Module 5

Management of the Use of Natural Resources

Natural resources are anything that we obtain from the environment to fulfill human needs
and wants. Some are directly available for use such as sunlight and air while others are
not, such as mineral and energy resources. Natural resources are assets or materials
that constitute the natural capital of a nation. Except for those directly available, natural
resources require application of capital and human resources to be exploited (extracted,
processed, refined) for the realization of their economic value.

One of the observed consequences of globalization is the rapid and environmentally

unsustainable pace of natural resource depletion in the Middle East, South Asia, and
Southeast Asia, including the Philippines. Steadily rising global demand for raw materials,
industrial inputs, and energy and the expansion of urban areas have been the main
drivers for the depletion and degradation of natural resources. Over-extraction of forestry,
mining, energy and water resources as well as unsustainable use of agricultural and
fishery resources are the major threats to natural resources depletion/degradation.

The Philippines is rich in natural resources. It has fertile, arable lands, vast forests, rich
mineral deposits, abundant water and fishery resources, and other natural resources that
can be utilized for energy generation. The country's stock of natural resources could cater
to the demands of the increasing population and be a great source of wealth. However,
they belong to the future generations as well, and hence should be managed sustainably.
Article XII of the 1987 Constitution expressly defines policies with respect to natural
resources, to wit:
a. All natural resources are owned by the State
b. All natural resources are inalienable; and
c. The exploration, development and utilization of natural resources shall be under
the full control and supervision of the state.

However, limited use, possession, and utilization of natural resources can be granted to
private persons, but with absolute ownership remaining at all times with the State. Private
individuals, in general, undertake the transformation of these natural resources into
wealth (such as in mining), into a utility necessary for development (such as for energy
resources) or systematic distribution to the people (such as water). Participation of foreign
investors is common in these areas of development.

Unlike the management of environmental quality, the management of the use of the
natural resources is lodged with a number of different government agencies . Although
the DENR has most of the responsibilities, there are other independent agencies such as
the DOE for the use of natural resources for energy purposes, and DA for the use of
agricultural resources.
The Philippine Constitution, the Environmental Policy and Environmental Code set the
framework for specific laws and implementing rules and regulations on the use of specific
law and implementing rules and regulations on the use of specific kinds of natural
resources. The different agencies in charge of the various aspects of natural resources
management develop. Update, and revise laws and IRRs related to the functions they are
specifically mandated to implement.

Some government agencies have overlapping mandates, such as for managing the use
of water for irrigation purposes, and its use for power generation. For this reason,
there is great value in coordination amongst various agencies in the implementation,
formulation, evaluation, updating, and revision of IRRs.

The country is also a party to the ASEAN Agreement on Conservation of Nature and
Natural Resources (ACNNR), where contracting parties commit to develop national
conservation strategies and shall coordinate such strategies within the framework of a
conservation strategy for the ASEAN Region. Contracting parties to the agreement
commits to pursue sustainable development by taking necessary measures to maintain
essential ecological process and life-support systems, to preserve genetic diversity, and
to ensure the sustainable utilization of harvested natural resources under their jurisdiction
in accordance with scientific principles.

Ambiguities in ownership, government with agencies scope of mandate and resource use
rights along with corruption are among the major impediments in fully realizing the
potential of the richness of the country's natural resources to spur economic development
and have led to unsustainable use of resources.

The following section presents an overview of the current system of management of

natural resources including management mechanisms, specific challenges, and
opportunities. For purposes of discussion, natural resource use management was
categorized into (1) Land-based natural resources, (2) Water-based natural resources
and (3) Energy Resources.

Land-Based Natural Resources Use Management

The 1987 Philippine Constitution classifies lands of the public domain into agricultural,
forest or timber, mineral lands, and national parks. The following subsections will give an
overview of the status, threats, and existing management mechanisms for the use of
forestry, mineral and agriculture resources, including major laws and policies.

