REECS Policy Brief

Pursuing
financial
sustainability
for protected
areas

No. 2015-02

The REECS Policy Brief series provides

overviews of the results of completed
REECS projects. This issue features the
main results of the project Sustainable
Financing of Protected Areas, which was
completed in 2013 for the Department
of Environment and Natural ResourcesBiodiversity Management Bureau.

REECS
Resources, Environment and
Economics Center for Studies

unding constraints is one of the major hindrances to the

effective management of the Philippines protected areas.
While the National Integrated Protected Areas System (NIPAS)
provides opportunities for financial sustainability, few PAs are able
to leverage these adequately due to operational, capability, or other
issues. The Sustainable Financing of Protected Areas project
worked with 18 protected areas across the country to improve their
financial sustainability prospects and demonstrate feasible revenue
generating schemes.

The Philippines has more than 200 protected areas (PA), of which
only about half are generating income. However, the amount
collected is too low to sustain PA operations. From 1996 to 2010,
only PHP198 million was remitted by PAs to the Integrated
Protected Area Fund (IPAF), the central repository of NIPAS
funds. This was generated from 100 protected areas, with the top 15
PAs contributing as much as 89% of the amount.
Currently, most of the funds used by the countrys PAs come from
the national government budget, i.e., allocations from the annual
budget of the Department of Environment and Natural Resources
(DENR). This funding is not enough. A 2011 study showed that
the Philippines protected areas are the most understaffed and most
underfunded in Southeast Asia.1
1http://www.rappler.com/world/specials/southeast-asia/asean-journey/85646-aseanprotected-areas-funds-staff

and activities specified in the plans.

As a result, many management
plans end up unfunded or with
huge funding gaps.

The Sustainable Financing of

Protected Areas Project was
implemented to help address
this situation. The Biodiversity
Management Bureau (BMB) of
the DENR, with funding from the
World Bank, tapped REECS to lead
the project.

There are also seldom any clear

plans to generate resources to
finance the implementation of the
management plans. PA managers
often start each year knowing
that they have access only to very
limited funds from DENR or IPAF
and just select priority activities
based on those funds.

REECS worked with the BMB

and staff of 18 selected PAs on two
major tracks: 1) development of
PA business plans and 2) initiating
the implementation of appropriate
revenue generating schemes in
selected PAs.

The Sustainable Financing of PAs

project adopted a business planning
approach to PA management. In
some ways, running a PA may be
compared to running a business.
Like any business venture, PAs can
generate revenues from ecotourism,
agricultural activities, communitybased enterprises, and other goods
and services. Running a business
and a PA also have similar goals: to

PA management as a
business
PA management plans often have
ambitious goals, but one of the
usual deficiencies of management
plans for PAs is the lack of cost
assessments of programs, projects

achieve the mandate, be efficient in

doing processes, increase revenues,
and reduce costs.
The business of PA management is
articulated through the PA business
plan. While the PA management
plan provides the strategic direction
in managing the PA, the business
plan helps to efficiently achieve the
goals of the management plan and
raise the necessary resources.
A good PA business plan ensures
that PA managers know what
specific activities they need to do to
accomplish their management plan
objectives, how much money they
need to implement those activities,
and what revenue generating
strategies or schemes they need
to do to get the needed resources.
The figure below shows the general
process by which management plan
components are translated into the
business plan.

METHODS/APPROACHES

STEP/PROCESS

Review the PA
management plan

Develop updated workplan

MAJOR COMPONENTS

Desk review, interviews, focus groups

Logical Framework Approach:
emphasizes results and ensures that
targets are clearly linked to goals

Goals
Programs
Activities

Desk review, interviews, focus groups

Activity-based cost accounting: allows
systematic and realistic budgeting of
planned programs and activities identified
in the PA management plans.

Staffing plan and capacity

building needs
Cost of implementing the
management plan
Current sources of revenues

Priority programs/activities
Potential sources of revenues
Revenue generation schemes

Assess funding gap

Draw up the business plan

Business planning workshops, studies on

revenue generating schemes
Action planning: determine options for
identifying additional revenue sources

Figure 1. Business planning broad strokes

REECS Policy Brief No. 2015-02

countrys remaining biodiversity and

their concomitant ecosystem services.

Sample Outline of a Protected Area Business Plan

1. Protected Area Profile
1.1. Location and Coverage
1.2. Salient Biodiversity Features and Natural Resources
1.3. Main Resource Users/Stakeholders
1.4. Key Issues, Concerns, and Challenges

Sustainable Financing
Schemes
While it is acknowledged that
there are market, policy and fiscal
barriers to improving PA financial
sustainability, there are sufficient
policies and operating guidelines
that will allow PAs to maximize
their potentials to increase revenues
to finance implementation of
management plans.

