LOCAL WATER UTILITIES ADMINISTRATION...2.1 Location Map of Legazpi City 13 4.1 Existing Water Supply System – LCWD 41 5.1 Present and Future Service Areas – LCWD 52 8.1 Schematic

FINAL REPORT

VOLUME 5: SUBPROJECT APPRAISAL REPORT: LEGAZPI CITY WATER DISTRICT

Asian Development Bank

LOCAL WATER UTILITIES ADMINISTRATION

WATER DISTRICT DEVELOPMENT SECTOR PROJECT

Project Preparatory Technical Assistance (PPTA) TA No: 7 122 - PHI PÖYRY IDP CONSULT, INC., PHILIPPINES in association with TEST Consultants Inc., Philippines PÖYRY Environment GmbH, Germany APRIL 2010

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TA No. 7122-PHI: Water District Development Sector Project PPTA – FR Vol. 5 – SPAR: LCWD

This report consists of 12 volumes:

Volume 1 Main Report

Volume 2 Institutional and Financial Assessment of LWUA

Volume 3 Subproject Appraisal Report: Metro La Union Water District

Volume 4 Subproject Appraisal Report: Quezon Metro Water District

Volume 5 Subproject Appraisal Report: Legazpi City Water District

Volume 6 Subproject Appraisal Report: Leyte Metro Water District

Volume 7 Subproject Appraisal Report: City of Koronadal Water District

Volume 8 Report and Recommendation of the President (RRP)

Volume 9 Supplementary Appendices A to G (Technical Aspects)

A Review and Assessment of Water Supply and Sanitation Sector Outside Metro Manila B Water Sector Laws and Policies C Assessment of Existing Water Supply Systems in Pilot Water Districts D Proposed Water Supply Component for Pilot Water Districts E Non Revenue Water Contract Mechanisms F Sanitation G Health

Volume 10 Supplementary Appendices H to J (Social Aspects)

H Socio-economic Survey I Stakeholder Consultation and Participation J Indigenous Peoples

Volume 11 Supplementary Appendices K to S (Financial, Implementation Aspects)

K Financial Management Assessment L Detailed Project Cost and Financing Plans for Water Districts M Financial Analysis N Financial History of Water Districts O Economic Analysis P Institutional Strengthening and Capacity Building Q Indicators for Measuring Development Objectives and Performance R Terms of Reference for Consultants (Project Implementation Support

Services) S Profiles of Priority Water Districts from Long-list

Volume 12 Supplementary Appendices T to V (Safeguard Aspects)

T Initial Environmental Examinations U Resettlement Framework

V Resettlement Plans


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SUBPROJECT APPRAISAL REPORT: LEGAZPI CITY WATER DISTRICT

List of Contents

Glossary and Acronyms viii Location Map xii

1 Executive Summary ..................................................................................... 1

1.1 Introduction .............................................................................................. 1 1.2 Conclusions of Socio-economic Survey and Stakeholder Consultations . 1

1.2.1 Summary .......................................................................................... 1 1.2.2 Recommendations ............................................................................ 2

1.3 Water Supply ........................................................................................... 3 1.3.1 Rationale ........................................................................................... 3 1.3.2 Existing Water Supply System .......................................................... 3 1.3.3 Scope of Proposed Water Supply Component ................................. 4 1.3.4 Implementation Schedule ................................................................. 5

1.4 Water District Capability and Subproject Implementation ........................ 7 1.5 Subproject Cost, Financing Plan and Financial Analysis ......................... 8 1.6 Economic Analysis ................................................................................ 10

1.6.1 Economic Internal Rate of Return and Sensitivity Analysis ............. 10 1.6.2 Subproject Beneficiaries ................................................................. 10 1.6.3 Subproject Sustainability ................................................................. 10 1.6.4 Poverty Impact ................................................................................ 11

2 Description of Study Area ......................................................................... 12

2.1 Location ................................................................................................. 12 2.2 PhysicaL Features ................................................................................. 12

2.2.1 Topography ..................................................................................... 12 2.2.2 Vegetation ....................................................................................... 12 2.2.3 Climate ............................................................................................ 12

2.3 Population ............................................................................................. 14 2.3.1 Demography ................................................................................... 14 2.3.2 Living Conditions ............................................................................. 15

2.4 Health and Sanitation ............................................................................ 16 2.4.1 General Health ................................................................................ 16 2.4.2 Water and Health-related Aspects .................................................. 17 2.4.3 Sanitation Facilities ......................................................................... 18 2.4.4 Education ........................................................................................ 19

2.5 Economy ............................................................................................... 20 2.5.1 City Income and Expenditures ........................................................ 20 2.5.2 Employment .................................................................................... 20 2.5.3 Agriculture ....................................................................................... 20 2.5.4 Commerce and Trade ..................................................................... 21 2.5.5 Tourism ........................................................................................... 21

2.6 Social Services ...................................................................................... 22 2.6.1 Health and Sanitation ...................................................................... 22 2.6.2 Transportation and Communication ................................................ 22 2.6.3 Power Supply .................................................................................. 23


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2.6.4 Water Supply .................................................................................. 24 2.7 Development Plans ............................................................................... 24

3 Socio-economic Survey and Stakeholder Consultations ....................... 25

3.1 Socio-economic Survey ......................................................................... 25 3.1.1 Profile of Households in Project Site ............................................... 25 3.1.2 Income and Expenditure Profile ...................................................... 26 3.1.3 Existing Water Service .................................................................... 26 3.1.4 Sanitation, Health and Hygiene....................................................... 27 3.1.5 Willingness to Connect/ Willingness to Pay .................................... 28 3.1.6 Risks and Vulnerabilities ................................................................. 29 3.1.7 Social Services and Networks......................................................... 30 3.1.8 Gender Roles, Issues and Concerns .............................................. 30

3.2 Stakeholder Consultations and Focus Group Discussions .................... 30 3.2.1 Summary of Consultations .............................................................. 31

3.3 Poverty Analysis, Social Benefits and Recommendations ..................... 35 3.3.1 Poverty Analysis ............................................................................. 35 3.3.2 Social Benefits ................................................................................ 35 3.3.3 Gender Analysis .............................................................................. 36 3.3.4 Indigenous People, Ethnic Minorities and other Vulnerable Groups .. ..... in the Subproject Area .................................................................... 36

3.4 Summary and Recommendations ......................................................... 37 3.4.1 Summary ........................................................................................ 37 3.4.2 Recommendations .......................................................................... 37

4 The Water District and its Existing Facilities ........................................... 39

4.1 Historical Background ............................................................................ 39 4.2 Description of Waterworks Facilities ...................................................... 40

4.2.1 Water Sources ................................................................................ 40 4.2.2 Transmission and Distribution network ........................................... 42 4.2.3 Treatment ....................................................................................... 42 4.2.4 Distribution ...................................................................................... 43 4.2.5 Storage Facilities ............................................................................ 43 4.2.6 Service Connections ....................................................................... 44

4.3 Service Area Coverage ......................................................................... 44 4.4 Organization and Management ............................................................. 44

4.4.1 Organization.................................................................................... 44 4.4.2 Operation ........................................................................................ 44 4.4.3 Non-Revenue Water (NRW) ........................................................... 45

4.5 Deficiencies of the Existing System ....................................................... 50 5 Population and Water Demand Projections ............................................. 51

5.1 General .................................................................................................. 51 5.2 Service Area Delineation ....................................................................... 51 5.3 Barangay and Service Area Population Projections .............................. 51

5.3.1 Past Growth Rates .......................................................................... 51 5.3.2 Future Growth Rates ....................................................................... 53 5.3.3 Population Projections .................................................................... 53 5.3.4 Served Population Projections ........................................................ 53

5.4 Water Demand Projections .................................................................... 54


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5.4.1 Domestic Water Demand ................................................................ 54 5.4.2 Commercial/Industrial Water Demand ............................................ 54 5.4.3 Institutional Water Demand ............................................................. 55 5.4.4 Non Revenue Water (NRW)............................................................ 55 5.4.5 Total Water Demand ....................................................................... 55 5.4.6 Number of Service Connections ..................................................... 55 5.4.7 Water Demand Variations ............................................................... 55

6 Water Resources ........................................................................................ 57

6.1 Water Resources Inventory ................................................................... 57 6.1.1 Surface Water Inventory ................................................................. 57 6.1.2 Groundwater Resources Inventory ................................................. 58 6.1.3 Water Quality .................................................................................. 62

6.2 Recommended Potential Sources ......................................................... 63 6.2.1 Surface Water ................................................................................. 63 6.2.2 Groundwater ................................................................................... 63

6.3 Recommended Further Investigations of Potential Sources .................. 63 6.3.1 Test Well Drilling ............................................................................. 63

