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ENVIRONMENTAL AND NATURAL RESOURCES ACCOUNTING II PROJECT




PALAWAN ASSET ACCOUNTS
Fishery, Forest, Land/Soil,
Mineral and Water Resources




          Palawan Council for Sustainable Development Staff



          National Statistical Coordination Board



          United Nations Development Programme
FOREWORD


In 1994, the Palawan Council for Sustainable Development Staff (PCSDS) and the
Provincial Government, together with the National Statistics Office (NSO) and the
Bureau of Agricultural Statistics (BAS), had the occasion of working with the National
Statistical Coordination Board (NSCB) for the pilot-testing of the compilation of the
Gross Provincial Domestic Product. A first attempt at sub-regional disaggregation of
the GDP, this exercise provided the basis for determining Palawan’s contribution to
the national economy. This activity likewise paved the way for identifying the areas
for improvement of the statistical data collection system in the province.

As an offshoot of this undertaking, Palawan was again selected in 1998 as the pilot
area for the institutionalization of the Philippine Economic-Environmental and Natural
Resources Accounting (PEENRA) System at the provincial level. Focusing this time
on the valuation of the asset accounts for five resources of Palawan, this activity was
able to show that environmental and natural resources accounting could be
successfully carried out at the sub-national level. Such activity could not have been
achieved without the support and cooperation of the various data producing agencies
operating in the province.

On behalf of the Provincial Government of Palawan, I would like to extend our
gratitude to the United Nations Development Programme (UNDP), the sponsor of the
second phase of the Environment and Natural Resources Accounting Project, NSCB
and the United Nations Statistics Division (UNSD), for the technical guidance
provided to us. I also commend the heads of agencies and technical staff who had
actively participated in pursuing the realization of the objectives of this project.

We take great pride that Palawan had initiated this worthwhile endeavor. Through
this publication, we hope to disseminate the experience and outputs of Palawan as a
pilot model towards the establishment of a provincial asset accounts of interested
provinces.




                                                      JOEL T. REYES
                                                         Governor
                                                    Province of Palawan




                                          ii
FOREWORD


This report contains the output of the technical working groups from 14 national
agencies and local government offices in Palawan who were involved in the
Environment and Natural Resources Accounting (ENRA) II Project. Funded by the
United Nations Development Programme (UNDP), the ENRA II Project included a
provincial component which aimed to institutionalize the Philippine Economic-
Environmental and Natural Resources Accounting (PEENRA) System at the
provincial level. Following the methodologies adopted during the first phase of the
project, asset accounts for five resources of Palawan, namely: land and soil, forest,
fishery, mineral and water, were compiled by a technical working group for each
resource.

As the lead implementing agency in the province, the Palawan Council for
Sustainable Development Staff (PCSDS) had spearheaded the operationalization of
the project. To effectively undertake our tasks, we sought the participation of national
agencies (Bureau of Agricultural Statistics, Department of Agrarian Reform, National
Irrigation Administration, National Statistics Office, and the Department of
Environment and Natural Resources) and the offices of the Palawan Provincial
Government (Provincial Planning and Development Office, Office of the Provincial
Agriculturist and the Environment and Natural Resources Office) and Puerto
Princesa City Government (City Planning and Development Office and City
Environment and Natural Resources Office). The Palawan Tropical Forestry
Protection Programme, a project of the PCSDS and the Paltubig, Inc. were also
active partners in this undertaking. Their participation and untiring support were
instrumental in the achievement of the project’s objectives. All our efforts however
could not have been effectively carried out without the guidance and supervision of
the National Statistical Coordination Board (NSCB), the project’s overall lead
executing agency.

Indeed we are grateful for the opportunity given to us by NSCB and for their
confidence that our provincial leaders and policy makers will find this project a
significant exercise. The skills that were imparted to us by the NSCB staff will be put
into test when we update the accounts in the future. The PCSDS fervently hopes that
the cooperation shown to us by the various agencies with whom we have worked
with will continue as we pursue the ultimate objectives of the PEENRA system.



                                                    JOSELITO C. ALISUAG
                                                      Executive Director
                                                           PCSDS




                                           iii
FOREWORD

Towards the Institutionalization of the Philippine Economic-Environmental and
Natural Resource Accounting (PEENRA) System at the Provincial Level, the National
Statistical Coordination Board is pleased to have been a part of the “Palawan
Provincial Asset Accounts”, a product of the Environmental and Natural Resource
Accounting II (ENRA II) Project funded by the United Nations Development
Programme.

Palawan, is so far the only province that has its own Provincial Product Accounts. As
a pioneering output in environmental accounting at the subnational level, it is hoped
that the Palawan Provincial Asset Accounts will greatly contribute to the development
of Palawan and will serve as a model for other provinces. Indeed, this compilation of
environmental resource accounts in Palawan from 1988 to 1999 covering six (6)
resources namely land/soil, fishery, mineral, forest, water and wildlife resources, is a
potent medium to bring to the fore the importance of environmental protection at the
subnational level.

The NSCB salutes the Palawan Council for Sustainable Development Staff for its
dedicated work in pursuing the realization of environmental accounting in the
province. The close collaboration among the various stakeholders -- the Provincial
Government, other government agencies, non-government organizations and private
institutions in Palawan, and the individual members of the Provincial Steering
Committee and the Technical Working Groups (TWGs), is an experience that should
inspire other provinces who wish to undertake the same activity. We acknowledge
the United Nations Statistics Division (UNSD) for the technical assistance given and
the UNDP for the financial support extended to the ENRA II Project.



                                                    ROMULO A. VIROLA
                                                   Secretary General, NSCB




                                           iv
TABLE OF CONTENTS



Foreword
List of Tables                                               viii
List of Figures                                               xii
List of Appendix Tables                                       xv
Executive Summary                                           xviii


CHAPTER 1. MARINE FISHERY RESOURCE

1.1   Introduction                                             2

1.2   Conceptual Framework                                     3

           1.2.1      Scope and Coverage                       3
           1.2.2      Framework of the Asset Account           3

1.3   Operationalizing the Framework                           5

           1.3.1      Sources of Data                          5
           1.3.2      Estimation Methodology                   5

1.4   Results and Discussion                                   7

           1.4.1      Share of the Fishery sector to GPDP      7
           1.4.2      Fish Catch and Fishing Effort            7
           1.4.3      Sustainable Yield and Depletion          8

1.5   Recommendations                                         10

Acronyms                                                      12
Definition of Terms                                           13
References                                                    14


CHAPTER 2. FOREST RESOURCE

2.1   Introduction                                            16

2.2   Conceptual Framework                                    17

           2.2.1      Scope and Coverage                      17
           2.2.2      Framework for the Asset Accounts        17

2.3   Operationalizing the Framework                          18

           2.3.1      Sources of Data                         18
           2.3.2      Estimation Methodology                  19

2.4   Analysis, Results and Discussions                       22



                                         v
2.4.1      Old Growth Dipterocarp Forest            22
           2.4.2      Second Growth Dipterocarp Forest         25
           2.4.3      Mangrove Forest                          27
           2.4.4      Rattan                                   29

2.5   Recommendations                                          31

Acronyms                                                       33
Definition of Terms                                            34
References                                                     48


CHAPTER 3. LAND/SOIL RESOURCE

3.1   Introduction                                             50

3.2   Conceptual Framework                                     50

           3.2.1      Scope and Coverage                       50
           3.2.2      Framework for the Asset Accounts         50

3.3   Operationalizing the Framework                           53

           3.3.1      Sources of Data                          53
           3.3.2      Estimation Methodology                   54
           3.3.3      Underlying Assumptions and Limitations   57

3.4   Result and Discussion                                    58

           3.4.1      Physical Asset Accounts                  58
           3.4.2      Monetary Accounts                        63
           3.4.3      Summary of the Land and Soil Resource    66

3.5   Recommendations                                          67

Acronyms                                                       69
Definition of Terms                                            70
References                                                     87


CHAPTER IV.           MINERAL RESOURCE

4.1   Introduction                                             90

4.2   Conceptual Framework                                     92

           4.2.1      Scope and Coverage                       92
           4.2.2      Framework for the Asset Account          92

4.3   Operationalizing the Framework                           93

           4.3.1      Sources of Data                          93
           4.3.2      Estimation Methodology                   94




                                        vi
4.4   Results and Discussion                                95

           4.5.1      Physical Asset Account               95
           4.5.2      Monetary Account                     97

4.5   Recommendations                                       98

Acronyms                                                   100
Definition of Terms                                        101
References                                                 108


CHAPTER 5. WATER RESOURCE

5.1   Introduction                                         110

5.2   Framework for the Asset Account                      111

           5.2.1      Scope and Coverage                   111
           5.2.2      Framework for the Asset Account      111

5.3   Operationalizing the Framework                       112

           5.3.1      Surface Water                        112
           5.3.2      Groundwater                          112

5.4   Analysis, Results and Discussion                     116

           5.4.1      Physical Accounts of Surface Water   116
           5.4.2      Physical Accounts of Groundwater     117

5.5   Limitations                                          119

5.6   Recommendations                                      119

Acronyms                                                   121
Definition of Terms                                        122
References                                                 130




                                        vii
LIST OF TABLES
Table Number                     Title                            Page

CHAPTER 1.     MARINE FISHERY RESOURCE

     1.1       Gross Provincial Domestic Product Accounts,
               (Palawan 1988 and 1994) …………………………….                7

     1.2       Estimated Volume of Catch and Fishing Effort
               of Marine Fishery resource, Palawan, 1983-1998 …     8

     1.3       Estimated Marine Fishery Resource Depletion,
               Palawan, 1983-1998 ….………………………….……                   9

CHAPTER 2.     FOREST RESOURCE

     2.1       Area Accounts of Old Growth Dipterocarp
               Forests, 1988-1999 (in hectares)……………………..          23

     2.2       Volume Accounts of Old Growth Dipterocarp
               Forests, 1988-1999 (in thousand cubic meters)…….    23

     2.3       Economic Accounts of Old Growth Dipterocarp
               Forest at Current Prices, 1988-1999
               (In million pesos)………………………………………..                 24

     2.4       Economic Accounts of Old Growth Dipterocarp
               Forest at Constant Prices, 1988-1999
               (In million pesos)………………………………………..                 24

     2.5       Stumpage Value for Natural Forest Stands at
               Current Prices, 1988-1999…………………………….               25

     2.6       Area Accounts of Second Growth Dipterocarp
               Forests, 1988-1999 (in hectares)……………………..          25

     2.7       Volume Accounts of Second Growth Dipterocarp
               Forests, 1988-1999 (In thousand cubic meters)…….    26

     2.8       Economic Accounts of Second Growth
               Dipterocarp Forest at Current Prices,
               1988-1999, (In million pesos)………………………….            27

     2.9       Economic Accounts of Second Growth
               Dipterocarp Forest at Constant Prices,
               1988-1999, (In million pesos)…………………………             27

     2.10      Area Accounts of Mangrove Forests, 1988-1999…..     28




                                viii
Table Number                      Title                               Page

     2.11      Volume Accounts of Mangrove Forests,
               1988-1999, (In thousand cubic meters)……………..            28

     2.12      Rattan Resources Volume Accounts, 1988-1998
               (In thousand lineal meters)……………………………                  29

     2.13      Economic Accounts of Rattan at Current Prices,
               1988-1991 (In million pesos)…………………………                  31

     2.14      Economic Accounts of Rattan at Constant Prices,
               1988-1991 (In million pesos)…………………………                  31



CHAPTER 3.     LAND/SOIL RESOURCE


     3.1       Sources of Data on Lands Devoted to Forestry,
               Agriculture and Built-up Uses…………………………                 54

     3.2       Physical Asset Account of Land Resources
               Devoted to Forest Uses, Mainland Palawan,
               1988-1998………………………………………………                             59

     3.3       Physical Asset Account of Land Resources
               Devoted to Agricultural Uses, Palawan,
               1988-1998………………………………………………                             60

     3.4       Physical Asset Account of Land Resources
               Devoted to Built-up Uses, Palawan,
               1988-1998………………………………………………                             60

     3.5       Physical Asset Account of Soil Resources
               Devoted to Forest Uses, Mainland Palawan,
               1988-1998………………………………………………                             61

     3.6       Physical Asset Account of Soil Resources
               Devoted to Agricultural Uses, Palawan,
               1988-1998………………………………………………                             61

     3.7       Adjusted Physical Area of Forest Lands by Type of
               Forest, in Hectares, Mainland Palawan,
               1988-1998………………………………………………                             62

     3.8       Adjusted Physical Area of Agricultural Lands by Type
               of Farm, In Thousand Hectares, Palawan,
               1988-1998……………………………………………….                            62

     3.9       Adjusted Physical Area of Built-up, In Hectares,
               Palawan, 1988-1998……………………………………                        63




                                  ix
Table Number                     Title                           Page


     3.10      Monetary Estimate of Land Resources
               Devoted to Forest Uses, Mainland Palawan,
               1988-1998………………………………………………                        63

     3.11      Monetary Estimate of Land Resources
               Devoted to Agricultural Uses, Palawan,
               1988-1998………………………………………………                        64

     3.12      Monetary Estimate of Land Resources
               Devoted to Built-up Uses, Palawan,
               1988-1998………………………………………………                        64

     3.13      Monetary Estimate of Soil Resources for Lands
               Devoted to Forest Uses, Mainland Palawan,
               1988-1998………………………………………………                        65

     3.14      Monetary Estimate of Soil Resources for Lands
               Devoted to Agricultural Uses, Palawan,
               1988-1998………………………………………………                        65

     3.15      Summary Table of Physical Asset Account of Land
               Use by Year, Palawan, 1988-1998…………………..           66

     3.16      Summary Table of Monetary Asset Account of Land
               Use by Year, Palawan, 1988-1998…………………..           67


CHAPTER 4. MINERAL RESOURCE

     4.1       Mineral Deposit in Palawan, 1981………………..…          91

     4.2       Nickel Physical Asset Accounts in Ore Form………      96

     4.3       Nickel Physical Asset Account in Metal Form……..    96

     4.4       Sand and Gravel Physical Account…………………            97

     4.5       Nickel Monetary Account (Using Net Price
               Method at 15% Interest Rate, In Peso)…………….        98

     4.6       Sand and Gravel Monetary Account (Using Net
               Price Method at 15% Interest Rate, In Peso)………     98


CHAPTER 5.     WATER RESOURCE

     5.1       Physical Accounts Framework for Surface and
               Groundwater……………………………………….….                     111

     5.2       Estimation Methodology and Sources of Data…….     114




                                 x
Table Number                     Title                            Page

     5.3       Surface Water Physical Asset Account of Palawan,
               1988-1998 (MCM)……….……………………………                     116

     5.4       Physical Account of Groundwater in the Province
               of Palawan , 1988-1996 (MCM)……………………..             118




                                 xi
LIST OF FIGURES
Figure Number                     Title                             Page

CHAPTER 1.      MARINE FISHERY RESOURCE

     1.1        Catch by Commercial and Municipal Fishery
                Industry, Palawan, 1983-1998………………………                 2

     1.2        Asset Accounts Framework for Fishery Resource…        4

     1.3        Total Catch and Total Fishing Effort, Palawan,
                1983-1998………………………………………………                           8

     1.4        Sustainable Yield Effort Curve for Marine Fishery
                Resources, 1983-1998………………………………..                   10


CHAPTER 2.      FOREST RESOURCE

     2.1        Asset Accounts Framework……………………………                  18

     2.2        Area and Volume Accounts of Old Growth
                Dipterocarp, 1988-1999…………………………….….                 24

     2.3        Area and Volume Accounts of Second Growth
                Dipterocarp, 1988-1999………………………………...                26

     2.4        Area Change by Forest Type………………………….                28

     2.5        Volume Change by Forest Type………………………                29

     2.6        Volume of harvested/Cut Rattan as Compared
                to the stock, 1989-1999…………………………….….                30

     2.7        Monetary Valuation of Rattan Forest
                Resource at Current and Constant Prices,
                1988-1999……………………………………………….                         30


CHAPTER 3.      LAND/SOIL RESOURCE

     3.1        Physical Accounts Framework for the
                Land/Soil Resource,…………………………………..                   51

     3.2        Monetary Accounts Framework for the
                Land/Soil Resource…………………………..………..                  52

     3.3        Summary of Physical Asset Accounts for Forest,
                Agriculture, Built-up and Other Land Uses,
                1988 and 1998…………………………………………                        66

     3.4        Comparison of Monetary Value of Forest,
                Agriculture and Built-up Use…………………………               67


                                  xii
Figure Number                      Title                               Page

CHAPTER 4.      MINERAL RESOURCE

     4.1        Asset Account Framework for Mineral Resource…           93

     4.2        Actual Nickel Extraction by RTNMC,
                1988 – 1998…………………………………………..                           96

     4.3        Sand and Gravel Reserve and Extraction,
                1990 –1999……………………………………………                             97


CHAPTER 5.      WATER RESOURCE

     5.1        Precipitation vs. Basin Recharge vs. Direct Run-off,
                1987-1998………………………………………………                            116

     5.2        Surface Water Physical Account (Net Basin Recharge
                vs. Withdrawal vs. Closing Stock), 1988-1998……..       117

     5.3        Surface Water Withdrawal, 1988-1998……………..             117

     5.4        Groundwater Physical Account, 1988-1998………..           118

     5.5        Groundwater Demand in 1988 an 1998..……………              118




                                   xiii
LIST OF APPENDIX TABLES
Appendix Table Number                   Title                          Page


CHAPTER 2.      FOREST RESOURCE


     2.1        Physical Area of Forest Lands by Type, Mainland
                Palawan, 1985 and 1992………………………………..                   37

     2.2        Physical Area of Forest Lands by Type, Mainland
                Palawan, 1986-1992……………………………………..                     37

     2.3        Adjusted Physical Area of Forest Lands by Type,
                Mainland Palawan, 1986 –1989…………………………                 37

     2.4        Average Bole Volume by Species in Dipterocarp Old
                Growth Forest, Forest, Palawan…………………………               38

     2.5        Average Bole Volume by Species in Dipterocarp
                Residual Forest, Palawan………………………………..                 39

     2.6        Average Rattan Occurrence in Dipterocarp
                Old Growth Forest, Palawan…………………………….                 40

