Project Executive Summary
GEF Council Work Program Submission
Contribution to Key Indicators of the Business Plan:.217,000 ha of protected areas more effectively managed; 60% of PAs using PA management effectiveness tool; SLM practiced in areas covering 264,000 ha; 25% decline in areas under slash and burn agriculture
Record of endorsement on behalf of the Government(s):
Roberto B. Tan, Assistant Secretary, Department of Finance Philippines / Date: March 23, 2005Financing Plan (US$)
GEF Project/Component
Project / 7,000,000
PDF A
PDF B / 350,000
PDF C
Sub-Total GEF
/ 7,350,000Co-financing*
GEF Agency / 50,000,000Government
Bilateral (AusAid)
Bilateral (NzAID)
NGOs
Others
Sub-Total Co-financing: / 50,000,000
Total Project Financing: / 57,350,000
Financing for Associated Activities If Any
Leveraged Resources If Any:
This proposal has been prepared in accordance with GEF policies and procedures and meets the standards of the GEF Project Review Criteria for work program inclusion
Steve Gorman
WB GEF Executive Coordinator
World Bank GEF Coordinator / Project Contact Person:
Robin Broadfield
EAP GEF Regional Coordinator
Date: March 23, 2006 / Tel. and email: Tel: 202-473-4355
Email:
GEFSECIA Project ID: P091147
GESEC ID: 2761
Country: Philippines
Project Title: National Program Support for Environment and Natural Resources Management Project (NPS-ENRMP
GEF Agency: World Bank
Other Executing Agency(ies): Department of Environment and Natural Resources Management (DENR); Local Government Units
Duration: 5 years
GEF Focal Area: : Integrated Approach to Ecosystem Management
GEF Operational Program: Integrated Ecosystem Management (OP12) with strong linkages to Forest Ecosystems (OP3) and Sustainable Land Management (OP15) Operational Programs
GEF Strategic Priority:EM-1: Integrated Approach to Ecosystem Management; SLM-1: Capacity Building; SLM-2: Implementation of Innovative and Indigenous Sustainable Land Management Practices; BD-1 Catalyzing Sustainability of Protected Areas; BD-2 Mainstreaming biodiversity in the production landscapes and sectors
Pipeline Entry Date: May 25, 2005
Estimated Starting Date: January 1, 2007
Acronym List
APL / Adaptable Program Lending / EcoGov / Environmental Governance
AOs / Administration Order / EMB / Environment Management
Bureau
BNFI / Bicol National Park
Foundation / ENR / Environment and Natural
Resources
CAS / Country Assistance Strategy / ENRU / Environment and Natural
Resources Unit
CBD / Convention on Biological
Diversity / FASPO / Foreign Assisted Program
Office
CBFM / Community Based Forest Management / FMB / Forest Management Bureau
CENRO / Community Environment and Natural Resources Officer / GEF / Global Environment Facility
CEPF / Critical Ecosystems
Partnership Fund / GIS / Geographic Information
System
CLUP / Comprehensive Land Use
Plan / GOP / Government of the
Philippines
CPPAP / Conservation of Priority
Protected Areas Programme / GOP / Government of the Philippines
DA / Department of Agriculture / GPOA / General Plan of Operations
and Activities
DA-BFAR / Department of Agriculture
Bureau of Fisheries and
Aquatic Resources / IBRD / International Bank for
Reconstruction and Development
DA-BSWM / Department of Agriculture-
Bureau of Soil and Water Management / ICB / International Competitive Bidding
DAO / Departmental Administration
Order / IEC / Information and Education
Campaign
DENR / Department of Environment
and Natural Resources / IEM / Integrated Ecosystem
Management
DILG / Department of Interiors and
Local Government / IPAF / Integrated Protected Area
Fund
IPRA / Indigenous Peoples’ Rights
Act / PA / Protected Area
IUCN / International Union for the Conservation of Nature / PAB / Project Advisory Board
JICA / Japan International
Cooperation Agency / PAMB / Protected Areas and Management
Board
LGUs / Local Government Units / PAWB / Protected Areas Wildlife Bureau
LSP / Local Service Providers / PCO / Project Coordination Office
M&E / Monitoring and Evaluation / PFEC / Philippine Federation for
Environmental Conservation
MFO / Major Final Outputs / PENRO / Provincial Environment and
Natural Resources Officer
MGB / Mining and Geosciences
Bureau / PES / Payments for Ecosystem Services
MOAs / Memoranda of Agreement / PSU / Private Service Unit
MSWW / Metro Manila Water and
Sewage Authority / SIL / Sector Investment Loan
MTPDP / Medium Term Philippine Development Plan / SIM / Sector Investment and Maintenance Loan
NBSAP / National Biodiversity
Strategy and Action Plan / SLM / Sustainable Land Management
NEDA / National Economic
Development Authority / USAID / United States Agency for
International Development
NIA / National Irrigation
Administration / UNDP / United Nations Development
Programme
NIPAS / National Integrated Protected Areas System / WEM / Watershed and Ecosystem
Management
NPS-ENRM / National Program Support to Environment and Natural
Resources Management / WMC / Watershed Management Council
NRM / Natural Resource
Management
1. project SUMMARY
Project Rationale
Country context: Since the 1980s the Philippine economy has been lagging behind others in Asia with appreciably lower levels of GDP growth and investment per capita than for the region as a whole. Weak economic performance and a fast growing population significantly constrain the country’s ability to reduce poverty. In response to these trends, the Government’s Medium Term Philippine Development Plan (MTPDP 2004-2010), the President’s 10 point agenda for development and the World Bank’s (WB[1]) current Country Assistance Strategy (CAS), view economic growth (with social inclusion and environmental responsibility), as the principal engines for achieving core development objectives related to poverty reduction and employment. In policy, the guiding principles are to ensure that the positive benefits from growth are optimized sustainably, whilst the real or imputed costs of attaining growth are minimized.