7 Analysis of Options and Alternatives ....................................................... 65

7.1 Water Supply ......................................................................................... 65 7.1.1 Water Sources ................................................................................ 65 7.1.2 Treatment ....................................................................................... 67 7.1.3 Storage ........................................................................................... 67

7.2 Sanitation .............................................................................................. 68 8 Recopmmnded Plan – Water Supply ........................................................ 70

8.1 Rationale for Subproject ........................................................................ 70 8.2 Water Supply Recommended Plan........................................................ 70

8.2.1 Water Source .................................................................................. 70 8.2.2 Storage Facility ............................................................................... 70 8.2.3 Transmission/Distribution Pipelines ................................................ 70 8.2.4 Service Connections ....................................................................... 72

8.3 Non Revenue Water (NRW) .................................................................. 72 8.3.1 NRW Reduction .............................................................................. 72 8.3.2 NRW Recommended Operational Activity Improvements ............... 75 8.3.3 NRW Capital Investment Requirement ........................................... 76

8.4 Implementation Schedule ...................................................................... 78 8.5 Cost Estimates for Improvement and Expansion of System .................. 78

9 Recommended Plan – Sanitation ............................................................. 82 10 Assessment of Water District Capability ................................................. 83

10.1 Water District History ............................................................................. 83 10.2 Technical and Operational Feasibility .................................................... 83

10.2.1 Debt Servicing ................................................................................. 83 10.2.2 Performance Parameters ................................................................ 84 10.2.3 “New Technology” Adopted ............................................................ 84 10.2.4 Non Revenue Water Reduction Program ........................................ 84 10.2.5 Service Coverage ........................................................................... 85


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10.3 Iinstitutional Feasibility ........................................................................... 85 10.3.1 Relationship with LGU .................................................................... 85 10.3.2 Relationship with LWUA ................................................................. 86 10.3.3 Structure and Staff .......................................................................... 86 10.3.4 Systems .......................................................................................... 86

10.4 Subproject Implementation .................................................................... 87 10.4.1 LWUA Proposed Project ................................................................. 87 10.4.2 Proposed Set-up for ADB Subproject Implementation .................... 87

11 Financial Analysis ...................................................................................... 89

11.1 Historical and Existing Financial Performance (2004-2008) .................. 89 11.1.1 Revenues and Expenses ................................................................ 89 11.1.2 Cash Flow ....................................................................................... 91 11.1.3 Outstanding Obligations .................................................................. 92 11.1.4 Assets ............................................................................................. 92 11.1.5 Accounts Receivable ...................................................................... 93 11.1.6 Liabilities ......................................................................................... 93 11.1.7 Financial Ratios .............................................................................. 94

11.2 Financial Feasibility ............................................................................... 94 11.2.1 Introduction ..................................................................................... 94 11.2.2 Cost Analysis .................................................................................. 95 11.2.3 Revenue Forecasts ......................................................................... 97 11.2.4 Project Viability ............................................................................... 98

11.3 Impact of the Proposed Subprojects on the WD’s Future ......................... Financial Operation ............................................................................... 99

12 Economic Analysis .................................................................................. 101

12.1 Overall Approach to Economic Analysis .............................................. 101 12.2 Economic rationale .............................................................................. 101 12.3 Before- and After-Project Situations .................................................... 102 12.4 Economic Benefits ............................................................................... 102 12.5 Willingness to Pay ............................................................................... 103 12.6 Economic Costs .................................................................................. 103 12.7 EIRR and Sensitivity Analysis ............................................................. 104 12.8 Subproject Beneficiaries ...................................................................... 105 12.9 Project Sustainability ........................................................................... 105


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Figures

1.1 Schematic of Proposed Water Supply Improvements - LCWD 6 2.1 Location Map of Legazpi City 13 4.1 Existing Water Supply System – LCWD 41 5.1 Present and Future Service Areas – LCWD 52 8.1 Schematic of Proposed Water Supply Improvements – LCWD 71 10.1 Project Management Organization Structure 88 Tables 1.1 Total Development Cost (in PhP’000) - LCWD 8 1.2 Financing Plan (in PhP’000) - LCWD 9 2.1 Land Area and Population Density of Barangays, Legazpi City, Albay, 2000 and 2007 14 2.2 Leading Causes of Morbidity, 2008 – Legazpi 17 2.3 Leading Causes of Mortality, 2008 – Legazpi 17 2.4 Sanitation Facilities and Coverage, Legazpi City, 2000 19 2.5 Albay Electric Cooperative Inc. II (ALECO II), Legazpi City, Albay 23 3.1 Location of Slums in Legazpi City, 2008 32 3.2 Flood Prone Areas, Legazpi City 32 4.1 Summary of Existing Well Sources - LCWD 40 4.2 Existing Pipe Sizes and Length - LCWD 42 4.3 Storage Facilities – LCWD 43 4.4 Number and Type of Service Connections - LCWD 44 4.5 Reported Water Production and Billed Volume for Year 2008 - LCWD 46 4.6 Components of Revenue and Non Revenue Water 46 4.7 Estimation of Apparent Losses - LCWD 47 4.8 IWA Water Balance Data for Year 2008 – LCWD 47 4.9 Unavoidable Annual Real Loss - LCWD 48 4.10 Infrastructure Leakage Index - LCWD 48 5.1 Legazpi City Growth Rates 53 5.2 Population Projections – Legazpi City 53 5.3 Projected Domestic Connections and Consumption (Usage) – LCWD 54 5.4 Projected Commercial/Industrial Connections and Consumption (Usage) – LCWD 54 5.5 Projected Institutional Connections and Consumption (Usage) – LCWD 55 5.6 Projected Total Connections and Average Day Demand – LCWD 55 5.7 Water Demand Variations - LCWD 56 6.1 Nasisi River and Yawa River Flow Frequencies - LCWD 58 7.1 Additional Water Requirement (2010 to 2025) - LCWD 65 7.2 Additional Water Requirement (2010 to 2025) – LCWD 66 7.3 Water Requirement for Taysan (2010 to 2025) – LCWD 67


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Tables (continued) 7.4 Review of Available Septage Treatment Technologies 69 8.1 Storage Requirement for Expansion Area – LCWD 70 8.2 NRW Capital Investment Requirements – LCWD 74 8.3 Estimated Distribution Main Line Leaks and Costs – LCWD 75 8.4 Summary of Proposed NRW Investment Expenditure – LCWD 77 8.5 Detailed NRW Cost Breakdown – LCWD 78 8.6 Implementation Schedule – LCWD 79 8.7 Total Capital Cost Estimate – LCWD 80 8.8 Operation and Maintenance Cost Estimate – LCWD 81 10.1 Summary of Performance Parameters – LCWD 84 10.2 NRW Reduction Activities – LCWD 85 11.1 LCWD Operating Revenues, 2004-2008 89 11.2 LCWD Water Tariff 89 11.3 LCWD Operating Expenses 90 11.4 LCWD Net Income, 2004-2008 90 11.5 Income Statement 2004-2008 – LCWD 91 11.6 Cash Flow Statements, 2005-2008 – LCWD 91 11.7 Details of Existing Loans (as of December 2008) – LCWD 92 11.8 Assets and Other Debts, 2004-2008 – LCWD 92 11.9 Aging of Accounts Receivables – LCWD 93 11.10 Liabilities and Equity, 2004-2008 – LCWD 93 11.11 LCWD Financial Ratios, 2004-2008 94 11.12 Total Development Cost – LCWD 95 11.13 Financing Plan – LCWD 96 11.14 Proposed Tariff Schedule, 2014 – LCWD 97 11.15 Other Parameters and Assumptions – LCWD 98 11.16 Weighted Cost of Capital – LCWD 98 11.17 Summary Result of FIRR – LCWD 99 11.19 Summary of Financial Ratios – LCWD 100

12.1 Before- and After-Project Situations, Water Supply – LCWD 102 12.2 Values for Quantifying Economic Benefits, Water Supply – LCWD 103 12.3 Willingness to Pay (WTP) – LCWD 103 12.4 EIRR and Sensitivity Test Results, Water Supply – LCWD 104 12.5 Subproject Beneficiaries, Water Supply– LCWD 105 12.6 Project Sustainability, Water Supply – LCWD 105