2. The PA Management Plan and Business Plan Logical

Framework
2.1. The PA Management Plan
2.2. The Business Plan Logical Framework
3. Human Resources Plan
3.1. Management and Administration
3.1.1. The Protected Area Management Board
3.1.2. The Protected Area Office
3.2. Staff Profile, Requirements, and Trainings
3.2.1. Current Staff Profile 
3.2.2. Minimum Human Resources Requirement
3.2.3. Capacity-Building Requirement

Under the NIPAS Act, PAs may

generate income or resources
through various ways:

4. Financial Plan
4.1. Overview of Current Budget Allocation and Revenues
4.1.1. Current Budget Allocation
4.1.2. Current Revenues
4.2. Capital Requirements
4.2.1. Institution-Building Costs
4.2.2. Recurring Capital Requirements
4.2.3 Proposed Management and Financial Scenario
4.2.4. Revenue Shortfall
4.3. Revenue Generating Strategies
4.3.1. Proposed Revenue Generating Scheme: User Fees
4.3.1.1. Entrance Fees
4.3.1.2. Agricultural Production Fees
4.3.1.3. Fishery Resource Use Fees
4.3.1.4. Facilities FeeParking
4.3.1.5. Water Use Fee
4.3.2. Private-Public Partnership
4.3.3. Revenue Projections
4.3.3.1 User Fees
4.3.3.2 Public-Private Partnership
4.3.4. Other Potential Revenue Generating Schemes
4.4. Enterprise-Building
4.5. Damage Fees

Business planning of 18 PAs

yielded an estimated average
annual investment requirements of
PhP489 million. These PAs have
been operating on budgets that are
considerably lower, and the business
planning process showed what the
actual needs are.

impose administrative fees and

fines
enter into contracts/agreements
with private entities or public
agencies for PA purposes
accept donations, grants, or
endowments
These options can either raise
funds or reduce the cost of
implementation of the PAs
activities. Using these mechanisms,
the project worked with staff and
partners of the 18 project sites to
jumpstart the implementation of
five types of revenue generation
options:

However, the expected annual

revenues of these PAs are only
PhP107 million, resulting in an
average annual revenue shortfall of
PhP382 million. Clearly, there is an
urgent need to address the financial
constraints to allow PAs to exist and
continue their role of conserving the

user fees
payments for ecosystem services
public-private partnerships
enterprise development
damage estimation

Pursuing financial sustainability for protected areas

User Fees
Imposing fees on resource users, with the fees usually based on users willingness to pay, cost-recovery,
or relevant valuation data. Most suited for PAs with a large number of identified resource users.
Key
considerations

Allowed resource uses should be consistent with management plan goals and
prescriptions.
Efficient and transparent processes should be adopted in designing the system
for collecting and disbursing fees.
Certain fees can only be imposed after the PA invests in the necessary
improvements or facilities.

Recommended
for PAs

Bataan Natural Park, Central Cebu Protected Landscape, Ninoy Aquino Parks and
Wildlife Nature Center, Bulusan Volcano Natural Park, Sagay Marine Reserve, Mt.
Malindang Natural Park, Naujan Lake Natural Park, Mt. Isarog Natural Park

The project identified four types of user fees that can be imposed in the eight selected PAs and
recommended specific fee amounts that can be charged.
Entrance fees, e.g., snorkeling, diving, mountaineering/trekking fees, user fees for commercial film
and still photography
Development fee, e.g., telecoms user fee
Resource user fees, e.g. water use fee, fishery resource use fee; agricultural production fee
Facilities user fee, e.g. parking fee
DENRs Administrative Order (DAO) 2000-51 provides the principles and guidelines in determining fees
for access to and sustainable use of resources in PAs. To promote faster user fee implementation in PAs,
the project also submitted a draft DAO prescribing minimum user fees that can be applied to all PAs that
have not yet established their own user fee system.
Sample Recommended User Fees: Bulusan Volcano Natural Park
Recommended Facilities User Fees and Guide
Services Fee for Visitors Climbing the Summit
Additional/Improved
Facilities and Services

Recommended Fee
(PHP in 2012 value/
person/day)

Recommended Entrance Fees

Recommended Fee
(PHP in 2012 value/
person/day)

User
Local residents*

30

Summit Climb

250

Local residents (national)

200

Comfort room

13

Foreign

300

Outdoor cooking areas

34

Camp sites

44

First aid stations

35

Orienteering sites

28

View decks/towers

34

Hikers rest areas

37

Motorcycles

Maps and booklets

25

Tricycles

10

Cars, PUJs, pick-ups, vans

35

Trucks and buses

50

Mountaineering guides

*Fee per person for a group of five

150*

*Bulusan, Irosin, Juban, Barcelona and Casiguran

Recommended Entrance Fees
Vehicle Type

Recommended Fee
(PHP in 2012 value/day)

