Widescreen DA BSWM Presentation FS For SSIP For Reg 12

Republic of the Philippines
Department of Agriculture
BUREAU OF SOILS AND WATER MANAGEMENT
Preparation of Feasibility Study for

Small-Scale Irrigation Projects
(SSIPs)
DOLORES MAE G. REONAL
Engineer II
Water Resources Management Division
DA-Bureau of Soils and Water Management
OUTLINE OF THE PRESENTATION
I. Definition of a Project
II. What is a Project Feasibility Study?
III. Parts of an FS
IV. Preparation of FS for SSIP (SWIP, DD)
A. Data collection
B. Outline of an FS for SSIP
ISO/IEC 17025
LA-2016-299B “Lupa’t Tubig Pag-ingatan at Pangalagaan
ATEL-1-1021-299B Tungo sa Maunlad na Agrikultura at Kabuhayan”
Laboratory Services Division
2
DEFINITION OF A PROJECT
 A whole complex of activities in the

undertaking that uses resources to
gain benefits – (Gittinger)
- Project can be considered as an

investment activity in which
financial resources are
expended to create capital
assets that produce benefits
over an extended period of time.
ISO/IEC 17025
3
DEFINITION OF A PROJECT
 Project is a variety of endeavors ranging from activities with single-

purpose, well-defined structures such as infrastructure projects, to
complex, multi-component system such as integrated rural
development scheme (NEDA)
- implies that project involves the use of one or more scarce

resources during a specified time period for the purpose of
producing a socio-economic return in the form of goods and
services.
ISO/IEC 17025
4
TYPE OF PROJECT
 Revenue/ income-generating projects
 Service-oriented/ social development projects – government projects

including small-scale irrigation projects (SSIPs)
ISO/IEC 17025
5
WHAT IS A PROJECT FEASIBILITY STUDY
(FS)?
 An evaluation or analysis of the potential impact of a proposed
program/ project with a view of deciding whether or not to proceed
with the program/ project implementation
 Refers to the culmination of all the preparatory work that provides a

comprehensive review of all aspects of the project before a final
decision about its viability is taken.
- NEDA
ISO/IEC 17025
6
WHY CONDUCT FEASIBILITY STUDY
(FS)?
ISO/IEC 17025
7
IMPORTANT AREAS/
PARTS OF AN FS
 Market Feasibility
 Technical Aspect
 Financial Analysis
 Socio-Economic Analysis
 Environmental Impact Analysis
 Management/ Institutional Development
Aspect
ISO/IEC 17025
8
MARKET ASPECT
• Determines demand or NEED for product or services

• Indicates extent of the demand for the product or
services
• Demand and supply analysis
• No Market = No Project
ISO/IEC 17025
9
TECHNICAL ASPECT
• Analyzes how best to implement a project considering:

 Location/ The Project Area
 Technology or production methods/ The Project
 Size and scale of operation (vis-à-vis market demand gaps)
 Resource or inputs requirements
 Phasing or timing of implementation
• All technical features are reasonably defined and found to be

workable, adequate and socially acceptable
ISO/IEC 17025
10
FINANCIAL ASPECT
• Involve the examination of the possible financial

effects of the projects on the project’s intended
beneficiaries
• Financial aspect determines the financial return to
the capital contributed in a project
• What are the sources of financing? Are they
enough for the initial capital investment and other
costs?
ISO/IEC 17025
11
• Economic adjustments are made to the financial data
and the project's costs and benefits are appraised
from the point of view of the economy
• Does the society and the economy derive net
positive gains/benefits from the project?
• Shows the economic viability, socio-economic impact
such as, but not limited to, reduction of production
cost, increase in yield and income of beneficiaries,
and generation of jobs and employment
• Involves discussion on risk and sensitivity analysis
ISO/IEC 17025
12
FEASIBILITY CRITERIA
 Net Present Value > 0
 Economic Internal Rate of Return (EIRR) ≥ Social Discount Rate (SDR)
 Benefit-Cost Ratio ≥ 1
ISO/IEC 17025
13
INSTITUTIONAL ASPECT
• The organizational aspect should be

examined to see that the project is
manageable.
• The project is feasible with regards to

organization and management if the
organizational set-up can carry out its Farmer-members of Ibabang Nangka Diversion Dam
functions effectively and efficiently. Project, Quezon.
ISO/IEC 17025
14
ENVIRONMENTAL IMPACT ASSESSMENT
 Environmental Compliance Certificate (ECC) – is a document issues by DENR-EMB after
a positive review of an ECC application, certifying that the proponent has complied with
all the requirements of the EIS system and has committed to implements is approved
Environment Management Plan
 Certification of Non-Coverage (CNC) – issued by EMB that certifies that based on the
submitted project description, the project is not covered by the EIS system and is not
required to secure an ECC
 Verify the inclusion of the project in the lists of Environmentally Critical Projects (ECPs) and/or
Environmentally Critical Areas (ECAs)
If the project is included, an Environmental Impact Assessment (EIA) needs to be conducted