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Appendices 3.1 Socio-economic Survey Results – Legazpi City Water District 106 3.2 Summary of Stakeholder Consultations – LCWD - April–August 2009 202 3.3 List of NGOs Serving Urban Poor and Vulnerable Groups, Legazpi City 216 3.4 Output of Gender Action Planning Workshop August 6 – 7, 2009 217 3.5 Some Recommendations on Social Dimensions in Subproject Implementation 220 4 Legazpi City Water District Organization Chart 224 5.1 Population Projections 2010-2025 – LCWD 225 5.2 Population Served and Number of Connections Projections – LCWD 227 5.3 Served Populations and Water Demand Projections – LCWD 228 A – 2010 B – 2015 C – 2020 D – 2025 5.4 Water Demand Variation – LCWD 237 6.1 Surface Water Data – LCWD 238 6.2 Groundwater Data – LCWD 246 6.3 Extract from Watcon, Inc. Geo-Resistivity Report June 2009 – LCWD 289 6.4 Proposed Well Locations and Designs – LCWD 290 8 Water Supply Infrastructure and Data - LCWD 291 11 Finanacial Analaysis Tables - LCWD 295 12 Economic Analysis – LCWD 303


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GLOSSARY AND ACRONYMS

ABD Asian Development Bank AIFC average incremental financial cost A/R accounts receivable AP affected person APIS annual poverty indicator survey ARI acute respiratory infection AusAID Australian Aid barangay village BNA basic needs approach BOT build-operate-transfer BSP basic sanitation package BWSA Barangay Water and Sanitation Association CAP community action plan CBO community-based organization CCF community consultation forum CDA Cooperatives Development Agency CDD community-driven development CFR case fatality rate CFT community facilitator team CLTS community-led total sanitation COA Commission on Audit C&P consultation and participation CPC certificate of public convenience CSC community sanitation center CSS city sanitation strategy CY calendar year DBL design-build-lease DBO design-build-operate DBM Department of Budget and Management BDP Development Bank of The Philippines DED detailed engineering design DENR Department of Environment and Natural Resources DFR draft final report DHF dengue hemorrhage fever DILG Department of Interior and Local Government DOF Department of Finance DOH Department of Health DPWH Department of Public Works and Highways DRA demand responsive approach DSA delineated service area DSCR debt service coverage ratio EA executing agency (LWUA) EARF environmental assessment review framework EIA environmental impact analysis EIRR economic internal rate of return EMP environmental management plan EO executive order EOCC economic opportunity cost of capital FGD focus group discussion FMAQ financial management assessment questionnaire forex foreign exchange FS feasibility study FY fiscal year (1 January – 31 December)


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GFI government financial institution GIS geographic information system GOCC government owned and controlled corporation GOP Government of the Republic of the Philippines GR (i) government regulation, (ii) general record (in legal cases) HDI Human Development Index HH household HRD human resources development IA implementing agency IBRD International Bank for Reconstruction and Development (World Bank) ICC Investment Coordinating Council (NEDA) ICG internal cash generation IDAP institutional development action plan IDC interest during construction IDCB institutional development and capacity building IEC information-education-communication IEE initial environmental examination IFS Investment and Financial Services (LWUA) IOL inventory of losses IPDP indigenous peoples’ development plan IRA internal revenue allotment IRR implementing rules and regulations IT information technology IWA International Water Association JICA Japan International Cooperation Agency KABP knowledge-attitudes-behavior-practices KFP an adaptation of KAP (knowledge, attitudes and practices) LCMD Legazpi City Water District LG local government LGC local government code LGU local government unit LIDAP local institutional development action plan LIHH low income household LLI local level institutions LOI letter of intent lps, l/s liters per second LWUA Local Water Utilities Administration MDFO Municipal Development Fund Office MDG Millennium Development Goals M&E monitoring and evaluation MFF Multitranche Financing Facility (ADB) MIS management information system MLUWD Metro La Union Water District MOU memorandum of understanding MPA Methodology for Participatory Assessments MTPDP Medium Term Philippine Development Plan MTPIP Medium-Term Public Investment Program MWSS Metropolitan Waterworks and Sewerage System (Metro Manila) NAMRIA National Mapping and Resources inventory Authority NAPC National Anti Poverty Commission NEDA National Economic Development Authority NGA national government agency


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NGO non-government organization NPV net present value NRW non-revenue water NSCB National Statistical Coordination Board NSO National Statistics Office NSSMP National Sewerage and Septage Management Program NWRB National Water Resources Board OCR Ordinary Capital Resources (ADB) ODA official development assistance OGCC Office of the Government Corporate Counsel OJT on-the-job training O&M operation and maintenance PD presidential decree PFI private funding institution PHAST Participatory Hygiene and Sanitation Transformation PhP, Php Philippine peso PIU project implementation unit PMO project management office PMU project management unit PNSDW Philippine National Standards on Drinking Water PPMS project performance monitoring system PPTA project preparation technical assistance PSA poverty and social assessment psi pounds per square inch PSP private sector participation PWSSR Philippine Water Supply Sector Roadmap QC quality control QM quality management QMWD Quezon Metro Water District RA republic act RG regional government RIAP revenue improvement action plan RRP report and recommendation of the president (ADB) RWSA Rural Waterworks and Sanitation Association SES socioeconomic survey SHBC

sanitation and health behavioral change

SLA sub-loan agreement SPAR subproject appraisal report SSC school sanitation centre SCSS simplified community sewerage system SLA subsidiary loan agreement SWG sanitation working group SWM solid waste management TA technical assistance TB tubercolosis TOR terms of reference TOT training-of-trainers UFW unaccounted-for water UNICEF USAID

United Nations Children Fund United States Agency for International Development

V variation (contract)


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VIP ventilated improved pit (latrine) WASCO Water Supply Coordination Office (NAPC) WD water district WHO World Health Organization WPEP Water Supply and Sanitation Performance Enhancement Project WQ water quality WS water supply WSP water service provider WSP-EAP Water and Sanitation Program – East Asia Pacific WSS water and sanitation WTP willingness-to-pay WWTP wastewater treatment plant


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Location Map

Metro La Union WD

Quezon Metro WD Legazpi

City WD

Leyte Metro WD

City of Koronadal WD


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SUBPROJECT APPRAISAL REPORT: LEGAZPI CITY WATER DISTRICT

1 EXECUTIVE SUMMARY

1.1 INTRODUCTION

1. Based on an evaluation of candidate water districts (WD) on criteria such as creditworthiness, interest to participate, and readiness, during the Inception Phase of the PPTA (March 2009), the Legazpi City Water District (LCWD) was selected as one of five pilot WDs to participate in the PPTA for the preparation of subproject appraisal reports (SPAR).

2. The SPAR is based on data collection field surveys (including a socio-economic survey), stakeholder consultations and analyses carried out during April-August 2009. A participatory approach was adopted, involving close consultation with key stakeholders and target communities which has enabled subproject design and formulation to reflect the views and aspirations of the WD, local government stakeholders and beneficiary communities. The subproject has been prepared in accordance with relevant national legal requirements and standards, and ADB requirements, policies, and guidelines.

3. Through this process, interest was expressed by both LCWD and the City of Legazpi Local Government Unit (LGU) in cooperating to develop a pilot sanitation (septage management) component—in addition to the proposed improvements and expansion of the WD’s water supply system.

4. Draft outline technical designs, tariff projections and implementation arrangements were presented and discussed with national and subproject stakeholders during a workshop on 26-27 August. Adjustments/ refinements to the subproject design and implementation program resulting from the workshop are incorporated in the SPAR in the Draft Final Report (DFR) submitted in November 2009.

5. For the preparation of the DFR it was assumed that sanitation works would be financed under a grant from AusAID, subject to confirmation. However, during the tripartite meeting for the DFR held on 16 February 2010, ADB informed that AusAID had changed their investment priorities, and grant funds were no longer available for sanitation.

6. On 10-11 March 2010, LCWD were consulted in this new light, to determine whether they were interested if sanitation was financed from the loan or from their own funds. The GM consulted with the Board, and later relayed the Board’s decision: they decided to just drop the sanitation component from the Project package. For the Final Report, it was agreed that the sanitation component for LCWD will be deleted from the proposal; the Final Report will only cover the water supply component.

7. The format of the SPAR is based on the standard format for feasibility studies as prepared for the Local Water Utilities Administration (LWUA), the executing agency for the PPTA.

1.2 CONCLUSIONS OF SOCIO-ECONOMIC SURVEY AND STAKEHOLDER CONSULTATIONS

1.2.1 Summary

8. Legazpi City has a relatively high average growth rate of over 1.6%. As the service center of Region 5, the rise of subdivisions, resettlement due to calamities and migration of


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the poor to urban centers in search of jobs has put pressure on basic services such as water and sanitation.

9. Within this context, stakeholder consultations confirmed the need for the subproject in accordance with the city’s development plans for southward expansion. Although there were some misgivings about the bulk water contract of the Water District—and areas for improvement were suggested relative to water quality and water rates—on the whole there was a positive response to the proposed plans for water service improvement and expansion.

