Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/211067 
Year of Publication: 
2018
Series/Report no.: 
PIDS Discussion Paper Series No. 2018-47
Publisher: 
Philippine Institute for Development Studies (PIDS), Quezon City
Abstract: 
A comprehensive assessment of irrigation investment should examine not just the benefits, but also make a systematic comparison of benefits with costs. This study has conducted this systematic comparison for investments undertaken in 2008-2016. Across various assessment frames, the findings converge around the following: Costs of irrigation investment are simply too large in comparison with expected benefits. None of the project worth indicators reach threshold levels: rather, the benefit-cost ratio (BCR) tends to fall below unity; internal rate of return (IRR) estimates tend to fall below the hurdle rate of 10 percent; and net present value (NPV) estimates tend to fall below zero. A key limitation of our analysis is that it incorporates benefits only from incremental rice output. Rather than invalidating the government's irrigation planning and investment allocation, our benefit-cost analysis makes a case for: more skeptical treatment of irrigation area targeting; and stricter application of benefit-cost analysis, with emphasis on credible projections of both crop and non-crop benefits.
Subjects: 
irrigation
benefit-cost analysis
discount rate
market projection
Document Type: 
Working Paper

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