Given the very high dependence of the economy and private income on primary resources, the responsible utilization and management of natural capital will be crucial in meeting and sustaining future development goals and preventing excessive environmental costs. Conversely, inadequate regard to implementing sound natural resource management (NRM) measures and safeguarding the nation from excessive environmental degradation will rapidly erode resource inventories (some of which are unique to the Philippines) and seriously compromise short term economic gains by significant, longer term costs.
Sector Issues: The Philippines is an archipelago of more than 7,100 islands covering an estimated area of 29.9 million hectares. Its territorial waters cover an estimated 221.1 million hectares or approximately 88% of the Philippine territory. Within these lands are areas of rainforest which contain high species diversity and high levels of endemism and territorial waters of equally extensive coral reefs, sea grass beds, seaweeds, which are also home to a high diversity of fishes, and beautiful and pristine beaches that attract tourists.
An expanding population, at present increasing by 2.36 percent annually, weak governance as well as high dependence on, and, “mining” of, natural resources has led to pollution and extensive ecosystem degradation. These threaten the livelihoods and health of a large proportion of the population and could jeopardize economic growth and productivity. Poverty is acute in rural areas where about 47% of the population still lives below the poverty line. Degradation of the environment and natural resource base is reflected in:
· Severe forest degradation, with forest cover reduced from 70% in 1900, to only 6% remaining;
· Only one third (32%) of coral reefs remain in good condition, while most are degraded with 27% in poor condition; coastal mangroves are also significantly depleted;
· Loss of watershed integrity due to inappropriate upland agriculture, deforestation, and road construction, leading to water shortages, sedimentation and natural disasters;
· Almost half (45%) of the arable lands in the Philippines have been moderately to severely eroded, forcing subsistence farmers to move onto critical and marginal lands;
· As a result of deforestation and overexploitation, the Philippines has many species under severe threat and endangered with 331 species on International Union for the Conservation of Nature (IUCN) Vulnerable or Endangered list in 2002 (compared to 183 species in 1992) while 23% of the endemic vertebrate species are threatened.
· Although the country has 206 priority protected areas (PAs) only 8 of these have been approved by Congress, and most PAs are “paper parks” with limited staff or no budgets.
· Air and water pollution in major urban centers exceed national standards;
· About 31% of diseases are water-related.
At present, about 30% of the country’s population or an estimated 17.4 million people live in upland areas. Half of the area cultivated in the upland areas is characterized by very steep slopes, and much of this land is cultivated without proper soil and water conservation measures being undertaken. This is a particularly serious problem because critical watersheds and protected areas are being damaged. Furthermore, swidden agriculture (or kaingin) is extensively practiced in many areas, adding to the pressure on local forest systems.
Many upland areas rich in valuable timber and minerals are severely affected by unsustainable exploitation practices. Widespread and commercialized illegal logging takes place in many forests, watersheds and protected areas. It has a devastating impact on the ecosystems and negatively affects local communities' livelihood and resource management options. Current environmentally unsustainable mining practices have serious implications for many communities. Likewise rapid urban growth and industrialization has resulted to serious pollution and reduction in the overall quality of life in major urban centers.
The root causes of environment and natural resources (ENR) degradation are sector-wide and inter-related including: (i) overexploitation; conversion of natural ecosystems, such as forests and mangroves, to other uses (such as inappropriate land conversion, upland agriculture, deforestation, and road construction); (ii) migration from lowlands to uplands due to population growth and the limited opportunities for alternative livelihoods; (iii) lack of awareness of natural resource values; (iv) lack of clear tenure; (v) pollution and sedimentation from urban and industrial centers and agricultural expansion; and (vi) because natural resources, and biodiversity, in cases where protected areas have yet to be created, are generally given a lower priority in terms of budgets, there is a general lack of enforcement of appropriate management techniques. A matrix is presented in Annex 1, Incremental Costs, which demonstrates the linkages between root causes, threats and proposed mitigation measures that could be implemented under the proposed program.
