ii) Provinces in the southern half of the Philippines that are included in the ADB Country Strategy Paper and Program (2005 2007), (iii)Provinces with at least four ARCs that have not received financial assistance for infrastructure from foreign-assisted projects of DAR, and (iv) LGUs willingness to cooperate with the ARCs and assurances of inter-LGU cooperation.
During Project Implementation LGU representatives in all 152 ARCs underwent training on development planning, including preparation of LGU investment plan in support of ARC development. Enhanced Participatory Area Planning (E-PAP) teams were formed and operational in about 137 ARCs covering all project provinces except Basilan, Sulu and Tawi-Tawi. The approved performance-based grant system (PBGS) for ARCP 2 provides capital and capacity development grants as incentives to LGUs to (i) improve performance in delivery of services in the agrarian reform communities (ARCs), and (ii) ensure sustainability of initiatives introduced in the ARCs. The policy governing board of the Department of Finance has approved 113 LGUs to receive the capital development grant.

Business Opportunities

Consulting Services An estimated 1,812 person months (pm) of consulting services, comprising 36 pm of international consultants and 1,776 pm of national consulting services, will be recruited in order to assist the national government agencies, LGUs at municipal and provincial levels, and local communities, in Project implementation. Consultants will be recruited in accordance with ADB's Guidelines on the Use of Consultants by Asian Development Bank and its Borrowers. The following specialists will be required (i) Project Management Adviser; (ii) Senior Economist; (iii) National Safeguards Specialist; (iv) Planning and Monitoring Specialist; (v) Community Driven Specialist; and (vi) Senior Rural Infrastructure Engineer. All consulting services will be procured through firm using QCBS procedure.

All goods and services to be financed partly or wholly by ADB will be procured under ADB's Procurement Guidelines. Procurement of small works will be through shopping. All civil works contracts exceeding $100,000 and less than $500,000 will be procured through the national competitive bidding procedure. Procurement of goods valued at less than $100,000 will be done through shopping. All equipments valued at more than $500,000 will be procured under the international competitive bidding procedure.

The procurement plan is being updated.

Responsible Staff

Responsible ADB Officer Sununtar Setboonsarng
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Environment, Natural Resources & Agriculture Division, SERD
Executing Agencies
Department of Agrarian Reform
Director Homer P. Tobias
Elliptical Road, Diliman, Quezon City
Municipal Dev'l Fund Office-(Implementing Agency)
Ms. Helen Habulan
Roxas Boulevard corner Pablo Ocampo, Sr.
Street, Manila


Concept Clearance 28 Nov 2006
Fact Finding 23 Apr 2007 to 09 May 2007
MRM 21 Aug 2007
Approval 27 Oct 2008
Last Review Mission -
PDS Creation Date 26 Apr 2006
Last PDS Update 30 Mar 2016

Loan 2465-PHI

Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Oct 2008 08 Dec 2008 04 Mar 2009 30 Jun 2015 30 Jun 2017 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 178.40 Cumulative Contract Awards
ADB 70.00 27 Oct 2008 44.79 0.00 67%
Counterpart 108.40 Cumulative Disbursements
Cofinancing 0.00 27 Oct 2008 28.38 0.00 42%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory Satisfactory Satisfactory - Satisfactory

Loan 8238-PHI

Approval Signing Date Effectivity Date Closing
Original Revised Actual
04 Dec 2007 17 Dec 2008 04 May 2009 31 Dec 2013 30 Jun 2017 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 30.00 Cumulative Contract Awards
ADB 0.00 04 Dec 2007 0.00 10.60 35%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 30.00 04 Dec 2007 0.00 4.07 14%
Title Document Type Document Date
Agrarian Reform Communities Project II Procurement Plans Sep 2013
Agrarian Reform Communities Project II Project/Program Administration Manual Mar 2009
Loan Agreement for Agrarian Reform Communities Project II between Republic of the Philippines and Asian Development Bank dated 8 December 2008 Loan Agreement (Ordinary Resources) Dec 2008
Agrarian Reform Communities Project II Design and Monitoring Frameworks Oct 2008
Agrarian Reform Communities Project II Reports and Recommendations of the President Oct 2008

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Title Document Type Document Date
Agrarian Reform Communities Project II in the Philippines (Final) Resettlement Plans Feb 2008
Agrarian Reform Communities Project II in the Philippines (Final) Resettlement Plans Feb 2008
Agrarian Reform Communities II Initial Environmental Examination Jan 2008
Second Agrarian Reform Communities Project Indigenous Peoples Planning Frameworks/Indigenous Peoples Development Frameworks Jan 2008

Evaluation Documents See also: Independent Evaluation

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Related Publications

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