separately and ECC is required prior to the project implementation
ISO/IEC 17025
16
Definition of Terms
 Environmentally Critical Area (ECA)– area delineated through Presidential Proclamation 2146
in 1981 as environmentally sensitive such that significant environmental impacts are expected
if certain are implemented in it
 Environmentally Critical Project (ECP) - project or program that has high potential for
significant negative environmental impact as defined under presidential Proclamation 2146
 Environmental Impact Assessment (EIA) – process that involves evaluating and predicting the
likely impacts of a project on the environment during construction, commissioning, operation
and abandonment
 Environmental Management Plan (EMP) – section in the EIS that details the prevention,
mitigation, compensation and monitoring measures to enhance positive impact and minimize
negative impact of proposed project
ISO/IEC 17025
17
Coverage of the Philippine EIS System
ISO/IEC 17025
18
Project Thresholds for Coverage Screening and Categorization
ISO/IEC 17025
19
FS Preparation for SSIP
ISO/IEC 17025
20
Basic Principles in FS Preparation for SSIP
• Availability of Land & Water Resources for Development

• Availability of Beneficiaries / Proponents
• Availability of Preliminary Data
ISO/IEC 17025
21
Main Contents
• Background of the Project

• Land Resources
• Water Resources
• Development Scheme-Engineering Plans/ Estimates
• Socio-Economic and Environmental Assessments
• Institutional Development
ISO/IEC 17025
22
DATA COLLECTION/ NEEDED
ISO/IEC 17025
23
Data Collection/ Needed
A. Project Area
• Geographical Profile
• Socio-economic activities
• Agricultural Profile
- Data on crop production (area, yield – rainfed and irrigated
for palay)
- Irrigation development
- Farmgate prices of crops and fisheries (for SWIP, if any)
ISO/IEC 17025
24
B. Data on Land Resources

• Soil Classification
• Soil Physical and Chemical Properties
• Land Classification
• Present Land Use
Soil sampling and analysis is needed for this part.
ISO/IEC 17025
25
C. Data on Water Resources
• Watershed
• Rainfall Data
• Meteorological Data
• Evaporation
• Evapotranspiration
• Streamflow
• Water Rights
These data are used for the design of SWIP/ DD
ISO/IEC 17025
26
D. Geological Data
• Regional Geology
• Local Geology
• Sub-surface Geology
• Geo-hazards Data
• Construction Materials and Disposal Areas
These data are used for the design of SWIP/ DD and
technical aspect of the project.
ISO/IEC 17025
27
E. Socio-Economic
• Actual production cost and returns of the farmers for the past 2 cropping
seasons
• Production inputs, i.e. seeds, fertilizers, pesticides, labor (man-day,
man-equipment), and other expenses (quantity, unit cost)
• Actual production – in kg and farmgate price
• Actual area planted for the past 2 cropping seasons
• Crops planted
• Willingness to have fishery production, in case of SWIP.
Needs actual socio-economic survey of the target beneficiaries of the project.
ISO/IEC 17025
28
E. Institutional and Social Aspect
• Existing association within the area
• If yes,
• Name of association
• Number of members
• Date organized
• Registration to SEC, DOLE, CDA
• Potential right-of-way (ROW) problem
• Potential conflict within the target beneficiaries and affected persons involved
Needs actual socio-economic survey of the target beneficiaries of the project.
ISO/IEC 17025
29
OUTLINE OF FS FOR
SWIP/ DD
ISO/IEC 17025
30
I. THE PROJECT AREA
 Background of the Project – Market Aspect
• Who requested for the project?
• Current situation in the project area in terms of irrigation development
 Geography, Climate and Socio-Economy
 Physiography, Soil Resources and Geology
• Physiography
• Soil Resources
• Includes discussion on the soil characteristics at the, service area, pond
area, and watershed area based on the soil sampling and analysis
conducted
• General Geology Construction Materials
ISO/IEC 17025
31
II. TECHNICAL FEASIBILITY
 The Project - structural component of the system

 Watershed Development Component
 Soil Suitability Classification
• Crop Identification
• General Cropping Pattern
• Fertilizer Requirement
ISO/IEC 17025
32
 The Project - structural component of the system
Structure Particulars
1. Dam
a. Type Intake
b. Intake Bed Elevation 19.30
c. Intake Crest Elevation 19.60
d. Intake Gradient (Percentage) 3
e. Length (m) 10
f. Upstream/ Downstream Apron Elev. (m) 19.60
g. Upstream/ Downstream Apron Width (m) 1
2. Irrigation Works (Outlet)
a. Rectangular Slide Gate (No.) @ Intake 1
b. Type Box Culvert
c. Dimensions – D/B (m) 0.60/.60
d. Length (m) 80
e. Manhole (No.) 7
3. Irrigation Works (Canal)
a. Main Canal (box culvert) 170 (m)
Figure 2.1: Dam section facing right (1B) and left side (1C) of the
b. Dimensions – D/B (m) 50. / 0.50
structure and three-dimensional image of the proposed structure.
c. Division boxes 2 units
d. End check 1 unit
e. Tractor Crossings 1 unit
Sample discussion on the proposed Diversion Dam (Intake Structure)

