Developing pro-poor markets for environmental services in the ...

Box 2.2 Case study of development fees for El Nido Marine Reserve
Facts
Location: Palawan
Area: 89,140ha
Unique features: Comprises a substantial representation of the most species-rich habitats in the province.
Fine sand beaches are nesting areas for four species of marine turtles while sea-grass meadows are the
habitats of dugong. It has some of the most diverse coral species in the world.
Users: Resorts and tourist establishments, tourists
Current fee structure: None
Management: Palawan Council for Sustainable Development (PCSD)
Chronology of activities
• Consulted with the Multi-Sectoral Tourism Council
• Presented the pilot testing activity to PCSD in April 1999
• Interviewed resort owners and operators in May 1999; reference year is 1998
• Gathered data from the Manila liaison offices of the large-scale island resorts
• Gathered data on visitor arrivals from the Department of Tourism (DOT) central office in Manila and
from the Provincial Tourism Office of Puerto Princesa, Palawan
• Data analysed and report written
Study results and recommendations
• Targeting a 25% share in excess profits: potential annual revenues = PhP 400,000 in development fees
• Partial expropriation of excess profits to maintain incentives for efficient operations of the resort
owners.
• Alternative basis: CA141 of 1936
• Rental of government land = 3% of reappraised value of land, plus 1% value of land improvements
• Based on value of improvements: potential development fee = PhP2.4 million per year
Source: Padilla, J.E. et al. (1999), Determination of Development Fees for Tourism Establishments Located in El Nido
Marine Reserve. ENRAP IV Technical Paper, USAID and DENR.
2.2 Watershed protection
Watershed-protection markets are the most diverse among all types of MES in the
Philippines. The diversity comes not in the form of payments, which are usually user-fee
systems set up in a number of watersheds in the country. Rather, payments are made for
varying uses within the watershed. Nevertheless, all these payment schemes were set up
basically with watershed protection as the end goal. Fifteen studies related to the
development of markets for watershed protection have been conducted (see Table 2.1).
Among these, seven concern estimating values of the watershed relating to water quality,
while two deal with erosion-control functions of the watershed. Meanwhile, eight further
studies relate to estimating values for the use of resources within the watershed. Although not
directly measuring watershed protection as a service, these eight studies are included here
because of the fact that the user fees form part of a fund, namely the Integrated Protected
Area Fund (IPAF), which is used for watershed-protection activities by the management
bodies involved (see Section 3 for a broader discussion of IPAF). Seven out of the 15 studies
are now under review by the respective PAMBs, for possibly setting up user fee systems.
Three studies have led to the drafting of DENR Administrative Orders regulating the
particular use through appropriate charges. Finally, one study has been translated into an
ordinance issued by the concerned local government unit in raising revenues for watershedprotection
activities in the area.
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