Forest Resources

Forests in the Philippines are not only a source of timber, but also an important habitat to
the diverse and exceptionally rich flora and fauna. Mt. Hamiguitan in Davao Oriental, for
example, has recently been declared as a UNESCO World Heritage Site during the
committee meeting in June 2014. The forest and mountain range is a wildlife sanctuary,
and has 225-hectare unique bonsai field or “pygmy” forest of 100-year old trees. The trees
in the pygmy forest have an average height of only 1.4 meters. Experts have attributed
the trees' stunt ed growth in the area to a high concentration of chromium, iron, nick el,
and magnesium in soil.

The ancestral domains of the country's 12 million indigenous peoples are also usually
located within forestlands. A significant portion of our population is dependent on forests
for their livelihood.

Of the country's aggregate land area of 30 million hectares, 52.7% is forestland and the
rest are certified alienable and disposable. As of 20 13, the total forest cover is estimated
at 6.8 million hectares. Of the total forest cover, around 6.4 million hectares are in
forestlands while the rest are in alienable and disposable land. Table 1 shows the
decrease of the forest cover as compared with the 2003 data based on the Philippine
forest statistics posted in the website of the Forest Management Bureau (FMB).

Table 1. Forest Cover in the Philippines

Forest Cover (Hectares)
2003 2010 Decrease
Total 7,168,400 6,839 ,718 328, 682
In forest lands 6 ,431,630 6,361,774 69,856
In alienable and disposable lands 736,770 477,944 258,826

Watershed forest reserves are contiguous forest areas that are protected from
development and retained in forest cover to provide long-term water supply. As of 2013,
there are 114 proclaimed watershed forest reserves in the country with an aggregate area
of 1.3 million hectares. The largest watershed forest reserve in the country is Lake Lanao
Watershed Reservation in Lanao del Sur, and second largest is the Kabulnan River
Watershed spread over the province s of Sultan Kudarat, Maguindanao and South
Cotabato. Region 3 has the biggest coverage and the most number of watershed forest
reserves, mostly found in the province of Aurora. Table 2 shows the trend in the number
and area of forest watershed reserves from 1993 to 2013.

Table 2. Forest Watershed Reserve in the Philippines

Year Number Area (Hectares)
1993 1 01 1,274,713
1998 124 1,382,881
2003 125 1,499,344
2008 128 1,517,412
2013 114 1,341,920

Increasing trend in forest watershed reserves was observed from 1993 to 2008. However,
there was a significant drop in 2013. This poses significant threat to water supply in the
long term.
The forest is perhaps one of the most valuable replaceable natural resource of the
Philippines. It is a source of raw materials and if properly managed, it could yield
significant revenues for the government.

In terms of its social and economic impacts, forest management in the Philippines may
be considered to have passed through two stages of development and is entering a third.
In stage one, large areas of forest were converted to farmland to support a growing
population. In stage two, the country sought to augment agricultural development by
developing an industrial economy based largely on natural resources. Forest
exploitation accelerated during this stage, resulting in a logging boom. Faced with
diminishing forest resource s, local forest -based industries were forced to diversify or go
out of business. In the third, and current, stage, concerted efforts are being made to
reverse the decline in forest area and quality, and protect the country's remaining natural
forests.

The country's forest cover is continuously declining. Forest guards tasked with safe
guarding forest reserves are often threatened by armed men with exploitation intention,
and some of these guards are killed in the line of duty. Watershed degradation and soil
erosion as a consequence of deforestation has emerged as one of the most critical
environmental problems in the Philippines, given that its impacts are felt not only in the
uplands but also very widely in the lowlands. Estimates of actual forested area and rates
of deforestation vary, which may be due to differences in definitions as well as severe
data deficiencies. Nevertheless, there is general agreement that continuing rapid tree
cutting has greatly shrunk the area of forested land in recent decades. The Conservation
International (Cl) recently declared the forest of the Philippines as the world's 4th most
threatened forest.