*Bulusan, Irosin, Juban, Barcelona and Casiguran

REECS Policy Brief No. 2015-02

Payments for Ecosystem Services

An arrangement where buyers of an ecosystem service compensates the sellers who work to deliver
or maintain the ecosystem service. In the PES schemes initiated by this project in three PAs, the
ecosystem service is water supply, the sellers are the upland communities who would maintain the
watershed by doing reforestation and sustainable farming practices, and the buyers are the household
and commercial water users in the lowlands.
Key
considerations

Usually requires considerable time to set up but offers great potential for promoting
sustainability, reducing local threats, and fostering local partnerships/stewardships.
Involvement of strong champion organizations and strong linkages or institutions
are key to successful implementation.

Recommended
for PAs

Mts. Banahaw and San Cristobal Protected Landscape, Mt. Kalatungan Range
Natural Park, Mt. Malindang Range Natural Park

The project worked in the three selected PES sites to identify potential buyers and sellers and hammer
out specific arrangements to establish the PES (e.g., price of the ecosystem service, payment mechanisms,
institutional arrangements, monitoring system). A year after the project was completed, the PES scheme
set up for Mt. Kalatungan Range Natural Park has been able to raise PhP1 million from downstream
water users Cooperative Development Authority, water districts, and other private entities.
A Look at the Process of Setting up PES in Mt. Kalatungan Range Natural Park
The Role of Intermediaries, Empowered Sellers and Performance Measure
In the case of Mt. Kalatungan Range Natural Park, a three-dimensional (3-D) map of the ancestral
domain of MILALITTRA, the indigenous people (IP) community identified to serve as first seller of
ecosystem services, is instrumental in convincing the other stakeholders in Cagayan de Oro river basin
management council of the potential role of IPs in implementing a sustainable reforestation program
in Mt. Kalatungan. A digitized version of the map showing how Batang watershed looked in 2000 and
later in 2013 showed a convincing record that the IPs can deliver the service that they said they will
deliver.
The 3D map showed the geographic location and landscape of Batang watershed as part of the
MILALITTRA ancestral domain. This headwater highly affects Cagayan de Oro and is very critical
due to the elevation, the steepness of the ridges, and the vegetation of the area.
The Philippine Association for Intercultural Development, Inc. (PAFID), through a series of
consultations and workshops with the Talaandig-Kalatunganon Tribe of MILALITTRA, assisted the
community to develop the 3D map. The map was also validated and encoded through GIS in order to
have a more accurate analysis.
The map of MILALITTRA had been substantial in the scheme as it provided critical information to
all stakeholders. It proved the direct linkage between the buyers and the sellers. In addition, it revealed
critical factors, which had to be considered in the management of the ecosystem such as elevation,
slopes, land cover, and land use changes.
These factors amplified the willingness of the stakeholders to push for engaging in PES. More
importantly, the digitized 2012 version of the 3D map provides a way to measure performance of
sellers in the delivery of promised activities as the map clearly indicates where the proposed 1600 has
for reforestation and agro-forestry would be located.

Pursuing financial sustainability for protected areas

Social Enterprise Development

Development of self-sustaining, ecologically harmonized enterprises to support the needs of PA
communities and lessen their dependence on the PAs natural resources. When implemented properly,
enterprise development can be directly linked to the short and long-term goals of PA management.
Key
considerations

Involves building the financial, technical, and management capacity of the

communities in managing the enterprise; analyzing the value chain of the chosen
industry; evaluating technical lessons learned in production; and linking with
consumer markets.

Recommended
for PAs

Mt. Kanlaon Natural Park, Northern Negros Natural Park

The project worked with the communities in the two PAs to set up sustainable social enterprises that
would enhance the protection of the natural parks. The communities decided to embark on agriculturebased social enterprises using organic and sustainable farming practices. After the project, the community
organizations were encouraged to sustain their linkage and cooperation with relevant NGOs and social
enterprises in the province to access further assistance in capital for production, technology for processing
and packaging, and network for stable marketing.

Public-Private Partnership
A partnership between the PA and a private entity to implement a venture that generates resources or
savings for the PA while also allowing the private entity to meet business objectives.
Key
considerations

To promote sustainability, the partnership should be approached in a way that does

not view private sector as donors, but as partners with vested interest in ensuring
the protection of the PA and its resources.

