Cesar2000-Economics of Coral Reefs.pdf

Benefits and Costs of Coral Reef
and Wetland Management,
Olango Island, Philippines
ALAN T. WHITE, MICHAEL ROSS & MONETTE FLORES
ABSTRACT
The Philippines has an estimated 27,000 km 2 of coral reef with
only about 5 percent of this area still in excellent condition.
Recent valuation studies indicate that reefs in the whole
country are contributing a conservative US$ 1.35 billion to the
national economy and that one km 2 of healthy Philippine reef
with some tourism potential produces annual net revenues
ranging from US$ 29,400 to US$ 113,000. A case study of
Olango Island, Cebu with 40 km 2 of poor quality coral reef is
analysed together with its wetland habitat and mangrove
contribution. The current annual net revenue range from the
Olango Island reef is US$ 38,300 to 63,400 per km 2 or
US$ 1.53 to 2.54 million for the entire 40 km 2 reef area.
Another US$ 389,000 is added when wetlands are considered.
This relatively high per km 2 and total amount of current
revenue reflects the proximity of the Olango reef to Mactan
Island, Cebu, a well-known tourist destination. The revenues
accrue primarily from on and off site expenditures of diving
tourists. Costs of managing Olango Island coral reefs and
wetland habitats for improved net revenues (benefits) and
conservation would amount to less than US$ 100,000 per year.
Cost and benefit analyses show that there is a very strong
justification on the part of local and national government and
private sector groups to invest in the management of reefs such
as Olango Island. Improved reef quality and wetland stewardship
on Olango could easily mean a 60 percent (US$ 1.4
million) increase in annual net revenues from reef and mangrove
fisheries and tourism expenditures.
1. INTRODUCTION
The coastal ecosystems of the Philippines are some of
the most productive and biologically diverse in the
world. This diversity is associated with high primary
productivity and high fishery yields. Coral reefs and
their associated seagrass beds are among the most productive
coastal ecosystems. The 27,000 square kilometres
of coral reef and seagrass ecosystems in the Philippines,
equal to slightly more than 10 percent of the
total land area of the country, are of significant value in
terms of fisheries for food security, coastal protection,
tourism, education, research and aesthetic value (Gomez
et al. 1994; Courtney et al. 1999; White 1987). Reef
fisheries employ more than one million small-scale fishers
(BFAR 1997). Unfortunately, these values are not always
apparent or understood and they are rarely factored into
planning for coastal resource management in monetary
terms.
Coastal ecosystems in the Philippines are under severe
stress from the combined impacts of human overexploitation,
habitat destruction, pollution, sedimentation
and general neglect (Chou et al. 1994; Junio-Menez
& Newkirk 1995). Surveys in the 1980’s and 1990s have
shown that more than 75 percent of the coral reefs in the
country have been degraded from human activities
(Chou et al 1994; Gomez 1991; Gomez et al. 1994; Yap
& Gomez 1985). As coral reefs are destroyed, fisheries,
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