Management Mechanisms for the Use of Forestry Resources

Forest management in the country is governed by Presidential Decree No. 705 issued in
1975, otherwise known as the "Revised Forestry Code of the Philippine s". It revised the
earlier-issued Presidential Decree 389. PD 705 declared the adoption of the State policy
that "multiple uses of forestlands shall be oriented to the development and progress
requirements of the country, the advancement of science and technology, and the public
welfare". In pursuing this key policy, the following major provisions are provided:
• Land classification and survey shall be systematized and hastened so as to clearly
segregate forest reservations from land open for other uses
• Defines areas needed for forest purposes
• Mandates the establishment of boundaries of forest lands
• Prescribes utilization and management scheme: multiple use, license agreement
license, lease or permit
• Prescribes that measures shall be taken to achieve an approximate balance
between growth and harvest or use of forest products in forest lands
• Requirement for inventory prior to timber utilization in forest lands
• Prescribes cutting cycle, annual allowable cut, duration of license agreement or
license to harvest timber in forest lands, guidelines for size of forest concessions
 • Rationalization of Wood or Forest Products Industry including incentives for wood
industry

Under PD 705, the Bureau of Forest Development [now the Forest Management Bureau
(FMB}, under DENR] was established and given jurisdiction and authority over all forest
land, grazing lands, and all forest reservations including watershed reservations. The
Bureau was assigned to lead the overall management of the forest resources guided by
IRRs issued by the DENR.

In the use of forestry resources, a community-based management system could be

implemented. Community-Based Forest Management Agreement is a production sharing
agreement between the DENR and participating people's organization (POs) normally for
a period of 25 years, renewable for another 25 years to provide tenurial security and
incentives to develop, utilize, and manage specific portions of forestlands.

The Philippine Sustainable Forest Management Strategy (PSFMS) provides the

framework for all forestry programs, projects, and activities. This framework is consistent
with the provisions of the Philippine Constitution, and supports the Local Government
Code of the Philippines (R.A. 7160), the National Integrated Protected Area System Act
(NIPAS Act), and the Indigenous People Rights Act (IPRA Law). It is also supportive of
the government 's commitment to relevant international agreements and covenants. A
copy of this law, as well as relevant IRRs, can be secured from FMB Office or through its
website.

Regarding international commitments related to forest resources, the country is a party

to the International Tropical Timber Agreement (ITTA), which aims to promote the
application of guidelines and criteria for the management, conservation, and sustainable
development of all types of timber producing forests.

Mineral Resources

Minerals are naturally-occurring homogenous solids with definite chemical composition

and highly ordered atomic arrangement s. It is usually formed by inorganic processes.
Any concentration of these minerals, with a potential economic value that can be
extracted at a profit, is considered a mineral resource.

Located within the Pacific Ring of Fire, the Philippines is one of the world's richest
countries in mineral resources. The country ranks fifth in the world in terms of total
mineral reserves estimated to reach US$ 1.387 trillion. The table below shows the
comparison of the estimated quantity, grade, and value of the various types of the major
mineral reserves in the country by the Australian-New Zealand Chamber of Commerce
Philippines (ANZCCP) and by the Mines and Geosciences Bureau (MGB).
 Mineral ANZCCP Estimates MGB Estimates Minerals
Quantity Average Quantity Average (US dollar
(Million Grade (Million Grade by
Metric Tons) Metric Tons) ANZCCP)
Gold 3,869 2.68 1.37 1.37 367.0
Copper 5,051 0.90 0.93 0.93 318
Nickel 783 2.62 1.26 1.26 328.0
Chromite 38 24.55 22.13 22.13 1.0
Iron
Iron 483 42.05 - - 103.0
Manganese 3 45.31 - - 0.1
Aluminum 434 27.50 - - 263 .0
Zinc 11 2.66 2.46 2.46 1.0
Molybdenum 306 0.08 - - 6.0
Total 1.387.1

Gold, nickel and copper contribute to 75% of the total estimated value of mineral reserves.
Gold accounts for 26% of total value.

Although there are considerable discrepancies in estimates, both estimates show that
copper is still the largest in terms of quantity. The two (2) reports also have comparable
results in terms of quality (reported as average grade) for copper, chromite and zinc.
However, gold and nickel were assessed to be higher in quality in the ANZCCP Report.

There are currently no officially available government estimates for the other mineral
types.

