financing for mpas

FINANCING for MPAs

The Philippine Environmental Governance 2 Project

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

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

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

MPA Costs

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

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, (Patrol boat, binoculars, paddle boats, diving gears,

rechargeable rechargeable flashlights, hand-held radio, etc) flashlights, hand-held radio, etc)

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 (Deputation of Bantay-Dagat, alternative livelihood, monitoring

and evaluation, paralegal and Municipal CLE training, IEC, etc.)and evaluation, paralegal and Municipal CLE training, IEC, etc.)

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

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

MPA Fund Sources

MPA Fund Sources

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

Phases Pilar MPA Program ImplementationPhase 1 Phase 2

Establishment Stage (2005)

Transition Phase (2006) Implementation Phase (2007)

Bio-Physical baseline surveyMS Mgt PlanningY1 Action Plan’g Delineation and installation of buoys and markersAcquisition of flashlight, rain-coats & rubber bootsFabrication of billboards and signagesPulong-pulongM& E TrainingParalegal TrainingFund Raising ActivitiesFundSourcesEco-Gov – 72,503MLGU-97,000Plan Int’l- 93,694PO – 1,500Indv- 3,000Total -267,697

Installation of Buoys and MarkersGuarding and patrollingEnforcement PlanningParalegal Training and Mun. CLE PlanningAdmeasurements TrainingBio-Physical monitoringCross-visit to Bohol and NegrosAction Planning for Y2Const. of floating guardhouseInstallation of billboardsFund Raising ActivitiesFund Sources:MLGU -109,240Eco-Gov – 113,684Plan Int’l- 44,626PO- 74,404Private Sector – 4,000Total P345,954

Guarding and patrollingAcquisition of paddle boatBio-physical monitoringInstallation of billboardMarine CampFund SourcesMLGU-145,010BLGU-14,000Plan Int.- 100,000Eco-Gov-41,144PMMP-21,048Private Indv. – 760Total = 321,962

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

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

Case Study on MPA Financing

Case Study - MS Profile

Name of MPA Location Area Mgt. Set-up

PMMP

(Sept. 2005)

Pilar,

Camotes179 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 hectares Co-mgt bet. Bgy and MLGU

Case Study - MS Profile

Name of MPALGU Class

and IRA Ave. Yearly

BudgetAve. Yearly Budget /ha.

PMMP 5th/16.9M 125,000 ($%) 697

Villahermosa MS 5th/16.5M 25,000(<1%) 361

Bibilik Fish/MS 3rd/28M 61,900 (1%) 3,095

Tambunan MS 5th/24.5M 435,000 (9%) 4,230

Talisay MS 5th/24.5M 0 0

MiSSTTA 4th/33M 600,000 (9%) 3,750

Case Study - Cost

Name of MPA

Establish-ment

Cost/ha

Implemen-tation

Cost/ha

Total Ave. Cost /year

Ave. Cost / ha.

PMMP

05-06

445,082 (2,482/ha)

612,153 (3,390/ha)

1057,035 528,617 2,947

Villahermosa MS 02-06

377,867 (5,453/ha)

808,898 (11,672/ha)

1,186,765 237,353 3,425

Bibilik Fish /MS 02-06

799,159 (39,958/ha)

1,427,326

(71,366/ha)

2,226,485 445,297 22,265

Tambunan MS 03-06

840,778 (8,163/ha)

1,999,942

(19,417/ha)

2,840,720 710,180 6,895

Talisay MS

03-06

357,576 (10,902/ha)

970,452 (29,587/ha)

1,328,028 332,007 10,122

MiSSTTA

04-06

741,081 (4,632/ha)

1,574,016 (9,838/ha)

2,315,097 771,699 4,823

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%

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

Case Study - Sources of Fund

Pilar Marine Park

Establish-ment Stage

Implemen-tation Stage

Total

Municipality 202,904

46%

427,15970%

630,06359%

Barangay 4,9901%

15,8512%

20,8412%

Community 0 11,0002%

11,0001%

Grants/Donation

237,18853%

152,24325%

389,43137%

MPA Revenue

0 6,9001%

6,9001%


Villahermosa MS

Establish-ment Stage


Total

Municipality 70,874

19%

22,937

3%

93,811

8%

Barangay 88,000

23%

235,143

29%

323,143

27%

Province 0 25,000

3%

25,000

2%

Community 48,000

13%

312,000

2%

360,000

30%

Grants/Donation 166,993

44%

164,818

20%

331,811

28%

MPA Revenue 4,000

1%

4,000

. 5%

8,000

1%


Bibilik Establish-ment Stage


Total


62%

537,901

38%

1,035,141

46%

Barangay 25,691

3%

76,399

5%

102,090

5%

Province 0 3,860

.3%

3,860

.2%

Community 15,000

2%

50,000

4%

65,000

3%


32%

729,350

51%

331,811

44%

NGA 3,000

<1%

29,816

2%

8,000

2%


Tambunan Establish-ment Stage


Total


65%

1,124,779

56%

1,673,464

59%

Barangay 1,053

.2%

29,853

15%

31,366

1%

Province 0 2,250

.1%

2,250

.1%

Community 1,500

.2%

9,000

.5%

10,500

.4%


33%

784,050

39%

1,062,340

37%

NGA 10,8000

1%

50,000

2%

60,800

2%


Talisay Establish-ment Stage


Total

Municipality 7,000

2%

40,933

4%

47,933

4%

Barangay 0

0%

24,372

3%

24,372

2%

Community 54,820

15%

418,040

43%

472,860

36%

Grants/Donation

295,756

83%

487,107

50%

782,863

59%


MiSSTA Establish-ment Stage


Total


63%

904,794

57%

1,328,028

59%

Barangay 43,546

6%

139,805

9%

183,351

8%

NGA 68,600

4%

68,600

3%

Grants/Donation

227,928

3%

460,817

29%

686,745

30%

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

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

Ring Fencing

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

• 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

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

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

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

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

Thank You!

financing for mpas

Documents

maintenance of buoys

installation of buoys

implementation phase

financial aspects

markersoffice maintenance

maintenance of guardhouse

transition phase

mpaaction plan