Recommended
for PAs

Ninoy Aquino Parks and Wildlife Center, Mt. Isarog Natural Park, Mt. Apo
Natural Park, Bataan Natural Park

The project negotiated public-private partnerships that were formalized through memoranda of agreement
or understanding: Ninoy Aquino Parks-Ayala Land, Inc., Mt. Isarog-Bicol Hydro Corp., Mt. Apo-Energy
Development Corp., and Bataan Natural Park-Ryan Whisnant. The implementation of the conceptualized
ventures are beyond the scope of the project, but sufficient groundwork was established to enable
continued efforts between the PAs and their respective private sector partners.

REECS Policy Brief No. 2015-02

Damage Estimation
Imposes charges or fines on human activities in or close to the PA that have adverse impacts
(damages) on the ecosystem and the supply of ecosystem services. The Protected Area Management
Board may impose charges to recover the loss of ecosystem services and/or impose fines to deter
activities that cause the adverse impacts.
Key
considerations

Can be a significant source of revenue for PAs at certain times, but the long-term
view should be less violations (and therefore less collections) because of effective PA
regulation and law enforcement.

Recommended
for PAs

Mt. Kanla-on Natural Park, Mt. Apo Natural Park, Mt. Kitanglad Natural Park

The project assessed the damages caused by various land/resource uses applicable to the three PAs and
recommended amounts that can be charged based on the total recovery/rehabilitation cost per hectare of
the damaged area. The project also drafted a DAO that DENR can use to provide guidelines in assessing
fees and charges for damages done to PAs.
Recommended Fines and Charges for Terrestrial PAs
Category

Amount

Additional Penalty

Land rehabilitation tax or charge for use of

land within the multiple-use zones*

Php 1,903 per hectare

per year

None

Land rehabilitation tax for use of land

within the strict protection zone
(Non- IPs only)**

Php 24,942 per hectare

per year

None

Damage fine for illegal land use in the

non-forested and multiple-use zones

Php 157,184 per hectare

Automatic ejectment

Damage fine for illegal land use in the

forested and strict protection zones

Php 278,030 per hectare

Automatic ejectment

* For tenured migrants within the multiple-use zones (does not include IPs)
** For tenured migrants within the strict protection zones (does not include IPs)

Revenue Projections
If all these revenue generating
schemes are implemented in the 18
PAs, will it be enough to support all
their funding requirements?
The table on the next page shows
the total projected annual revenues
from each revenue generating
scheme in the 18 PAs, indicating
that the PhP382 million financing
gap is almost wiped out. These

calculations assume 100% collection

efficiency. PAs should therefore
aim to establish all recommended
revenue-generating schemes and
collect as soon as possible, with
BMB closely monitoring along the
way.
Looking at individual PAs, in some
cases, the revenue projections
were almost enough to close the

financing gap. However, for some

PAs, there were just not enough
users and resource uses that could
be subjected to revenue generating
schemes.
It is safe to assume that this reality
is also reflected in other NIPAS
PAs not covered by this project.
Attempting to minimize the
financing gap in general should thus

Pursuing financial sustainability for protected areas

Projected Annual Revenues from Revenue Generating Schemes, 100% Collection Efficiency

PA

User Fees

PES

Enterprise
Development

PPP

Damage
Charges

Apo

9,890,876

Apo Reef

Banahaw-San Cristobal

7,497,000

Bataan

2,276,066

3,870,000

Bulusan

10,900,450

Central Cebu

33,085,135

Isarog

49,390,004

1,440,000

Kanlaon

4,937,734

36,359,312

Kalatungan

31,784,580

Kitanglad

3,107,537

Manleluag

Malindang

10,000,671

20,418,000

NAPWC

114,755,179

7,927,610

Naujan

19,117,550

5,550,641

Mantalingahan

Northern Negros
Palay-Palay

Sagay

746,895.00

TOTAL

240,271,950

59,699,580

13,237,610

10,488,375

49,357,725

373,055,240

TOTAL ALL SCHEMES

be approached with prudence and

pragmatism; it may be possible only
on a case-to-case basis.
The national government will
still have a major role to play
in supporting the countrys PA
system in the long term. Revenue
generation may be a viable option

for PAs, but the ultimate goal

should still be preserving the
integrity of the PAs natural
resources. Each cent that goes into
that effort is a worthy investment
for ensuring continued ecosystem
services derived from the PAs.

For more information on our projects, please contact:

Resources, Environment and Economics Center for Studies, Inc.

REECS

Suite 405, The Tower at Emerald Square

J.P. Rizal corner P. Tuazon Sts
Project 4, Quezon City
1109 PHILIPPINES

Phone: (632) 438-8858 / 995-0556

Fax: (632) 995-0556
Email: reecsinc@yahoo.com
Website: http://www.reecs-inc.com/