Thirty percent (30%) of the total land area of the country (9 million hectares) is found to
be geologically prospective for metallic minerals. Metallic mineral deposits could be
found in different parts of the country in different combinations a n d Figure 5 illustrates
the types of deposits that are being mined as of 2013.

The relative amount of gold, copper, nickel, chromite, and Zinc reserves in the major
island groups, Luzon, Visayas and Mindanao is shown in the figure below.
 Copper with Gold and Silver
Copper with Gold
Chromite
Nickel

Zinc

Types of Metallic Mineral Deposits in the Philippines (Source: MGB)

Selected Minerals Reserve Estimates by Island Group as of 2010

Mining has always been associated with environmental degradation and was said to be
among the first major causes of environmental degradation in the Philippines. Mineral
resource exploitation began to grow in the last 50 years of the Spanish occupation, and
saw its boom in the form of large-scale mining during US colonial rule. Mining activities
brought with them the first instances of deforestation and a mage to mountains, sea
resources, rivers, and other natural resources in the country. Hence, although the
depletion of mineral resources is not much of an issue because of abundance, their
potential and alleged adverse impacts on biodiversity and environmental quality is
something that the government has to manage.

The first national policies directed at the mining industry focused on the extraction and
utilization of mineral resources, and were devoid of any reference to environmental
protection. The Philippine Bill of 1902, for example, which deals extensively with mining
claims and rights, says nothing on the environment, save for a few pro visions on auxiliary
timber and water rights. Realizing that the country's rich mineral reserves and resources
presented big opportunities for investments and economic growth, Republic Act No. (RA)
7942 or the Philippine Mining Act was issued in 1995 to spur the development of the
Philippine mining industry. An early challenge to the constitutionality of the Mining Act, on
the grounds that it created a means of granting foreign owner ship over natural minerals
and resources, was ultimately denied - after ten years with the Supreme Court - and
the Act in its entirety was declared valid and constitutional in the landmark ruling of the
Supreme Court in La Bugal-B'laan Tribal Association, Inc. v. Ramos. The resolution of
the constitutional challenge gave way to the rise of the mining industry in the Philippines,
resulting in a sharp increase in foreign investments after the finality of the judgment in
2005.

RA 7942 declared as a policy that all mineral resources in public and private lands within
the territory and exclusive economic zone of the Republic of the Philippines are owned
by the St at e. The law underscores the following key provisions on the use of mineral
resources:
• It shall be the responsibility of the State to promote their rational exploration,
development, utilization, and conservation through the combined efforts of the
government and the private sector in order to enhance national growth in a way
that effectively safeguards the environment and protect the rights of affected
communities.
• The exploration, development, utilization, and processing of mineral resources
shall be under the State's full control and supervision, and that it may directly
undertake such activities or it may enter into mineral agreements with contractors.

The details of the procedures on how these are implemented are further detailed in the
IRRs of RA 7942, which can be secured from the Mines and Geosciences Bureau (MGB)
Office or its website.

Through the years, Civil Society Organizations (CSOs) never ceased to raise issues
about the mining industry and corresponding governance mechanisms. In response,
Executive Order 79 was issued in 2012 as a key reform, among the features of which is
the increase in the government's share of the mining income through an equitable
revenue sharing scheme. Still, EO 79 seems to fail in pleasing various stakeholders.
Mining firms are being hit by a freeze on the approval of new permits and the prospect of
paying higher taxes . Environmentalists are disappointed that existing mining contracts
are honored . Local government units are hurting from the provision that says local laws
should be aligned with national laws on mining.

Despite its controversy and potentially adverse environmental impacts, mining has been
the subject of few international standards. Like energy, mining is regulated by
international law only to the extent that it is incidentally addressed by environment al
impact assessments and rules that address the protection of flora and fauna, the disposal
of waste, and air pollution.

Agricultural Lands

The Philippines has fertile lands. Rich, wide plains suitable for farming are found in
Cagayan Valley, Central Luzon, South Western Bicol, Panay, Negros, Davao, Cotabato,
Agusan and Bukidnon. Six major crops produced from agricultural lands include rice,
corn, sugarcane, coconut, abaca, and tobacco. Except for rice and corn, all these
products are exported, along with bananas, mangoes, and pineapples. Agricultural
products produced by the agriculture sector also include sugar, flowers, other fruits, root
crops such as potatoes, and seafood.