ISO/IEC 17025
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Structure Particulars
1. Dam
a. Type Modified Homogenous Earthfill
b. Crest Elevation (m) 110.00
c. Height (m) 10.00
• Structural component of the SWIP d. Crest Width (m)
e. Crest Length (m)
5.00
71.00
f. Upstream slope (H:V) 2.75:1
g. Downstream slope (H:V) 2.50:1
2. Spillway
2.1 Apron Channel
a. Length (m) 7.00
b. Width (m) 4.00
c. Surcharge Height (m) 0.30
2.2 Discharge Channel
a. Length (m) 46.00
b. Width (m) 4.00
c. Slope (%) Average 22.87
2.3 Stilling Basin
a. Type Type III USBR
b. Length (m) 7.00
c. Width (m) 5.00
d. Slope (%) Average 0% Basin / 4% Riprap
2.4 Design Flood
a. Q in 50 years (cu.m) 2.44
b. Q out 50 years (cu.m) 2.17
3. Outlet Works
a. Type Steel Pressure Pipe
b. Pipe Diameter (m) 0.20
1. Pipe Length (m) 42.00
2. Maximum discharge (cu.m/ sec) 0.07
4. Irrigation Works
a. Canal Length (m) 855.00
b. Canal Structures
End Check (No.) 1
ISO/IEC 17025
LA-2016-299B
Division Boxes Right/ Left (No. 6
“Lupa’t Tubig Pag-ingatan at Pangalagaan
ATEL-1-1021-299B Tungo sa Maunlad na Agrikultura at Kabuhayan” Flume / Length (m) 1/ 5; Length = 20.00 m
5. Access Road 34
 Watershed Development Component
• Discussion on the current

watershed condition and strategies
to undertake to manage the SWIS
watershed
ISO/IEC 17025
35
 Agronomic Soil Suitability Classification
• Crop Identification
• General Cropping Pattern
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Fallow Rice Rice
• Fertilizer Requirement
Fertilizer Recommendations
(Bags/Hectare)
Crops
Commercial
16-20-0 46-0-0 0-0-60
organic
Paddy Rice - Actual soil sampling and analysis is needed
20 bags 6.0 2.0 0.25
(Wet Season) - May use the soil suitability map.
Paddy Rice
20 bags 6.0 3.0 0.25
(Dry Season)
ISO/IEC 17025
36
III. SOCIO-ECONOMIC FEASIBILITY
 Financial Aspect
 The project cost – how much is the project based on POW
and DED prepared?
 Operation and Maintenance Cost
 Financing Scheme – who will finance the project, the
counterpart on ROW, and other mandatory and regulatory
requirements.
ISO/IEC 17025
37
III. SOCIO-ECONOMIC FEASIBILITY
 Economic Analysis
• Discusses the project’s long-term effect on farmers, derived
from the sources of incremental benefits of the projects
• Employs “With” and “Without Project” analysis
• Results of the economic indicators
 Sensitivity Analysis
• Results of the sensitivity analysis
ISO/IEC 17025
38
ECONOMIC ANALYSIS
ISO/IEC 17025
39
OBJECTIVE
The objective of economic evaluation is to ascertain the project’s

desirability in terms of its net contribution to the economic and
social welfare of the country as a whole.
ISO/IEC 17025
40
STEPS IN ECONOMIC ANALYSIS
7
1 6
Perform
Determine scope Calculate NPV,
sensitivity
of the analysis BCR, IRR
analysis
2 5 8
Identify cost and Discounting to Make
benefits present value recommendations
3 4
Valuation of costs Employment of
and benefits shadow price
ISO/IEC 17025
41
1 Scope of Analysis
 Project type
• How project solves the problem
• Other project alternatives
 Stakeholders
• Whose impacts (benefits and costs)
• General welfare: investors, beneficiaries
 Project lifespan
• Duration of impact quantification
• For SWIP and DD, we use 25 years as life span
ISO/IEC 17025
42
2 Identify Cost and Benefits
 COST
 Capital / Investment Costs
- Project Cost
- Engineering Administrative expenses (EAO)
- ROW acquisition
 Production Cost
- Cost of Producing Palay in the designed service area
- Cost of fishery production, if SWIP
 Operating and Maintenance (O&M) Costs

- Minor Repair of units and parts
- Rehabilitation of system
ISO/IEC 17025
43
2 Identify Cost and Benefits
 BENEFITS
A benefit constitutes an increase in output or savings in resource use.
 Increase in output
• Improved productivity – increase in yield/ ha
• Increased in Area – increase in effective area/ cropping intensity
 Savings in resources used

• Payment for irrigation
• Shift from fossil fuel to renewable energy
ISO/IEC 17025
44
3 Valuation
 COST
 Project Cost
• Total cost of the project based on Engineering plans and design and cost
estimate
 Crop production cost

• Input costs: seeds, fertilizer, pesticides, labor, etc.
 Operation and Maintenance Cost

• Projected maintenance and repair costs (spread throughout the project life)
– usually 1.5 – 3% of the total project cost
ISO/IEC 17025
45
3 Valuation
 Improved productivity
 Difference in yield/ha
• Irrigated: 4.5mt
• Rainfed: 3.0mt
• Incremental yield
• = 1.5mt * multiplier (farmgate price)
• Gross Returns from Palay Production, Fish pond (for

