1. FINANCING for MPAs The Philippine Environmental Governance 2 Project

2. 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

3. 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

4. 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

5. MPA Costs

6. 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

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

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

9. 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

10. 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

11. MPA Fund Sources

12.  LGU Allocations (Mun. / Bgy. / Prov.) 20% Dev. Fund General Fund (CRM Regular Allocation, Mayor’s 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

13. Phases Pilar MPA Program Implementation Phase 1Phase 2 Establishment Stage (2005)Transition Phase (2006)Implementation Phase (2007) Bio-Physical baseline survey MS Mgt Planning Y1 Action Plan’g 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 Int’l- 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 Int’l- 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

14. 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

15. 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

16. Case Study on MPA Financing

17. Case Study - MS Profile Name of MPALocationAreaMgt. 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 hectaresCo-mgt bet. Bgy and MLGU

18. Case Study - MS Profile Name of MPA LGU Class and IRA Ave. Yearly Budget Ave. Yearly Budget /ha. PMMP5 th /16.9M125,000 ($%)697 Villahermosa MS5 th /16.5M25,000(<1%)361 Bibilik Fish/MS3 rd /28M61,900 (1%)3,095 Tambunan MS5 th /24.5M435,000 (9%)4,230 Talisay MS5 th /24.5M00 MiSSTTA4 th /33M600,000 (9%)3,750

19. Case Study - Cost Name of MPA Establish- ment Cost/ha Implemen- tation Cost/ha TotalAve. Cost /year Ave. Cost / ha. PMMP 05-06 445,082 (2,482/ha) 612,153 (3,390/ha) 1057,035528,6172,947 Villahermo sa MS 02- 06 377,867 (5,453/ha) 808,898 (11,672/ha) 1,186,765237,3533,425 Bibilik Fish /MS 02-06 799,159 (39,958/ha) 1,427,326 (71,366/ha) 2,226,485445,29722,265 Tambunan MS 03-06 840,778 (8,163/ha) 1,999,942 (19,417/ha) 2,840,720710,1806,895 Talisay MS 03-06 357,576 (10,902/ha) 970,452 (29,587/ha) 1,328,028332,00710,122 MiSSTTA 04-06 741,081 (4,632/ha) 1,574,016 (9,838/ha) 2,315,097771,6994,823

20. 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%

21. 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

22. Case Study - Sources of Fund Pilar Marine Park Establish- ment Stage Implemen- tation Stage Total Municipality202,904 46% 427,159 70% 630,063 59% Barangay4,990 1% 15,851 2% 20,841 2% Community011,000 2% 11,000 1% Grants/Dona tion 237,188 53% 152,243 25% 389,431 37% MPA Revenue 06,900 1% 6,900 1%

23. Case Study - Sources of Fund Villahermosa MS Establish- ment Stage Implemen- tation Stage Total Municipality70,874 19% 22,937 3% 93,811 8% Barangay88,000 23% 235,143 29% 323,143 27% Province025,000 3% 25,000 2% Community48,000 13% 312,000 2% 360,000 30% Grants/Donation166,993 44% 164,818 20% 331,811 28% MPA Revenue4,000 1% 4,000. 5% 8,000 1%

24. Case Study - Sources of Fund BibilikEstablish- ment Stage Implemen- tation Stage Total Municipality497,240 62% 537,901 38% 1,035,141 46% Barangay25,691 3% 76,399 5% 102,090 5% Province03,860.3% 3,860.2% Community15,000 2% 50,000 4% 65,000 3% Grants/Donation258,228 32% 729,350 51% 331,811 44% NGA3,000 <1% 29,816 2% 8,000 2%

25. Case Study - Sources of Fund TambunanEstablish- ment Stage Implemen- tation Stage Total Municipality548,685 65% 1,124,779 56% 1,673,464 59% Barangay1,053.2% 29,853 15% 31,366 1% Province02,250.1% 2,250.1% Community1,500.2% 9,000.5% 10,500.4% Grants/Donation278,290 33% 784,050 39% 1,062,340 37% NGA10,8000 1% 50,000 2% 60,800 2%

26. Case Study - Sources of Fund TalisayEstablish- ment Stage Implemen- tation Stage Total Municipality7,000 2% 40,933 4% 47,933 4% Barangay0 0% 24,372 3% 24,372 2% Community54,820 15% 418,040 43% 472,860 36% Grants/Donatio n 295,756 83% 487,107 50% 782,863 59%

27. Case Study - Sources of Fund MiSSTAEstablish- ment Stage Implemen- tation Stage Total Municipality469,607 63% 904,794 57% 1,328,028 59% Barangay43,546 6% 139,805 9% 183,351 8% NGA68,600 4% 68,600 3% Grants/Donatio n 227,928 3% 460,817 29% 686,745 30%

28. 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

29. 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

30. Ring Fencing

31. 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 Ring Fencing - Definition

32. 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 Ring Fencing - Definition

33. 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

34. 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

35. 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

36. 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

37. Thank You !