International Protected Area Financing Consultant

The Project intends to address sustainable PA financing as one of the major barriers to the effective management of the national PA system in the Philippines. These include inadequate systems for financial planning, budgetary management and revenue generation. The budget for PA system management, such as general planning, prioritization, national coordination, establishment of linkages, technical assistance, policy support, monitoring and evaluation, continuing development of tools and procedures, establishment and maintenance of a national database, advocacy, information and awareness campaigns, are all lodged with the PAWB, and funded through the regular budget cycle of government.

For the period 2005 to 2009, the average annual operating budgets allocated to PAWB in support of these activities is about Php 900,000 or only about US$20,000. In 2011, this budget has increased to P 6,593,000 (US $ 149,840). The regional offices have budgets to support local capacity building, and supporting the operations of the PAMBs. For the year 2011, the allocation for PA management and biodiversity conservation total P 357,091,000 (US $ 8,115,704). This reflects the total budget allocated to all the 238 PAs under the system.

 

An initial assessment undertaken during project preparation revealed that the sustainable financing problem has several components. First, while the Philippines National Integrated Protected Areas System (NIPAS) provides for an effective structure to generate and allocate revenues through the Integrated Protected Area Fund (IPAF), its implementation has proven problematic. It was designed to operate as a trust fund, and allow the PA generating the funds to allocate for itself, 75% of its earnings, while the remaining 25% is centrally managed and reallocated to other PAs. However, in practice, all the proceeds are deposited with the National Treasury, on the basis of which the Department of Budget and Management (DBM) makes annual allocations from the national budget. This budget is legislated annually as the General Appropriations Act (GAA), wherein DBM sets limits on how much can be used from this fund. For 2011, the authorized spending from IPAF is set at a ceiling of P20 million. (US$ 454,000). Regional offices of DENR have to submit work and financial plans and have these approved before they are able to tap into this Fund. Because of these limitations, most PA Managers have opted to have donations given directly or in kind to the PA, rather than remitted through the IPAF. 

Second, the PA system has not maximized funding streams by capitalizing on the economic value of PAs. The IPAF draws its income from fines, entrance fees, donations, concessions and leases (in multiple use zones), and taxes on permitted sales and exports of flora and fauna. Since its implementation in 1996, total IPAF collection amounted to PhP 165,821,352 (approximately US$3,768,667), as of 2010. This was generated from a total of 100 protected areas, with the top 15 PAs contributing as much as 89% of this amount. Given the funding levels and the number of PAs requiring support, there is obviously a huge funding gap in supporting the management of PAs in the Philippines. This gap is expected to increase as more PAs become part of the system; and as the PA system is expanded to include community conservation areas.

 

Thus, most PAs are financed entirely out of government revenues, and systems to capitalize on alternative revenue streams (e.g. from ecotourism or ecosystem services) remain limited. Several studies have been undertaken to estimate economic values and determine user charges, but very few PAs have implemented these.[1] The use of payments for environmental services (PES) as a scheme of generating resources for PA management has been tested and implemented in a few sites.[2] Other examples include the experience in Bukidnon, wherein a scheme has been developed called Rewarding Upland Farmers for Environmental Services (RUPES). While there are a number of examples, there is no proper documentation of successful experiences or of the potential for these mechanisms to be used more widely as instruments to generate resources. In order to provide guidance to PA Managers and PAMBs, the DENR has issued DAO 2000 - 51 which prescribed the procedures for the determination of user charges on protected areas. However, PAMBs lack the capacity to generate sufficient information as basis for the setting of charges. Other examples include the experience in Bukidnon, wherein a scheme has been developed called Rewarding Upland Farmers for Environmental Services (RUPES). While there are a number of examples, there is no proper documentation of successful experiences or of the potential for these mechanisms to be used more widely as instruments to generate resources. In order to provide guidance to PA Managers and PAMBs, the DENR has issued DAO 2000 - 51 which prescribed the procedures for the determination of user charges on protected areas. However, PAMBs lack the capacity to generate sufficient information as basis for the setting of charges. Other examples include the experience in Bukidnon, wherein a scheme has been developed called Rewarding Upland Farmers for Environmental Services (RUPES). While there are a number of examples, there is no proper documentation of successful experiences or of the potential for these mechanisms to be used more widely as instruments to generate resources. In order to provide guidance to PA Managers and PAMBs, the DENR has issued DAO 2000 - 51 which prescribed the procedures for the determination of user charges on protected areas. However, PAMBs lack the capacity to generate sufficient information as basis for the setting of charges. Other examples include the experience in Bukidnon, wherein a scheme has been developed called Rewarding Upland Farmers for Environmental Services (RUPES). While there are a number of examples, there is no proper documentation of successful experiences or of the potential for these mechanisms to be used more widely as instruments to generate resources. In order to provide guidance to PA Managers and PAMBs, the DENR has issued DAO 2000 - 51 which prescribed the procedures for the determination of user charges on protected areas. However, PAMBs lack the capacity to generate sufficient information as basis for the setting of charges. The use of payments for environmental services (PES) as a scheme of generating resources for PA management has been tested and implemented in a few sites. Other examples include the experience in Bukidnon, wherein a scheme has been developed called Rewarding Upland Farmers for Environmental Services (RUPES). While there are a number of examples, there is no proper documentation of successful experiences or of the potential for these mechanisms to be used more widely as instruments to generate resources. In order to provide guidance to PA Managers and PAMBs, the DENR has issued DAO 2000 - 51 which prescribed the procedures for the determination of user charges on protected areas. However, PAMBs lack the capacity to generate sufficient information as basis for the setting of charges.