     2.7        Average Rattan Occurrence in Dipterocarp
                Residual Forest, Palawan……………………………….                  40

     2.8        Total Volume of Timber Production, In Cubic Meters,
                1988-1999…………………………………………………                           41

     2.9        Total Volume of Confiscated Timber, In Cubic Meters,
                1988-1999…………………………………………………                           41

     2.10       Total Area Covered within ISF/CBFM Concessions
                andAgro. Forestry, 1988 – 1999………………………..              42

     2.11       Total Area of Implementation of Conservation Efforts
                (Second Growth Forest), 1988 – 1999………………...           42

     2.12       Total Area of Implementation of Conservation Efforts
                (Mangrove Forest), 1989 – 1995……………………….               43

     2.13       Total Area Damaged from Kaingin and Forest Fires,
                1991-1999………………………………………………….                          43

     2.14       Total Rattan Harvest Manifestation, 1988-1999……….      44

     2.15       Total Volume of Confiscated Rattan, 1989-1995……..      44

     2.16       Rattan Resources Volume Accounts, 1988-1999
                (In thousand lineal meters)………………………………                45




                                  xiv
Appendix Table Number                    Title                     Page

     2.17        Economic Accounts of Rattan at Current Prices
                 1988-1999, (in million pesos)………………………            46

     2.18        Computation for the Stumpage Values for
                 Rattan Resources, 1988-1998……………………..             47


CHAPTER 3.       LAND/SOIL RESOURCE

     3.1         Physical Area of Forest Lands by Type of
                 Forest, Mainland Palawan, 1985-1998, in
                 Hectares…………………………………………                          81

     3.2         Forest Destruction by Cause, Mainland Palawan,
                 1991 – 1998, in hectares…………….…………                82

     3.3         Conversion of Forest Lands to Other Uses,
                 Mainland Palawan, 1988-1997………….…….               82

     3.4         Areas of Reforestation by Municipality,
                 Mainland Palawan, 1987-1998, in hectares...       83

     3.5         Logged Area, Palawan, In Hectares,
                 1988-1992……………………………….….…..                       83

     3.6         Land Values, Palawan, In Hectares,
                 1987-1998…………………………………..…..                       83

     3.7         Erosion Hazard Assessment, Tamlang
                 Catchment, 1985……………………….….…...                   84

     3.8         Slope Distribution, by Class Interval,
                 Palawan, in Hectares, 1985………………..…..             84

     3.9         Retail Price of Fertilizers, Philippines,
                 1988-1998…………………………………..……                        84

     3.10        Daily Wage Rate for Agricultural Plantation,
                 Philippines, 1986-1997……………………..…..               85

     3.11        Physical Area of Agricultural lands by Type of
                 Farm, Palawan, in Thousand Hectares,
                 1980 and 1988 to 1999………………………….                  85

     3.12        Kaingin Areas, Palawan, in Hectares,
                 1991-1998………………………………….……..                       85

     3.13        Land Conversion from Agricultural to Other Uses
                 by Municipality, Palawan, 1989-1998………….          86




                                    xv
Appendix Table Number                    Title                       Page

     3.14        Mangrove Area Converted to Fishpond, Palawan,
                 in hectares, 1995 to 1998……………………………                 86

     3.15        Physical Area of Built-up Area, Palawan,
                 1988 to 1998, in hectares……………………………                 86

     3.16        Estimated Zonal Values of Lands, by type
                 of Land Use, Palawan, 1985………………………..                86


CHAPTER 4.       MINERAL RESOURCE

     4.1         Nickel Reserve of Mining Companies, 1996…………        104

     4.2         Volume of Nickel Reserve and Metal Content by Rio
                 Tuba Nickel Mining Corporation, 1987 – 1996………      105

     4.3         Summary of Sand and Gravel Reserve on Selected
                 Rivers in Palawan, 1999……………………….………                106

     4.4         Computed Unit Rent and Resource Rent of Nickel
                 Resource, Palawan, 1988 – 1998……………….……             106

     4.5         Computed Unit Rent and Resource Rent of Sand and
                 Gravel Resource, Palawan, 1990 – 1999……….…… 107

     4.6         Market Price per Unit Volume, 1988 – 1999……….…      107


CHAPTER 5.       WATER RESOURCE

     5.1         Estimated Basin Recharge, 1987-1998 (MCM)……..       124

     5.2         Palawan Annual Rainfall Data, 1987-1998 (mm)……      124

     5.3         Palawan Hydrometric Network Mean River
                 Discharge, 1986-1989 (MCM)…………………………                124

     5.4         Agricultural Water Uses from Surface Water in the
                 Province of Palawan, 1988-1998 (MCM)……………           125
.
     5.5         Total Area Planted with Crops, in hectare, 1988-1998 125

     5.6         Physical Accounts of Groundwater, 1980-1987 (MCM) 125

     5.7         Water Demand from Groundwater, 1980-1996 (MCM) 126

     5.8         Palawan Population Data, 1980-1998……………….           127

     5.9         Number of Establishments, 1978-1999………………           127




                                   xvi
Appendix Table Number              Title                             Page

     5.10       Livestock and Poultry Water Demand from,
                Groundwater, 1988-1994 (MCM)……………………..               128

     5.11       Livestock and Poultry Population, Number of Heads,
                1988-1998……………………………………………….                         128

     5.12       Groundwater Recharge Based from Rainfall,
                1980-1998……………………………………………….                         129




                                  xvii
EXECUTIVE SUMMARY


Palawan is one of the remaining islands of the Philippine archipelago with a relatively
well maintained environment. In order to ensure the preservation of the remaining
forest areas, coral reefs and other fragile ecosystems as well as to promote the wise
utilization of its natural resources, Republic Act No. 7611, otherwise known as the
Strategic Environmental Plan (SEP) for Palawan Act, was adopted in June 1992 as
the province’s framework for sustainable development. To achieve a balance
between development and conservation, all programs and projects in Palawan were
subsequently aligned with the goals and objectives of the SEP. Complementary
policies were likewise issued by the provincial government in consonance with the
plan.

The selection of Palawan as the pilot area for the institutionalization of the Philippine
Economic-Environmental and Natural Resources Accounting (PEENRA) was then a
welcome opportunity for the local government and the Palawan Council for
Sustainable Development Staff (PCSDS), the policy-making body tasked with the
operationalization of the SEP, to have at hand a system that can provide the basis for
the formulation of the policies that will promote the rational utilization of its resources.

The provincial component of the UNDP-funded Environment and Natural Resources
Accounting (ENRA) II Project called for the compilation of asset accounts of five
major resources, namely, fishery, forest, land and soil, mineral and water. Based on
the experience at the national level, asset accounts were estimated by technical
working groups whose members came from 14 national agencies and offices of the
Provincial Government of Palawan and the City Government of Puerto Princesa.
Attempts were made to compute both the physical and monetary valuation of the
resources. However, due to data limitations, both physical and monetary accounts
were established only for fishery, land/soil, and mineral resources. For surface and
ground water, mangrove forest and fishery resources, only the physical accounts
were compiled.

A major objective of the project in Palawan was the institutionalization of the
PEENRA system. As the lead implementing agency and in the light of its mandate
under R.A. No.7611, the PCSDS assumed the responsibility of sustaining the
activities. Immediately after the termination of the pilot testing in June 2001, the
PCSDS integrated into its regular annual plan the updating of the asset accounts.
The PEENRA system became a component of an Environmental Monitoring and
Evaluation System which was developed to determine the status of the environment
in support to the implementation of the SEP. Currently, preparations are underway to
formalize the arrangements with the agencies of the national and local government to
cover data gathering and actual compilation of the accounts. The recommendations
made by the technical working groups will also be pursued.

The highlights of the results of the accounting exercise in Palawan are summarized
in the following sections.




                                           xviii
Fishery Resource

The resources covered in this accounting exercise are municipal and commercial
marine fisheries. Because of constraints in the data, the compilation was limited to
the estimation of the volume of depletion and an approximation of the sustainable
yield levels based on the Fox Model.

The fishery sector contributed 22.8 percent and 20.6 percent to the gross provincial
domestic product for Palawan in 1988 and 1994, respectively. Despite efforts to
protect the numerous fishing grounds and long coastline of Palawan, the resource
showed signs of depletion. A comparison of the trends in 1988 to 1998 reveals that
fishing effort increased at a faster rate than fish catch. In fact, during this period, the
volume of catch rose by 3.0 percent while fishing effort, based on the total
horsepower of both municipal and commercial vessels, grew by 21.4 percent.

The maximum sustainable yield of 101,954 metric tons, that is, the biomass that can
be caught without jeopardizing the fish stock of any species, was reached at an effort
of 65,629 horsepower. During the earlier years of the accounting period, the volume
of catch exceeded the rate of natural growth. Depletion level was pegged at a
comparatively high 20,727 metric tons in 1988 but this went down to 1,413 metric
tons in 1990. In the next four years (1992 to 1995), the extraction level was below the
sustainable yield. During this period, the local government’s active law enforcement
and concerted conservation and protection programs of different sectors were
believed to have contributed to the recovery of the marine ecosystem from previous
destructive fishing practices. However, starting 1996, the result showed that
production activities had again put pressure on the resource as evidenced by the
harvested volume being greater than the resource’s natural growth. From a depletion
level of 2,639 metric tons in 1996, it rose to 23,607 metric tons in 1998.

Based on the experiences in the compilation of the asset accounts and results of the
accounting exercise, the technical working groups had drawn up recommendations to
improve the data collection system and the actual consolidation of information from
the offices of the different data producers. Initial policy recommendations were put
forward to address certain issues that are being confronted in line with the
management and utilization of these resources. Mechanisms to institutionalize the
accounting were likewise identified.




                                            xix
Forest Resource

The forest provides both ecological and economic benefits. Palawan is one of the
country’s provinces endowed with rich natural resources and the forest ecosystem is
characterized by a highly diverse flora and fauna. Palawan’s forest land of 647,090
hectares accounts for 43 percent of Palawan’s total land area.

Due to commercial logging, which was allowed until 1992, old growth forest area
declined by 52 percent (175,990 hectares) from 1988 to 1999. From the closing stock
of 339,208 hectares in 1988, total forest area decreased to 163,218 hectares in
1999. Similarly, the equivalent volume of old growth dipterocarp timber was depleted
by 2.9 million cubic meters per year, reducing its 1988 timber closing stock of 61.1
million cubic meters to its 1999 stock of 29.4 million cubic meters. The monetary
value for old growth forest fell during the accounting period by P 2.6 billion or P 233.9
million annually at current prices. At constant prices, the value shrunk from P 55.3
billion in 1988 to P 26.6 billion in 1999. The depletion that resulted from the changes
in the physical stock of old growth forest averaged P 860 million per year or an
annual decline of 1.6 percent.

The 1988 closing stock of second growth forest area was 216,057 hectares and
increased to 392,406 hectare in 1999, representing an 82 percent increase. Second
growth dipterocarp timber volume increased by 25,042 thousand cubic meters from
1988 to 1999 with an average annual increase of 2,277 thousand cubic meters per
year. Several factors contributed to the increase including the prevalence of
reforestation and assisted natural regeneration activities and old growth forest being
converted to second growth forest. The monetary value of second growth forest,
likewise, showed an increasing trend with an annual average increment of P 4.1
billion at current prices and P 1.0 billion at constant prices.

Mangrove forest plays a vital role in directly preserving the islands surrounding
marine ecology. However, because of the conversion to fishpond and harvesting,
vast tracts of mangrove areas were lost at a rate of 683.5 ha per year. The total
mangrove stock declined at a rate of 88,091 cu. m. per year from its 1988 closing
stock of 4.6 million cubic meters to 3.7 million cubic meters in 1999.

Rattan stock in both old growth and second growth forest decreased at a rate of 4.5
million linear meters annually draining its 1988 closing stock of 746.0 million linear
meters to 696.6 million linear meters in 1999. Because of the decrease in the volume
of stock of rattan, the value of its closing stock at current prices increased from P
590.0 million in 1988 to P 1.1 billion in 1999. At 1985 prices, the real value declined
from P 508.9 million in 1988 to P 470.0 million in 1999, recording an annual decline
of 0.7 percent.




                                           xx
Land and Soil Resources

Land and soil resources are among the most important natural resources because of
their direct relationship to plants that in turn provide environmental benefits, food and
livelihood. Thus, it is imperative to understand the nature and characteristics of these
resources in order to manage and conserve them properly.

Palawan is the largest province of the country with a land area of 1,489,630 hectares.
In 1988, about 43.4 percent of its total land area was devoted to forest area,
particularly in Mainland Palawan, 11.6 percent to agriculture use, and a negligible 0.5
percent to built-up use. Meanwhile, a large proportion of about 44.5 percent was
classified as reproduction brush, grassland, water bodies and shallow coast including
the forest areas in the island municipalities.

From 1988 to 1998, forest area decreased from 647 thousand hectares valued at
P 31.9 million to 612 thousand hectares valued at P 75.9 million in 1998. It declined
at an average annual rate of 0.5 percent equivalent to around 3,545 hectares per
year. Given the general increase in the prices of land, there was a substantial
increase of P 44.0 million in the value of forest area. An average of 1,494 hectares
per year of forest area was converted to different agricultural uses. Such change in
land use was attributed to the deforestation caused by logging and conversion to
kaingin and other non-forest uses. It also includes conversion of mangrove forest
areas into fishpond.

In 1988, the total agricultural land was 172,945 hectares with a monetary value of P
1.7 billion which increased to 217,697 hectares in 1998 with a value of P 5.3 billion.
Meanwhile, more than 600 hectares of lands devoted to agricultural uses was
recorded as legally converted into built-up areas. It is however observed that this
area is quite small considering the change in built-up area from 1988 to 1998 of
34,796 hectares (equivalent to P 84.1 billion). Unreported illegal land conversion from
agriculture to other land uses without the approval of DAR is one of the reasons for
the large area that is left unaccounted for.

The change in soil quantity, expressed in terms of nutrient loss, serves as an
indicator on the extent of soil degradation. The amount of soil eroded, on the other
hand, is a measure of soil depletion. In 1988, a total of 11.8 million metric tons was
eroded from forest and agricultural lands. By 1998, the volume was estimated at 13.9
million metric tons. Some portions of the eroded materials are deposited in
waterways and farmland, while others may be dissolved in water as they are carried
downstream. The volume of sediment due to erosion from forest and agricultural area
grew from 8.1 million metric tons in 1988 to 9.6 million metric tons ten years hence.
The annual average nutrient loss from sediments, expressed in fertilizer equivalent,
from both forest and agricultural lands were 22,959 tons of nitrogen, 487 tons of
phosphorous, and 3,542 tons of potassium. In sum, the estimated value of
degradation amounted to P 111.2 million in 1988 and increased to P 253.8 million in
1998 for both forest and agricultural lands.




                                           xxi
Mineral Resource

Among the metallic mineral deposits mapped in the province are nickel, chromite,
copper, mercury, antimony, lead, gold, manganese, uranium, pyrite and iron.
Meanwhile, the non-metallic reserves are silica, limestone, pebbles, marble, coal,
sand and gravel. Nickel, which is the only metallic metal currently being put into
commercial production, was included in accounting for the resource.

The opening stock of nickel ore in 1988 was placed at 412.7 million metric tons and
had an equivalent volume of about 5.8 million metric tons of metal. By 1998, the
volume of nickel ore had declined to 407.5 metric tons with a corresponding metal
content of 5.7 metric tons. The metal content slightly varied during the period from
1.41 percent to 1.43 percent. In sum, the total extracted ore during the accounting
period of 3.7 million dry metric tons contained 52 thousand metric tons of nickel
metal.

In monetary terms, Palawan’s nickel reserve, valued at P 272.6 billion in 1988,
increased by 1.1 percent to P 304.7 billion in 1998. The variable market price of
nickel was noted during the period. The highest market price was recorded in 1989
at P 68.25 per kilogram and the lowest was in 1993, pegged at P 27.07 per kilogram.

Based on a 1999 survey of 15 rivers in Mainland Palawan which are the major
sources of sand and gravel aggregates, the reserve was placed at 5.4 million cubic
meters. The volume extracted increased at an average of 12.7 percent per annum.
From the 1990 extraction of 19 thousand metric tons, the volume rose to 71 thousand
metric tons in 1999 with equivalent monetary values of P 66.6 million and P 629.4
million, respectively.




                                        xxii
Water Resource

Palawan consists of 191 catchments, 31 of which are identified as major catchments.
According to the Master Plan Study on Water Resources Management of the
Philippines conducted by the National Water Resources Board (NWRB) in 1977, only
15 percent or 2,242 square kilometers of the 14,896 square kilometers total land area
of Palawan has available groundwater. The population depends mainly on the
groundwater for its domestic, commercial and industrial consumption. On the other
hand, a large proportion of the surface water is being consumed by the agriculture
sector.

For this specific undertaking, both the surface and groundwater resources were
covered. Results of the estimation of the physical accounts of surface water showed
an increase in stock from 15,023.0 million cubic meters in 1988 to 45,642.5 million
cubic meters in 1998. The increasing trend in the demand for surface water in
agriculture is still very small compared to the basin recharge. Thus, the available
stock for surface water adds potential for the agricultural development of the
province.

The groundwater stock depends on the recharge from rainfall. The province
experienced the lowest recharge in 1991 due to lower amount of rainfall particularly
in the southern part of the mainland. The study showed an increase in abstraction of
groundwater for domestic, commercial and industrial purposes from 24.4 million
cubic meters in 1988 to 37.7 million cubic meters in 1998. The increase in abstraction
may be attributed to the rapid increase in population brought about by migration.




                                         xxiii
Palawan Marine Fishery Resource
Environmental and Natural Resources Accounting


                                              MARINE FISHERY RESOURCE


1.1.   INTRODUCTION

1.      Palawan is an archipelago of 1,780 islands and islets with a coastline of
about 2,000 kilometers. It has an estimated water body of 49,408 square kilometers,
coral reefs of 9,800 square kilometers (excluding Tubbataha and Kalayaan) and a
mangrove forest of 46,445 hectares (JAFTA, 1992).