10. Specific recommendations and insights were also forwarded for the implementation of affordable, pro-poor and gender responsive programs and policies. These called for the subproject to develop gravity water sources and improve water quality. Feedback also confirmed participatory and collaborative strategies to enhance water access by the poor through the pipe system and through communal water points. In coordination with NGOs, local governments and other agencies, partnerships were also seen as important in promoting the role of communities, and in the improvement of sanitation facilities and hygiene practices that could maximize benefits from the increased access to safe water. A Gender Action Plan included community-based initiatives to address identified gender and poverty issues.

11. Legazpi City is vulnerable to natural calamities; this in turn highlighted the vulnerability, especially of the poor, to the loss of water sources, to the increased cost of water delivery and to the destruction of homes, water and sanitation facilities. While the city does not manage a designated watershed, the continuing degradation of water resources coupled with fast population increase signal a need to help ensure the sustainability of water sources.

1.2.2 Recommendations

12. The pilot subproject should support strategies to link water and sanitation to the Project’s overarching goal of poverty reduction. The proposed elements of a plan for the social dimensions of the subproject reinforce a public service orientation and a Corporate Social Responsibility agenda consistent with the delivery of water and sanitation as a public service with pro-poor programs.

13. The budget for some specific recommendations is integrated in the technical components for water and sanitation as microfinance or pro-poor allocations such as for public faucets, and in capability building and institutional plans as technical assistance.

14. Pro-Poor Targeting of Participants. The subproject should target all households living within the vicinity of the network of the piped water system. The subproject should also target disadvantaged groups (e.g. women headed households and poor HHs in the slum areas) and other unserved/underserved areas for appropriate water services such as communal water points in collaboration with the city and barangays. This may also be through easy installation plans that expand the reach of subproject benefits while maximizing cost recovery.

15. Households for the sanitation component should be identified in coordination with the LGU that will undertake a survey of sanitation facilities. In coordination with the LGU, targets will also be made to cover a set percentage of sanitation hotspots for the improvement of septage systems by the end of the subproject loan implementation period.

16. Micro-finance and Livelihood Options. A micro-finance facility should be set up to ensure participation in septic tank installation/improvement of communal facilities for


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interested participants in sanitation hotspots. Part of this could also be leveraged with the LGU to promote the repair of substandard individual septic tanks. A cost recovery scheme should be established to enable others to benefit from the revolving fund. The WD’s Gender and Development Fund and other sources may be accessed to support water and sanitation-related livelihood options of women and urban poor groups.

1.3 WATER SUPPLY

1.3.1 Rationale

17. The present service area of LCWD includes 53 barangays out of the 70 barangays of Legazpi City. Barangays Taysan, Lamba and Maslog, located approximately 4 kilometers away from the existing system, are being proposed by LCWD as its priority area for its expansion program. Another expansion area being eyed by LCWD for expansion is Barangay Banquerohan; this barangay is approximately 20 km away from the city center.

18. There is thus a need to increase water production to improve and expand the water supply system of LCWD in order to meet the projected water demand for the design year 2025, both in the existing and proposed service areas. The expansion area will include people to be relocated away from the hazard area of the Mayon volcano.

1.3.2 Existing Water Supply System

19. Following the severe damage caused by Typhoon Reming in 2006, at present only six (6) of 10 previous springs are being utilized to support the water requirement of about 1,000 households in Barangays Upper Arimbay, Bigaa and Bagong Abre. Well sources are still in place, including the submersible pumps and the hydraulic control structures. Although not in operation, these facilities are still being maintained regularly by LCWD up to the present time. From November 2006 up to February 2008, LCWD continued the utilization of these water sources, despite the reduction of the discharge rate of the spring sources.

20. In March 2007, LCWD entered into a 25-year Bulk Water Supply contract with Philippine Hydro Inc. for the supply and delivery of 20,000 cubic meters per day of bulk water to the system of LCWD. The raw water source is the River Yawa.

21. As of May 2009, LCWD has a total of 16,934 metered service connections, covering 53 barangays.

22. LCWD is aware of the need to maintain control of non-revenue water (NRW), and is concerned by the increase in NRW that has occurred since the commissioning of the bulk water supply, especially given the cost of the bulk water at PhP13.50/cum. The proactive meter management strategy is a direct result of this concern. However, other operational measures such as district metering, leakage management and illegal use management do not currently appear to be given a high priority—perhaps due to the upfront investment requirement for metering and leakage management equipment.

23. LCWD reported production and billed volume figures for 2008 were analyzed to evaluate NRW performance, and show that the reported NRW for 2008 was 21.2%—with a loss volume of 1.1 million m3.

24. Deficiencies of the Existing System. The main deficiencies concern pressure distribution and water quality.

25. Pressure Distribution: The existing transmission and distribution network was designed and constructed in 1981 in consideration of the distance and location of the


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previous wells and spring sources. Although the pressure distribution is quite balanced despite the introduction of bulk water to the system, it is still necessary to conduct hydraulic analysis of the pipe network and reconfigure the pipe sizes and pressure distribution of the existing system in consideration of future expansion.

26. Water Quality: When bulk water was injected into the system, several complaints were lodged by consumers regarding poor water quality. The perception was that the increase of system pressure has caused old and dilapidated pipes to deteriorate; thus, water became contaminated. As of July 2009, the complaints on poor water quality still continue to mount despite the completion of the program to replace old and dilapidated pipes, and LCWD’s continuous flushing and maintenance of the system.

27. LCWD has to look into the effectiveness of the water treatment plant of bulk water by monitoring treated water at various distribution points.

1.3.3 Scope of Proposed Water Supply Component

28. Water demand. The scope of proposed water supply component is designed to meet the projected water demand of LCWD for the year 2025. The total average daily demand of the WD is projected to increase significantly as a result of population growth and the improvement of the standard of living of the residents in the service area. The average day water demand is expected to increase from 19,353 cumd in 2010 to 21,775 cumd in 2015, to 24,457 cumd in 2020, and to 27,046 cumd in 2025.

29. Water resources. The Yawa River could support the year 2025 total water demands. The flow of 848 lps (73,267cumd), which corresponds to 80 per cent of minimum flow as the limit for extraction is more than thrice the present abstraction from the river.

30. The bulk water supplier could also immediately meet additional demands of 116 lps (10,000 cumd), considering that the design capacity of the plant is 347 lps (30,000 cumd).

31. The existing wells in the Bogna and Mabinit Wellfields that produce good water quality can also be used to support the additional LCWD demands. A total of 103.98 lps (8,984 cumd) is available from the two (2) wellfields—79.83 lps from the Bogna Wellfield and 24.14 lps from the Mabinit Wellfield.

32. The absence of wells within the expansion areas of the LCWD covering Barangay Taysan and Banquerohan makes it necessary to construct test wells or exploratory wells during the initial stage of the design phase of the subproject. Test well drilling will confirm the quantity and quality of available groundwater prior to finalization of the subproject detailed design.

33. Proposed works. The existing service coverage will eventually be expanded to include the un-served population within the existing service area and additional areas, particularly Barangay Taysan, Lamba, Maslog and Banquerohan.

34. Taking into account the cost of water between the different alternatives (least-cost analysis), the following works are proposed:

� Re-commissioning of nine (9) existing wells at Bogna and Mabinit well fields. For the main system, no additional storage facility is recommended if the additional water source is tapped from existing and new well sources at Bogna and Mabinit well field.

� Well sources for the expansion area of Barangays Taysan, Maslog, Lamba and Banquerohan (2 new wells).


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� For the main system, reinforcement pipes are recommended at various sections of the distribution network to accommodate the 2025 flow and minimum pressure requirement within LCWD main service area.

� The service connection is expected to increase from the existing 16,934 to 24,929 by the design year 2025. The additional 7,995 service connections will come from the unserved portions within the main service area and the four (4) barangays in the proposed expansion areas.

� There is scope for investment in NRW reduction by LCWD in a limited number of areas.

35. A schematic diagram of the proposed improvements is shown on Figure 1.1.

1.3.4 Implementation Schedule

36. At the start of subproject physical implementation in 2012, construction activities shall cover recommissioning of 9 existing wells at Bogna and Mabinit well fields, and the construction of deep well, pumping facilities, storage facilities and transmission/distribution pipelines and service connections at Barangays Taysan, Lamba, Maslog and Banquerohan.


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Figure 1.1: Schematic of Proposed Water Supply Improvements - LCWD


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1.4 WATER DISTRICT CAPABILITY AND SUBPROJECT IMPLEMENTATION

37. Water district performance. LCWD is performing very well despite the usual operational problems it faces with the LGU and some customers. The price arrangements with the bulk water supplier have driven operating costs significantly, but the WD can now focus on managing the system—thus improving efficiency in operations.