SWIP)
ISO/IEC 17025
46
3 Valuation
 Crop production
 Difference in cropping intensity
• % change (ex. 1.6 if 2 CS 100% CS1 + 60% CS2)
• Net return
 Difference in area planted

• With: Increase in cropping area (expansion)
• Net return
ISO/IEC 17025
47
FINANCIAL COST
Without Project With Project
Year 1 Year 1
Table 3.3a Cost and Return Analysis of Rice Production - 1st Cropping Table 3.4a Cost and Return Analysis of Rice Production - 1st Cropping
Without Project With Project
I. COSTS OF PRODUCTION No. Unit Unit Price I. COSTS OF PRODUCTION No. Unit Unit Price
A. Labor Cost 25,400.00 A. Labor Cost 31,605.00
B. Cost of Inputs 19,313.06 B. Cost of Inputs 23,535.75

1. 14-14-14 4.44 bags 1,469.00 6,522.36 1. 16-20-0 6 bags 1,635.00 9,810.00
2. 0-0-60 0.29 bags 1,533.00 444.57 2. 0-0-60 0.25 bags 1,533.00 383.25
3. 46-0-0 4.93 bags 1,362.50 6,717.13 3. 46-0-0 3 bags 1,362.50 4,087.50
4 commercial organic fertilizer bags - 4 commercial organic fertilizer 20 bags 200.00 4,000.00
5. Insecticides/pesticides 5 liter 779.00 3,895.00 5. Insecticides/pesticides 5 liter 779.00 3,895.00
6. Seeds 51 kg 34.00 1,734.00 6. Seeds 40 kg 34.00 1,360.00
Total Cost of Production 44,713.06 Total Cost of Production 55,140.75
II. RETURNS II. RETURNS

A. Production (71 cavans @ 50kg/ A. Production (90 cavans @ 50kg/
71 cavan 18.00 63,900.00 90 cavan 18.00 81,000.00
cavan; PhP18/kg) cavan; PhP18/kg)
III. NET RETURN 19,186.95 III. NET RETURN 25,859.25

ISO/IEC 17025
ATEL-1-1021-299B
Prepare annual cost and returns for the whole duration ofTungo
Laboratory Services Division thesaproject
Maunlad na Agrikultura at Kabuhayan”
48
4 Shadow Pricing
 BCA uses economic cost NOT actual financial outlay and market prices
 Economic cost
• inferred from opportunity cost
 Opportunity cost
• the foregone value from the next best use
ISO/IEC 17025
49
4 Shadow Pricing
 Why use ECONOMIC price instead of FINANCIAL price?
 Economic POV: general welfare

• Economic flows from society
 Financial POV: interested party

• Financial flows from investor or project provider perspective
ISO/IEC 17025
50
4 Shadow Pricing
 Methodology was worked out as a reaction to demand
 Market prices may diverge from its true value due to:
A. Market distortions: Taxes, subsidies, regulations
B. Imperfect market competition: Monopoly, monopsony
ISO/IEC 17025
51
4 Shadow Pricing
 Skilled labor (SFP: 1)
• Valued at going market rate
• If not employed by project, would probably be hired somewhere else at that rate
 Unskilled labor (SFP: 0.6)

• 60% of legislated wages
• Economic value of every 1 peso spent on unskilled labor is 60 cents
 Materials (SFP: 1)
• Its direct opportunity cost is measured by the ratio of unit value index for
export/import and domestic price index for materials
• OC of society from foreign exchange
 Equipment (SFP: 1.2)

• Its direct opportunity cost is measured by the ratio of unit value index for
ISO/IEC 17025
LA-2016-299B
export/import and domestic price index for machinery
52
ECONOMIC COST
FINANCIAL COST ECONOMIC COST
Without Project Without Project
Year 1 Year 1
Without Project Without Project

1. 14-14-14 4.44 bags 1,469.00 6,522.36 1. 14-14-14 4.44 bags 1,469.00 6,522.36
2. 0-0-60 0.29 bags 1,533.00 444.57 2. 0-0-60 0.29 bags 1,533.00 444.57
3. 46-0-0 4.93 bags 1,362.50 6,717.13 3. 46-0-0 4.93 bags 1,362.50 6,717.13
4 commercial organic fertilizer bags - 4 commercial organic fertilizer bags -
6. Seeds 51 kg 34.00 1,734.00 6. Seeds 51 kg 34.00 1,734.00

71 cavan 18.00 63,900.00 71 cavan 18.00 63,900.00
ISO/IEC 17025
III. NET RETURN
ATEL-1-1021-299B 26,150.95 III. NET RETURN 19,186.95
Tungo sa Maunlad na Agrikultura at Kabuhayan”
53
ECONOMIC COST
FINANCIAL COST ECONOMIC COST
With Project With Project
Year 1 Year 1
With Project With Project