2.       The province has numerous coves and bays with rich fishing grounds. About
64,400 fishers, majority of whom are migrants coming from Cebu, Iloilo and other
provinces ply these waters. Palawan contributes roughly 40 percent to the total
fishery production of the Philippines (BAS, 1998). Commercial and municipal
fisheries registered an average production of 94,070 metric tons annually from 1988
to 1998 (Figure 1.1). Vessels classified under municipal fishery represented 77
percent of the total fishing boats. Similarly, about two thirds of the total catch in 1998
was contributed by municipal fishery. It is not surprising therefore that fish is the
principal source of protein for the Palaweños whose per capita food requirement for
fish is estimated at 30.66 kilos per annum (MHS, 1982).

                            Figure 1.1 Catch by Commercial and Municipal Fishery Industry,
                                   Palawan, 1983 to 1998 (In Metric Tons)




                                   90,000
          Catch (in metric tons)




                                   80,000
                                   70,000
                                   60,000
                                   50,000
                                   40,000
                                   30,000
                                   20,000
                                   10,000
                                            1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998


                                                                 Commercial
                                                                 Municipal



3.      In 1995, about 75 percent (NSO, 1995) of the total population resided in the
coastal zone whose sources of livelihood were derived from the coastal/marine
resources. Majority of the local residents engaged in municipal fishing, however
some of them resorted to deep-sea fishing in order to increase production. One of
the factors that influenced small fishers to go beyond the municipal waters was the
declining catch.


2   Palawan Marine Fishery Resource
Environmental and Natural Resources Accounting



4.      Human activities have been contributory to the deterioration of the coral reef,
sea grass beds and mangrove forest that serve as shelter and nursery of spawning
and juvenile fish. The problems besetting the fishery resource are also rooted to the
destructive activities in the terrestrial area that cause siltation and sedimentation in
the coastal areas. Moreover, the use of harmful fishing methods, such as trawl and
dynamite fishing, and obnoxious substances like sodium cyanide, put pressure on
the resource. Meanwhile, the mangrove forest in Southern Palawan has been
destroyed through illegal mangrove tree debarking and conversion of mangrove
forest into fishpond. The coral reefs are also deteriorating as disclosed by some
researches. For example, out of 75 sites surveyed in 1997 to 2000 by the Palawan
Council for Sustainable Development Staff (PCSDS) and Non-Government
Organizations (NGOs) in Puerto Princesa City, Aborlan, Narra, Espanola, and
Busuanga, only 12 percent were classified under excellent condition, that is, having a
coral cover of at least 75 percent.

5.      To address these problems and issues and to formulate appropriate plans
and policies in accordance with the concept of sustainable development,
comprehensive information on the status of the fishery sector is needed by planners
and policy makers. It is for these reasons that accounting of the resource was
pursued under the Environment and Natural Resources Accounting (ENRA) II
Project.


1.2.   CONCEPTUAL FRAMEWORK

       1.2.1        Scope and Coverage

6.     The fishery resource accounts cover cultivated and non-cultivated fish stock
and other aquatic animals. The former includes the stock of fish and other aquatic
animals in fishponds and farms while the latter are found in the ocean and the inland
and coastal waters. The study however is confined to non-cultivated fish stocks and
due to data limitations, it covers only marine fishery resource for the period 1988 to
1998.

       1.2.2        Framework of the Asset Account

7.     The SEEA framework was used in the accounting of the resource both for the
physical and monetary accounts. Below is the conceptual framework operationalized
to come up with the fishery resource accounts for the Province of Palawan.




               Figure 1.2 Asset Accounts Framework for Fishery Resource



   Palawan Marine Fishery Resource                                                    3
Environmental and Natural Resources Accounting



           OPENING STOCK
           Changes due to economic activity
                  Depletion
                  Total Catch
                  Sustainable Yield
           Other Accumulation
                  +/- Conversion of fish stocks to economic control
           Other Volume Changes due to natural or multiple causes
                  + Natural growth
                  - Natural mortality
                  +/- Net migration
                  - Mortality due to natural disasters or due to the
                        destruction of natural habitats
           Changes in Stocks

           Revaluation*

           CLOSING STOCK

               *For monetary valuation only



               Fish Stocks

8.     The opening and closing stocks characterize the volume of the asset at a
given point in time. Ideally, the stock is measured in terms of the biomass at the
beginning and end of the accounting period.

               Changes in Stock

9.      Change in the volume of stock is affected by natural loss, fishing activity and
recruitment. Fishing is an extraction activity resulting to reduction of stock. The level
of fish catch that is beyond its natural growth occurring at a given point in time is
considered as depletion. It occurs when total catch exceeds sustainable yield.

               Other Accumulation

10.   The positive or negative conversion of fish stocks to economic control is
accounted as other accumulation.

               Other Volume Changes

11.     The variables classified under other volume changes may be due to natural or
multiple causes. It consists of natural growth as additional stock and natural mortality
as reduction to the stock. Mortality due to natural disasters or destruction of natural
habitat is also a reduction to the stock. Meanwhile, net migration is either addition or
reduction to the stock.

12.     Due to data constraints, the accounting of the fishery resource was limited to
the framework discussing the changes due to economic activity particularly on the
depletion of the marine fishery resources. The methods used in the exercise is just
an alternative approach to account for the resource rent based on the level of
depletion, considering that depletion is only one of the changes in the balance sheet.
The physical and monetary values of depleted commercial and municipal fish catch
were presented as an initial output for the fishery resource accounting.


4   Palawan Marine Fishery Resource
Environmental and Natural Resources Accounting




1.3.       OPERATIONALIZING THE FRAMEWORK

          1.3.1.       Sources of Data

13.     The basic data requirements of the account using the Fox model are volume
of catch and the fishing effort expressed in terms of horsepower. The Bureau of
Agricultural Statistics (BAS) provided the data for total fish catch and producers’
price based on their surveys covering the period 1988 to 1998. Data on catch from
1983 to 1987 were retrieved from the Bureau of Fisheries and Aquatic Resources
(BFAR) Statistical Profile. The total number of fishing boats and their corresponding
gross tonnage and engine horsepower for commercial and municipal fishery were
derived from the records of fishing vessel operators when they apply for a license
from the office of the Philippine Coast Guard, BFAR and MARINA. Since these are
available in raw form, processing of data on horsepower and gross tonnage from
individual licenses issued to fishing operators was undertaken under the project1.

14.     Gathered data were only restricted to a period of fifteen years covering 1983
to 1998. Data on total fish production, measured in metric tons, were gathered from
landing centers and were classified into commercial and municipal fishing.
Commercial fishing uses boats that are more than three gross tons while municipal
fishing uses boats of three gross tons and below.

          1.3.2        Estimation Methodology

                   Fish Stock

15.    The Palawan Technical Working Group (PTWG) attempted to compute for the
physical asset accounts of the fishery resource using the System of Integrated
Economic and Environmental Accounting (SEEA) framework. However, results of
stock assessment surveys of several reef areas of Palawan conducted independently
by BFAR, PCSDS and NGOs were not sufficient to represent the stock of the
province’s numerous fishing grounds.

                   Fish Catch

16.     One of the data needed to derive variables on fishing effort, sustainable yield
and depletion is the fish catch. Data on fish captured from commercial and municipal
fishing were gathered focusing only on marine fishes. Fishery products such as
shrimps, prawns and other invertebrates were excluded in the resource accounting.
To show the status of Palawan’s fishery resource in terms of Maximum Sustainable
Yield (MSY) for fishing, a series of data of at least fifteen years was compiled. An
undercoverage of 20 percent was applied to compute for the total fish production
(NSCB, 1994). It represents the assumed unrecorded fish catch in different landing
sites not monitored by the survey conducted by BAS.

                   Fishing Effort

17.   At the outset, the working group tried to estimate the stock based on the
assumption that a coral reef yields an average 15.6 tons/km2/year (White, et. al.,

1
    Processing of data from the files of individual operators was contracted in order to estimate the
    horsepower of fishing vessels.


      Palawan Marine Fishery Resource                                                              5
Environmental and Natural Resources Accounting


1998). However, this method was not deemed acceptable to the UNSD consultant
since it only accounted for the growth for a particular year and did not provide the
initial stock. It was further recommended that ICLARM should be consulted on the
establishment of the baseline data and development of a model that can be adopted
for the regular updating of the accounts.

18.     Finally, the group adopted the Fox Model the data requirements of which are
fish catch and total fishing effort (expressed in horsepower) to be able to come up
with an estimated catch per unit effort (CPUE), sustainable yield and depletion.
Absence of published data on the number of fishing vessels, gears used and number
of fishers prompted the processing of raw data on fishing effort from individual
records of fishing boat operators from boat licensing offices, namely, MARINA,
Philippine Coast Guard and BFAR.

19.     Initial results of the data processing from the records of the afore-mentioned
agencies showed a big leap in the horsepower from 1991 to 1992 and 1997 to 1998.
One of the possible causes of the erratic trend was the failure of some fishing
operators to register their vessels for the year although their operation was
uninterrupted. In 1992, the recording system may have been affected by the transfer
of responsibilities on boat licensing from the Philippine Coast Guard and MARINA.
Missing records were also noted. There were some municipalities with zero
registration which is considered impossible and therefore erroneous. Meanwhile,
intensified law enforcement activities of national agencies and local task forces in
1998 was believed to have been instrumental to the increase in the number of
registered fishing boats.

20.     In view of these observations, the PTWG reviewed the raw data processed by
the contractor and conducted a rapid appraisal of the economic life span of fishing
boats. As a result, duplicate entries were cancelled and the records corrected. A
minimum period of eight years was applied to a fishing boat starting from the year it
was built. Based on the adjusted data, the total horsepower of commercial and
municipal fishing vessels was derived. It is noted however that this computed
horsepower is underestimated. The equivalent fishing effort of the fishing gear and
the fishers were not covered because of the absence of an inventory of gears used
while there were no data on the number of fishers by type of employment, that is, on
the number of full-time, part-time time and occasional fishers.

               Sustainable Yield

21.   Sustainable yield was estimated using the Fox Model. The equation below
was used (Philippine Asset Accounts, 1998):

               Y       =        E exp (a + b E)
                       where:
                                Y        =        catch or yield from the resource
                                E        =        fishing effort per unit time
                                a        =        constant
                                b        =        regression coefficient

22.   The regression coefficient was determined by establishing the relationship
between the time series data on fish catch and the estimated fishing effort.

               Depletion



6   Palawan Marine Fishery Resource
Environmental and Natural Resources Accounting


23.    To compute for depletion, total actual catch was deducted from the
sustainable yield. If the catch exceeds the sustainable yield, depletion then occurs.
To value the cost of resource depletion, expressed as net rent, the net price method
was used. Net rent is the value of the output per unit of measurement after deducting
the expenses incurred in extracting the resource.

                  The equation used is as follows:

                  Depletion         =        Actual Catch less Sustainable Catch
                  Net rent          =        Net price per unit x Depletion


1.4.   RESULTS AND DISCUSSION

       1.4.1.         Share of the Fishery Sector to GPDP


24.      Fishery is a major sector of the economy of Palawan. Estimates of the Gross
Provincial Domestic Product (GPDP) in 1988 showed that agriculture, fishery and
forestry accounted for about 54.2 percent of the provincial economy with fishery
contributing 22.8 percent (Table 1.1). By 1994, the share of the fishery sector was
slightly smaller at 20.6 percent but it still had contributed the second largest share to
the total GPDP, next to agricultural crops.

       Table 1.1. Gross Provincial Domestic Product Accounts, Palawan,
                  1988 and 1994 (In Million Pesos)

                                        At Constant 1985 Prices                     Percent
                  Sector                 1988            1994               1988              1994
       Agriculture, Fishery and
       Forestry                             1,603.9          1,907.7               54.2              49.9

          Agricultural Crops                 602.0             866.0               20.4              22.7
          Livestock and Poultry              166.2             253.3                5.6               6.6
          Fishery                            673.8             784.9               22.8              20.6
          Forestry                           161.8               3.4                5.0               0.1

       Industry                              459.7             636.9               15.6              16.7

       Services                              891.6            1274.4               30.2              33.4

       GPDP                                2,955.2            3819.0            100.0              100.0
       Source: Development of the Gross Provincial Domestic Product (GPDP) Accounts for the Province of
       Palawan, NSCB, Provincial Government of Palawan, PCSDS, 1998



       1.4.2          Fish Catch and Fishing Effort

25.     During the entire 11-year accounting period, municipal fishery comprised the
bulk of the total fish production (Table 1.2). On the average, catch of municipal
fishers represented 74 percent of the total while commercial fishery accounted for the
remaining 26 percent. Both municipal and commercial fishery showed an increasing
trend in terms of catch.

26.     Results of the comparative analysis of fish catch vis-à-vis fishing effort or the
CPUE (Figure 1.3) also showed that the rate of increase in fishing effort was more
than that of the fish catch. Total catch rose by 3.0 percent from 1988 to 1998 while
fishing effort increased by about 21.4 percent.



   Palawan Marine Fishery Resource                                                                          7
Environmental and Natural Resources Accounting



       Table 1.2. Estimated Volume of Catch of Marine Fishery Resource,
                       Palawan, 1988 - 1998

                                                                                   Fish Catch
                                                                                    Commercial          Total
                                                  Year    Municipal Fishery
                                                                                      Fishery        (in metric
                                                           (in metric ton)
                                                                                  (in metric tons)      tons)
                                                  1988            54,284                   28,622     82,907
                                                  1989            56,264                   32,456     88,721
                                                  1990            69,349                   20,348     89,698
                                                  1991            73,624                   21,066     94,690
                                                  1992            67,136                   15,380     82,517
                                                  1993            68,108                   25,426     93,534
                                                  1994            73,556                   24,076     97,632
                                                  1995            74,580                   20,579     95,159
                                                  1996            73,256                   20,890     94,146
                                                  1997            81,731                   26,082     107,813
                                                  1998            81,605                   26,356     107,960
                                            Source: BAS Central


       Figure 1.3. Total Catch vis-à-vis Total Fishing Effort


                                        120,000                                                             120,000

                                        100,000                                                             100,000
         Total Catch (in metric tons)




                                                                                                                      Fishing effort (in horsepower)
                                         80,000                                                             80,000

                                         60,000                                                             60,000

                                         40,000                                                             40,000

                                         20,000                                                             20,000

                                            -                                                               -
                                                   1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
                                                                     Total Catch
                                                                     Fishing Effort (Hp)



       1.4.3                                      Sustainable Yield and Depletion

27.    Extraction of marine fish and utilization of the fishery resource in general
cannot be left unregulated. However, in order to have a sound basis for managing
and regulating the extraction of the resource, fish stock, sustainable yield and levels
of depletion, if any, of the resource should be determined. Because attempts in this
study to establish the sustainable yield was faced with the difficulty of meeting the
data requirements of the SEEA framework, an approximation was arrived at using
the Fox Model.

28.     Table 1.3 shows the estimated sustainable yield and depletion of the marine
fishery resource after combining the catch and effort of municipal and commercial
fisheries. At the start of the accounting period in 1988, depletion was observed and


8   Palawan Marine Fishery Resource
Environmental and Natural Resources Accounting


continued until 1991 but at a decreasing rate; from 20,727 metric tons, the level of
depletion went down to 1,413 metric tons. Apparently, efforts by law enforcement
agencies to curb destructive fishing methods were becoming effective. During this
time, the government introduced interventions to put a stop or at least minimize
harmful fishing practices and restrain over-fishing. The local government organized
the Bantay Dagat, an inter-agency task force that was formed to enhance the
monitoring of the coastal areas and went further to apprehending violators of fishery
regulations and other environmental laws. From 1992 until 1995, there was no
recorded depletion of the marine fishery resource.

29.      However, in 1996, depletion of the marine fishery was again evident. Starting
at a volume of 2,639 metric tons, it dramatically rose to 20,153 metric tons in 1997
and went further up to 23,607 metric tons in the following year. It is believed that
initial headway reached in combating illegal fishing activities and destruction of the
marine ecosystems during the early 90’s may have not been sustained.

30.    Figure 1.4 presents the Sustainable Yield – Effort Curve with Maximum
Sustainable Yield estimated at 101,954 metric tons and effort at 65,629 horsepower.


          Table 1.3. Estimated Marine Fishery Resource Depletion, Palawan,
                      1988-1998

            Year      Total Catch       Fishing      Sustainable    Depletion
                                       Effort (Hp)      Yield
            1988         82,907          19,958         62,180        20,727
            1989         88,721          25,462         72,946        15,774
            1990         89,698          34,415         86,023        3,675
            1991         94,690          41,695         93,277        1,413
            1992         82,517          47,120         97,050          -
            1993         93,534          59,256        101,441          -
            1994         97,632          67,391        101,918          -
            1995         95,159          89,816         96,517          -
            1996         94,146         101,047         91,507        2,639
            1997        107,813         108,593         87,659        20,153
            1998        107,960         114,715         84,354        23,607




Figure 1.4. Sustainable Yield - Effort Curve for Marine Fishery Resource, 1988 – 1998




   Palawan Marine Fishery Resource                                                      9
Environmental and Natural Resources Accounting




                           110,000
                                                           1993
                                                                            1995
                           100,000                1991                                   1997
                                                                  1994
       Sustainable Yield



                                                         1992
                            90,000                                                1996
        (in metric ton)




                                         1989     1990                                   1998
                            80,000
                                          1988
                            70,000

                            60,000

                            50,000
                                     -   20,000   40,000    60,000       80,000    100,000 120,000 140,000

                                                             Fishing Effort
                                                            (in horsepower)



                 Estimated Maximum Sustainable Yield                       = 101,954 metric tons
                 Estimated Maximum Fishing Effort                          = 65,629 horsepower


1.5.             RECOMMENDATIONS

31.      There are indications that the fishery resource of Palawan is now facing
threats. Based on the initial findings of the study, the volume of depletion of marine
fishery resource is rising at an increasing rate. However, to have a more solid basis
for evaluating the condition of the resource and in the formulation of the appropriate
policy interventions, the SEEA framework should be fully operationalized. Foremost
is the need to satisfy the data needs of the framework. Along this line, follow-on
activities are recommended in order to meet the requirements of the fishery resource
accounting, namely:

                 a.            Resource assessment should be conducted to be able to establish the
                               fish stock.

                 b.            Close monitoring of fishing activities and regular collection of data
                               should be strengthened. Among the data that should be compiled are:
                               (a) fish catch by species; (b) number of fishermen and terms of
                               employment, that is, whether full-time, part time, or occasional; (c)
                               number of fishing boats with corresponding horsepower; and (d)
                               inventory of fishing gears.

                 c.            The prevailing price of fishery products by species should be gathered
                               as well as cost of production to facilitate monetary valuation.

                 d.            Installation of Municipal Fishery Licensing System to keep a record of
                               operating fishing vessels. This will help in determining the pressure to
                               the coastal area as a result of fishing. It will also provide baseline
                               information that can be subsequently used for regulatory and revenue
                               purposes.