38. Compared to the industry average, the LCWD was seen to be performing well in 2007. Its production efficiency improved with a significant reduction in NRW. Its collection effort deteriorated slightly but was still well within industry standards. Its level of profitability decreased significantly due to higher operating costs but was still higher than the average. Cost control also deteriorated significantly as a result and suffered in comparison to the industry standard. Management of personnel was better than the average Large WDs but the increase in the number of customers over this 3-year period was still lacklustre considering that LCWD was able to increase its customer base by only 1,774 or by only 10.0%.

39. The water district is presently undertaking a hydraulic network modelling project. The impacts of this activity on the WD are improvements in operating efficiency and NRW reduction as this will allow WD engineers to create hydraulic zones and district metering areas. There will be better understanding of water usage across the network, improved knowledge of the network asset types and condition, and information acquired will better support strategic resource planning.

40. The WD realizes that there is a need to reduce its NRW to acceptable levels given the cost of bulk water supply. It has is to eliminate illegal connections and has made serious attempts to repair leaks.

41. As of June 30, 2009, the Water District has a total of 17,060 registered connections and a service coverage of about 55% of the population. Out of 60 barangays with the City’s boundaries, 53 have already been reached. From 300 connections 27 years ago, the Water District can be said to be performing satisfactorily.

42. Subproject implementation. A Water District Implementing Unit (WDIU) within LCWD will act as the central coordinating body for subproject implementation, and be headed by the Construction Division Manager or a senior professional within WD ranks.

43. Blank

44. Blank


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1.5 SUBPROJECT COST, FINANCING PLAN AND FINANCIAL ANALYSIS

45. Development Costs. The total development cost for the water supply subproject is approximately Php113 million ($2.5 million). This is based on the costs presented in Chapters 8 and 9 with additional price contingencies to allow for the timing of implementation. Table 1.1 presents a summary of the development cost for the water supply system.

Table 1.1: Total Development Cost (in PhP’000) – LCWD

Civil Works Equipment Land1 Source Development

a. Well Drilling/Development m 1 7,400,000 7,400.0 - - 2,220.0 5,180.0 7,400.0 b. Surface Water / River Intake lot 0 0 - - - - - - c. Spring Intake & Sump Improvement lot 0 0 - - - - - -

Sub-Total 7,400.0 - - 2,220.0 5,180.0 7,400.0 2 Pumping Station

a. Pump House including pipings, ls 1 200,000 172.0 28.0 - 48.0 152.0 200.0 production meters, valves, hypochlorinators, etc

b. Electro-mechanical Equipment ls 1 3,600,000 900.0 2,700.0 - 2,448.0 1,152.0 3,600.0 including controls & accessories,riser pipes, transformers, powerline extension, etc.

c. Gen-set set 0 0 - - - - - - Sub-Total 1,072.0 2,728.0 - 2,496.0 1,304.0 3,800.0

3 Transmission Facilities ls 1 37,000,000 33,300.0 3,700.0 - 14,800.0 22,200.0 37,000.0 4 Storage Facilities ls 1 10,000,000 9,500.0 500.0 - 1,900.0 8,100.0 10,000.0 5 Service Connections no 7,995 1,500 7,195.6 4,797.0 - 3,837.7 8,154.9 11,992.6 6 NRW Reduction ls 1 12,566,984 7,540.1 5,026.7 - 4,021.3 8,545.5 12,566.8 7 Land Acquisition lot 1 2,000,000 - 2,000.0 - 2,000.0 2,000.0

SUB-TOTAL 66,007.7 16,751.7 2,000.0 29,275.0 55,484.4 84,759.4 DETAILED ENGINEERING DESIGN 5,462.1 - - 1,638.6 3,823.5 5,462.1 CONSTRUCTION SUPERVISION 3,641.4 - - 364.1 3,277.3 3,641.4 PHYSICAL CONTINGENCIES - - - 1,591.4 6,784.5 8,375.9 PRICE CONTINGENCIES 7,881.7 1,757.8 209.9 795.6 9,932.7 10,728.3

G R A N D T O T A L 82,992.9 18,509.5 2,209.9 33,664.8 79,302.4 112,967.2

Unit CostComponent FEC Local TotalSub-Total

Unit Quantity

46. Financing Plan. The subproject will mainly be financed by ADB through relending by LWUA to the Water District. ADB loan will finance Php97.7 million ($2.17 million) of the water supply while the WD will finance the cost of land acquisition and taxes amounting to about Php15.3 million. The financing plan is shown in Table 1.2 .


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Table 1.2: Financing Plan (in PhP’000) – LCWD

2011 2012 2013 TOTAL

FUND APPLICATION

Basic Construction Cost 6,786 38,973 37,001 82,759

Land Acquisition/Resettlement 2,000 - - 2,000

Detailed Engineering Design 5,462 - - 5,462

Physical Contingency 779 3,897 3,700 8,376

Price Contingency 1,003 4,141 5,585 10,728

Supervision 299 1,715 1,628 3,641

TOTAL 16,328 48,726 47,913 112,967

FUND SOURCE

WD Equity 2,214 6,606 6,496 15,316

Sub-Loan 14,115 42,119 41,417 97,651

ADB Sub-Loan 14,115 42,119 41,417 97,651

LWUA Sub-Loan - - -

TOTAL 16,328 48,726 47,913 112,967

47. Water Tariff. LCWD last increased the water tariff in 2008. It is assumed that even if there is no subproject, the water tariff will have to be increased in the future to cover increases in its operational expenses. For purposes of the projection, it is assumed that water tariffs will have to be increased by 10% every two years in the future.

48. A two-time tariff increase is proposed--the first increase in 2011 and the second increase in 2014. A 20% increase in 2011, even before completion of the subproject, is necessary for the water district to gain sufficient funds to meet its existing operations. Another 20% increase is proposed in 2014. From 2016 onwards, it is proposed that water tariff will have to be increased by 10% every two years. The proposed increases in the tariff are less than 60% of the previous tariff and not more than 5% of the family income of the low income group, which are both in accordance with LWUA’s requirements.

49. Financial Internal Rate of Return (FIRR). A subproject is considered financially viable if the resulting FIRR of the proposed subproject is higher than the weighted average cost of capital (WACC) that was used in financing the subproject. An FIRR higher than the WACC implies that the incremental net revenues generated by the project will be enough to recover the implementation and operating costs.

50. On the basis of the financing mix and the loan interest of 9.8% and the assumed cost of equity of 12.0% (the economic opportunity cost of capital), the WACC is 7.04%. Sensitivity analyses are likewise conducted to determine the effects of adverse changes on a project such as delay in operation, revenues not realized as expected or increase in capital and O&M cost. The FIRR results under the five scenarios evaluated show that the subproject is viable with FIRR ranging from 13.18% to 18.35%..

51. Affordability of Water Rates. A major consideration in the development of the tariff schedule is the ability of target beneficiaries to pay for their monthly water bill. It is a standing policy of LWUA that the minimum charge for residential connections should not exceed 5% of the family income of the low income group among families connected to the system.

52. For Legazpi City, the estimated monthly income for 2014 is Php12,217. Using the affordability criteria, the minimum monthly bill (minimum charge) of Php286.00 when the project starts to operate in 2014 is only 2.34% of the estimated monthly income of poor families. In all subsequent years the minimum monthly bill is less than 5% of the estimated


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monthly income. Hence, the proposed level of water tariff is deemed affordable to the low income or poor families.

53. Impact of the Proposed Subproject on the WD’s Financial Operation. The Projected Income Statement for the period 2009 to 2041 shows that the Water District will generate net income for all years of the projection period.

54. Cash Flow Statements are also developed for the same period. For all years during the evaluation period, the statements show that annual cash inflows will be sufficient to cover all annual cash outflows of the Water District.

1.6 ECONOMIC ANALYSIS

55. The economic viability of the subproject was determined by computing the economic internal rate of return (EIRR) and comparing the result with the economic opportunity cost of capital (EOCC) of 15%.1 An EIRR exceeding the assumed EOCC indicates that the subproject is economically viable.

1.6.1 Economic Internal Rate of Return and Sensitivity Analysis

56. With the stream of economic benefits and costs computed over the assumed 25-year period, the economic internal rate of return (EIRR) of the water supply investments is 14% which is slightly lower than the assumed cut-off rate of 15%.

