FINANCING for MPAs

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FINANCING for MPAs
The Philippine Environmental Governance 2 Project
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Workshop Objectives

• Present costing and revenue elements in the
  establishment and implementation stages of an MPA
• Present comparative MPA costing of 6 Eco-Gov
  sites
• Participants able to do costing exercises based
  on their respective MPA action plans
• Orientation on Ring-Fencing and CCIF Financial
  Model

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Expected Output

• Better understanding of the financial aspects of
  an MPA
• Action Plan with corresponding cost items and
  revenue sources
• Knowledge on concept of Ring-Fencing and the CCIF
  Financial Model

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Session Outline

• Part 1 Presentation of Concepts and
• Case study
• Part 2 Workshop on Action Plan
• (identification of activities, costs,
• and sources of funds)
• Part 3 Introduction to CCIF Financial
• Model

• 45 Minutes
• 1 hour
• 45 Minutes
• 30 Minutes

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MPA Costs
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Two Types of MPA Costs

• Establishment Cost
• Start-up costs in establishing an MPA
• Implementation/Recurring Operating Cost
• Costs incurred for the operation and maintenance
  of an MPA

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MPA Costs

• Establishment Cost
• Administrative/Organization
• (MS Mgt Planning Workshop, ground working,
  action planning,
• cross visits, Forming and Organizing
  Enforcement team, etc)
• Site Development/Habitat Enhancements
• (Construction of Guard house, Delineation of
  Marine Sanctuary
• and Installation of buoys and markers,
  posting of signages)
• Acquisition of Equipment
• (Patrol boat, binoculars, paddle boats, diving
  gears, rechargeable
• flashlights, hand-held radio, etc)

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MPA Costs

• Establishment Cost
• Baseline Survey
• (Reef and bio-physical Assessments)
• Capability Building
• (Deputation of Bantay-Dagat, alternative
  livelihood, monitoring and evaluation, paralegal
  and Municipal CLE training, IEC, etc.)

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MPA Costs

• Recurring Operating Costs
• Regular coastal clean-up activities
• Annual Bio-physical monitoring
• Regular patrolling and guarding
• IEC activities
• Regular meetings
• Repairs and maintenance of buoys and markers
• Office maintenance and operating cost

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MPA Costs

• Recurring Operating Costs
• Salaries / Honoraria of personnel
• Traveling Expenses
• Fuel and oil
• Follow-up trainings
• Supplies and Materials (Office and Other
  Supplies)
• Repairs and maintenance of guardhouse, pump boats
  and other equipment

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MPA Fund Sources
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MPA Fund Sources

• LGU Allocations (Mun. / Bgy. / Prov.)
• 20 Dev. Fund
• General Fund (CRM Regular Allocation, Mayors
  Office and Intelligence Fund)
• National Government (including PDAF)
• Fines and Penalties
• User fees (diving, educational, entrance, etc.)
• Fund-Raising activities
• Grants and Donations
• Non-Government Organizations
• Private Institutions
• Private Individuals

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Phases Pilar MPA Program Implementation
Phase 1 Phase 1 Phase 2
Establishment Stage (2005) Transition Phase (2006) Implementation Phase (2007)
Bio-Physical baseline survey MS Mgt Planning Y1 Action Plang Delineation and installation of buoys and markers Acquisition of flashlight, rain-coats rubber boots Fabrication of billboards and signages Pulong-pulong M E Training Paralegal Training Fund Raising Activities FundSources Eco-Gov 72,503 MLGU-97,000 Plan Intl- 93,694 PO 1,500 Indv- 3,000 Total -267,697 Installation of Buoys and Markers Guarding and patrolling Enforcement Planning Paralegal Training and Mun. CLE Planning Admeasurements Training Bio-Physical monitoring Cross-visit to Bohol and Negros Action Planning for Y2 Const. of floating guardhouse Installation of billboards Fund Raising Activities Fund Sources MLGU -109,240 Eco-Gov 113,684 Plan Intl- 44,626 PO- 74,404 Private Sector 4,000 Total P345,954 Guarding and patrolling Acquisition of paddle boat Bio-physical monitoring Installation of billboard Marine Camp Fund Sources MLGU-145,010 BLGU-14,000 Plan Int.- 100,000 Eco-Gov-41,144 PMMP-21,048 Private Indv. 760 Total 321,962
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Sustainability Concerns of MPAs