The agricultural crop sector plays an important role in the economic progress of a
nation. It provides food and vital raw materials for the growing economy. Materials
needed for various economic activities come from agricultural crops. The agricultural
crop sector likewise provides employment to a large number of Filipinos and supports
other sectors of the economy like manufacturing, trade, and service s by supplying the
needed raw materials .

Data over the past 20 years show a trend of deterioration in the performance of the
Philippine agricultural sector, which is highlighted when taken against the performance
of its neighboring countries in the region.

From 1946 to 1969, agriculture accounted for 20 to 30 percent of the Gross Domestic
Product (GDP) but has continued to dwindle , down to 11.06 percent of GDP in 2012 (
NSCB, 2013}. The country's earnings from agricultural exports are decreasing while
import expenditures are increasing. This may be partly due to the numerous typhoons
that struck the agricultural sector of the count ry. The country's agricultural resources
have yet to be optimally used for the realization of their full potential as a significant
contributor to economic growth..

The Philippines' cropland, freshwater, and coastal and marine ecosystems face
significant, and often severe, problems of environmental degradation, both from the
depletion of resource stocks and from pollution.
With the emerging signs of slowdown in agricultural productivity growth -or even reversal-
in the "best" lowland irrigate areas, the degradation of the agricultural land base is a
source of serious concern. In cereal crops, production growth has been associated with
increasingly intensive use of inorganic fertilizers and pesticides. Although "environment-
friendly" techniques such as integrated pest management (IPM) are becoming
increasingly popular, inorganic chemical control pests remains the norm , which, in the
long term, lead to the degradation of agricultural lands. Off -sit e, inorganic fertilizers
and agricultural chemicals further contribute to wat er pollution and loss of biological
function in lakes, streams, and estuaries.

Agricultural land degradation in the lowlands is a result of the intensive cultivation and
can be offset by proper crop management practices. A more serious problem arises from
land degradation in the uplands, which primarily results in soil erosion. The cost of erosion
is accounted for mostly by the depletion in the stock of available soil nutrients. While short
term effects of erosion are negligible, the long-term cumulative effect is an irreversible
decline in land quality.

Management Mechanisms for the Use of Agricultural Resources

The policy of the State to enable those who belong to the agriculture and fisheries sectors
to participate and share in the fruits of development and growth is stipulated in Republic
Act No. 8435 otherwise known as the Agriculture and Fisheries Modernization act of
1997. The Act provides for the utilization of the nation's resources in the most efficient
and sustainable way possible by establishing a more equitable access to assets, income,
basic and support services and infrastructure, and State support to optimize production
of rice and white corn, which is the staple food of Filipinos.

The Comprehensive Agrarian Reform Law (RA 6657) of 1988 provides for the application
of the principles of agrarian reform, or stewardship, whenever applicable in accordance
with law, in the disposition or utilization of other natural resources. These include lands
of the public domain, under lease or concession, suitable to agriculture, subject to prior
rights, homestead rights of small settlers, and the rights of indigenous communities to
their ancestral lands. It likewise stipulates that the State shall be guided by the principles
that land has a social function and land ownership has a social responsibility. Owners of
agricultural lands have the obligation to cultivate directly or through labor administration
the lands they own, and thereby make the land productive.

RA 8435 and RA 6657 underscore the need to properly manage the use of agricultural
resources for purposes of satisfying the needs of the present generation without
compromising its usefulness for future generations. The implementation of these laws are
further guided by lRRs issued by the Department of Agriculture (DA) and the Department
of Agrarian Reform (DAR). Copies of the aforementioned laws and corresponding lRRs
can be secured from the said offices or their websites.
Water-Based Natural Resources Use Management

For purposes of discussion in relation to the overall management of the use of natural
resources, this section covers the management of the use of water and the use of fishery
and aquatic resources.