57. Sensitivity test results based on (i) a 10% reduction in capital costs, and (ii) a 10% reduction in O&M costs show increases in the EIRR by 1.4 percentage points to 15.4% which are above the EOCC benchmark. Thus, reducing capital and O&M costs by a mere 10% makes the investments economically viable. On the other hand, an increase in resource cost savings and incremental water had the opposite effect of lowering the base case EIRR to just about 13.9% and 13.2% respectively. In these two cases, the EIRR remains below the EOCC benchmark. Of the four key variables that were considered, the subproject was found to be most sensitive to change in O&M costs (SI=0.97) followed by decrease in capital costs (SI=0.94) and increase in incremental water (SI=0.6). Change in resource cost savings has a very small impact on viability. The switching value for O&M costs is 103% and for capital costs, 106%.

1.6.2 Subproject Beneficiaries

58. At the end of 2035, a total of 9,188 new water service connections shall have been added to the existing ones. This will consist of 7,552 residential connections (82%) and 1,636 non-domestic connections (18%). An estimated overall total of 42,394 residents of Legazpi City will directly benefit from the investments by having direct connection to the piped water supply network.

1.6.3 Subproject Sustainability

59. At full economic cost (i.e, capital investments plus O&M), the average incremental economic cost of water (AIEC), or the marginal cost of producing each cubic meter of water, was computed at Php14.2/m3. Considering only capita costs, the AIEC is Php6.9/m3.

1 The hurdle rate for water supply investments is prescribed under NEDA-ICC guidelines for project evaluation which also provides shadow prices for foreign exchange (SER), wage rate for unskilled (SWR) and other non-tradable components of investment costs.


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60. The average tariff, which was computed by dividing the present value of revenue by incremental water consumption, is Php23.8/m3. With an average tariff higher than AIEC, no economic subsidy will be required. The tariff revenue to be generated by the subproject during the period could fully recover all costs, including the full economic cost of the investments which includes capital and O&M.

1.6.4 Poverty Impact

61. The water supply subproject is expected to generate a total net economic benefits (NEB)2 of about Php45 million. Approximately Php42 million will accrue to water consumers. The labour sector will gain about Php17 million while the economy, because of distortions in the exchange rate, will lose around Php14 million. On balance, the economy as a whole will gain the entire NEB of Php45 million.

62. The poverty impact ratio (PIR) for the investments is 25% which means that one-quarter of the NEB will directly benefit the poor in the area.

2 NEB is the difference between the present value of subproject net economic and financial flows.


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2 DESCRIPTION OF STUDY AREA

2.1 LOCATION

63. The City of Legazpi is located in the midsection of the eastern side of the Province of Albay, as well as the Bicol Region as a whole. It is bounded on the north by the Municipality of Sto. Domingo, on the east by the Albay Gulf and the Municipality of Manito, on the west by the Municipality of Daraga, and on the south by the Municipalities of Pilar and Castilla of the Province of Sorsogon.

64. The city is approximately at 13º 09´ N latitude and at 123º45´ East longitude and is about 534 kilometers southeast of Manila via the Philippine-Japan Friendship Highway. It is centrally-located in the Bicol Region. Figure 2.1 shows the location map of the City of Legazpi.

2.2 PHYSICAL FEATURES

2.2.1 Topography

65. The City is generally flat at its Central Business District and the urban area, with slopes ranging from 1% to 7% but with some areas exceeding 18%. Several barangays have slopes ranging from 23.7% at Dapdap up to 99.8% at Bañadero. The northeastern portion of the City has an average slope of about 21% with rolling and undulating areas. The northern barangays have undulating terrain with an average slope of 11.6% and its southern portion is characterized by rolling mountains, except for Barangay Bagacay where its marshlands are below sea level.

2.2.2 Vegetation

66. In 2003, Legazpi City still had a forested area of 864.7 hectares. It also had a large Grassland/Pasture of 4,656 hectares or 22.8 percent of the City’s land area of 20,420.40 hectares. About half of the City’s land area (10,411.48 hectares or 50.99%) was devoted to agriculture, and the built-up area totaled 3,287.19 hectares or about 16.1% of the land area. The remaining 1,100 or so hectares were used for Special Uses such as mining/quarrying, National Park, airport, and military.

2.2.3 Climate

67. The climate of the City of Legazpi is classified as Type II of the Modified Coronas Classification of the Philippine Climate which is characterized by the absence of a dry season, with a very pronounced maximum rain period generally in the months of December and January. There is not a single dry month in this area.

68. On average, 5 to 6 tropical cyclones blow over the area annually. The average minimum temperature which usually occurs in January and February is about 24ºC and the average maximum temperature which usually occurs in May is about 31ºC. It rains about 250 days a year in Legazpi City with an average total annual rainfall of about 3,200 mm.

69. As a result of the city’s climate, 41 of its barangays involving 15,802 households are flood prone. Very heavy rains can result in mudflows from Mayon Volcano which can adversely affect 2 additional barangays, involving 573 additional families. Of the 41 barangays which are flood-prone, 11 barangays are subject to both flooding and mudflows.


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Table 2.1: Location Map of Legazpi City


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70. Damage to buildings and infrastructure are an always present danger as shown by the passage of Typhoons Milenyo and Reming.

2.3 POPULATION

2.3.1 Demography

71. The population of Legazpi City according to the NSO Census of 2007 is 175,843, with 35,290 household. Urban population accounts for 108,249 which is 61.56% of the total population, while the rural population accounts for 67,594 which is 38.44% of the total population. The annual growth rate is 1.63% based on the 2000 and 2007 population data.

72. The study area is composed of 70 barangays covering a total land area of 20,420.40 hectares which includes a National Park of 857.77 hectares. With the 2007 population of 175,843, the population density then was about 870 persons per km2. Table 2.1 presents the list of urban and rural barangays showing the land area and population for 2000 and 2007.

Table 2.1: Land Area and Population Density of Barangays, Legazpi City, Albay, 2000 and 2007

BARANGAY

LAND AREA (Km²)

POPULATION DENSITY

2000 2007

Urban: 1. EM’s Barrio 0.4367 3680 4183 2. EM’s Barrio South 0.4266 1418 1848 3. EM’s Barrio East 0.1376 1006 833 4. Sagpon 0.1504 1003 1117 5. Sagmin 0.1521 672 633 6. Banadero 0.3756 1127 1195 7. Bano 0.0882 825 886 8. Bagumbayan 0.3657 3456 3436 9. Pinaric 0.1727 1110 1150 10. Cabugao 0.0859 542 590 11. Maoyod 0.1420 1038 1060 12. Tula-Tula 0.1240 2348 2175 13. Ilawod West 0.0851 712 759 14. Ilawod 0.0893 852 868 15. Ilawod East 0.3581 2108 2292 16. Kawit-East Washington 0.7390 4847 5322 17. Rizal St., Ilawod 0.6192 1349 1730 18. Cabagñan West 0.5661 2396 3094 19. Cabagñan 0.1441 1332 1294 20. Cabagñan East 0.1714 666 727 21. Binanuahan West 0.0790 862 855 22. Binanuahan East 0.1695 1222 1328 23. Imperial Court Subdivision 0.1176 633 750 24. Rizal St. 0.1334 1893 2190 25. Lapu-Lapu 0.1744 1091 1088 26. Dinagaan 0.1305 711 637 27. Victory Village South 0.1001 1042 1106 28. Victory Village North 0.1293 2197 2518 29. Sabang 0.1022 1412 1411 30. Pigcale 0.0870 1965 2152 31. Centro-Baybay 0.1911 1216 1279 32. San Roque 0.3825 5219 5338 33. PNR-Penaranda 0.3087 2532 2746 34. Oro Site-Magallanes 0.0984 1827 2607 35. Tinago 0.0690 737 611 36. Kapantawan 0.7192 583 4144


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BARANGAY

LAND AREA (Km²)

POPULATION DENSITY

2000 2007

37. Bitano 0.6380 6341 2797 38. Gogon 1.4631 4699 5498 39. Bonot 0.5723 3815 3614 40. Cruzada 1.3977 3837 5349 41. Bogtong 1.3330 3239 3706 42. Rawis 2.2264 7477 8322 43. Arimbay 1.1360 2923 3421 44. Buraguis 2.4368 3341 3996 45. Dap-Dap 0.2625 1728 1956 Sub-Totals 19.8875 Rural: 46. Tamaoyan 0.5314 1112 1440 47. Pawa 5.2252 2896 3049 48. Dita 0.5109 1349 1586 49. San Joaquin 0.5467 1620 1906 50. Bagong Abre 1.3524 1141 1354 51. Bigaa 1.3173 4954 5199 52. Padang 3.8017 2050 1539 53. Buyuan 4.6441 2737 3162 54. Matanag 4.2172 1364 1618 55. Bogña 5.4693 2928 3257 56. Mabinit 6.7445 1083 1325 57. Estanza 8.3179 3318 4212 58. Taysan 14.6446 7165 10243 59. Puro 2.7547 3670 4084 60. Lamba 2.6739 991 1046 61. Maslog 8.1519 3412 3757 62. Homapon 8.4016 3560 3822 63. Mariawa 9.2108 1361 1414 64. Bagacay 1.7596 1393 1591 65. Imalnod 4.7950 1497 1964 66. Banquerohan 18.1471 5351 6034 67. Bariis 12.7919 1728 1770 68. San Francisco 12.7976 2019 2233 69. Buenavista 14.7739 936 1048 70. Cagbacong 21.9776 2346 2579 Sub-Totals 175.5588 National Park 8.5777 Grand Totals 204.0240

Sources: Physico-Socio Economic Profile, 2008 and NSO Statistics.