1. 16-20-0 6 bags 1,635.00 9,810.00 1. 16-20-0 6 bags 1,635.00 9,810.00
2. 0-0-60 0.25 bags 1,533.00 383.25 2. 0-0-60 0.25 bags 1,533.00 383.25
3. 46-0-0 3 bags 1,362.50 4,087.50 3. 46-0-0 3 bags 1,362.50 4,087.50
4 commercial organic fertilizer 20 bags 200.00 4,000.00 4 commercial organic fertilizer 20 bags 200.00 4,000.00
6. Seeds 40 kg 34.00 1,360.00 6. Seeds 40 kg 34.00 1,360.00

90 cavan 18.00 81,000.00 90 cavan 18.00 81,000.00
ISO/IEC 17025
LA-2016-299B “Lupa’t Tubig Pag-ingatan at RETURN
Pangalagaan
III. NET RETURN
ATEL-1-1021-299B 25,859.25 III. NET 33,117.25
Tungo sa Maunlad na Agrikultura at Kabuhayan”
54
Discounting
• Process of finding the present worth of a future value
• Makes values with different time paths comparable
• Discount rate: ‘exchange rate’ between value today and value in the
future
ISO/IEC 17025
55
Social Discount Rate (SDR)
• Society’s relative valuation of today vs future well-being
• Hurdle rate for a project’s EIRR

• Too high: could preclude socially desirable projects
• Too low: could allow economically inefficient projects
ISO/IEC 17025
56
Social Discount Rate (SDR)
• 10% SDR based on NEDA’s ICC Project Evaluation Procedures and

Guidelines
• Why use NEDA’s recommendation?

- NEDA’s computation of SDR is applicable to Philippine
development projects
ISO/IEC 17025
57
Discounting Table
NET PRESENT VALUE
YEAR 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15%