• High investment costs
• Escalating operational and maintenance costs
• Highly subsidized program
• Limited financing
• Funds compete with other basic services of
  government

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Tips to MPA financing

• Secure buy in of the program from Local leaders
  to be prioritized in budget allocation
• Prepare Work and Financial Plan
• Update local leaders on status of implementation
  and utilization of fund
• Secure external sources of fund

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Case Study on MPA Financing
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Case Study - MS Profile
Name of MPA Location Area Mgt. Set-up
PMMP (Sept. 2005) Pilar, Camotes 179 hectares (30 MS 149 MR) Co-mgt bet. Bgy and MLGU
Villahermosa MS (2004) Tudela, Camotes 69.3 hectares (29.8 core 39.5 buffer) Bgy managed (LGU assisted)
Bibilik Fish MS (2002) Dumalinao, Zambo Sur 20 hectares (No take zone) Co-mgt bet. Bgy and MLGU
Tambunan MS (2003) Tabina, Zambo Sur 103 hectares (95 core 8.5 mangrove) Municipality managed
Talisay MS (2004) Tabina, Zambo Sur 32.8 hectares (19.8 MS 13 mangrove) Peoples Org. managed
MiSSTTA (2003) Tukuran, Zambo Sur 160 hectares Co-mgt bet. Bgy and MLGU
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Case Study - MS Profile
Name of MPA LGU Class and IRA Ave. Yearly Budget Ave. Yearly Budget /ha.
PMMP 5th/16.9M 125,000 () 697
Villahermosa MS 5th/16.5M 25,000(lt1) 361
Bibilik Fish/MS 3rd/28M 61,900 (1) 3,095
Tambunan MS 5th/24.5M 435,000 (9) 4,230
Talisay MS 5th/24.5M 0 0
MiSSTTA 4th/33M 600,000 (9) 3,750
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Case Study - Cost
Name of MPA Establish-ment Cost/ha Implemen-tation Cost/ha Total Ave. Cost /year Ave. Cost / ha.
PMMP 05-06 445,082 (2,482/ha) 612,153 (3,390/ha) 1057,035 528,617 2,947
Villahermosa MS 02-06 377,867 (5,453/ha) 808,898 (11,672/ha) 1,186,765 237,353 3,425
Bibilik Fish /MS 02-06 799,159 (39,958/ha) 1,427,326 (71,366/ha) 2,226,485 445,297 22,265
Tambunan MS 03-06 840,778 (8,163/ha) 1,999,942 (19,417/ha) 2,840,720 710,180 6,895
Talisay MS 03-06 357,576 (10,902/ha) 970,452 (29,587/ha) 1,328,028 332,007 10,122
MiSSTTA 04-06 741,081 (4,632/ha) 1,574,016 (9,838/ha) 2,315,097 771,699 4,823
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Case Study - Labor Cost
Name of MPA of Labor Cost to Total Cost
PMMP 26
Villahermosa MS 50
Bibilik Fish/MS 34
Tambunan MS 42
Talisay MS 39
MiSSTTA 42
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Insight on Cost

• Cost vary with the nature of materials or labor
  (i.e. opportunity cost)
• Phase (e.g. establishment, implementation
  sustaining) and activities of MPA affect cost
• Size matters, i.e. large MPAs are more economical
  to manage than small MPAs (economies of scale)
• Cost-sharing results in smaller expenditures for
  each of the parties involved in co-management