Use of Water

The country's water resources, in general, are abundant, but access to freshwater in
some areas is a problem. The National Water Resources Board (NWRB) has identified
nine water-critical urbanized areas where water is consumed intensively. These include
Metro Manila, Metro Cebu, Davao, Baguio City, Angeles City, Bacolod City, lloilo City,
Cagayan de Oro City, and Zamboanga City.

Access to clean and adequate water is an acute seasonal problem in urban and coastal
areas in the Philippines. The National Capital Region (Metro Manila), Central Luzon,
Southern Tagalog, and the Central Visayas regions are the four urban critical regions in
terms of water quality and quantity.

This concern is further highlighted by the government's monitoring data indicating the
following:
• Just over a third of the country's river systems are classified as sources of public
water supply;
• More than half of groundwater reserves sampled are contaminated with coliform
and need treatment;
• Approximately a third of illnesses monitored for a five-year period were caused by
water-borne sources; and
• Many areas experience shortage of water supply during the dry season.

For its various activities, the country obtains its water supply from different sources. These
include: rainfall, surface water resources (i.e. rivers, lakes and reservoirs), and
groundwater resources.

As a tropical country, rainfall in the Philippines is abundant and collected as runoff by the
natural topography of principal river basins, natural lakes, and streams. Rainwater also
recharges our aquifers or groundwater. Changes in land use patterns that do not take into
consideration these natural processes, such as conversion of watersheds and rapid
urbanization, could potentially disrupt the supply of water.

Increasing discharges of untreated wastes and various pollutants also affect the
availability of water for human consumption. For example, since the rivers in Metro Manila
are heavily polluted, they are fit only for navigation and cannot be potential sources of
water supply. For this reason, the Metropolitan Waterworks and Sewerage System
(MWSS) has to get its supply of water for Metro Manila from the Angat River, which is
located in another river basin.
Mechanism for Managing the Use of Water

Presidential Decree 1067 governs the utilization of water resources under the following
principles:

• All waters belong to the State

• All waters cannot be subject to acquisitive prescription.
• The State may allow the use or development of waters by administration
concession.
• The utilization, exploitation, development, conservation and protection of water
resources shall be subject to the control and regulation of the government through
the National Water Resources Council (now the National Water Resources Board).

Waters, as used in this Code, refer to water under the ground, water above the ground,
water in the atmosphere, and the waters of the sea within the territorial jurisdiction of the
Philippines.

Presidential Decree No. 1067 — otherwise known as the Water Code of the Philippines
issued in December 31, 1976 — consolidated the laws governing the ownership,
appropriation, utilization, exploitation, development, conservation, and protector of
water resources. The following are the key features of the Code:

• It establishes the basic principles and framework relating to the appropriation,

control, and conservation of water resources to achieve the optimum development
and rational utilization of these resources;
• It defines the extent of the rights and obligation of water users and owners,
including the protection and regulation of such rights;
• It adopts a basic law governing the ownership, appropriation, utilization,
exploitation, development, conservation, and protection of water resources and
rights to land related thereto; and
• It identifies the administrative agencies that will enforce the Code, the lead being
the National Water Resources Council (now the National Water Resources Board)

The full text of RA 1067 and its IRRs can be secured from the NWRB Office or its website.
The NWRB is an agency attached to the DENR.

Fishery and Aquatic Resources

We hear stories of old folks having the luxury to choose the most palatable fish among
the wide variety of species thriving in various fishing grounds around the country.
Because of the abundance of our fishery resources before, old fisherfolks would say that
fish less than a foot will automatically be thrown back to the water.

