INTRODUCTION

Bucao Watershed is located within the boundaries of the provinces of Zambales and Tarlac which
covers a total land area of approximately 68,145.77 ha; wherein 55,401.58 ha is covered by five
municipalities in Zambales namely Botolan, Cabangan, San Marcelino, Iba, and San Felipe, while the
remaining 7,681.34 ha is covered by two municipalities of Tarlac namely San Jose and Capas. The
watershed covers the Eastern portion of Zambales mountain range including the Mountains of Pinatubo,
Gatas, Cahapatan, Iba, and Mangkirat. The major tributaries of this watershed are located in Botolan
Zambales which include the rivers of Balinbaquero, Maraunot, Cabatuan and Baquilan.

This watershed is considered as the largest watershed in Zambales and thus provides important
functions to the welfare of the local people by supporting the major irrigation system of the municipality as
well as providing livelihood for local communities who are dependent on watershed resources. Resources
from natural forest vegetation and wildlife species are prevalent in this area. However, natural disasters
such as volcanic eruptions, forest fires, and unsustainable and illegal human activities such as kaingin-
making caused the depletion of these resources.

In proposing a project in a certain area, aside from site characterization, land capability assessment,
land suitability assessment of the area, financial feasibility assessment must also be done to ensure that the
proposed project is feasible. Financial feasibility analysis is one of the most important feasibility analyses
that is required in carrying out any project. This kind of analysis ensures that the project lives up to its
performance expectation. Furthermore, it determines the financial viability of a proposed project. Financial
feasibility analysis is a process through which profitability of the proposed project could be estimated.

The objective of this effort is to evaluate the overall financial feasibility of the proposed project in
Bucao Watershed and to examine opportunities for minimizing any projected funding gap associated with
the said project.
METHODOLOGY

In doing a financial feasibility analysis, there steps followed to capture the things needed In the
analysis. First, financial values are derived, and a preparation of reference table is done. Items, labor rate,
productivity rate, market price, and interest rate must be included in this step. The second step requires the
preparation of cashflow wherein the production inputs, production outputs, revenues, cost, and net revenues
are the important items to be included. This is usually done in spreadsheet to see and a positive cashflow is
usually desired. Third is the determination of discounted values wherein values should be in the same
values. And lastly, the computation of financial profitability indicators which is a single number that is
calculated for characterization of project profitability in a concise and understandable form. There are
different indicators that could be used but the most commonly used are; (1) simple payback; (2) return of
investment; (3) net present value; and (4) internal rate of return.

Deriveation of Financial Values

and Preparation of Reference Preparation of Cas Flow Table
Table

Dertermination of Discounted Computation of the Financial

Values Proditability Indicators

Figure 1. Steps in conduction financial analysis