0 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000
1 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9259 0.9174 0.9091 0.9009 0.8929 0.8850 0.8772 0.8696
2 0.9803 0.9612 0.9426 0.9246 0.9070 0.8900 0.8734 0.8573 0.8417 0.8264 0.8116 0.7972 0.7831 0.7695 0.7561
3 0.9706 0.9423 0.9151 0.8890 0.8638 0.8396 0.8163 0.7938 0.7722 0.7513 0.7312 0.7118 0.6931 0.6750 0.6575
4 0.9610 0.9238 0.8885 0.8548 0.8227 0.7921 0.7629 0.7350 0.7084 0.6830 0.6587 0.6355 0.6133 0.5921 0.5718
5 0.9515 0.9057 0.8626 0.8219 0.7835 0.7473 0.7130 0.6806 0.6499 0.6209 0.5935 0.5674 0.5428 0.5194 0.4972
6 0.9420 0.8880 0.8375 0.7903 0.7462 0.7050 0.6663 0.6302 0.5963 0.5645 0.5346 0.5066 0.4803 0.4556 0.4323
7 0.9327 0.8706 0.8131 0.7599 0.7107 0.6651 0.6227 0.5835 0.5470 0.5132 0.4817 0.4523 0.4251 0.3996 0.3759
8 0.9235 0.8535 0.7894 0.7307 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665 0.4339 0.4039 0.3762 0.3506 0.3269
9 0.9143 0.8368 0.7664 0.7026 0.6446 0.5919 0.5439 0.5002 0.4604 0.4241 0.3909 0.3606 0.3329 0.3075 0.2843
10 0.9053 0.8203 0.7441 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 0.3855 0.3522 0.3220 0.2946 0.2697 0.2472
11 0.8963 0.8043 0.7224 0.6496 0.5847 0.5268 0.4751 0.4289 0.3875 0.3505 0.3173 0.2875 0.2607 0.2366 0.2149
12 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 0.4440 0.3971 0.3555 0.3186 0.2858 0.2567 0.2307 0.2076 0.1869
13 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 0.3677 0.3262 0.2897 0.2575 0.2292 0.2042 0.1821 0.1625
14 0.8700 0.7579 0.6611 0.5775 0.5051 0.4423 0.3878 0.3405 0.2992 0.2633 0.2320 0.2046 0.1807 0.1597 0.1413
15 0.8613 0.7430 0.6419 0.5553 0.4810 0.4173 0.3624 0.3152 0.2745 0.2394 0.2090 0.1827 0.1599 0.1401 0.1229
16 0.8528 0.7284 0.6232 0.5339 0.4581 0.3936 0.3387 0.2919 0.2519 0.2176 0.1883 0.1631 0.1415 0.1229 0.1069
17 0.8444 0.7142 0.6050 0.5134 0.4363 0.3714 0.3166 0.2703 0.2311 0.1978 0.1696 0.1456 0.1252 0.1078 0.0929
18 0.8360 0.7002 0.5874 0.4936 0.4155 0.3503 0.2959 0.2502 0.2120 0.1799 0.1528 0.1300 0.1108 0.0946 0.0808
19 0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.2765 0.2317 0.1945 0.1635 0.1377 0.1161 0.0981 0.0829 0.0703
20 0.8195 0.6730 0.5537 0.4564 0.3769 0.3118 0.2584 0.2145 0.1784 0.1486 0.1240 0.1037 0.0868 0.0728 0.0611
21 0.8114 0.6598 0.5375 0.4388 0.3589 0.2942 0.2415 0.1987 0.1637 0.1351 0.1117 0.0926 0.0768 0.0638 0.0531
22 0.8034 0.6468 0.5219 0.4220 0.3418 0.2775 0.2257 0.1839 0.1502 0.1228 0.1007 0.0826 0.0680 0.0560 0.0462
23 0.7954 0.6342 0.5067 0.4057 0.3256 0.2618 0.2109 0.1703 0.1378 0.1117 0.0907 0.0738 0.0601 0.0491 0.0402
24 0.7876 0.6217 0.4919 0.3901 0.3101 0.2470 0.1971 0.1577 0.1264 0.1015 0.0817 0.0659 0.0532 0.0431 0.0349
25 0.7798 0.6095 0.4776 0.3751 0.2953 0.2330 0.1842 0.1460 0.1160 0.0923 0.0736 0.0588 0.0471 0.0378 0.0304
26 0.7720 0.5976 0.4637 0.3607 0.2812 0.2198 0.1722 0.1352 0.1064 0.0839 0.0663 0.0525 0.0417 0.0331 0.0264
27 0.7644 0.5859 0.4502 0.3468 0.2678 0.2074 0.1609 0.1252 0.0976 0.0763 0.0597 0.0469 0.0369 0.0291 0.0230
28 0.7568 0.5744 0.4371 0.3335 0.2551 0.1956 0.1504 0.1159 0.0895 0.0693 0.0538 0.0419 0.0326 0.0255 0.0200
29
ISO/IEC 17025 0.7493 0.5631 0.4243 0.3207 0.2429 0.1846 0.1406 0.1073 0.0822 0.0630 0.0485 0.0374 0.0289 0.0224 0.0174
LA-2016-299B
30 0.7419 0.5521 0.4120 0.3083 0.2314 0.1741 0.1314 0.0994 0.0754
“Lupa’t Tubig Pag-ingatan at Pangalagaan 0.0573 0.0437 0.0334 0.0256 0.0196 0.0151
58
Example of an Economic Analysis of Proposed SSIP
Total Incremental Investment Cost Incremental Production Total Incremental Discounted Benefits Discounted Costs
Year O & M Cost
Benefits (PhP) (PhP) Costs (PhP) Costs (PhP) (PhP) (PhP)
0 2,570,000.00 2,570,000.00 2,570,000.00
1 1,180,764.00 77,100.00 544,268.91 621,368.91 1,073,421.82 564,880.83
2 1,245,078.00 77,100.00 688,164.51 765,264.51 1,028,990.08 632,450.01
3 1,407,078.00 77,100.00 707,964.51 785,064.51 1,057,158.53 589,830.59
4 1,326,078.00 77,100.00 727,764.51 804,864.51 905,729.12 549,733.29
5 1,959,012.00 77,100.00 617,708.91 694,808.91 1,216,392.32 431,421.67
6 1,959,012.00 77,100.00 617,708.91 694,808.91 1,105,811.20 392,201.52
7 1,959,012.00 77,100.00 617,708.91 694,808.91 1,005,282.91 356,546.83
8 1,959,012.00 77,100.00 617,708.91 694,808.91 913,893.56 324,133.48
9 1,959,012.00 77,100.00 617,708.91 694,808.91 830,812.32 294,666.80
10 1,959,012.00 77,100.00 617,708.91 694,808.91 755,283.93 267,878.91
11 1,959,012.00 77,100.00 617,708.91 694,808.91 686,621.76 243,526.28
12 1,959,012.00 77,100.00 617,708.91 694,808.91 624,201.60 221,387.53
13 1,959,012.00 77,100.00 617,708.91 694,808.91 567,456.00 201,261.39
14 1,959,012.00 77,100.00 617,708.91 694,808.91 515,869.09 182,964.90
15 1,959,012.00 77,100.00 617,708.91 694,808.91 468,971.90 166,331.73
16 1,959,012.00 77,100.00 617,708.91 694,808.91 426,338.09 151,210.66
17 1,959,012.00 77,100.00 617,708.91 694,808.91 387,580.08 137,464.24
18 1,959,012.00 77,100.00 617,708.91 694,808.91 352,345.53 124,967.49
19 1,959,012.00 77,100.00 617,708.91 694,808.91 320,314.12 113,606.81
20 1,959,012.00 77,100.00 617,708.91 694,808.91 291,194.65 103,278.92
21 1,959,012.00 77,100.00 617,708.91 694,808.91 264,722.41 93,889.92
22 1,959,012.00 77,100.00 617,708.91 694,808.91 240,656.74 85,354.48
23 1,959,012.00 77,100.00 617,708.91 694,808.91 218,778.85 77,594.98
24
ISO/IEC 17025
1,959,012.00 77,100.00 617,708.91 694,808.91 198,889.86 70,540.89
LA-2016-299B25 1,959,012.00 77,100.00 “Lupa’t Tubig Pag-ingatan
617,708.91 at Pangalagaan 694,808.91 180,808.97 64,128.08
LaboratoryTOTAL
Services Division 46,298,250.00 2,570,000.00 1,927,500.00 15,640,049.55 21,515,700.00 15,637,525.42 9,011,252.24
59
Calculate the Economic Indicators
• Net Present Value (NPV)

• Discounted cumulative net benefits throughout the project life
• Benefit-Cost Ratio (BCR)

• Ratio between present value of benefits and costs
• Economic Internal Rate of Return (EIRR)

• Discount rate that equates the NPV to zero
• Earning power of investment
 Why compute for 3 indicators?

