DLSU Business & Economics Review Special Issue

Authors: Arlene Inocencio and Randolph Barker

Year: April 2018 Special Issue
Volume: 28 No. 1
Pages: 1-17

Abstract:
There is a growing concern in the Philippines and elsewhere over what some have termed a “water crisis”—too little or at times too much water. We first discuss the historical context of Philippine irrigation development and management. Then we discuss the trends in irrigation development—public and private investment, national and communal systems, and new and rehabilitation projects. We note the rapid increase in private investment based on the agricultural census, mostly pumps and shallow tube wells, and the increase in investments on communals in the last decade. With the recurring and persistent problems on planning and investment, design and management, and operation and maintenance, we call for the rethinking of the way we develop and manage our agricultural water resources. Despite all the concerns, there are paths to improving water management and increasing water productivity, some of which are currently being pursued. We conclude, however, that climate change will make it difficult to achieve food security without continued reliance on rice imports.

Authors: Arlene Inocencio, Marites Tiongco, Kenji Yoshinaga and Anna Bella Siriban-Manalang

Year: April 2018 Special Issue
Volume: 28 No. 1
Pages: 18-30

Abstract:
Irrigation systems in many Asian countries including the Philippines remain heavily dependent on public funds and are mostly unsustainable. Systematic degradation due to poor and inadequate management, maintenance and operation, and limited public funding calls for a new approach. Governments have implemented participatory irrigation management, which evolved into an irrigation management transfer (IMT). While progress has been slow, the IMT appear to present some improvements in the irrigation sector. However, the lack of incentives and motivation for irrigators associations (IAs) to become autonomous and irrigation agencies’ unwillingness to let go further slows the growth of the irrigation sector. For the irrigation sector to grow fast and to provide the right incentives and policy environment for both farmers and IAs in the Philippines, the next logical step to take is a public-private partnership (PPP) between the responsible public agency and IAs. This paper explores the potential of establishing a PPP by empowering existing IAs beyond the IMT to become viable and sustainable private companies. This paper proposes four financial options for the irrigators associations-irrigation service management company (IAs-ISMC) to become more independent from public subsidies. These financial options are defined, which include doing community work beyond the PPP contracts to generate additional funds to the irrigation
service fees (ISF). Necessary policy measures and institutional arrangements are proposed to enable the establishment of a start-up private company.

Author: Guillermo Q. Tabios III

Year: April 2018 Special Issue
Volume: 28 No. 1
Pages: 31–38

Abstract:
The Angat Reservoir is a multipurpose reservoir serving competing uses for Metro Manila’s domestic water supply and Bulacan’s Angat-Maasim River irrigation system with a privatized hydropower generation component. This study assesses the reliability of Angat Reservoir operations to deliver these demands with an increased domestic water supply requirement from 46 to 50 m3/sec and with future reservoir sedimentation in 2050. A reservoir optimization simulation model is employed to simulate daily reservoir operations with long-term generated inflows from a watershed model. Then, the resulting daily reservoir releases for each scenario are subjected to flow duration analysis in the context of reliability analysis to assess the competing water uses of Angat Reservoir.

Author: Guillermo Q. Tabios III

Year: April 2018 Special Issue
Volume: 28 No. 1
Pages: 39–50

Abstract:
This study is to compare the Balog-Balog multipurpose, single dam project with the proposed Balog-Balog multiple dam system, using reliability and cost-benefit analyses, of the ability of the two reservoir systems to deliver irrigation water supply to the Balog-Balog irrigation system including hydropower generation and flood control functions through optimization-simulation model studies. On the basis of reliability to deliver irrigation water, generate hydropower, reservoir life, people displaced due to reservoir construction, flood control benefits, and economic analysis, the Balog-Balog single, high dam is better project compared to the multiple dam system.

Authors: Kei Kajisa, Piedad Moya, Lolita Garcia, Ma. Shiela Valencia, and Mary Rose San Valentin

Year: April 2018 Special Issue
Volume: 28 No. 1
Pages: 51-69

Abstract:
Volumetric irrigation water pricing, to replace area-based pricing, was experimentally introduced in two surface irrigation systems in Northern Luzon, Philippines. A survey was conducted in 2012 (baseline) and in 2013 (after the treatment). This paper draws lessons from this pilot project for future studies. We find that the impacts are not against the expected benefit of volumetric pricing: reduced discharge (water saving), more water for lower stream (equitable water distribution), and stricter water management. At the same time, we realized the tremendous difficulty in accurate volume measurement in surface irrigation systems. Given the difficulty, a volumetric system design may be feasible to measure volume at the headgate of a primal-level canal with a firm measurement structure and charge the fee to the group of farmers in the canal. This approach, however, demands for the successful collective management among the large group of farmers. An alternative design may be to charge water fee to a much smaller unit (e.g., water users group) for their easier collective management. However, this requires investment in infrastructure for group-level volume measurement and water control. An appropriate system in the reality seems to lie in the spectrum of these two options, depending on different environmental and socio-economic background.

