THE GOVERNMENT has asked the World Bank for a two-year extension on the validity of a $7-million rural development grant due to the slow implementation of an agricultural productivity enhancement project in selected provinces.

According to World Bank documents obtained by BusinessWorld, the government requested a two-year extension of the Global Environment Facility (GEF) grant to May 31, 2023 from the original ending date of May 31, 2021.

The grant targets projects in six regions, supporting livelihood programs and capacity-building at coastal local government units (LGUs) and communities.

“Project startup was significantly affected by delays in the initial release of project funds as well as by low LGU capacity to support planning and facilitation of subprojects. LGUs and communities had relatively low resources, and generating counterpart funding and facilitating transactions were initially difficult, especially for those located in remote areas,” the bank said in a report.

The initial delays were eventually addressed and the implementation was brought back on track, it said, but the restrictions on movement imposed by the pandemic last year derailed progress once more.

“Completing all the subprojects is expected to go beyond the original closing date, especially those that have slowed down in 2020 due to COVID-19 restrictions as well as those affected and damaged by the series of typhoons,” it added.

The bank also acknowledged that the project needs more time for follow-up technical assistance on expanding GEF activities and ensuring their sustainability. It said deeper training and facilitation for integrated protected area management are needed to ensure LGUs and communities sustain the gains.

The grant is linked to the broader Philippine Rural Development Project which was approved in August 2014, with a loan of $412.33 million.

Within this loan, the government also asked to divert undisbursed funds worth $697,021 from the $4.261-million component of the loan for the “Enterprise Development Grants” program.

The balance was initially meant to fund a second round or an expansion of marine protected areas and micro-enterprise subprojects of other qualified LGUs that wanted to participate in the program but the government considers the implementation period insufficient to process another batch of recipients.

“Implementing relatively small but transaction-intensive subprojects in often remote and calamity-hit communities and low class/poor LGUs have been key challenges experienced by the project in the past,” according to the report.

“These are further aggravated by difficulties in the preparation of documentary requirements, procurement, implementation, fund utilization and liquidation, among others. The pandemic… has also made it more difficult for LGUs to generate counterpart funds,” it added.

If approved, the remaining funds will instead support activities such as hands-on research technology information and market-driven development test projects, consultants’ services and incremental operating costs for project management.

The Department of Agriculture is the main implementor of the rural development project.

The report indicates that 82% or $5.77 million has been disbursed from the grant, leaving a $1.23 million balance.

From the $412-million loan, the World Bank has released 91% or $376.12 million, leaving a balance of $36.21 million. — Beatrice M. Laforga