10 Palawan Marine Fishery Resource
Environmental and Natural Resources Accounting


       e.      Strengthen collaboration with the provincial offices of national
               agencies and the municipal offices in the compilation of data that they
               generate through locally initiated surveys and in the exercise of their
               regulatory functions. These data should be incorporated into their
               regular reports.

       f.      Conduct of studies to gather a more comprehensive data on cultivated
               and non-cultivated fish stock for both marine and fresh water bodies

32.      Moreover, it is emphasized that the economy of Palawan is still hinged on the
agricultural sector, in particular, crop farming and fishery, which are the population’s
major sources of livelihood. While this study is focused on the fishery resource, it
should not be overlooked that most fishers also cultivate small farm lots to augment
their income. Further, because of the topography of the province, its coastal areas
and marine resources are especially vulnerable to adverse environmental activities in
the terrestrial areas. Aside from the destruction of the mangrove and marine
ecosystems that have direct impact on the resource, activities in the terrestrial areas
(e.g., lowland and upland farming) also affect the coastal areas. As such, depletion of
the resource is not only the effect of harmful fishing practices but may also be the
result of equally harmful farming techniques. Fishing and farming should therefore be
addressed through parallel interventions. It is imperative that both sectors be
afforded immediate attention in terms of policy and program formulation.

33.    Meanwhile, efforts to mitigate the problems on illegal fishing call for stricter
implementation of fishery laws and related environmental laws primarily to protect
and conserve the coastal marine ecosystem and its natural resources. Formulation of
municipal and barangay ordinances to support national policies is likewise
recommended.




   Palawan Marine Fishery Resource                                                   11
Environmental and Natural Resources Accounting


                                       ACRONYMS

BAS            Bureau of Agricultural Statistics

BFAR           Bureau of Fisheries and Aquatic Resources

CPUE           Catch Per Unit Effort

GT             Gross Tonnage

Hp             Horsepower

ICLARM         International Center for Living Aquatic Resources Management

MARINA         Maritime Industry Authority

MSY            Maximum Sustainable Yield

MT             Metric Tons

NGO            Non-Government Organizations

PCSDS          Palawan Council for Sustainable Development Staff

PTWG           Provincial Technical Working Group Members

SEEA           System of Integrated Economic and Environmental Accounting

UNSD           United Nations Statistics Division

JAFTA          Japan Forest Technical Association




12 Palawan Marine Fishery Resource
Environmental and Natural Resources Accounting


                               DEFINITION OF TERMS

Depletion              is the extraction of fishery resources beyond the rate of natural
                       growth, measured as a positive difference between catch and
                       sustainable yield. It occurs when the total catch exceeds the
                       natural growth.

Commercial
Fishing                is fishing for commercial purposes in sea waters with the use
                       of fishing boats of more than three gross tons.

Fishing Boat           refers to the watercraft used for catching and transporting of
                       fish resources from seawaters.

Fish Catch             refers to the volume of fish landed by commercial and
                       municipal fishery industry.

Fishing                is the catching, gathering and culturing of fish, crustaceans,
                       mollusks, and all other aquatic animals and plants in the sea or
                       in inland waters. It includes the catching of fish and aquatic
                       animals like turtles; the gathering of clams, snails, shells and
                       seaweeds; and the culturing of fish and oysters. Sport fishing
                       or small sale fishing pursued as a hobby is excluded.

Fishing Effort         refers to manpower, machine power and technology employed
                       in harvesting fishery resources yielding to catch per unit effort.
                       It is measured in terms of horsepower.

Fishing Gears          are equipment used in catching fish with or without the use of
                       boats.

Marine Fishery         refers to the fishing activity at the seawaters outside of the
                       coastal line.

Municipal Fishing      is characterized by the use of simple gear and fishing boats
                       some of which are non-motorized and with a capacity of three
                       and less than three gross tonnage.

Horsepower             is the work done at the rate of 550 foot-pounds per second and
                       it is equivalent to 745.7 watts




   Palawan Marine Fishery Resource                                                    13
Environmental and Natural Resources Accounting


                                      REFERENCES

Bureau of Agriculture Statistics. Production Fishery Production Statistics, Production
     Statistics, BAS. 1988 – 1993. BAS, Quezon City.

Bureau of Fisheries and Aquatic Resources. 1997 Philippine Fisheries Profile. BFAR.
     Quezon City.

Ilarina, Vivian. Compilation of Resource Accounts (Selected Case Studies) Fishery
       Resources. International Workshop on Environmental and Economic
       Accounting. September 2000. Manila, Philippines.

Ministry of Human Settlements. Town Planning Guidelines and Standard, Economic
       Sector, 1982.

National Statistics Office. 1995 Census of Population (Palawan).

Palawan Integrated Area Development Project, Phase II Final Report. Volume 2-
     Production Component Annexes. February 1990.

Philippine Asset Accounts. ENRA Report No. 2. May 1998. NSCB.

Japan Forest Technical Association (JAFTA). Forest Register (Palawan). Information
     System Development Project for the Management of Tropical Forest. 1992.

White, Allan, et al. The Value of Philippine Coastal Resources: Why Protection and
      Management are Critical. 1998. Coastal Resource Management Project.
      DENR and United States Agency for International Development. Cebu City,
      Philippines.




14 Palawan Marine Fishery Resource
Palawan Forest Resource
Environmental and Natural Resources Accounting


                             FOREST RESOURCE


2.1     INTRODUCTION


1.       Palawan is situated in the southwest part of the Philippine Islands chain.
Palawan stands as the country's largest province with its 1.5 million hectares
land area. Tall mountain ranges bisect the province into east and west coast. The
east coast has narrow beaches and a swampy shoreline, backed by plains and
short valleys. The west coast is more rugged, with mountains rising up near the
sea, and narrow lowlands. Palawan, often intriguingly described as "The Last
Frontier" and "Paradise Lost", is home to vast rainforests, underground rivers and
cave systems, mangrove swamps, and rare species of flora and fauna found only
in the Philippines. Palawan’s forest area of 647,090 ha accounts for 43 percent
of its total land area (NAMRIA, 1985 and JAFTA, 1992).

2.     The objective of this study is to account for the physical and monetary
stock of the forest resources from 1988 to 1999 and to determine the factors that
contribute to the changes. Ultimately it aims to come up with relevant
recommendations in the proper management of the resource.

3.      Palawan’s forests are classified into four different types, namely,
dipterocarps, submarginal, mossy and mangrove forest. Dipterocarp forests are
further classified as either old growth or second growth. Old growth dipterocarp
forests are virgin forests with no traces of commercial logging, while second
growth dipterocarp forests are those with traces of logging (NSCB, 1998). The
dipterocarp forest is the principal Indo-Malayan tropical rainforest formation. It is
one of the world’s three main tropical rainforests in addition to the tropical
American and African rainforests. Several layers of vegetation and a multiplicity
of tree species characterize these tropical rainforests. The dipterocarp forest is
not a pure stand of tree species belonging to the family Dipterocarpaceae but
rather a mix forest consisting of species of various families with the dipterocarp
as dominant component.

4.      Philippine dipterocarps are mostly medium to large sized trees,
unbranched to a considerable height and usually attain a height of 40 to 65
meters in diameter at breast height (dbh) or diameter above buttress (dab) of 60
to 150 centimeters. A few unusually large trees have been found to attain a dab
as large as 30 cm, their boles are generally straight and regular (Whitford, 1911;
Tamesis and Aguilar, 1951). In terms of economic importance, the family
Dipterocarpaceae produces the greatest bulk of commercial wood in the country
sold worldwide under the trade name “Philippine Mahogany”. Dipterocarp timber
constitutes the bulk of our country’s log exports and wood for domestic building
construction and infrastructure development (NSCB, 1998).

5.     Mangroves are coastal trees or shrubs that are adapted to estuarine or
even saline environments. The term mangrove refers to the individual plants,
whereas mangal refers to the whole community or association dominated by
these plants. Mangroves have characteristic features that allow them to live in
marine waters (Calumpong and Meñez, 1996).




16 Palawan Forest Resource
Environmental and Natural Resources Accounting


6.      Mangroves minimize soil erosion and pollution of seawater. Its extensive
air root system traps eroded soil and industrial pollutants especially during strong
rains; aids in reclaiming considerable land area, shelterbelt against tidal waves,
typhoons and strong winds; wildlife habitat; increase fish and shellfish
productivity; provides alternative wood supply, and industrial inputs such as resin
for plywood, adhesive manufacture, fuelwood and high grade charcoal, tanning
for dyeing hide into leather, viscose rayon for textile fabric manufacture; livestock
feed supplement, medicine and wine, vinegar and thatching materials from nipa
(Soriano and Fortes, 1987). It is also for these reasons that mangrove forests
are drastically exploited. To address possible loss of mangrove genetic diversity
or a much worse scenario of the entire mangrove forest area of the province
being wiped out, Palawan’s mangrove area has been declared a Mangrove
Swamp Forest Reserve on December 29, 1981.

7.      Rattan is a climbing palm which has a versatile stem of high economic
value. It is one of the most important non-timber forest products of Palawan. It is
used in the manufacture of fine handicrafts, furniture and furniture components,
binding materials, fish traps, hammocks, sleeping mats, carpet beaters, hats,
walking sticks, tool handles and others. Palawan is a major source of rattan poles
for furniture centers like Manila, Iloilo and Cebu. It is a major livelihood source for
poor and indigenous communities who are tapped by most rattan permittees for
cane gathering and processing.

8.      Among the many non-timber forest resources, rattan is being prioritized in
this accounting effort in view of its worsening state. Unlike bamboo, rattan is not
so prolific. Since rattan is co-terminus with dipterocarp forests, rattan is subject to
the damages caused by logging of its tree hosts.


2.2      CONCEPTUAL FRAMEWORK

         2.2.1.      Scope and Coverage

9.      The system of forest resource accounting calls for the compilation of
asset accounts for area (in hectare) and volume of standing trees (in cubic
meter) and non-timber forest products. However, for this study, the accounting is
limited to the asset accounts of dipterocarp forest (old growth and secondary
growth), mangrove forest, and rattan. These resources were included in the
accounting process because of their economic and ecological significance and in
consideration of the availability of data.

         2.2.2.      Framework for the Asset Account

10.    The forest accounts, in physical and in monetary terms, adopted the
format presented on the next page. The opening stock represents the stock of
resources at the beginning of the accounting period. Several factors account for
the changes in stock including changes due to economic activities, other
accumulation, and other volume changes representing the changes due to non-
economic factors. Other volume changes include the statistical discrepancy
equivalent to the difference between the computed closing stock (based on the
framework’s identified factors) and the opening stock of the succeeding year.
The closing stock for a year is equal to the opening stock of the succeeding year.




      Palawan Forest Resource                                                       17
Environmental and Natural Resources Accounting


                        Figure 2.1. Asset Accounts Framework

                    OPENING STOCK

                        Changes due to economic activity
                           Assisted regeneration
                           Legal Logging
                           Unauthorized cutting
                           Damage from logging

                        Other Accumulation
                           Forest Conversion

                        Other Volume Changes
                           Stand growth
                           Mortality
                           Forest fires
                           Natural Disasters

                    Changes in stock

                    CLOSING STOCK

11.      Changes due to economic activity refer to human production activities as
they affect the stock of resources. Assisted regeneration is caused by human
intervention in regenerating natural forests such as plantations and reforestation
activities.    Legal logging refers to the commercial logging done by
concessionaires from 1988-1992 when commercial logging was still allowed in
the province. Legal logging data from 1993 onwards account for harvest
manifestations from areas with known Certificate of Stewardship Contracts
(CSC) as proof of right in the management of the awarded forest area. The item
unauthorized cutting, on the other hand, accounts for illegally extracted
resources as manifested by confiscated forestry products during apprehension.
Damage from logging accounts for forest resource damages, which resulted in
the actual conduct of the logging activity.

12.     The item other accumulation covers forest conversions which mainly
refers to clearing of forest to convert it to other uses such as for residential or
industrial purposes. Under other volume changes, additions to the stock include
natural stand growth and regeneration while reductions to the forest cover are
mortality, forest fires and natural disasters.


2.3     OPERATIONALIZING THE FRAMEWORK

        2.3.1.      Sources of Data

                 Physical Accounts

13.    The base information for forest area was lifted from the 1992 JAFTA
LandSat Thematic Mapper and 1985 aerial photographs from NAMRIA, covering
mainland Palawan. Stock volume was projected using information available from
the RP-German Forest Resource Inventory Project (FRIP).          The project
generated data on the inventory of standing volume, forest regeneration and
minor forest products from national agencies and LGUs.



18 Palawan Forest Resource
Environmental and Natural Resources Accounting



14.    For dipterocarp forests, data for depletion due to legal logging and
unauthorized harvesting were taken from the Provincial Environment and Natural
Resources Office (PENRO) and Community Environment and Natural Resources
Offices (CENRO) of the DENR, Economic Intelligence and Investigation Bureau
(EIIB), and Bantay Palawan, a multi-sectoral task force that conducts
apprehension of illegal loggers.

15.    For mangrove forests, data came from DENR-PENRO, CENROs, and
Municipal Planning and Development Offices (MPDOs). Rattan data were lifted
from the RP-German FRIP and records of the DENR-PENRO, Bantay Palawan
and EIIB.

                 Monetary Accounts

16.    Parameters used in the computation of stumpage value for rattan were
supplied by the National Statistics Office, National Statistical Coordination Board
and Pio Bote’s 1990 study on stumpage value for dipterocarp forest.

        2.3.2.        Estimation Methodology

17.     Physical asset accounts for old and second growth dipterocarp forest and
mangrove consisted of area and volume accounts while accounts for rattan were
limited to volume only. On the other hand, the study came up with the monetary
valuation only for dipterocarp forest and rattan. There was no available
information on the stumpage value of mangrove forest.

                 Physical Asset Accounts, Area

                 a.     Old Growth Dipterocarp Forest

18.     In the compilation of the physical asset accounts, the forest stock in area
terms were projections from the 1985 NAMRIA aerial photographs and 1992
JAFTA satellite imagery covering mainland Palawan only. Legal logging in old
growth forests from 1988-1992 were still covered by Timber License Agreements
before the implementation of the total commercial log ban in the entire province.

19.    Other changes under other volume changes represent the statistical
discrepancy (S.D.) or the unaccounted factors in the changes in area. It is
derived as the reported closing area during the year, taken from the official
sources, less the computed closing area, derived by summing up the opening
area, changes due to economic activity, changes due to other accumulation and
the identified other volume changes.

                 b.     Second Growth Dipterocarp Forest

20.    Changes        due     to    economic      activity    include    assisted
regeneration/plantation or reforestation, the accounted legal logging and logging
damage. Assisted regeneration comprised the area covered by those forest
areas with Certificate of Stewardship Contracts (CSC) such as Integrated Social
Forestry (ISF) Program, Community Based-Forest Management Agreements
(CBFMA), Industrial Tree Plantation (ITP) and agro-forestry projects. Legal
logging area was derived from the total area covered within ISF/CBFM




    Palawan Forest Resource                                                     19
Environmental and Natural Resources Accounting


concessions, ITP and agro-forestry areas times 80 percent1. The estimated
damage due to logging was placed at 15 percent of logged area (legal and illegal
logging) in old growth forests during the previous year. Other accumulation
includes data covered by old growth forest converted to second growth forest
and other non-forest land use and areas devoted/converted to kaingin or upland
farming. The area converted from old growth to second growth is equal to the
area logged in old growth forest in the previous year less 15 percent for log
landings, roads and skidding/yarding trails. Other volume changes account for
area covered by forest fires and statistical discrepancy (S.D.) or the unaccounted
factors in the changes in area.

                      c.        Mangrove Forest

21.     Mangrove forest area was likewise derived from the same geometric
projections as that of the dipterocarp forest. Changes due to economic activity
includes plantation and reforestation efforts, which are treated as an addition to
stock, and unauthorized mangrove harvesting, and charcoal making, which are
treated as reduction to the stock. Mangrove forest conversions to fishpond
development were the activities that contributed to area deductions under other
accumulation and as such also treated as reduction to the stock. Statistical
discrepancy (S.D.) was likewise accounted for under other volume changes.

                      d.        Rattan

22.     No separate area accounts for rattan were compiled since rattan thrives
in the same area as that of dipterocarp forest.

                      Physical Asset Accounts, Volume

                      a.        Old Growth Dipterocarp Forest

23.    Opening volume was derived from area projections multiplied by
harvestable volume of 180.2 cu. m. per hectare computed from the FRIP. Legal
and unauthorized logging were regarded as depletion as adopted from actual
data generated from EIIB, DENR-PENRO and CENRO’s monthly
accomplishment reports. Other changes (S.D.) were computed using the same
procedure as in the area accounts.

                      b.        Second Growth Dipterocarp Forest

24.     Opening and closing volume were likewise derived from the area
projections in second growth dipterocarp following the same sources and
multiplying the computed area by 142 cu.m. per hectare, harvestable volume for
second growth dipterocarp forest based on the results of the FRIP.

25.     Damage from logging, kaingin, and forest fires were treated as depletion
from stock while old growth conversion to second growth was accounted as
addition. All derivations were obtained using the same assumed 142 cu.m. per
hectare harvestable volume. Meanwhile, stand growth under other volume
changes was computed by multiplying the opening area with the annual growth
rate of 4.735 cu. m. per hectare based on the study of Uriarte and Virtucio in
1988.

1
    It is assumed that the actual area logged is 80 percent while 20 percent will remain as second growth forest.


20 Palawan Forest Resource
Environmental and Natural Resources Accounting




                c.      Mangrove Forest

26.   Volume determination was based on a special study conducted by the
PCSDS; the results of which showed that the average volume was 128.93 cu. m.
mangrove timber per hectare. The mangrove timber volume was multiplied to the
opening and closing area based on the 1985 NAMRIA aerial photographs and
1992 JAFTA LandSat TM.