 

A third dimension of financing is related to the development of business plans. One of the deficiencies of management plans is the lack of cost assessments related to the programs and activities specified in the plans. Thus, many plans end up unfunded, or with huge funding gaps. Moreover, few PAs have clear plans for resource generation to guide them in reducing the funding gap to finance implementation of their management plans. In 2009, Congress approved the allocation of some P119 Million to seven PAs from the government budget.[3] While this represented a step in supporting the financial requirements for more effective management of these PAs, it was unusual in that NIPAS is supposed to be self-financed through the IPAF. It is therefore highly unlikely to be repeated or sustained throughout the approximately 238 PAs across the Philippines. While this represented a step in supporting the financial requirements for more effective management of these PAs, it was unusual in that NIPAS is supposed to be self-financed through the IPAF. It is therefore highly unlikely to be repeated or sustained throughout the approximately 238 PAs across the Philippines.

 

One potential additional source of financing is LGUs. They are mandated under the Local Government Code to allocate some 20% of their internal revenue allotment for development, including environmental management. However, most of their budget for environment goes to clean and green programs and solid waste management. There is very little recognition of the importance of PAs by most LGUs, their roles in PA management; this influences how they allocate their resources. Another potential source of finance is the charter of local water utilities to allocate funds for watershed conservation. Many PAs located in major watersheds have yet to fully harness this potentially important source of financing. The private sector represents another innovative mechanism, as evidenced by the example of a group of private individuals who reside in Danyugan islands, off Negros, to generate donations to conserve their areas. 

Finally, there is a need to set realistic estimates of the recurrent costs of PA management, as a basis for estimating the total requirements for all PAs, as new ones are added to the system. There are no standards yet developed on the costs to maintain a PA, once all the investment costs of establishment, demarcation, management planning, and strengthening of PA managers are undertaken. This information would be important not only to guide the development of realistic estimates of total funding gap, but more so, as basis for determining whether individual PAs have sufficient resources to manage their areas effectively. 

 

Efforts to test innovative instruments to generate revenues mainly through user charges, such as the one in the Samar Island Natural Park (SINP) has been limited and are still in their early stages. This will not be sufficient to generate lessons for wide scale implementation or replication in other PAs and CAs. Similarly, the payment for environmental services (PES) have not been vigorously pursued, tested and implemented more widely by PAs and new CAs. This has been tested successfully in a watershed community in Cagayan, within the Sierra Madre terrestrial corridor. Other PAs who have generated relatively higher incomes are marine PAs, such as the Apo Reef and Tubattaha Reef through increased demand by visitors and the unique attraction of diving and coral reefs. Suitable mechanisms for terrestrial PAs have been undeveloped to enable the identification of appropriate user groups, matching of their demand with services, and promoted actively.

 

The potential for capture of revenues by the IPs and LGUs in areas which are currently managed by these organizations have not been fully explored. There has been limited documentation and/or analysis of policy gaps and successful practices to enable continuing policy development and sharing with managers of PAs and new conservation areas.

At the national level, management of the national PA system has been constrained by limited capacity and lack of comprehensive strategy in PAWB to underwrite the financing gap. This is seen as a serious barrier to any future plan to expand the coverage of the existing system, and its sustainability. The results of the baseline financing scorecard prepared during the preparation stage indicate levels of capacity in the following areas: legal, regulatory and institutional frameworks – 33.3%; business planning and tools for cost effective management – 19.6%; and tools for revenue generation – 17.54%.

 

The proposed project will significantly contribute to the achievement of GEF Biodiversity Strategic Objective 1 on catalyzing sustainability of protected areas. Specifically, this assignment will contribute to the achievement of having sufficient and predictable revenue to finance management of the PA system. This will be achieved by addressing the related systemic barrier of inadequate systems for financial management and resource mobilization that hinders the effective management of terrestrial PAs. The Project will make use of the GEF PA Financing Scorecard to validate the baseline financial system and measure progress in enhancing financial sustainability

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