2.3.2 Living Conditions

73. The latest available data on housing is in 2000. There were 30,173 housing units occupied by 30,612 households. Less than half of the households (12,672 or 41.4%) owned or were amortizing their homes and less than 1/10th (2,408 or 8.0%) were renting. Another 9,829 or 32.1% occupying houses rent-free with the consent of the owners but 3,988 or 13.0% were occupying houses rent-free without the consent of the owners.

74. A large majority of these buildings (27,988 or 91.4%) were single housing units. The remainder was either duplexes or multi-unit residential buildings. More than half of these housing units (18,797 or 62.3%) were in good condition. Another 4,872 or 15.9% need major repairs and 264 units were dilapidated or condemned. Only 4 houses were vacant.


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75. Out of the 30,173 housing units, 15,862 or 52.6% had galvanized iron or aluminum roofs, 1,777 or 6.0% had tile/concrete/clay tile roofs, and 1,470 or 4.87% had half-galvanized iron & half concrete roofs. No data are available for the remaining11,064 housing units.

76. Half of the housing units (15,232 or 50.5%) had concrete/brick/stone walls. Another 5,694 or 18.87% had walls made of wood, 4,884 or 16.2% had walls of half concrete/brick/stone and half wood, and 3,000 or 10% had walls made of bamboo/sawali/Cogon/Nipa. The remaining units had walls of other materials like salvaged/improvised materials.

77. The median floor area was about 25 square meters, with an average occupancy of 5.19 people.

78. In 2008, there were 37,184 households in Legazpi City. Of these, 26,288 or 70.7% had complete basic sanitation facilities, with the remaining 10,896 or 29.3% using other means of excreta disposal. This is a modest improvement over 2006 where 67.5% of households had sanitary toilets.

2.4 HEALTH AND SANITATION

2.4.1 General Health 1

79. The available data on morbidity and mortality from the City Health Office are those for 2008. Tables 2.2 and 2.3 present the ten leading causes of morbidity and mortality, respectively. From Table 2.2, it can be noted that a potential waterborne disease, diarrhea (all forms), is the 2nd leading cause of morbidity, with 2,802 reported cases. It was also disturbing to have discovered that diarrhea was the 5th leading cause of under-five mortality in the City, with 7 reported cases.

80. Infant Mortality Rate in Legazpi in the past 5 years (2004 –2008) shows an increasing trend. Within this 5 year period, IMR ranges from 13.26 (2004) to 17.75 (2008). However, it has significantly improved compared with the NSO national baseline recorded in 1998 when the mortality rate among infant was at 46 per 1,000 live births. Moreover, the latest figure of 17.78 is very close to the National Objectives for Health for 2010 target set by the DOH (at 17 per 1,000 live birth) and the Millennium Development Goal for child health of at least less than 17 infant deaths per 1,000 live births for the year 2015.

81. Along with the slow progress in attaining these health goals, Legazpi City has specific health threats that need to be addressed. These are concerns that pertain to the double burden of disease. While health problems related to poor development like infectious diseases, malnutrition, diseases related to water and sanitation are still not completely controlled, there are indications that so-called lifestyle and development related diseases are beginning to rise in prevalence. According to the City Health Office, while infectious diseases are still considered as one of the leading causes of morbidity and mortality, cardiovascular diseases and other chronic degenerative diseases are becoming significant contributors to the increasing numbers of sickness and deaths in the City.

82. As of the latest official 2007 FHSIS report to the DOH, Legazpi City public health workers still predominantly rely on the assistance of volunteer health workers or Barangay Health Workers (BHWs) in the delivery of basic public health services. There are about 370 active BHWs in the City as of 2007. Also, traditional birth attendants (TBAs) still are still considered significant providers of health services in the city whose numbers are almost the same as the public health midwives (22 Rural Health Midwives vs. 29 TBAs)

1 Health data are presented in Supplementary Appendix G.


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Table 2.2: Leading Causes of Morbidity, 2008 - Legazpi

CAUSES

Number

Rate

1. Upper Respiratory Tract Infection 22,588 1,236 2. Diarrhea, All Forms 2,802 153 3. Infected Wound 2,026 111 4. Pneumonia, All Forms 1,606 88 5. Fever of unknown origin 1,441 79 6. Hypertension 1,273 70 7. Bronchial Asthma 1,257 69 8. TB, All Forms 1,194 65 9. Skin Disease 1,153 63 10. Intestinal Parasitism 818 45 Source: Legazpi City Health Office.

Table 2.3: Leading Causes of Mortality, 2008 - Legazpi

CAUSES

Number

Rate

1. Pneumonia 264 14 2. Disease of the Vascular System 195 11 3. Disease of the Heart 162 9 4. Neoplasms 93 5 5. TB, All Forms 70 4 6. COPD 52 3 7. Septicemia 50 3 8. Accidents 45 2 9. Diabetes Mellitus 36 2 10. Renal Disease 25 1

Source: Legazpi City Health Office.

83. It is also significant to note that Legazpi City which belongs to the province of Albay, whose provision of basic services are still considered inadequate compared with the national average on health service utilization or coverage indicators like Fully Immunized Children or FIC (for complete immunization services for children under 1 year of age), Ante-Natal Care or ANC (for pre-natal consultation of pregnant women during the entire course of their pregnancy), Skilled Birth Attendants or SBA (for doctors, nurses or midwives attending to women during actual delivery), Facility Based Deliveries or FBD (for access of women to facilities attended by skilled birth attendants during delivery), and Contraceptive Prevalence Rate or CPR (for access of women of reproductive age to modern family planning method of their choice). For all these indicators, the values for the province are lower compared to the national average.

2.4.2 Water and Health-related Aspects

84. Incidence of diarrhea among 0-59 months old children (being the vulnerable population age group) in the localities included in the appraisal is used to indicate the magnitude of the health problem related to water and sanitation, and hygiene. In general, the 5-year trend (2004 – 2008) of diarrhea incidence among children below 5 years old and below is increasing, starting at about 16 percent in 2004 to about 20 percent in 2008. Aside from diarrhea, the City Health Office of Legazpi also reported cases of Soil-Transmitted Helminthiasis, Dengue Hemorrhagic Fever, and Typhoid/ Parathyphoid in the last five years.


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85. Based on the consultation with the City Health Office, there were claims that public health campaign on sanitation and hygiene are regularly being conducted by the local health authorities concerned. These activities range from the conduct of mothers’ class (i.e. bench seminar), food handlers’ class to a more organized activities conducted yearly such as the DOH-initiated Garantisadong Pambata where clients (mostly mothers) are given basic health messages including those that deals with sanitation and hygiene. The City Health Office also regularly collaborates with the public elementary schools where lessons on basic sanitation and hygiene are incorporated in the school curricula like proper handwashing technique and food preparation. Aside from information dissemination and educational campaign, the local health office selectively conducts water chlorination and water testing using PHC (primary health care) media.

86. The City Health Office also conducts bacteriological water testing as part of its routine monitoring of water quality. It also screens food handlers through routine laboratory testing and issuance of health permits.

87. When it comes to hospital waste management, most of the hospitals in the City resort to incineration to dispose hospital wastes despite national policy governing this type of waste. The City plans to organize a more comprehensive management of hospital waste.

88. According to the DOH, Legazpi City has not reported any disease outbreaks due to water contamination or sanitation-related causes, in the past 5 years. There are only occasional increases in the incidence of diarrhea but not at epidemic proportion.

2.4.3 Sanitation Facilities

89. The City of Legazpi has no sewerage system. Although PD 198 mandates Water District to handle wastewater through a sewerage system, this intervention has been neglected for quite some time due to its prohibitive cost.

90. In the absence of a sewerage system, domestic wastewater, which includes excreta is collected by septic tanks. However, the BOD content in septic tanks is only partially removed (about a maximum of 60%2). Thus, still a significant proportion of BOD is left untreated.

91. The NSO data of 2000 (Table 2.4) shows that households using septic tanks are about 57%. It basically means that the remaining 43 % are at risk of disposing excreta in the environment in an unsafe manner that consequently degrades the quality of bodies of water and increases the risk of infection.