Authors: Caesar Cororaton, Marites Tiongco, Arlene Inocencio, Anna Bella Siriban-Manalang and Albert Lamberte

Year: April 2018 Special Issue
Volume: 28 No. 1
Pages: 70–83

Abstract:
The Philippines is experiencing the effects of wide swings in weather conditions in recent years. The country experienced super typhoons, floods, and extended periods of drought recurring in most of the regions. The agricultural commodity that is severely affected by climate change is rice, which is the staple food of Filipinos. Using a computable general equilibrium model calibrated to Philippine data, the paper analyzes the effects of climate change as it affects palay productivity. The analysis looks at the impact on palay production and rice supply, prices, consumption, household income, and welfare. The paper extends the analysis by computing the income distribution and poverty effects of the productivity changes by applying a poverty microsimulation using the 2012 Family Income and Expenditure Survey. The results indicate that climate change decreases palay production in rainfed (or non-irrigated) areas, leading to higher prices, reduced rice consumption, decreased real income of households, decreased welfare, increased income inequality, and poverty. These effects however are minimized or reversed if the limits imposed by the government on rice imports are relaxed. If the government reduces the trade barriers on imported rice which is considerably cheaper than domestically produced rice,
supply of rice improves which decreases prices, rice consumption increases, real household improves, welfare increases, and income inequality and poverty decrease.

Authors: Maria Graciela Anna S. Arceo, Rex Victor O. Cruz, Cristino L. Tiburan Jr., Juancho B. Balatibat and Nathaniel R. Alibuyog

Year: April 2018 Special Issue
Volume: 28 No. 1
Pages: 84–101

Abstract:
Quantitative prediction of land cover and climate change impacts on hydrologic processes is widely used to develop sound watershed management strategies. However, not much is yet understood about the hydrologic behavior of watersheds in the Philippines in response to land cover change and climate variability. This study was designed to simulate the hydrologic responses of eight land cover and climate scenarios of Pagsanjan-Lumban Watershed (PLW) in Laguna, Quiaoit River Watershed (QRW) in Ilocos Norte, and Saug Watershed (SW) in Davao del Norte through the Soil and Water Assessment Tool (SWAT). Streamflow was then used to calibrate and validate the model using SUFI-2 algorithm in SWATCUP. The calibration exhibited a good match between observed and simulated streamflow for PLW (R2 = 0.72, NS = 0.69), QRW (R2 = 0.67, NS = 0.62), and SW (R2 = 0.78 NS = 0.77). Simulation results showed that (i) increased (decreased) precipitation in the areas also increased (decreased) water yield, surface runoff, and baseflow; (ii) the moderate shift to forest within the watershed moderately decreased runoff volume and increased evapotranspiration, which consequently decreased baseflow; (iii) urbanization resulted in lower baseflow but higher evapotranspiration; and (iv) presence of forest vegetation is associated with high infiltration and recharge; thus, lower surface runoff with higher baseflow. Hydrologic behavior, therefore, changes as it responds to changes in land cover and climate. Thus, appropriate interventions are vital to attain water security and sustainability in the watersheds.

Author: Tolentino B. Moya

Year: April 2018 Special Issue
Volume: 28 No. 1
Pages: 102–120

Abstract:
Irrigation is a socio-technical infrastructure for food and water security programs of many developing countries, including the Philippines. Consequently, the government has been heavily investing in irrigation development to boost crop yield and to enlarge currently irrigated areas for many years now. However, the Philippine climate has been changing; and the climatic variations and change present potential threats to the resilience of the Philippine irrigation systems. The impacts of climate variability and change on the resiliency of irrigation infrastructures challenge the sustainability of the government’s investments in food security programs. Climate change would alter the Philippine water cycle thus changing the temporal and geographical patterns of rainfall, evapotranspiration, runoff, and groundwater recharge. Extreme hydro-meteorological events have been occurring more frequently in the country today—strong typhoons with undocumented wind speed and with rainfall of unrecorded amount and intensity are being experienced more often now than before. These extreme events bring about risks to irrigated agriculture because of the uncertainty of either too much or too little water, or both. The aforementioned risks will infringe upon the planning, design, and construction processes of new irrigation systems, and upon the operation and maintenance of existing ones. The study applied systems dynamics approach to review and analyze factors that strengthen or weaken the resiliency of the Philippine irrigation systems to the impacts of climate variability and change. The intrinsic system resilience to stresses and episodic shocks of climate variability and change emerge from the interrelationship and feedback interaction between the elements and irrigation processes in an irrigation system. The current internal dynamics in most irrigation systems exposes its incapacity to serve fully its designed area. As a result, the overoptimistic technical and economic assumptions used in the planning and design phase imperiled the intrinsic resilience of existing irrigation systems to climate variability and change. Moreover, the degradation of physical infrastructures attributable to low maintenance level and inadequate rehabilitation works result in continuing inability of irrigation systems to serve the designed area with adequate water and weaken their intrinsic resilience. The social components of the system–the irrigation agency, and the farmer community in particular, are undertaking varied adaptation actions to increase and strengthen both the system’s “soft” and “hard” resiliency.

Authors: Nicostrato Perez, Mark W. Rosegrant and Arlene Inocencio

Year: April 2018 Special Issue
Volume: 28 No. 1
Pages: 121-146

Abstract:
Three broad strategies in the agricultural water sector can be used to address the challenge posed by climate change: (1) increasing the supply of water for irrigation through investment in infrastructure; (2) conserving water and improving the efficiency of water use in existing systems; and (3) improving crop productivity per unit of water and land through integrated water management and agricultural research and policy efforts (Rosegrant, 2015). This paper analyzes in detail the first strategy for the Philippines, together with a brief comparison with the third strategy. The alternative irrigation investment scenarios also assess different regional allocation rules, expansion targets, and investment costs. Results show that on all the economic and food security outcomes, at the lower irrigation cost estimate of US$3,500/ha, irrigation development has a higher positive impact compared with investment in varietal and seed development and farm level technology. But at higher irrigation cost levels, the varietal and seed and farm level technologies can have higher rates of return, and it would be preferable to shift some of the investment to these other development strategies. If the costs of new irrigation can be kept relatively low, faster irrigation development would make a major contribution to agricultural development and food security in the Philippines.