27.    Unauthorized harvesting data were lifted from DENR-CENRO, Roxas.
Stand growth for other volume changes was based on young growth of 1.1 cu. m.
per hectare per year derived from the study entitled Physical Forest Resources of
Palawan by Carandang (1994).

                d.      Rattan

28.     Data on rattan include the average rattan occurrence in both old growth
and secondary growth forests. Separate estimates were made for rattan poles
with diameters of less than two centimeters (< 2 cm) and that for poles greater
than two centimeters (> 2 cm). The opening volume was computed based on the
average rattan occurrence of 1,060.7 lineal meter and 946.3 lineal meter per
hectare of < 2 cm poles in old growth and residual forests, and 393.2 lineal meter
and 224.1 lineal meter for pole > 2 cm in the same types of forests, respectively,
as indicated in the FRIP.

29.     Depletion in stock comes from legal and illegal harvests derived from
actual data reflected in the PENRO and CENRO reports. Logging damages were
estimated at 36 percent of total merchantable length, which remain as waste due
to preliminary processing, and those left in high trees. It was derived by
multiplying the total volume of harvested rattan by 36 percent. Mortality for other
volume changes were estimated at 5 percent as adopted from Pabuayon (1991).
It was computed by multiplying the opening volume of rattan by 5 percent.

                Monetary Asset Accounts

                a.      Dipterocarp Forest

30.     The net price method was used in valuing forest resources. The
economic or monetary accounts were derived by multiplying the volume accounts
by the stumpage value of the forest product. The stumpage value is the value of
the standing timber and it was based on the market prices of logs less harvesting
cost, overhead cost and margin for profit and risk (MPR). The stumpage value
represents the potential economic rent accruing to operators. Revaluation is
equivalent to the differences due to changes in prices between the opening and
closing periods.

31.    The sale value of log is equal to the weighted selling price of the product.
The cost items include logging cost, pre-logging cost, post logging cost, road
construction, transportation and overhead costs. Logging cost represents felling
and bucking costs and the cost of pulling the logs from the felling site to the log
landing. The costs are classified by terrain type, by extractable log volume, and
by logging methods. Pre-logging cost represents the cost of activities such as
pre-logging inventory and tree marking. Post-logging cost is the cost of post
logging residual stand inventory, and enrichment planting conducted by the



    Palawan Forest Resource                                                     21
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Palawan Asset Accounts