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Case Study - Sources of Fund
Pilar Marine Park Establish-ment Stage Implemen-tation Stage Total
Municipality 202,904 46 427,159 70 630,063 59
Barangay 4,990 1 15,851 2 20,841 2
Community 0 11,000 2 11,000 1
Grants/Donation 237,188 53 152,243 25 389,431 37
MPA Revenue 0 6,900 1 6,900 1
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Case Study - Sources of Fund
Villahermosa MS Establish-ment Stage Implemen-tation Stage Total
Municipality 70,874 19 22,937 3 93,811 8
Barangay 88,000 23 235,143 29 323,143 27
Province 0 25,000 3 25,000 2
Community 48,000 13 312,000 2 360,000 30
Grants/Donation 166,993 44 164,818 20 331,811 28
MPA Revenue 4,000 1 4,000 . 5 8,000 1
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Case Study - Sources of Fund
Bibilik Establish-ment Stage Implemen-tation Stage Total
Municipality 497,240 62 537,901 38 1,035,141 46
Barangay 25,691 3 76,399 5 102,090 5
Province 0 3,860 .3 3,860 .2
Community 15,000 2 50,000 4 65,000 3
Grants/Donation 258,228 32 729,350 51 331,811 44
NGA 3,000 lt1 29,816 2 8,000 2
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Case Study - Sources of Fund
Tambunan Establish-ment Stage Implemen-tation Stage Total
Municipality 548,685 65 1,124,779 56 1,673,464 59
Barangay 1,053 .2 29,853 15 31,366 1
Province 0 2,250 .1 2,250 .1
Community 1,500 .2 9,000 .5 10,500 .4
Grants/Donation 278,290 33 784,050 39 1,062,340 37
NGA 10,8000 1 50,000 2 60,800 2
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Case Study - Sources of Fund
Talisay Establish-ment Stage Implemen-tation Stage Total
Municipality 7,000 2 40,933 4 47,933 4
Barangay 0 0 24,372 3 24,372 2
Community 54,820 15 418,040 43 472,860 36
Grants/Donation 295,756 83 487,107 50 782,863 59
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Case Study - Sources of Fund
MiSSTA Establish-ment Stage Implemen-tation Stage Total
Municipality 469,607 63 904,794 57 1,328,028 59
Barangay 43,546 6 139,805 9 183,351 8
NGA 68,600 4 68,600 3
Grants/Donation 227,928 3 460,817 29 686,745 30
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Insight on Fund Sources

• Municipalities and barangays tend to allocate
  more funds to MPAs that they themselves manage or
  co-manage
• MPA share not highly prioritized in municipal and
  barangay 20 DF
• Co-management between barangays and
  municipalities results in greater total budget
  for the MPA

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Salient Observations

• Critical role of external assistance to sustain
  MPA, at least in the initial phases
• NGAs contribute minimally, MPA are functionally
  largely as local responsibility
• High dependency on LGU budget and external
  funding makes MPAs vulnerable to changes in
  political leadership and withdrawal of donor
  support
• Revenue generation is as yet at initial stage,
  but critical to sustainability
• Incentives for local resource managers and
  volunteers key also to sustainability

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• Ring Fencing

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Ring Fencing - Definition

• Ring-Fencing means
• Separation/isolation or fencing-off of financial
  accounts of specific programs of LGUs to enable
• exclusive use of resources earmarked for these
  programs
• retention and plow back of revenues generated by
  the program for use in implementation or
  investments

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Ring Fencing - Definition

• In operational terms, it means either
• setting up a special account for the program
  under the General Fund of LGUs, with subsidiary
  accounting system, or
• operating as an autonomous economic enterprise

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Why Ring-Fence?

• General Objectives
• To build a more sustainable and financially
  viable program or operations.
• To improve governance and promote sound
  management practices transparency,
  accountability, and informed decision-making

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Legal Basis

• The Local Government Code allows LGUs to create
  special accounts under the General Fund for
  public utilities and economic enterprises,
  development projects funded by its internal
  revenue allotment and other special accounts
  created by law or ordinance.
• Sec. 105, Chapter 6 (Special Accounts) of the New
  Government Accounting System (NGAS) states that
  LGUs shall maintain special accounts in the
  General Fund for public utilities and other
  economic enterprises, loans, interests, bond
  issues, and other contributions for special
  purposes

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Why ring-fence ENR Programs ?

• ENR-related activities are assigned to different
  LGU units especially if LGU has no environment
  office
• program budget/expenses are lodged in various LGU
  units and are not tracked on a program basis
• LGUs are often unable to properly program
  activities (e.g., start refo at the right time)
  or respond immediately to emergency needs of
  programs (e.g., repair of equipment for solid
  waste management)
• revenues become part of the General Fund and can
  be used by the LGU for purposes unrelated to ENR
• revenue potentials are not fully tapped revenue
  collection is also not tracked on a program basis

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Why ring-fence ENR Programs?

• Specific Benefits
• Establishes information on LGU investments in
  the ENR sector or a specific ENR program.
• Budget allocated by the LGU for the program and
  revenues generated from related services are kept
  within the program to sustain/improve operations.
  
• Better monitoring and tracking of the performance
  of the program through separate and reliable
  financial reports.
• Better and transparent basis for setting fees
• Facilitates private sector engagement in the
  program
• Promotes enterprise thinking within LGU

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Thank You!