A large number of agencies and organizations are involved in natural resources management representing different legal mandates and interests and they implement programs and projects jointly or separately from each other. The Department of Environment and Natural Resources (DENR), in particular is faced with an ever-growing mandate, linked to inadequate funding and capacity, especially at the local level where natural resource management (NRM) activities are implemented. Furthermore, the DENR is in a unique position, having dualistic mandates of protecting the environment and pursuing the sustainable development of the nation's natural resources, including water, land, minerals, forests, wetlands, and biodiversity. These are indeed difficult tasks to accomplish and balance and, in many cases, the various bureaus under DENR end up being in conflict with each other.
Government’s Strategy: The Government of the Philippines (GoP) has undertaken widespread reforms to enhance the policy and institutional framework for ENR management. Numerous laws and regulations are in place. Government institutional functions were transformed with passage of the Local Government Code (LGC), which advocated comprehensive decentralization and devolution of some Department of Environment and Natural Resources Management (DENR) functions to Local Government Units (LGU). Some of these policies are beginning to have a positive impact by encouraging the integration of environmental concerns and improved sustainable resource use and ecosystem protection into local development planning, though on a limited scale.
Despite these commendable initiatives, many barriers still remain to overcoming the threats to the natural resource base. For example, weaknesses in local resource planning still remain, with biodiversity concerns not sufficiently integrated into sector plans. The major challenge facing the Department of Environment and Natural Resources (DENR) is to ensure that its core mandates as protector and conservator of environment and natural resources are fully reflected in future development policy and conduct. However, to ensure this, the Department will need to:
I. Improve credibility and transparency – enhance public confidence in the DENR, away from a perception of being just a regulator to being an effective and respected conservator. This negative perception of the Department, often clouded by allegations of corruption, has significantly limited the ability of DENR to forge constructive partnerships with other Departments and stakeholders in ENR management;
II. Rationalize functions & expenditures- promote a sound and efficient institutional basis for ENR management, only after which other purposeful policy and regulatory actions become more feasible. In this regard DENR needs a substantial institutional overhaul to improve service delivery. In particular: (a) rationalize functions and expenditures; (b) finalize prioritization of functions with budget; (c) enhance effective partnerships with line agencies to improve delivery; (d) devolve more responsibility for ENR management (ENRM) to other public agencies and local government units LGUs where possible; (e) provide incentives for sustained private sector involvement in ENRM; and (f) streamline the policy and legal framework for ENRM to improve effectiveness; and
III. Improve ENRM standards, which are currently lacking, for example, very slow procedures in securing tenure instruments and issuance of resource-use permits.
Given budgetary limitations and the fact that more than 95% of DENR’s budget goes just on maintaining the bureaucracy and non-operational personnel costs, has meant that the Department has relied heavily on foreign assisted projects and grants to fund actual operations and investments. However, this has led to a projectized approach and resulted in short-term interventions, changing priorities and lack of follow-up and sustainability. There is wide recognition, that this segmented approach with weak linkages and poor follow through in relation to ENRM priorities has to change to a more inclusive sector wide approach consistent with long term priorities. This needs to be based on an integrated ecosystem approach that would address cross-sectoral ENRM issues using the watershed as the unit of program planning, inter-agency coordination, prioritization, devolution of power and responsibilities, LGU empowerment and accountability and engaging the private sector.
Since 2004, the Bank has actively engaged DENR, key policy makers in the National Economic Development Authority (NEDA), donor partners, NGOs, LGUs and communities to ascertain critical and emerging natural resource management issues and their linkages to development strategies and priorities in the Philippines. The outcomes of these consultations were a study on “Governance of Natural Resources in the Philippines” and a “Natural Resources Management Way Forward Action Plan for the Philippines”. Among other things, the studies concluded and recommended: (i) an integrated approach to address priorities on watershed, protected areas and coastal zone management; (ii) that there is a need to improve demand for good NR governance – by establishing service delivery standards and accountatbility mechanisms; and (iii) there is need for mechanisms that define and facilitate functional coordination among the DENR and other government entities and NGOs for protected area management and other critical habitats. The proposed National Program Support to Environment and Natural Resources Management Program (NPS-ENRMP) is designed to respond to the challenges identified in these studies and consultations. These comprehensive engagements provide the Bank a unique perspective of critical country and sector issues related to environment and natural resources management that will have to be addressed to meet country and CAS development and poverty reduction objectives.