  • 1. ENVIRONMENTAL AND NATURAL RESOURCES ACCOUNTING II PROJECT PALAWAN ASSET ACCOUNTS Fishery, Forest, Land/Soil, Mineral and Water Resources Palawan Council for Sustainable Development Staff National Statistical Coordination Board United Nations Development Programme
  • 2. FOREWORD In 1994, the Palawan Council for Sustainable Development Staff (PCSDS) and the Provincial Government, together with the National Statistics Office (NSO) and the Bureau of Agricultural Statistics (BAS), had the occasion of working with the National Statistical Coordination Board (NSCB) for the pilot-testing of the compilation of the Gross Provincial Domestic Product. A first attempt at sub-regional disaggregation of the GDP, this exercise provided the basis for determining Palawan’s contribution to the national economy. This activity likewise paved the way for identifying the areas for improvement of the statistical data collection system in the province. As an offshoot of this undertaking, Palawan was again selected in 1998 as the pilot area for the institutionalization of the Philippine Economic-Environmental and Natural Resources Accounting (PEENRA) System at the provincial level. Focusing this time on the valuation of the asset accounts for five resources of Palawan, this activity was able to show that environmental and natural resources accounting could be successfully carried out at the sub-national level. Such activity could not have been achieved without the support and cooperation of the various data producing agencies operating in the province. On behalf of the Provincial Government of Palawan, I would like to extend our gratitude to the United Nations Development Programme (UNDP), the sponsor of the second phase of the Environment and Natural Resources Accounting Project, NSCB and the United Nations Statistics Division (UNSD), for the technical guidance provided to us. I also commend the heads of agencies and technical staff who had actively participated in pursuing the realization of the objectives of this project. We take great pride that Palawan had initiated this worthwhile endeavor. Through this publication, we hope to disseminate the experience and outputs of Palawan as a pilot model towards the establishment of a provincial asset accounts of interested provinces. JOEL T. REYES Governor Province of Palawan ii
  • 3. FOREWORD This report contains the output of the technical working groups from 14 national agencies and local government offices in Palawan who were involved in the Environment and Natural Resources Accounting (ENRA) II Project. Funded by the United Nations Development Programme (UNDP), the ENRA II Project included a provincial component which aimed to institutionalize the Philippine Economic- Environmental and Natural Resources Accounting (PEENRA) System at the provincial level. Following the methodologies adopted during the first phase of the project, asset accounts for five resources of Palawan, namely: land and soil, forest, fishery, mineral and water, were compiled by a technical working group for each resource. As the lead implementing agency in the province, the Palawan Council for Sustainable Development Staff (PCSDS) had spearheaded the operationalization of the project. To effectively undertake our tasks, we sought the participation of national agencies (Bureau of Agricultural Statistics, Department of Agrarian Reform, National Irrigation Administration, National Statistics Office, and the Department of Environment and Natural Resources) and the offices of the Palawan Provincial Government (Provincial Planning and Development Office, Office of the Provincial Agriculturist and the Environment and Natural Resources Office) and Puerto Princesa City Government (City Planning and Development Office and City Environment and Natural Resources Office). The Palawan Tropical Forestry Protection Programme, a project of the PCSDS and the Paltubig, Inc. were also active partners in this undertaking. Their participation and untiring support were instrumental in the achievement of the project’s objectives. All our efforts however could not have been effectively carried out without the guidance and supervision of the National Statistical Coordination Board (NSCB), the project’s overall lead executing agency. Indeed we are grateful for the opportunity given to us by NSCB and for their confidence that our provincial leaders and policy makers will find this project a significant exercise. The skills that were imparted to us by the NSCB staff will be put into test when we update the accounts in the future. The PCSDS fervently hopes that the cooperation shown to us by the various agencies with whom we have worked with will continue as we pursue the ultimate objectives of the PEENRA system. JOSELITO C. ALISUAG Executive Director PCSDS iii
  • 4. FOREWORD Towards the Institutionalization of the Philippine Economic-Environmental and Natural Resource Accounting (PEENRA) System at the Provincial Level, the National Statistical Coordination Board is pleased to have been a part of the “Palawan Provincial Asset Accounts”, a product of the Environmental and Natural Resource Accounting II (ENRA II) Project funded by the United Nations Development Programme. Palawan, is so far the only province that has its own Provincial Product Accounts. As a pioneering output in environmental accounting at the subnational level, it is hoped that the Palawan Provincial Asset Accounts will greatly contribute to the development of Palawan and will serve as a model for other provinces. Indeed, this compilation of environmental resource accounts in Palawan from 1988 to 1999 covering six (6) resources namely land/soil, fishery, mineral, forest, water and wildlife resources, is a potent medium to bring to the fore the importance of environmental protection at the subnational level. The NSCB salutes the Palawan Council for Sustainable Development Staff for its dedicated work in pursuing the realization of environmental accounting in the province. The close collaboration among the various stakeholders -- the Provincial Government, other government agencies, non-government organizations and private institutions in Palawan, and the individual members of the Provincial Steering Committee and the Technical Working Groups (TWGs), is an experience that should inspire other provinces who wish to undertake the same activity. We acknowledge the United Nations Statistics Division (UNSD) for the technical assistance given and the UNDP for the financial support extended to the ENRA II Project. ROMULO A. VIROLA Secretary General, NSCB iv
  • 5. TABLE OF CONTENTS Foreword List of Tables viii List of Figures xii List of Appendix Tables xv Executive Summary xviii CHAPTER 1. MARINE FISHERY RESOURCE 1.1 Introduction 2 1.2 Conceptual Framework 3 1.2.1 Scope and Coverage 3 1.2.2 Framework of the Asset Account 3 1.3 Operationalizing the Framework 5 1.3.1 Sources of Data 5 1.3.2 Estimation Methodology 5 1.4 Results and Discussion 7 1.4.1 Share of the Fishery sector to GPDP 7 1.4.2 Fish Catch and Fishing Effort 7 1.4.3 Sustainable Yield and Depletion 8 1.5 Recommendations 10 Acronyms 12 Definition of Terms 13 References 14 CHAPTER 2. FOREST RESOURCE 2.1 Introduction 16 2.2 Conceptual Framework 17 2.2.1 Scope and Coverage 17 2.2.2 Framework for the Asset Accounts 17 2.3 Operationalizing the Framework 18 2.3.1 Sources of Data 18 2.3.2 Estimation Methodology 19 2.4 Analysis, Results and Discussions 22 v
  • 6. 2.4.1 Old Growth Dipterocarp Forest 22 2.4.2 Second Growth Dipterocarp Forest 25 2.4.3 Mangrove Forest 27 2.4.4 Rattan 29 2.5 Recommendations 31 Acronyms 33 Definition of Terms 34 References 48 CHAPTER 3. LAND/SOIL RESOURCE 3.1 Introduction 50 3.2 Conceptual Framework 50 3.2.1 Scope and Coverage 50 3.2.2 Framework for the Asset Accounts 50 3.3 Operationalizing the Framework 53 3.3.1 Sources of Data 53 3.3.2 Estimation Methodology 54 3.3.3 Underlying Assumptions and Limitations 57 3.4 Result and Discussion 58 3.4.1 Physical Asset Accounts 58 3.4.2 Monetary Accounts 63 3.4.3 Summary of the Land and Soil Resource 66 3.5 Recommendations 67 Acronyms 69 Definition of Terms 70 References 87 CHAPTER IV. MINERAL RESOURCE 4.1 Introduction 90 4.2 Conceptual Framework 92 4.2.1 Scope and Coverage 92 4.2.2 Framework for the Asset Account 92 4.3 Operationalizing the Framework 93 4.3.1 Sources of Data 93 4.3.2 Estimation Methodology 94 vi
  • 7. 4.4 Results and Discussion 95 4.5.1 Physical Asset Account 95 4.5.2 Monetary Account 97 4.5 Recommendations 98 Acronyms 100 Definition of Terms 101 References 108 CHAPTER 5. WATER RESOURCE 5.1 Introduction 110 5.2 Framework for the Asset Account 111 5.2.1 Scope and Coverage 111 5.2.2 Framework for the Asset Account 111 5.3 Operationalizing the Framework 112 5.3.1 Surface Water 112 5.3.2 Groundwater 112 5.4 Analysis, Results and Discussion 116 5.4.1 Physical Accounts of Surface Water 116 5.4.2 Physical Accounts of Groundwater 117 5.5 Limitations 119 5.6 Recommendations 119 Acronyms 121 Definition of Terms 122 References 130 vii
  • 8. LIST OF TABLES Table Number Title Page CHAPTER 1. MARINE FISHERY RESOURCE 1.1 Gross Provincial Domestic Product Accounts, (Palawan 1988 and 1994) ……………………………. 7 1.2 Estimated Volume of Catch and Fishing Effort of Marine Fishery resource, Palawan, 1983-1998 … 8 1.3 Estimated Marine Fishery Resource Depletion, Palawan, 1983-1998 ….………………………….…… 9 CHAPTER 2. FOREST RESOURCE 2.1 Area Accounts of Old Growth Dipterocarp Forests, 1988-1999 (in hectares)…………………….. 23 2.2 Volume Accounts of Old Growth Dipterocarp Forests, 1988-1999 (in thousand cubic meters)……. 23 2.3 Economic Accounts of Old Growth Dipterocarp Forest at Current Prices, 1988-1999 (In million pesos)……………………………………….. 24 2.4 Economic Accounts of Old Growth Dipterocarp Forest at Constant Prices, 1988-1999 (In million pesos)……………………………………….. 24 2.5 Stumpage Value for Natural Forest Stands at Current Prices, 1988-1999……………………………. 25 2.6 Area Accounts of Second Growth Dipterocarp Forests, 1988-1999 (in hectares)…………………….. 25 2.7 Volume Accounts of Second Growth Dipterocarp Forests, 1988-1999 (In thousand cubic meters)……. 26 2.8 Economic Accounts of Second Growth Dipterocarp Forest at Current Prices, 1988-1999, (In million pesos)…………………………. 27 2.9 Economic Accounts of Second Growth Dipterocarp Forest at Constant Prices, 1988-1999, (In million pesos)………………………… 27 2.10 Area Accounts of Mangrove Forests, 1988-1999….. 28 viii
  • 9. Table Number Title Page 2.11 Volume Accounts of Mangrove Forests, 1988-1999, (In thousand cubic meters)…………….. 28 2.12 Rattan Resources Volume Accounts, 1988-1998 (In thousand lineal meters)…………………………… 29 2.13 Economic Accounts of Rattan at Current Prices, 1988-1991 (In million pesos)………………………… 31 2.14 Economic Accounts of Rattan at Constant Prices, 1988-1991 (In million pesos)………………………… 31 CHAPTER 3. LAND/SOIL RESOURCE 3.1 Sources of Data on Lands Devoted to Forestry, Agriculture and Built-up Uses………………………… 54 3.2 Physical Asset Account of Land Resources Devoted to Forest Uses, Mainland Palawan, 1988-1998……………………………………………… 59 3.3 Physical Asset Account of Land Resources Devoted to Agricultural Uses, Palawan, 1988-1998……………………………………………… 60 3.4 Physical Asset Account of Land Resources Devoted to Built-up Uses, Palawan, 1988-1998……………………………………………… 60 3.5 Physical Asset Account of Soil Resources Devoted to Forest Uses, Mainland Palawan, 1988-1998……………………………………………… 61 3.6 Physical Asset Account of Soil Resources Devoted to Agricultural Uses, Palawan, 1988-1998……………………………………………… 61 3.7 Adjusted Physical Area of Forest Lands by Type of Forest, in Hectares, Mainland Palawan, 1988-1998……………………………………………… 62 3.8 Adjusted Physical Area of Agricultural Lands by Type of Farm, In Thousand Hectares, Palawan, 1988-1998………………………………………………. 62 3.9 Adjusted Physical Area of Built-up, In Hectares, Palawan, 1988-1998…………………………………… 63 ix
  • 10. Table Number Title Page 3.10 Monetary Estimate of Land Resources Devoted to Forest Uses, Mainland Palawan, 1988-1998……………………………………………… 63 3.11 Monetary Estimate of Land Resources Devoted to Agricultural Uses, Palawan, 1988-1998……………………………………………… 64 3.12 Monetary Estimate of Land Resources Devoted to Built-up Uses, Palawan, 1988-1998……………………………………………… 64 3.13 Monetary Estimate of Soil Resources for Lands Devoted to Forest Uses, Mainland Palawan, 1988-1998……………………………………………… 65 3.14 Monetary Estimate of Soil Resources for Lands Devoted to Agricultural Uses, Palawan, 1988-1998……………………………………………… 65 3.15 Summary Table of Physical Asset Account of Land Use by Year, Palawan, 1988-1998………………….. 66 3.16 Summary Table of Monetary Asset Account of Land Use by Year, Palawan, 1988-1998………………….. 67 CHAPTER 4. MINERAL RESOURCE 4.1 Mineral Deposit in Palawan, 1981………………..… 91 4.2 Nickel Physical Asset Accounts in Ore Form……… 96 4.3 Nickel Physical Asset Account in Metal Form…….. 96 4.4 Sand and Gravel Physical Account………………… 97 4.5 Nickel Monetary Account (Using Net Price Method at 15% Interest Rate, In Peso)……………. 98 4.6 Sand and Gravel Monetary Account (Using Net Price Method at 15% Interest Rate, In Peso)……… 98 CHAPTER 5. WATER RESOURCE 5.1 Physical Accounts Framework for Surface and Groundwater……………………………………….…. 111 5.2 Estimation Methodology and Sources of Data……. 114 x
  • 11. Table Number Title Page 5.3 Surface Water Physical Asset Account of Palawan, 1988-1998 (MCM)……….…………………………… 116 5.4 Physical Account of Groundwater in the Province of Palawan , 1988-1996 (MCM)…………………….. 118 xi
  • 12. LIST OF FIGURES Figure Number Title Page CHAPTER 1. MARINE FISHERY RESOURCE 1.1 Catch by Commercial and Municipal Fishery Industry, Palawan, 1983-1998……………………… 2 1.2 Asset Accounts Framework for Fishery Resource… 4 1.3 Total Catch and Total Fishing Effort, Palawan, 1983-1998……………………………………………… 8 1.4 Sustainable Yield Effort Curve for Marine Fishery Resources, 1983-1998……………………………….. 10 CHAPTER 2. FOREST RESOURCE 2.1 Asset Accounts Framework…………………………… 18 2.2 Area and Volume Accounts of Old Growth Dipterocarp, 1988-1999…………………………….…. 24 2.3 Area and Volume Accounts of Second Growth Dipterocarp, 1988-1999………………………………... 26 2.4 Area Change by Forest Type…………………………. 28 2.5 Volume Change by Forest Type……………………… 29 2.6 Volume of harvested/Cut Rattan as Compared to the stock, 1989-1999…………………………….…. 30 2.7 Monetary Valuation of Rattan Forest Resource at Current and Constant Prices, 1988-1999………………………………………………. 30 CHAPTER 3. LAND/SOIL RESOURCE 3.1 Physical Accounts Framework for the Land/Soil Resource,………………………………….. 51 3.2 Monetary Accounts Framework for the Land/Soil Resource…………………………..……….. 52 3.3 Summary of Physical Asset Accounts for Forest, Agriculture, Built-up and Other Land Uses, 1988 and 1998………………………………………… 66 3.4 Comparison of Monetary Value of Forest, Agriculture and Built-up Use………………………… 67 xii
  • 13. Figure Number Title Page CHAPTER 4. MINERAL RESOURCE 4.1 Asset Account Framework for Mineral Resource… 93 4.2 Actual Nickel Extraction by RTNMC, 1988 – 1998………………………………………….. 96 4.3 Sand and Gravel Reserve and Extraction, 1990 –1999…………………………………………… 97 CHAPTER 5. WATER RESOURCE 5.1 Precipitation vs. Basin Recharge vs. Direct Run-off, 1987-1998……………………………………………… 116 5.2 Surface Water Physical Account (Net Basin Recharge vs. Withdrawal vs. Closing Stock), 1988-1998…….. 117 5.3 Surface Water Withdrawal, 1988-1998…………….. 117 5.4 Groundwater Physical Account, 1988-1998……….. 118 5.5 Groundwater Demand in 1988 an 1998..…………… 118 xiii
  • 14. LIST OF APPENDIX TABLES Appendix Table Number Title Page CHAPTER 2. FOREST RESOURCE 2.1 Physical Area of Forest Lands by Type, Mainland Palawan, 1985 and 1992……………………………….. 37 2.2 Physical Area of Forest Lands by Type, Mainland Palawan, 1986-1992…………………………………….. 37 2.3 Adjusted Physical Area of Forest Lands by Type, Mainland Palawan, 1986 –1989………………………… 37 2.4 Average Bole Volume by Species in Dipterocarp Old Growth Forest, Forest, Palawan………………………… 38 2.5 Average Bole Volume by Species in Dipterocarp Residual Forest, Palawan……………………………….. 39 2.6 Average Rattan Occurrence in Dipterocarp Old Growth Forest, Palawan……………………………. 40 2.7 Average Rattan Occurrence in Dipterocarp Residual Forest, Palawan………………………………. 40 2.8 Total Volume of Timber Production, In Cubic Meters, 1988-1999………………………………………………… 41 2.9 Total Volume of Confiscated Timber, In Cubic Meters, 1988-1999………………………………………………… 41 2.10 Total Area Covered within ISF/CBFM Concessions andAgro. Forestry, 1988 – 1999……………………….. 42 2.11 Total Area of Implementation of Conservation Efforts (Second Growth Forest), 1988 – 1999………………... 42 2.12 Total Area of Implementation of Conservation Efforts (Mangrove Forest), 1989 – 1995………………………. 43 2.13 Total Area Damaged from Kaingin and Forest Fires, 1991-1999…………………………………………………. 43 2.14 Total Rattan Harvest Manifestation, 1988-1999………. 44 2.15 Total Volume of Confiscated Rattan, 1989-1995…….. 44 2.16 Rattan Resources Volume Accounts, 1988-1999 (In thousand lineal meters)……………………………… 45 xiv
  • 15. Appendix Table Number Title Page 2.17 Economic Accounts of Rattan at Current Prices 1988-1999, (in million pesos)……………………… 46 2.18 Computation for the Stumpage Values for Rattan Resources, 1988-1998…………………….. 47 CHAPTER 3. LAND/SOIL RESOURCE 3.1 Physical Area of Forest Lands by Type of Forest, Mainland Palawan, 1985-1998, in Hectares………………………………………… 81 3.2 Forest Destruction by Cause, Mainland Palawan, 1991 – 1998, in hectares…………….………… 82 3.3 Conversion of Forest Lands to Other Uses, Mainland Palawan, 1988-1997………….……. 82 3.4 Areas of Reforestation by Municipality, Mainland Palawan, 1987-1998, in hectares... 83 3.5 Logged Area, Palawan, In Hectares, 1988-1992……………………………….….….. 83 3.6 Land Values, Palawan, In Hectares, 1987-1998…………………………………..….. 83 3.7 Erosion Hazard Assessment, Tamlang Catchment, 1985……………………….….…... 84 3.8 Slope Distribution, by Class Interval, Palawan, in Hectares, 1985………………..….. 84 3.9 Retail Price of Fertilizers, Philippines, 1988-1998…………………………………..…… 84 3.10 Daily Wage Rate for Agricultural Plantation, Philippines, 1986-1997……………………..….. 85 3.11 Physical Area of Agricultural lands by Type of Farm, Palawan, in Thousand Hectares, 1980 and 1988 to 1999…………………………. 85 3.12 Kaingin Areas, Palawan, in Hectares, 1991-1998………………………………….…….. 85 3.13 Land Conversion from Agricultural to Other Uses by Municipality, Palawan, 1989-1998…………. 86 xv
  • 16. Appendix Table Number Title Page 3.14 Mangrove Area Converted to Fishpond, Palawan, in hectares, 1995 to 1998…………………………… 86 3.15 Physical Area of Built-up Area, Palawan, 1988 to 1998, in hectares…………………………… 86 3.16 Estimated Zonal Values of Lands, by type of Land Use, Palawan, 1985……………………….. 86 CHAPTER 4. MINERAL RESOURCE 4.1 Nickel Reserve of Mining Companies, 1996………… 104 4.2 Volume of Nickel Reserve and Metal Content by Rio Tuba Nickel Mining Corporation, 1987 – 1996……… 105 4.3 Summary of Sand and Gravel Reserve on Selected Rivers in Palawan, 1999……………………….……… 106 4.4 Computed Unit Rent and Resource Rent of Nickel Resource, Palawan, 1988 – 1998……………….…… 106 4.5 Computed Unit Rent and Resource Rent of Sand and Gravel Resource, Palawan, 1990 – 1999……….…… 107 4.6 Market Price per Unit Volume, 1988 – 1999……….… 107 CHAPTER 5. WATER RESOURCE 5.1 Estimated Basin Recharge, 1987-1998 (MCM)…….. 124 5.2 Palawan Annual Rainfall Data, 1987-1998 (mm)…… 124 5.3 Palawan Hydrometric Network Mean River Discharge, 1986-1989 (MCM)………………………… 124 5.4 Agricultural Water Uses from Surface Water in the Province of Palawan, 1988-1998 (MCM)…………… 125 . 5.5 Total Area Planted with Crops, in hectare, 1988-1998 125 5.6 Physical Accounts of Groundwater, 1980-1987 (MCM) 125 5.7 Water Demand from Groundwater, 1980-1996 (MCM) 126 5.8 Palawan Population Data, 1980-1998………………. 127 5.9 Number of Establishments, 1978-1999……………… 127 xvi
  • 17. Appendix Table Number Title Page 5.10 Livestock and Poultry Water Demand from, Groundwater, 1988-1994 (MCM)…………………….. 128 5.11 Livestock and Poultry Population, Number of Heads, 1988-1998………………………………………………. 128 5.12 Groundwater Recharge Based from Rainfall, 1980-1998………………………………………………. 129 xvii
  • 18. EXECUTIVE SUMMARY Palawan is one of the remaining islands of the Philippine archipelago with a relatively well maintained environment. In order to ensure the preservation of the remaining forest areas, coral reefs and other fragile ecosystems as well as to promote the wise utilization of its natural resources, Republic Act No. 7611, otherwise known as the Strategic Environmental Plan (SEP) for Palawan Act, was adopted in June 1992 as the province’s framework for sustainable development. To achieve a balance between development and conservation, all programs and projects in Palawan were subsequently aligned with the goals and objectives of the SEP. Complementary policies were likewise issued by the provincial government in consonance with the plan. The selection of Palawan as the pilot area for the institutionalization of the Philippine Economic-Environmental and Natural Resources Accounting (PEENRA) was then a welcome opportunity for the local government and the Palawan Council for Sustainable Development Staff (PCSDS), the policy-making body tasked with the operationalization of the SEP, to have at hand a system that can provide the basis for the formulation of the policies that will promote the rational utilization of its resources. The provincial component of the UNDP-funded Environment and Natural Resources Accounting (ENRA) II Project called for the compilation of asset accounts of five major resources, namely, fishery, forest, land and soil, mineral and water. Based on the experience at the national level, asset accounts were estimated by technical working groups whose members came from 14 national agencies and offices of the Provincial Government of Palawan and the City Government of Puerto Princesa. Attempts were made to compute both the physical and monetary valuation of the resources. However, due to data limitations, both physical and monetary accounts were established only for fishery, land/soil, and mineral resources. For surface and ground water, mangrove forest and fishery resources, only the physical accounts were compiled. A major objective of the project in Palawan was the institutionalization of the PEENRA system. As the lead implementing agency and in the light of its mandate under R.A. No.7611, the PCSDS assumed the responsibility of sustaining the activities. Immediately after the termination of the pilot testing in June 2001, the PCSDS integrated into its regular annual plan the updating of the asset accounts. The PEENRA system became a component of an Environmental Monitoring and Evaluation System which was developed to determine the status of the environment in support to the implementation of the SEP. Currently, preparations are underway to formalize the arrangements with the agencies of the national and local government to cover data gathering and actual compilation of the accounts. The recommendations made by the technical working groups will also be pursued. The highlights of the results of the accounting exercise in Palawan are summarized in the following sections. xviii
  • 19. Fishery Resource The resources covered in this accounting exercise are municipal and commercial marine fisheries. Because of constraints in the data, the compilation was limited to the estimation of the volume of depletion and an approximation of the sustainable yield levels based on the Fox Model. The fishery sector contributed 22.8 percent and 20.6 percent to the gross provincial domestic product for Palawan in 1988 and 1994, respectively. Despite efforts to protect the numerous fishing grounds and long coastline of Palawan, the resource showed signs of depletion. A comparison of the trends in 1988 to 1998 reveals that fishing effort increased at a faster rate than fish catch. In fact, during this period, the volume of catch rose by 3.0 percent while fishing effort, based on the total horsepower of both municipal and commercial vessels, grew by 21.4 percent. The maximum sustainable yield of 101,954 metric tons, that is, the biomass that can be caught without jeopardizing the fish stock of any species, was reached at an effort of 65,629 horsepower. During the earlier years of the accounting period, the volume of catch exceeded the rate of natural growth. Depletion level was pegged at a comparatively high 20,727 metric tons in 1988 but this went down to 1,413 metric tons in 1990. In the next four years (1992 to 1995), the extraction level was below the sustainable yield. During this period, the local government’s active law enforcement and concerted conservation and protection programs of different sectors were believed to have contributed to the recovery of the marine ecosystem from previous destructive fishing practices. However, starting 1996, the result showed that production activities had again put pressure on the resource as evidenced by the harvested volume being greater than the resource’s natural growth. From a depletion level of 2,639 metric tons in 1996, it rose to 23,607 metric tons in 1998. Based on the experiences in the compilation of the asset accounts and results of the accounting exercise, the technical working groups had drawn up recommendations to improve the data collection system and the actual consolidation of information from the offices of the different data producers. Initial policy recommendations were put forward to address certain issues that are being confronted in line with the management and utilization of these resources. Mechanisms to institutionalize the accounting were likewise identified. xix