92. The PPTA consultation with communities and LGUs revealed that it is an accepted fact that there are septic tanks in the subproject area with unsealed bases. This condition definitely contaminates groundwater.

93. There are private desludgers operating in the area. However, the disposal sites of septage are unknown. When interviewed by the PPTA, they expressed interest to participate in the program.

2 Philippine Sanitation Sourcebook and Decision Aid, World Bank, 2006


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Table 2.4: Sanitation Facilities and Coverage, Legazpi City, 2000

Type of Toilet facilities HH

coverage % Water Sealed + Septic Tank 15160 50 Water Sealed + Septic Tank -Shared 2173 7 Water Sealed + Others 3750 12 Water Sealed + Others - Shared 1688 6 Closed Pit 3061 10 Open Pit 2174 7 Others 778 3 None 1828 6 Total 30612 100

Source: NSO, 2000. 94. Moreover, households with undesludged septic tanks for more than 5 years would become inefficient in treating excreta. The accumulation of sludge lessens the space and retention time needed for treatment. Untreated effluent would consequently go out directly from the septic tank and flow to drainage going to bodies of water. The public’s exposure to untreated effluent along the drainage as well as in the bodies of water is a health risk that should be addressed.

95. Much worse is the presence of open defecation or direct disposal to bodies of water. NSO figures (Table 2.4) reflect that around 1,828 households in the year 2000 had no toilets at all! Without addressing this concern, the exposure level to excreta contamination of vulnerable groups (i.e. poor, children, marginalized groups) will remain very high.

96. The Water Quality Monitoring Report (2002) reflected in the 2008 Socio Economic Profile of Legazpi City showed that certain sampling sites along Sumagayon River have below 5 mg/L Dissolved Oxygen level. These were as follows:

� EM Barrio South (1.8 mg/L) � Dapdap (2.1 mg/L) � Bagumbayan (3.3 mg/L) � Rizal St. (2.7 mg/L).

97. DAO 34 standards indicate 5 mg/L Dissolved Oxygen as the minimum limit. Going below the limit would suggest that the water has excessive organic contents which could come from garbage or untreated wastewater disposed to the river. The practice of indiscriminate disposal of wastes to the bodies of water has to be controlled by the local authorities to avoid its impending impact to economy, health and environment.

2.4.4 Education

98. During the school year 2006-2007, Legazpi City had a total of 32 private schools in operation and 45 public schools in operation at all levels. Three private schools offered only pre-school education, 5 schools offered only pre-school and elementary education, 5 schools offered education from pre-school up to high school only, and 3 schools offered the full course from pre-school up to tertiary level education. Only 1 school offered both elementary and high school education only, 2 schools offered high school education only, 4 schools offered high and college education only, 6 colleges offered tertiary education only.

99. During this school year, there were 41 public elementary schools in operation. The government provided secondary education through 4 high schools and offered tertiary education through only 1 university – the Bicol University.


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2.5 ECONOMY

2.5.1 City Income and Expenditures

100. Legazpi City is a 1st class City and is the Capital of Albay Province. From the 2006 City Accomplishment Report provided by the City Planning & Development Office, the average annual revenue of the City over the period of 3 years from 2006 to 2008 was PhP419,686,819.40. Over the same period, it had an average obligated amount of PhP395,391,055.80 for an annual average surplus of PhP24,295,763.60. Its largest revenue came from its Internal Revenue Allotment which averaged PhP246,933,518.70 per year or 59.0% of the City’s annual revenues over this 3-year period.

101. In terms of Obligation by Sector/Services, General Public Services took the lion’s share of obligated amounts with an annual average of PhP217,078,610.70 or 55.0% of the annual average amount obligated. Economic Services, 20% Development Fund, and Health Services followed a distant 2nd, 3rd, and 4th places, respectively.

2.5.2 Employment

102. In April 2003, Legazpi City had a labor supply of 106,584, age 15 years old and over. This was about 60.6% of the total population. Of this figure, 38,157 or about 35.8% were not in the labor force, leaving an employable population of 68,427 or 64.2% of the labor supply. Employed were 57,136 leaving 11,291 unemployed. However, of the employed population, 13,370 were visibly unemployed so that those who were fully employed totaled 43,766 or 64.0% of the Labor Force.

103. From the 2003 Barangay Socio-Economic Survey, service workers dominate the City’s occupational groupings, with 46% in the services sector. About 16% were production and related workers, transport equipment, etc.; 15% comprise the professional, technical and related workers, clerical workers, administrative, executive, and management workers; 12% were in sales; and another 12% were in agriculture, animal husbandry, and family workers.

104. It is also interesting to note that there were 326 Overseas Contract Workers from this City in 2006.

2.5.3 Agriculture

105. In 2007, agricultural land accounted for about 48.0% (9,755.14 hectares) of the total land area of the City. In the urban barangays, there were 115.25 hectares of agriculture land which was only 5.8% of the urban land area. In the rural barangays, 55.0% (9,639,89 hectares) of the land area was dedicated to agriculture.

106. About 31.6% of the agricultural land was devoted to crops such as rice, corn, root crops, vegetables, legumes, fruit trees, and industrial crops. Rice and corn were planted in 1,231 hectares of which 708 hectares were irrigated and the remaining 523 hectares being rain-fed or planted to upland rice. Coconut trees were planted in 6,747 hectares or 33.0% of the City’s total land area, national park included. Bananas were planted in almost 300 hectares and fruit vegetables were planted in 190 hectares of land. Leafy vegetables were planted in about 100 hectares.

107. Industrial crops include pili (a type of nut), coffee, cacao, bamboo, anahaw (a type of palm leaf, fan-shaped), nipa, and sugarcane.


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2.5.4 Commerce and Trade

108. In 2006, a total of 2,543 business establishments were registered in Legazpi City. A total of 2,351 establishments belonged to the services sector most of which were wholesale and retail trade. There were 257 hotels and restaurants and 223 health and social work establishments. In the Industry Sector, of the 166 registered establishments, 96 were into manufacturing and 61 were into construction.

109. Also in 2006, a total of 29 banks were located in Legazpi City. There were 11 commercial banks, 2 government banks, 3 rural banks, 5 savings banks, and 8 unibanks. In addition, there were 95 non-bank financial intermediaries; these were 9 financing companies, 12 lending investors, 3 savings and loans associations, 47 insurance companies, and 24 pawnshops.

2.5.5 Tourism

110. There are many tourist destinations in the City of Legazpi. There is, of course, the famous Mayon Volcano with its nearly perfect cone shape. It stands at 8,189 feet, with a base of about 10 kms radius. The Department of Tourism schedules annual hiking activity on the slopes of Mayon Volcano.

111. There are two hills which attract tourists, namely the Kapuntukan Hill and the Ligñon Hill. The Kapuntukan Hill gives a beautiful vista of Legazpi City at night as well as the neighboring municipalities of Manito and Rapu-Rapu. Ligñon Hill, on the other hand, offers a good view of Mayon Volcano and the City as well.

112. The beaches called Puro White Beach, Bagacay Beach, and Porta Azul offer good facilities, and are good places for swimming, boating, scuba diving, fishing, and speed boat racing.

113. The Liberty Bell is a bronze bell installed by the American Forces in 1945 and is located in Peñaranda Park in Rizal Street. The Jose Ma. Peñaranda Monument was built as a tribute to the late Jose Ma. Peñaranda who served as the Governor of Albay from 1834 to 1843. The Headless Monument was constructed as a dedication to the unknown heroes who died during the Japanese occupation of the City.

114. There is a 40-meter long L-shaped tunnel 7 feet deep used by the Japanese forces as an arsenal during WWII. It is located at Barangay EM’s Barrio South. There is also the Legazpi Heroes Memorial Pylon which is 16-meters high and is located in the Commercial District of the City.

115. The Fluvial Procession is a colorful activity in Legazpi City. It is a traditional procession at the Albay Gulf by the residents of Barangays Sabang and Pigcale. The image of the Patron Nuestra Señora de Penafrancia is placed on a decorated motorized banca or kumpit and paraded in a procession.

116. The Ibalong Festival is a week-long celebration designed to enhance development in the region, specifically to promote tourism in Legazpi City. The centerpiece of the whole event is a Mardi Gras-style street presentation featuring the characters of the Ibalong epic.


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2.6 SOCIAL SERVICES

2.6.1 Health and Sanitation

117. Secondary and tertiary health services are provided by 1 government hospital, 6 private hospitals, 26 government cl

Documents

LOCAL WATER UTILITIES ADMINISTRATION...2.1 Location Map of Legazpi City 13 4.1 Existing Water Supply System – LCWD 41 5.1 Present and Future Service Areas – LCWD 52 8.1 Schematic