• Proper decision-making
ISO/IEC 17025
60
Evaluation Criteria
• Net Present Value (NPV)

𝑛
𝐵𝑡 − 𝐶𝑡
NPV = ෍
1+𝑟 𝑡
𝑡=1
Where:
Bt is the peso value of benefits incurred at time t
Ct is the peso value of costs incurred at time t
r is the social discount rate
n is the life of the project, in years
• Criterion: NPV > 0
ISO/IEC 17025
61
Evaluation Criteria
• Benefit-Cost Ratio (BCR)
𝑛 𝑛
B 𝐵𝑡 𝐶𝑡
=෍ 𝑡 /෍
C 1=𝑟 (1 + 𝑟)𝑡
𝑡=1 𝑡=1
Where:
• Criterion: BCR > 1
ISO/IEC 17025
62
Evaluation Criteria
• Internal Rate of Return (IRR)
𝑛
𝐵𝑡 − 𝐶𝑡
NPV = ෍ =0
1+𝑟 𝑡
𝑡=1
Where:
• Criterion: IRR > SDR
ISO/IEC 17025
63
Sample Calculation
ECONOMIC INDICATOR VALUE
Net Present Value (NPV) PhP 6,658,409.76
Benefit – Cost Ratio (BCR) 1.70
Economic Internal Rate of Return (EIRR) 30%
ISO/IEC 17025
64
Sensitivity Analysis
• Cost sensitivity:
• Price changes during implementation
• Higher cost of repairs
• Construction delays
• Benefit sensitivity:
• Hindrances in expected crop production
• Typhoons, flooding
• Capital unavailability
ISO/IEC 17025
65
Sensitivity Analysis
• Test of impact robustness, provides appreciation of the project risk
• Case 1: +20% Cost

• Sensitivity to cost
• Case 2: -20% Benefits
• Sensitivity to benefits
• Case 3: Combination of Case 1 & 2
ISO/IEC 17025
66
Sample Calculation
+20% Cost
ECONOMIC INDICATOR +20% Cost
-20% Benefits
Net Present Value (NPV) PhP 4,763,763.12 PhP 1,537,434.54
Benefit – Cost Ratio (BCR) 1.42 1.14
Economic Internal Rate of Return (EIRR) 22.649 14.448
ISO/IEC 17025
67
Recommendation
 NPV > 0
 BCR > 1
 EIRR > SDR (10%)
• Passed indicators, robust result

• The NPV of the project amounts to _ with _ BCR
and _ IRR. Moreover, sensitivity analysis shows
robust results against probable degree of
deviations in costs and benefits. Hence, the project
is viable and recommended for implementation.
ISO/IEC 17025
68
Recommendation
• Passed indicators, sensitive

and _ IRR. However, sensitivity analysis showed
results are sensitive to probable degree of
deviations in costs/benefits. Justification;
otherwise, not recommended for implementation.
ISO/IEC 17025
69
Recommendation
• Not feasible indicators

and _ IRR. The project did not pass the _ criteria;
therefore, it is not recommended for
implementation.
ISO/IEC 17025
70
IV. ENVIRONMENTAL IMPACT ASSESSMENT
ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT FOR SSIPs
PURPOSE Identify the foreseen positive as well as negative environmental and social impacts related to the project and
correspondingly identify the proposed mitigation measures (for foreseen negative impacts) as well as enhancement or
sustenance measures (for foreseen positive impacts)
WHY? Ensure sustainability of the project by ensuring environmental and social considerations in the design, operation and
management through:
- Ensuring stability of structures/facilities by incorporating appropriate measures in the design
- Incorporation of measures that would safeguard structures and facilities during construction and operation
- Avoidance of possible hazards (landslides and other geologic hazards, flooding of nearby areas, irritants among the
people, etc.)
Basic principle: Balanced Development
Scope of a) Assessment of environmental baseline information considering physical, biological and socio-economic condition of
Study the project area
b) Watershed characterization/profiling, i.e., its importance, issues and problems, existing flora and fauna, current
management plans and programs, among others
c) Profiling of the Indigenous People (IP) community considering, but not limited to, their territory layout, customary
rights, and decision-making process
d) Direct/indirect impacts to the environment and the affected communities, with special emphasis on IPs and
vulnerable people
ISO/IEC 17025 e) Mitigation and/or enhancement measures for the impacts identified
71
IV. ENVIRONMENTAL IMPACT ASSESSMENT
ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT FOR SSIPs
OUTPUT Any of the following, depending on the magnitude/scale of the project and category of project area
(environmentally critical area or not).
Project Description Report (PDR)
Initial Environmental Examination Checklist (IEEC)
Initial Environmental Examination Report (IEER)
(Full-Blown) Environmental Impact Statement (EIS) Report
Main Project Description