  • 20. Forest Resource The forest provides both ecological and economic benefits. Palawan is one of the country’s provinces endowed with rich natural resources and the forest ecosystem is characterized by a highly diverse flora and fauna. Palawan’s forest land of 647,090 hectares accounts for 43 percent of Palawan’s total land area. Due to commercial logging, which was allowed until 1992, old growth forest area declined by 52 percent (175,990 hectares) from 1988 to 1999. From the closing stock of 339,208 hectares in 1988, total forest area decreased to 163,218 hectares in 1999. Similarly, the equivalent volume of old growth dipterocarp timber was depleted by 2.9 million cubic meters per year, reducing its 1988 timber closing stock of 61.1 million cubic meters to its 1999 stock of 29.4 million cubic meters. The monetary value for old growth forest fell during the accounting period by P 2.6 billion or P 233.9 million annually at current prices. At constant prices, the value shrunk from P 55.3 billion in 1988 to P 26.6 billion in 1999. The depletion that resulted from the changes in the physical stock of old growth forest averaged P 860 million per year or an annual decline of 1.6 percent. The 1988 closing stock of second growth forest area was 216,057 hectares and increased to 392,406 hectare in 1999, representing an 82 percent increase. Second growth dipterocarp timber volume increased by 25,042 thousand cubic meters from 1988 to 1999 with an average annual increase of 2,277 thousand cubic meters per year. Several factors contributed to the increase including the prevalence of reforestation and assisted natural regeneration activities and old growth forest being converted to second growth forest. The monetary value of second growth forest, likewise, showed an increasing trend with an annual average increment of P 4.1 billion at current prices and P 1.0 billion at constant prices. Mangrove forest plays a vital role in directly preserving the islands surrounding marine ecology. However, because of the conversion to fishpond and harvesting, vast tracts of mangrove areas were lost at a rate of 683.5 ha per year. The total mangrove stock declined at a rate of 88,091 cu. m. per year from its 1988 closing stock of 4.6 million cubic meters to 3.7 million cubic meters in 1999. Rattan stock in both old growth and second growth forest decreased at a rate of 4.5 million linear meters annually draining its 1988 closing stock of 746.0 million linear meters to 696.6 million linear meters in 1999. Because of the decrease in the volume of stock of rattan, the value of its closing stock at current prices increased from P 590.0 million in 1988 to P 1.1 billion in 1999. At 1985 prices, the real value declined from P 508.9 million in 1988 to P 470.0 million in 1999, recording an annual decline of 0.7 percent. xx
  • 21. Land and Soil Resources Land and soil resources are among the most important natural resources because of their direct relationship to plants that in turn provide environmental benefits, food and livelihood. Thus, it is imperative to understand the nature and characteristics of these resources in order to manage and conserve them properly. Palawan is the largest province of the country with a land area of 1,489,630 hectares. In 1988, about 43.4 percent of its total land area was devoted to forest area, particularly in Mainland Palawan, 11.6 percent to agriculture use, and a negligible 0.5 percent to built-up use. Meanwhile, a large proportion of about 44.5 percent was classified as reproduction brush, grassland, water bodies and shallow coast including the forest areas in the island municipalities. From 1988 to 1998, forest area decreased from 647 thousand hectares valued at P 31.9 million to 612 thousand hectares valued at P 75.9 million in 1998. It declined at an average annual rate of 0.5 percent equivalent to around 3,545 hectares per year. Given the general increase in the prices of land, there was a substantial increase of P 44.0 million in the value of forest area. An average of 1,494 hectares per year of forest area was converted to different agricultural uses. Such change in land use was attributed to the deforestation caused by logging and conversion to kaingin and other non-forest uses. It also includes conversion of mangrove forest areas into fishpond. In 1988, the total agricultural land was 172,945 hectares with a monetary value of P 1.7 billion which increased to 217,697 hectares in 1998 with a value of P 5.3 billion. Meanwhile, more than 600 hectares of lands devoted to agricultural uses was recorded as legally converted into built-up areas. It is however observed that this area is quite small considering the change in built-up area from 1988 to 1998 of 34,796 hectares (equivalent to P 84.1 billion). Unreported illegal land conversion from agriculture to other land uses without the approval of DAR is one of the reasons for the large area that is left unaccounted for. The change in soil quantity, expressed in terms of nutrient loss, serves as an indicator on the extent of soil degradation. The amount of soil eroded, on the other hand, is a measure of soil depletion. In 1988, a total of 11.8 million metric tons was eroded from forest and agricultural lands. By 1998, the volume was estimated at 13.9 million metric tons. Some portions of the eroded materials are deposited in waterways and farmland, while others may be dissolved in water as they are carried downstream. The volume of sediment due to erosion from forest and agricultural area grew from 8.1 million metric tons in 1988 to 9.6 million metric tons ten years hence. The annual average nutrient loss from sediments, expressed in fertilizer equivalent, from both forest and agricultural lands were 22,959 tons of nitrogen, 487 tons of phosphorous, and 3,542 tons of potassium. In sum, the estimated value of degradation amounted to P 111.2 million in 1988 and increased to P 253.8 million in 1998 for both forest and agricultural lands. xxi
  • 22. Mineral Resource Among the metallic mineral deposits mapped in the province are nickel, chromite, copper, mercury, antimony, lead, gold, manganese, uranium, pyrite and iron. Meanwhile, the non-metallic reserves are silica, limestone, pebbles, marble, coal, sand and gravel. Nickel, which is the only metallic metal currently being put into commercial production, was included in accounting for the resource. The opening stock of nickel ore in 1988 was placed at 412.7 million metric tons and had an equivalent volume of about 5.8 million metric tons of metal. By 1998, the volume of nickel ore had declined to 407.5 metric tons with a corresponding metal content of 5.7 metric tons. The metal content slightly varied during the period from 1.41 percent to 1.43 percent. In sum, the total extracted ore during the accounting period of 3.7 million dry metric tons contained 52 thousand metric tons of nickel metal. In monetary terms, Palawan’s nickel reserve, valued at P 272.6 billion in 1988, increased by 1.1 percent to P 304.7 billion in 1998. The variable market price of nickel was noted during the period. The highest market price was recorded in 1989 at P 68.25 per kilogram and the lowest was in 1993, pegged at P 27.07 per kilogram. Based on a 1999 survey of 15 rivers in Mainland Palawan which are the major sources of sand and gravel aggregates, the reserve was placed at 5.4 million cubic meters. The volume extracted increased at an average of 12.7 percent per annum. From the 1990 extraction of 19 thousand metric tons, the volume rose to 71 thousand metric tons in 1999 with equivalent monetary values of P 66.6 million and P 629.4 million, respectively. xxii
  • 23. Water Resource Palawan consists of 191 catchments, 31 of which are identified as major catchments. According to the Master Plan Study on Water Resources Management of the Philippines conducted by the National Water Resources Board (NWRB) in 1977, only 15 percent or 2,242 square kilometers of the 14,896 square kilometers total land area of Palawan has available groundwater. The population depends mainly on the groundwater for its domestic, commercial and industrial consumption. On the other hand, a large proportion of the surface water is being consumed by the agriculture sector. For this specific undertaking, both the surface and groundwater resources were covered. Results of the estimation of the physical accounts of surface water showed an increase in stock from 15,023.0 million cubic meters in 1988 to 45,642.5 million cubic meters in 1998. The increasing trend in the demand for surface water in agriculture is still very small compared to the basin recharge. Thus, the available stock for surface water adds potential for the agricultural development of the province. The groundwater stock depends on the recharge from rainfall. The province experienced the lowest recharge in 1991 due to lower amount of rainfall particularly in the southern part of the mainland. The study showed an increase in abstraction of groundwater for domestic, commercial and industrial purposes from 24.4 million cubic meters in 1988 to 37.7 million cubic meters in 1998. The increase in abstraction may be attributed to the rapid increase in population brought about by migration. xxiii
  • 25. Environmental and Natural Resources Accounting MARINE FISHERY RESOURCE 1.1. INTRODUCTION 1. Palawan is an archipelago of 1,780 islands and islets with a coastline of about 2,000 kilometers. It has an estimated water body of 49,408 square kilometers, coral reefs of 9,800 square kilometers (excluding Tubbataha and Kalayaan) and a mangrove forest of 46,445 hectares (JAFTA, 1992). 2. The province has numerous coves and bays with rich fishing grounds. About 64,400 fishers, majority of whom are migrants coming from Cebu, Iloilo and other provinces ply these waters. Palawan contributes roughly 40 percent to the total fishery production of the Philippines (BAS, 1998). Commercial and municipal fisheries registered an average production of 94,070 metric tons annually from 1988 to 1998 (Figure 1.1). Vessels classified under municipal fishery represented 77 percent of the total fishing boats. Similarly, about two thirds of the total catch in 1998 was contributed by municipal fishery. It is not surprising therefore that fish is the principal source of protein for the Palaweños whose per capita food requirement for fish is estimated at 30.66 kilos per annum (MHS, 1982). Figure 1.1 Catch by Commercial and Municipal Fishery Industry, Palawan, 1983 to 1998 (In Metric Tons) 90,000 Catch (in metric tons) 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Commercial Municipal 3. In 1995, about 75 percent (NSO, 1995) of the total population resided in the coastal zone whose sources of livelihood were derived from the coastal/marine resources. Majority of the local residents engaged in municipal fishing, however some of them resorted to deep-sea fishing in order to increase production. One of the factors that influenced small fishers to go beyond the municipal waters was the declining catch. 2 Palawan Marine Fishery Resource
  • 26. Environmental and Natural Resources Accounting 4. Human activities have been contributory to the deterioration of the coral reef, sea grass beds and mangrove forest that serve as shelter and nursery of spawning and juvenile fish. The problems besetting the fishery resource are also rooted to the destructive activities in the terrestrial area that cause siltation and sedimentation in the coastal areas. Moreover, the use of harmful fishing methods, such as trawl and dynamite fishing, and obnoxious substances like sodium cyanide, put pressure on the resource. Meanwhile, the mangrove forest in Southern Palawan has been destroyed through illegal mangrove tree debarking and conversion of mangrove forest into fishpond. The coral reefs are also deteriorating as disclosed by some researches. For example, out of 75 sites surveyed in 1997 to 2000 by the Palawan Council for Sustainable Development Staff (PCSDS) and Non-Government Organizations (NGOs) in Puerto Princesa City, Aborlan, Narra, Espanola, and Busuanga, only 12 percent were classified under excellent condition, that is, having a coral cover of at least 75 percent. 5. To address these problems and issues and to formulate appropriate plans and policies in accordance with the concept of sustainable development, comprehensive information on the status of the fishery sector is needed by planners and policy makers. It is for these reasons that accounting of the resource was pursued under the Environment and Natural Resources Accounting (ENRA) II Project. 1.2. CONCEPTUAL FRAMEWORK 1.2.1 Scope and Coverage 6. The fishery resource accounts cover cultivated and non-cultivated fish stock and other aquatic animals. The former includes the stock of fish and other aquatic animals in fishponds and farms while the latter are found in the ocean and the inland and coastal waters. The study however is confined to non-cultivated fish stocks and due to data limitations, it covers only marine fishery resource for the period 1988 to 1998. 1.2.2 Framework of the Asset Account 7. The SEEA framework was used in the accounting of the resource both for the physical and monetary accounts. Below is the conceptual framework operationalized to come up with the fishery resource accounts for the Province of Palawan. Figure 1.2 Asset Accounts Framework for Fishery Resource Palawan Marine Fishery Resource 3
  • 27. Environmental and Natural Resources Accounting OPENING STOCK Changes due to economic activity Depletion Total Catch Sustainable Yield Other Accumulation +/- Conversion of fish stocks to economic control Other Volume Changes due to natural or multiple causes + Natural growth - Natural mortality +/- Net migration - Mortality due to natural disasters or due to the destruction of natural habitats Changes in Stocks Revaluation* CLOSING STOCK *For monetary valuation only Fish Stocks 8. The opening and closing stocks characterize the volume of the asset at a given point in time. Ideally, the stock is measured in terms of the biomass at the beginning and end of the accounting period. Changes in Stock 9. Change in the volume of stock is affected by natural loss, fishing activity and recruitment. Fishing is an extraction activity resulting to reduction of stock. The level of fish catch that is beyond its natural growth occurring at a given point in time is considered as depletion. It occurs when total catch exceeds sustainable yield. Other Accumulation 10. The positive or negative conversion of fish stocks to economic control is accounted as other accumulation. Other Volume Changes 11. The variables classified under other volume changes may be due to natural or multiple causes. It consists of natural growth as additional stock and natural mortality as reduction to the stock. Mortality due to natural disasters or destruction of natural habitat is also a reduction to the stock. Meanwhile, net migration is either addition or reduction to the stock. 12. Due to data constraints, the accounting of the fishery resource was limited to the framework discussing the changes due to economic activity particularly on the depletion of the marine fishery resources. The methods used in the exercise is just an alternative approach to account for the resource rent based on the level of depletion, considering that depletion is only one of the changes in the balance sheet. The physical and monetary values of depleted commercial and municipal fish catch were presented as an initial output for the fishery resource accounting. 4 Palawan Marine Fishery Resource
  • 28. Environmental and Natural Resources Accounting 1.3. OPERATIONALIZING THE FRAMEWORK 1.3.1. Sources of Data 13. The basic data requirements of the account using the Fox model are volume of catch and the fishing effort expressed in terms of horsepower. The Bureau of Agricultural Statistics (BAS) provided the data for total fish catch and producers’ price based on their surveys covering the period 1988 to 1998. Data on catch from 1983 to 1987 were retrieved from the Bureau of Fisheries and Aquatic Resources (BFAR) Statistical Profile. The total number of fishing boats and their corresponding gross tonnage and engine horsepower for commercial and municipal fishery were derived from the records of fishing vessel operators when they apply for a license from the office of the Philippine Coast Guard, BFAR and MARINA. Since these are available in raw form, processing of data on horsepower and gross tonnage from individual licenses issued to fishing operators was undertaken under the project1. 14. Gathered data were only restricted to a period of fifteen years covering 1983 to 1998. Data on total fish production, measured in metric tons, were gathered from landing centers and were classified into commercial and municipal fishing. Commercial fishing uses boats that are more than three gross tons while municipal fishing uses boats of three gross tons and below. 1.3.2 Estimation Methodology Fish Stock 15. The Palawan Technical Working Group (PTWG) attempted to compute for the physical asset accounts of the fishery resource using the System of Integrated Economic and Environmental Accounting (SEEA) framework. However, results of stock assessment surveys of several reef areas of Palawan conducted independently by BFAR, PCSDS and NGOs were not sufficient to represent the stock of the province’s numerous fishing grounds. Fish Catch 16. One of the data needed to derive variables on fishing effort, sustainable yield and depletion is the fish catch. Data on fish captured from commercial and municipal fishing were gathered focusing only on marine fishes. Fishery products such as shrimps, prawns and other invertebrates were excluded in the resource accounting. To show the status of Palawan’s fishery resource in terms of Maximum Sustainable Yield (MSY) for fishing, a series of data of at least fifteen years was compiled. An undercoverage of 20 percent was applied to compute for the total fish production (NSCB, 1994). It represents the assumed unrecorded fish catch in different landing sites not monitored by the survey conducted by BAS. Fishing Effort 17. At the outset, the working group tried to estimate the stock based on the assumption that a coral reef yields an average 15.6 tons/km2/year (White, et. al., 1 Processing of data from the files of individual operators was contracted in order to estimate the horsepower of fishing vessels. Palawan Marine Fishery Resource 5
  • 29. Environmental and Natural Resources Accounting 1998). However, this method was not deemed acceptable to the UNSD consultant since it only accounted for the growth for a particular year and did not provide the initial stock. It was further recommended that ICLARM should be consulted on the establishment of the baseline data and development of a model that can be adopted for the regular updating of the accounts. 18. Finally, the group adopted the Fox Model the data requirements of which are fish catch and total fishing effort (expressed in horsepower) to be able to come up with an estimated catch per unit effort (CPUE), sustainable yield and depletion. Absence of published data on the number of fishing vessels, gears used and number of fishers prompted the processing of raw data on fishing effort from individual records of fishing boat operators from boat licensing offices, namely, MARINA, Philippine Coast Guard and BFAR. 19. Initial results of the data processing from the records of the afore-mentioned agencies showed a big leap in the horsepower from 1991 to 1992 and 1997 to 1998. One of the possible causes of the erratic trend was the failure of some fishing operators to register their vessels for the year although their operation was uninterrupted. In 1992, the recording system may have been affected by the transfer of responsibilities on boat licensing from the Philippine Coast Guard and MARINA. Missing records were also noted. There were some municipalities with zero registration which is considered impossible and therefore erroneous. Meanwhile, intensified law enforcement activities of national agencies and local task forces in 1998 was believed to have been instrumental to the increase in the number of registered fishing boats. 20. In view of these observations, the PTWG reviewed the raw data processed by the contractor and conducted a rapid appraisal of the economic life span of fishing boats. As a result, duplicate entries were cancelled and the records corrected. A minimum period of eight years was applied to a fishing boat starting from the year it was built. Based on the adjusted data, the total horsepower of commercial and municipal fishing vessels was derived. It is noted however that this computed horsepower is underestimated. The equivalent fishing effort of the fishing gear and the fishers were not covered because of the absence of an inventory of gears used while there were no data on the number of fishers by type of employment, that is, on the number of full-time, part-time time and occasional fishers. Sustainable Yield 21. Sustainable yield was estimated using the Fox Model. The equation below was used (Philippine Asset Accounts, 1998): Y = E exp (a + b E) where: Y = catch or yield from the resource E = fishing effort per unit time a = constant b = regression coefficient 22. The regression coefficient was determined by establishing the relationship between the time series data on fish catch and the estimated fishing effort. Depletion 6 Palawan Marine Fishery Resource
  • 30. Environmental and Natural Resources Accounting 23. To compute for depletion, total actual catch was deducted from the sustainable yield. If the catch exceeds the sustainable yield, depletion then occurs. To value the cost of resource depletion, expressed as net rent, the net price method was used. Net rent is the value of the output per unit of measurement after deducting the expenses incurred in extracting the resource. The equation used is as follows: Depletion = Actual Catch less Sustainable Catch Net rent = Net price per unit x Depletion 1.4. RESULTS AND DISCUSSION 1.4.1. Share of the Fishery Sector to GPDP 24. Fishery is a major sector of the economy of Palawan. Estimates of the Gross Provincial Domestic Product (GPDP) in 1988 showed that agriculture, fishery and forestry accounted for about 54.2 percent of the provincial economy with fishery contributing 22.8 percent (Table 1.1). By 1994, the share of the fishery sector was slightly smaller at 20.6 percent but it still had contributed the second largest share to the total GPDP, next to agricultural crops. Table 1.1. Gross Provincial Domestic Product Accounts, Palawan, 1988 and 1994 (In Million Pesos) At Constant 1985 Prices Percent Sector 1988 1994 1988 1994 Agriculture, Fishery and Forestry 1,603.9 1,907.7 54.2 49.9 Agricultural Crops 602.0 866.0 20.4 22.7 Livestock and Poultry 166.2 253.3 5.6 6.6 Fishery 673.8 784.9 22.8 20.6 Forestry 161.8 3.4 5.0 0.1 Industry 459.7 636.9 15.6 16.7 Services 891.6 1274.4 30.2 33.4 GPDP 2,955.2 3819.0 100.0 100.0 Source: Development of the Gross Provincial Domestic Product (GPDP) Accounts for the Province of Palawan, NSCB, Provincial Government of Palawan, PCSDS, 1998 1.4.2 Fish Catch and Fishing Effort 25. During the entire 11-year accounting period, municipal fishery comprised the bulk of the total fish production (Table 1.2). On the average, catch of municipal fishers represented 74 percent of the total while commercial fishery accounted for the remaining 26 percent. Both municipal and commercial fishery showed an increasing trend in terms of catch. 26. Results of the comparative analysis of fish catch vis-à-vis fishing effort or the CPUE (Figure 1.3) also showed that the rate of increase in fishing effort was more than that of the fish catch. Total catch rose by 3.0 percent from 1988 to 1998 while fishing effort increased by about 21.4 percent. Palawan Marine Fishery Resource 7
  • 31. Environmental and Natural Resources Accounting Table 1.2. Estimated Volume of Catch of Marine Fishery Resource, Palawan, 1988 - 1998 Fish Catch Commercial Total Year Municipal Fishery Fishery (in metric (in metric ton) (in metric tons) tons) 1988 54,284 28,622 82,907 1989 56,264 32,456 88,721 1990 69,349 20,348 89,698 1991 73,624 21,066 94,690 1992 67,136 15,380 82,517 1993 68,108 25,426 93,534 1994 73,556 24,076 97,632 1995 74,580 20,579 95,159 1996 73,256 20,890 94,146 1997 81,731 26,082 107,813 1998 81,605 26,356 107,960 Source: BAS Central Figure 1.3. Total Catch vis-à-vis Total Fishing Effort 120,000 120,000 100,000 100,000 Total Catch (in metric tons) Fishing effort (in horsepower) 80,000 80,000 60,000 60,000 40,000 40,000 20,000 20,000 - - 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Total Catch Fishing Effort (Hp) 1.4.3 Sustainable Yield and Depletion 27. Extraction of marine fish and utilization of the fishery resource in general cannot be left unregulated. However, in order to have a sound basis for managing and regulating the extraction of the resource, fish stock, sustainable yield and levels of depletion, if any, of the resource should be determined. Because attempts in this study to establish the sustainable yield was faced with the difficulty of meeting the data requirements of the SEEA framework, an approximation was arrived at using the Fox Model. 28. Table 1.3 shows the estimated sustainable yield and depletion of the marine fishery resource after combining the catch and effort of municipal and commercial fisheries. At the start of the accounting period in 1988, depletion was observed and 8 Palawan Marine Fishery Resource
  • 32. Environmental and Natural Resources Accounting continued until 1991 but at a decreasing rate; from 20,727 metric tons, the level of depletion went down to 1,413 metric tons. Apparently, efforts by law enforcement agencies to curb destructive fishing methods were becoming effective. During this time, the government introduced interventions to put a stop or at least minimize harmful fishing practices and restrain over-fishing. The local government organized the Bantay Dagat, an inter-agency task force that was formed to enhance the monitoring of the coastal areas and went further to apprehending violators of fishery regulations and other environmental laws. From 1992 until 1995, there was no recorded depletion of the marine fishery resource. 29. However, in 1996, depletion of the marine fishery was again evident. Starting at a volume of 2,639 metric tons, it dramatically rose to 20,153 metric tons in 1997 and went further up to 23,607 metric tons in the following year. It is believed that initial headway reached in combating illegal fishing activities and destruction of the marine ecosystems during the early 90’s may have not been sustained. 30. Figure 1.4 presents the Sustainable Yield – Effort Curve with Maximum Sustainable Yield estimated at 101,954 metric tons and effort at 65,629 horsepower. Table 1.3. Estimated Marine Fishery Resource Depletion, Palawan, 1988-1998 Year Total Catch Fishing Sustainable Depletion Effort (Hp) Yield 1988 82,907 19,958 62,180 20,727 1989 88,721 25,462 72,946 15,774 1990 89,698 34,415 86,023 3,675 1991 94,690 41,695 93,277 1,413 1992 82,517 47,120 97,050 - 1993 93,534 59,256 101,441 - 1994 97,632 67,391 101,918 - 1995 95,159 89,816 96,517 - 1996 94,146 101,047 91,507 2,639 1997 107,813 108,593 87,659 20,153 1998 107,960 114,715 84,354 23,607 Figure 1.4. Sustainable Yield - Effort Curve for Marine Fishery Resource, 1988 – 1998 Palawan Marine Fishery Resource 9
  • 33. Environmental and Natural Resources Accounting 110,000 1993 1995 100,000 1991 1997 1994 Sustainable Yield 1992 90,000 1996 (in metric ton) 1989 1990 1998 80,000 1988 70,000 60,000 50,000 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 Fishing Effort (in horsepower) Estimated Maximum Sustainable Yield = 101,954 metric tons Estimated Maximum Fishing Effort = 65,629 horsepower 1.5. RECOMMENDATIONS 31. There are indications that the fishery resource of Palawan is now facing threats. Based on the initial findings of the study, the volume of depletion of marine fishery resource is rising at an increasing rate. However, to have a more solid basis for evaluating the condition of the resource and in the formulation of the appropriate policy interventions, the SEEA framework should be fully operationalized. Foremost is the need to satisfy the data needs of the framework. Along this line, follow-on activities are recommended in order to meet the requirements of the fishery resource accounting, namely: a. Resource assessment should be conducted to be able to establish the fish stock. b. Close monitoring of fishing activities and regular collection of data should be strengthened. Among the data that should be compiled are: (a) fish catch by species; (b) number of fishermen and terms of employment, that is, whether full-time, part time, or occasional; (c) number of fishing boats with corresponding horsepower; and (d) inventory of fishing gears. c. The prevailing price of fishery products by species should be gathered as well as cost of production to facilitate monetary valuation. d. Installation of Municipal Fishery Licensing System to keep a record of operating fishing vessels. This will help in determining the pressure to the coastal area as a result of fishing. It will also provide baseline information that can be subsequently used for regulatory and revenue purposes. 10 Palawan Marine Fishery Resource
  • 34. Environmental and Natural Resources Accounting e. Strengthen collaboration with the provincial offices of national agencies and the municipal offices in the compilation of data that they generate through locally initiated surveys and in the exercise of their regulatory functions. These data should be incorporated into their regular reports. f. Conduct of studies to gather a more comprehensive data on cultivated and non-cultivated fish stock for both marine and fresh water bodies 32. Moreover, it is emphasized that the economy of Palawan is still hinged on the agricultural sector, in particular, crop farming and fishery, which are the population’s major sources of livelihood. While this study is focused on the fishery resource, it should not be overlooked that most fishers also cultivate small farm lots to augment their income. Further, because of the topography of the province, its coastal areas and marine resources are especially vulnerable to adverse environmental activities in the terrestrial areas. Aside from the destruction of the mangrove and marine ecosystems that have direct impact on the resource, activities in the terrestrial areas (e.g., lowland and upland farming) also affect the coastal areas. As such, depletion of the resource is not only the effect of harmful fishing practices but may also be the result of equally harmful farming techniques. Fishing and farming should therefore be addressed through parallel interventions. It is imperative that both sectors be afforded immediate attention in terms of policy and program formulation. 33. Meanwhile, efforts to mitigate the problems on illegal fishing call for stricter implementation of fishery laws and related environmental laws primarily to protect and conserve the coastal marine ecosystem and its natural resources. Formulation of municipal and barangay ordinances to support national policies is likewise recommended. Palawan Marine Fishery Resource 11
  • 35. Environmental and Natural Resources Accounting ACRONYMS BAS Bureau of Agricultural Statistics BFAR Bureau of Fisheries and Aquatic Resources CPUE Catch Per Unit Effort GT Gross Tonnage Hp Horsepower ICLARM International Center for Living Aquatic Resources Management MARINA Maritime Industry Authority MSY Maximum Sustainable Yield MT Metric Tons NGO Non-Government Organizations PCSDS Palawan Council for Sustainable Development Staff PTWG Provincial Technical Working Group Members SEEA System of Integrated Economic and Environmental Accounting UNSD United Nations Statistics Division JAFTA Japan Forest Technical Association 12 Palawan Marine Fishery Resource
  • 36. Environmental and Natural Resources Accounting DEFINITION OF TERMS Depletion is the extraction of fishery resources beyond the rate of natural growth, measured as a positive difference between catch and sustainable yield. It occurs when the total catch exceeds the natural growth. Commercial Fishing is fishing for commercial purposes in sea waters with the use of fishing boats of more than three gross tons. Fishing Boat refers to the watercraft used for catching and transporting of fish resources from seawaters. Fish Catch refers to the volume of fish landed by commercial and municipal fishery industry. Fishing is the catching, gathering and culturing of fish, crustaceans, mollusks, and all other aquatic animals and plants in the sea or in inland waters. It includes the catching of fish and aquatic animals like turtles; the gathering of clams, snails, shells and seaweeds; and the culturing of fish and oysters. Sport fishing or small sale fishing pursued as a hobby is excluded. Fishing Effort refers to manpower, machine power and technology employed in harvesting fishery resources yielding to catch per unit effort. It is measured in terms of horsepower. Fishing Gears are equipment used in catching fish with or without the use of boats. Marine Fishery refers to the fishing activity at the seawaters outside of the coastal line. Municipal Fishing is characterized by the use of simple gear and fishing boats some of which are non-motorized and with a capacity of three and less than three gross tonnage. Horsepower is the work done at the rate of 550 foot-pounds per second and it is equivalent to 745.7 watts Palawan Marine Fishery Resource 13
  • 37. Environmental and Natural Resources Accounting REFERENCES Bureau of Agriculture Statistics. Production Fishery Production Statistics, Production Statistics, BAS. 1988 – 1993. BAS, Quezon City. Bureau of Fisheries and Aquatic Resources. 1997 Philippine Fisheries Profile. BFAR. Quezon City. Ilarina, Vivian. Compilation of Resource Accounts (Selected Case Studies) Fishery Resources. International Workshop on Environmental and Economic Accounting. September 2000. Manila, Philippines. Ministry of Human Settlements. Town Planning Guidelines and Standard, Economic Sector, 1982. National Statistics Office. 1995 Census of Population (Palawan). Palawan Integrated Area Development Project, Phase II Final Report. Volume 2- Production Component Annexes. February 1990. Philippine Asset Accounts. ENRA Report No. 2. May 1998. NSCB. Japan Forest Technical Association (JAFTA). Forest Register (Palawan). Information System Development Project for the Management of Tropical Forest. 1992. White, Allan, et al. The Value of Philippine Coastal Resources: Why Protection and Management are Critical. 1998. Coastal Resource Management Project. DENR and United States Agency for International Development. Cebu City, Philippines. 14 Palawan Marine Fishery Resource
  • 39. Environmental and Natural Resources Accounting FOREST RESOURCE 2.1 INTRODUCTION 1. Palawan is situated in the southwest part of the Philippine Islands chain. Palawan stands as the country's largest province with its 1.5 million hectares land area. Tall mountain ranges bisect the province into east and west coast. The east coast has narrow beaches and a swampy shoreline, backed by plains and short valleys. The west coast is more rugged, with mountains rising up near the sea, and narrow lowlands. Palawan, often intriguingly described as "The Last Frontier" and "Paradise Lost", is home to vast rainforests, underground rivers and cave systems, mangrove swamps, and rare species of flora and fauna found only in the Philippines. Palawan’s forest area of 647,090 ha accounts for 43 percent of its total land area (NAMRIA, 1985 and JAFTA, 1992). 2. The objective of this study is to account for the physical and monetary stock of the forest resources from 1988 to 1999 and to determine the factors that contribute to the changes. Ultimately it aims to come up with relevant recommendations in the proper management of the resource. 3. Palawan’s forests are classified into four different types, namely, dipterocarps, submarginal, mossy and mangrove forest. Dipterocarp forests are further classified as either old growth or second growth. Old growth dipterocarp forests are virgin forests with no traces of commercial logging, while second growth dipterocarp forests are those with traces of logging (NSCB, 1998). The dipterocarp forest is the principal Indo-Malayan tropical rainforest formation. It is one of the world’s three main tropical rainforests in addition to the tropical American and African rainforests. Several layers of vegetation and a multiplicity of tree species characterize these tropical rainforests. The dipterocarp forest is not a pure stand of tree species belonging to the family Dipterocarpaceae but rather a mix forest consisting of species of various families with the dipterocarp as dominant component. 4. Philippine dipterocarps are mostly medium to large sized trees, unbranched to a considerable height and usually attain a height of 40 to 65 meters in diameter at breast height (dbh) or diameter above buttress (dab) of 60 to 150 centimeters. A few unusually large trees have been found to attain a dab as large as 30 cm, their boles are generally straight and regular (Whitford, 1911; Tamesis and Aguilar, 1951). In terms of economic importance, the family Dipterocarpaceae produces the greatest bulk of commercial wood in the country sold worldwide under the trade name “Philippine Mahogany”. Dipterocarp timber constitutes the bulk of our country’s log exports and wood for domestic building construction and infrastructure development (NSCB, 1998). 5. Mangroves are coastal trees or shrubs that are adapted to estuarine or even saline environments. The term mangrove refers to the individual plants, whereas mangal refers to the whole community or association dominated by these plants. Mangroves have characteristic features that allow them to live in marine waters (Calumpong and Meñez, 1996). 16 Palawan Forest Resource
  • 40. Environmental and Natural Resources Accounting 6. Mangroves minimize soil erosion and pollution of seawater. Its extensive air root system traps eroded soil and industrial pollutants especially during strong rains; aids in reclaiming considerable land area, shelterbelt against tidal waves, typhoons and strong winds; wildlife habitat; increase fish and shellfish productivity; provides alternative wood supply, and industrial inputs such as resin for plywood, adhesive manufacture, fuelwood and high grade charcoal, tanning for dyeing hide into leather, viscose rayon for textile fabric manufacture; livestock feed supplement, medicine and wine, vinegar and thatching materials from nipa (Soriano and Fortes, 1987). It is also for these reasons that mangrove forests are drastically exploited. To address possible loss of mangrove genetic diversity or a much worse scenario of the entire mangrove forest area of the province being wiped out, Palawan’s mangrove area has been declared a Mangrove Swamp Forest Reserve on December 29, 1981. 7. Rattan is a climbing palm which has a versatile stem of high economic value. It is one of the most important non-timber forest products of Palawan. It is used in the manufacture of fine handicrafts, furniture and furniture components, binding materials, fish traps, hammocks, sleeping mats, carpet beaters, hats, walking sticks, tool handles and others. Palawan is a major source of rattan poles for furniture centers like Manila, Iloilo and Cebu. It is a major livelihood source for poor and indigenous communities who are tapped by most rattan permittees for cane gathering and processing. 8. Among the many non-timber forest resources, rattan is being prioritized in this accounting effort in view of its worsening state. Unlike bamboo, rattan is not so prolific. Since rattan is co-terminus with dipterocarp forests, rattan is subject to the damages caused by logging of its tree hosts. 2.2 CONCEPTUAL FRAMEWORK 2.2.1. Scope and Coverage 9. The system of forest resource accounting calls for the compilation of asset accounts for area (in hectare) and volume of standing trees (in cubic meter) and non-timber forest products. However, for this study, the accounting is limited to the asset accounts of dipterocarp forest (old growth and secondary growth), mangrove forest, and rattan. These resources were included in the accounting process because of their economic and ecological significance and in consideration of the availability of data. 2.2.2. Framework for the Asset Account 10. The forest accounts, in physical and in monetary terms, adopted the format presented on the next page. The opening stock represents the stock of resources at the beginning of the accounting period. Several factors account for the changes in stock including changes due to economic activities, other accumulation, and other volume changes representing the changes due to non- economic factors. Other volume changes include the statistical discrepancy equivalent to the difference between the computed closing stock (based on the framework’s identified factors) and the opening stock of the succeeding year. The closing stock for a year is equal to the opening stock of the succeeding year. Palawan Forest Resource 17
  • 41. Environmental and Natural Resources Accounting Figure 2.1. Asset Accounts Framework OPENING STOCK Changes due to economic activity Assisted regeneration Legal Logging Unauthorized cutting Damage from logging Other Accumulation Forest Conversion Other Volume Changes Stand growth Mortality Forest fires Natural Disasters Changes in stock CLOSING STOCK 11. Changes due to economic activity refer to human production activities as they affect the stock of resources. Assisted regeneration is caused by human intervention in regenerating natural forests such as plantations and reforestation activities. Legal logging refers to the commercial logging done by concessionaires from 1988-1992 when commercial logging was still allowed in the province. Legal logging data from 1993 onwards account for harvest manifestations from areas with known Certificate of Stewardship Contracts (CSC) as proof of right in the management of the awarded forest area. The item unauthorized cutting, on the other hand, accounts for illegally extracted resources as manifested by confiscated forestry products during apprehension. Damage from logging accounts for forest resource damages, which resulted in the actual conduct of the logging activity. 12. The item other accumulation covers forest conversions which mainly refers to clearing of forest to convert it to other uses such as for residential or industrial purposes. Under other volume changes, additions to the stock include natural stand growth and regeneration while reductions to the forest cover are mortality, forest fires and natural disasters. 2.3 OPERATIONALIZING THE FRAMEWORK 2.3.1. Sources of Data Physical Accounts 13. The base information for forest area was lifted from the 1992 JAFTA LandSat Thematic Mapper and 1985 aerial photographs from NAMRIA, covering mainland Palawan. Stock volume was projected using information available from the RP-German Forest Resource Inventory Project (FRIP). The project generated data on the inventory of standing volume, forest regeneration and minor forest products from national agencies and LGUs. 18 Palawan Forest Resource
  • 42. Environmental and Natural Resources Accounting 14. For dipterocarp forests, data for depletion due to legal logging and unauthorized harvesting were taken from the Provincial Environment and Natural Resources Office (PENRO) and Community Environment and Natural Resources Offices (CENRO) of the DENR, Economic Intelligence and Investigation Bureau (EIIB), and Bantay Palawan, a multi-sectoral task force that conducts apprehension of illegal loggers. 15. For mangrove forests, data came from DENR-PENRO, CENROs, and Municipal Planning and Development Offices (MPDOs). Rattan data were lifted from the RP-German FRIP and records of the DENR-PENRO, Bantay Palawan and EIIB. Monetary Accounts 16. Parameters used in the computation of stumpage value for rattan were supplied by the National Statistics Office, National Statistical Coordination Board and Pio Bote’s 1990 study on stumpage value for dipterocarp forest. 2.3.2. Estimation Methodology 17. Physical asset accounts for old and second growth dipterocarp forest and mangrove consisted of area and volume accounts while accounts for rattan were limited to volume only. On the other hand, the study came up with the monetary valuation only for dipterocarp forest and rattan. There was no available information on the stumpage value of mangrove forest. Physical Asset Accounts, Area a. Old Growth Dipterocarp Forest 18. In the compilation of the physical asset accounts, the forest stock in area terms were projections from the 1985 NAMRIA aerial photographs and 1992 JAFTA satellite imagery covering mainland Palawan only. Legal logging in old growth forests from 1988-1992 were still covered by Timber License Agreements before the implementation of the total commercial log ban in the entire province. 19. Other changes under other volume changes represent the statistical discrepancy (S.D.) or the unaccounted factors in the changes in area. It is derived as the reported closing area during the year, taken from the official sources, less the computed closing area, derived by summing up the opening area, changes due to economic activity, changes due to other accumulation and the identified other volume changes. b. Second Growth Dipterocarp Forest 20. Changes due to economic activity include assisted regeneration/plantation or reforestation, the accounted legal logging and logging damage. Assisted regeneration comprised the area covered by those forest areas with Certificate of Stewardship Contracts (CSC) such as Integrated Social Forestry (ISF) Program, Community Based-Forest Management Agreements (CBFMA), Industrial Tree Plantation (ITP) and agro-forestry projects. Legal logging area was derived from the total area covered within ISF/CBFM Palawan Forest Resource 19
  • 43. Environmental and Natural Resources Accounting concessions, ITP and agro-forestry areas times 80 percent1. The estimated damage due to logging was placed at 15 percent of logged area (legal and illegal logging) in old growth forests during the previous year. Other accumulation includes data covered by old growth forest converted to second growth forest and other non-forest land use and areas devoted/converted to kaingin or upland farming. The area converted from old growth to second growth is equal to the area logged in old growth forest in the previous year less 15 percent for log landings, roads and skidding/yarding trails. Other volume changes account for area covered by forest fires and statistical discrepancy (S.D.) or the unaccounted factors in the changes in area. c. Mangrove Forest 21. Mangrove forest area was likewise derived from the same geometric projections as that of the dipterocarp forest. Changes due to economic activity includes plantation and reforestation efforts, which are treated as an addition to stock, and unauthorized mangrove harvesting, and charcoal making, which are treated as reduction to the stock. Mangrove forest conversions to fishpond development were the activities that contributed to area deductions under other accumulation and as such also treated as reduction to the stock. Statistical discrepancy (S.D.) was likewise accounted for under other volume changes. d. Rattan 22. No separate area accounts for rattan were compiled since rattan thrives in the same area as that of dipterocarp forest. Physical Asset Accounts, Volume a. Old Growth Dipterocarp Forest 23. Opening volume was derived from area projections multiplied by harvestable volume of 180.2 cu. m. per hectare computed from the FRIP. Legal and unauthorized logging were regarded as depletion as adopted from actual data generated from EIIB, DENR-PENRO and CENRO’s monthly accomplishment reports. Other changes (S.D.) were computed using the same procedure as in the area accounts. b. Second Growth Dipterocarp Forest 24. Opening and closing volume were likewise derived from the area projections in second growth dipterocarp following the same sources and multiplying the computed area by 142 cu.m. per hectare, harvestable volume for second growth dipterocarp forest based on the results of the FRIP. 25. Damage from logging, kaingin, and forest fires were treated as depletion from stock while old growth conversion to second growth was accounted as addition. All derivations were obtained using the same assumed 142 cu.m. per hectare harvestable volume. Meanwhile, stand growth under other volume changes was computed by multiplying the opening area with the annual growth rate of 4.735 cu. m. per hectare based on the study of Uriarte and Virtucio in 1988. 1 It is assumed that the actual area logged is 80 percent while 20 percent will remain as second growth forest. 20 Palawan Forest Resource
  • 44. Environmental and Natural Resources Accounting c. Mangrove Forest 26. Volume determination was based on a special study conducted by the PCSDS; the results of which showed that the average volume was 128.93 cu. m. mangrove timber per hectare. The mangrove timber volume was multiplied to the opening and closing area based on the 1985 NAMRIA aerial photographs and 1992 JAFTA LandSat TM. 27. Unauthorized harvesting data were lifted from DENR-CENRO, Roxas. Stand growth for other volume changes was based on young growth of 1.1 cu. m. per hectare per year derived from the study entitled Physical Forest Resources of Palawan by Carandang (1994). d. Rattan 28. Data on rattan include the average rattan occurrence in both old growth and secondary growth forests. Separate estimates were made for rattan poles with diameters of less than two centimeters (< 2 cm) and that for poles greater than two centimeters (> 2 cm). The opening volume was computed based on the average rattan occurrence of 1,060.7 lineal meter and 946.3 lineal meter per hectare of < 2 cm poles in old growth and residual forests, and 393.2 lineal meter and 224.1 lineal meter for pole > 2 cm in the same types of forests, respectively, as indicated in the FRIP. 29. Depletion in stock comes from legal and illegal harvests derived from actual data reflected in the PENRO and CENRO reports. Logging damages were estimated at 36 percent of total merchantable length, which remain as waste due to preliminary processing, and those left in high trees. It was derived by multiplying the total volume of harvested rattan by 36 percent. Mortality for other volume changes were estimated at 5 percent as adopted from Pabuayon (1991). It was computed by multiplying the opening volume of rattan by 5 percent. Monetary Asset Accounts a. Dipterocarp Forest 30. The net price method was used in valuing forest resources. The economic or monetary accounts were derived by multiplying the volume accounts by the stumpage value of the forest product. The stumpage value is the value of the standing timber and it was based on the market prices of logs less harvesting cost, overhead cost and margin for profit and risk (MPR). The stumpage value represents the potential economic rent accruing to operators. Revaluation is equivalent to the differences due to changes in prices between the opening and closing periods. 31. The sale value of log is equal to the weighted selling price of the product. The cost items include logging cost, pre-logging cost, post logging cost, road construction, transportation and overhead costs. Logging cost represents felling and bucking costs and the cost of pulling the logs from the felling site to the log landing. The costs are classified by terrain type, by extractable log volume, and by logging methods. Pre-logging cost represents the cost of activities such as pre-logging inventory and tree marking. Post-logging cost is the cost of post logging residual stand inventory, and enrichment planting conducted by the Palawan Forest Resource 21