contents Baseline assessment, impacts and mitigation or enhancement measures re:
of report Land
Air in the project area and
Water in the watershed
People
Environmental Management Plan (EMaP)
Environmental Monitoring Plan (EMoP)
Other recommendations, (including budget)
ISO/IEC 17025
72
IV. INSTITUTIONAL DEVELOPMENT
A. General
• Discussion on the rationale/ importance of institutional development
and its importance on the success of the implementation of the
project.
B. Institutional Works
• Discusses the agencies or personnel (DA, LGU, CDO) involved in
the implementation of the project, from its start of implementation till
its monitoring
• Discusses the possible institutional arrangements
ISO/IEC 17025
73
C. Farmers’ Participation
• Discusses the role of the farmers in the implementation of the
project.
• Are they properly consulted or are they the ones who requested for
the project?
• Identification of existing associations in the area and organization
into SWISA.
ISO/IEC 17025
74
TYPICAL SWISA ORGANIZATION CHART
General Assembly
Board of Trustees
President Secretary
Vice-President
Treasurer Auditor
Water Tender
Group Leader Group Leader Group Leader Group Leader
ISO/IEC 17025
LA-2016-299B Member Member Member
Member
75
D. Farmers’ Training Program

• Includes all the possible trainings needed by the association/ beneficiaries
to help operate, maintain, and sustain the project
• Possible trainings include:
1. Basic Leadership Skills Training (BLST) and Technical Skills Training (TST);
2. Water Management and Rice Production Seminar;
3. Watershed Development and Management;
4. Financial Management; and
5. Livelihood Trainings
ISO/IEC 17025
76
A. Operation and Maintenance

• Discussion on the importance of operation and maintenance
• Who will maintain the system?
• May refer to the organizational chart
B. Sustainable support
• Discussion on the how to sustain the system and possible support
from the government, e.g. DA, LGU
ISO/IEC 17025
77
Thank you.
“Lupa’t Tubig ay Pag-ingatan at Pangalagaan,
Tungo sa Maunlad na Agrikultura at Kabuhayan.”
www.bswm.da.gov.ph
@OfficialBSWM (and your official FB page)
customers.center@bswm.da.gov.ph
(and your preferred official govmail)
(632) 8273-2474 local 3202
(and your preferred official landline)
DA-BSWM
Department of Agriculture-Bureau of Soils and Water Management
78

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Republic of the Philippines

Preparation of Feasibility Study for

 A whole complex of activities in the

- Project can be considered as an

 Project is a variety of endeavors ranging from activities with single-

- implies that project involves the use of one or more scarce

 Revenue/ income-generating projects

 Service-oriented/ social development projects – government projects

 Refers to the culmination of all the preparatory work that provides a

• Determines demand or NEED for product or services

• Analyzes how best to implement a project considering:

• All technical features are reasonably defined and found to be

• Involve the examination of the possible financial

 Net Present Value > 0

 Economic Internal Rate of Return (EIRR) ≥ Social Discount Rate (SDR)

• The organizational aspect should be

• The project is feasible with regards to

If the project is included, an Environmental Impact Assessment (EIA) needs to be conducted

• Availability of Land & Water Resources for Development

• Background of the Project

B. Data on Land Resources

Soil sampling and analysis is needed for this part.

Needs actual socio-economic survey of the target beneficiaries of the project.

Needs actual socio-economic survey of the target beneficiaries of the project.

 The Project - structural component of the system

Sample discussion on the proposed Diversion Dam (Intake Structure)

• Discussion on the current

Fallow Rice Rice

The objective of economic evaluation is to ascertain the project’s

 Operating and Maintenance (O&M) Costs

 Savings in resources used

 Crop production cost

 Operation and Maintenance Cost

• Gross Returns from Palay Production, Fish pond (for

 Difference in area planted

B. Cost of Inputs 19,313.06 B. Cost of Inputs 23,535.75

Total Cost of Production 44,713.06 Total Cost of Production 55,140.75

II. RETURNS II. RETURNS

III. NET RETURN 19,186.95 III. NET RETURN 25,859.25

 Economic POV: general welfare

 Financial POV: interested party

 Methodology was worked out as a reaction to demand

A. Market distortions: Taxes, subsidies, regulations

B. Imperfect market competition: Monopoly, monopsony

 Unskilled labor (SFP: 0.6)

 Equipment (SFP: 1.2)

B. Cost of Inputs 19,313.06 B. Cost of Inputs 19,313.06

Total Cost of Production 37,749.06 Total Cost of Production 44,713.06

II. RETURNS II. RETURNS

B. Cost of Inputs 23,535.75 B. Cost of Inputs 23,535.75

Total Cost of Production 55,140.75 Total Cost of Production 55,140.75

II. RETURNS II. RETURNS

• Process of finding the present worth of a future value

• Makes values with different time paths comparable

• Society’s relative valuation of today vs future well-being

• Hurdle rate for a project’s EIRR

• 10% SDR based on NEDA’s ICC Project Evaluation Procedures and

• Why use NEDA’s recommendation?

YEAR 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15%

• Net Present Value (NPV)

• Benefit-Cost Ratio (BCR)

• Economic Internal Rate of Return (EIRR)

 Why compute for 3 indicators?