With its territorial waters measuring as much as 1.67 million square kilometers and
located in the world's fishing center, the Philippines is definitely rich in marine resources.
Of the 2,400 fish species found in the country, 65 have good commercial value. Other
marine products include corals, pearls, crabs and seaweeds. Some of the country’s best
slat-water fishing areas are found in Singtangki Island, Estancia in Bohol, Malampaya in
Palawan, Lingayen, Gulf in Pangasinan, San Miguel Lake in Camarines Norte, Bantayan
Channel in Cebu, and the seas of Quezon and Sorsogon. On the other hand, among our
biggest fresh-water fishing areas are Laguna de Bay, Bombon Lake in Batangas, Bato
Lake in Camarines Sur, Naujan Lake in Mindoro, and Mainit lake in Agusan del Norte.
In 2010, the Philippines ranked Sth among the top fish producing countries in the world,
with its total production of 5.16 million metric tons of fish, crustaceans, mollusks, and
aquatic plants (including seaweeds). The Aquaculture production of fish, crustaceans and
mollusks in 2010, amounting to over 1.56 billion US Dollars ranked 10th in the world, and
is equivalent to approximately 1.24% share to the total global aquaculture production.
Similarly, the Philippines is the world's 3rd largest producer of aquatic plants (including
seaweeds) (FAO website).

Population in the Philippines has grown significantly and with this, the demand for basic
commodifies has increased. The demand for fish, both for food consumption and other
uses, has increased correspondingly.

To meet the demand, improved fishing technology was promoted which, in turn, brought
stress to the country's marine and coastal ecosystem, thereby affecting the fishery
resource. More and more fishing boats became motorized. Many commercial fishing
vessels became bigger and more powerful. Fishing gears, have evolved from simple tools
to highly sophisticated fishing gadgets that could sweep the bottom of the fishing grounds,
including the precious coral reefs. Illegal fishing has been pointed out as the major cause
of destruction of coral beds in many of the country's fishing grounds, contributing to
dwindling fishery resources over time.

There is evidence of destruction of mangrove areas and corals, and the pollution of
coastal waterways. The country's coral reefs, which provide habitats for fish and other
forms of marine life, are degraded, with nearly one-third classified in poor condition.
Destructive fishing methods, sediment deposition, mine tailings, and other forms of water
pollution and coastal developments contribute to the problem.

Incidences of fish kills have become rampant, and among the root causes being pointed
out are disposal of solid wastes and discharges of chemical wastes by various industries.
Among the most controversial cases was the Marcopper mine spill, where mine tailings
leaked into the Boac river and its tributaries, poisoning the river water. This incident led
to the killing of several tons of fish and other aquatic life. Another contributor to country's
fishery resource depletion is the siltation and sedimentation of the water ecosystem due
to deforestation, mining, and other human activities. Sift and sediments lead to the
shallowing of the riverbeds, killing phytoplankton and other aquatic organisms which are
responsible for photosynthesis activities. Photosynthesis, aside from being part of the
food chain process, supplies oxygen to fish as well as all other living organisms in the
aquatic ecosystem.
The most tangible and direct economic impact of the degradation of the marine
ecosystem is the depletion of fish stocks. The National Statistical Coordination Board, in
its effort to account environmental and natural resources in the country, revealed that the
Philippine marine fishery resource started to dwindle in 1986.

Mechanisms for Managing the Use of Fishery and Aquatic Resources

Republic Act No. 8550, otherwise known as the Philippine Fisheries Code of 1998,
provides for the development, management, and conservation of fisheries and aquatic
resources. It seeks to limit access to the fishery and aquatic resources of the Philippines
for the exclusive use and enjoyment of Filipino citizens. Consistent with the objective of
maintaining sound ecological balance and protecting and enhancing the quality of the
environment, the Act aims to ensure the rational and sustainable development,
management, and conservation of fishery and aquatic resources in Philippine waters
including the Exclusive Economic Zone (EEZ) and in the adjacent high seas.

The Act provides that the State shall ensure sustainable use of fishery and other aquatic
resources through the following:
• Conservation, protection and sustained management of the country's fishery and
aquatic resources;
• Poverty alleviation and the provision of supplementary livelihood among municipal
fisherfolk;
• Improvement of productivity of aquaculture within ecological limits
• Optional utilization of offshore and deep-sea resources; and
• Upgrading of post-harvest technology

The full text of RA 8550 and its lRRs can be secured from the Bureau of Fisheries and
Aquatic Resources (BFAR) Office or its website. The BFAR is under the Department of
Agriculture (DA).
Energy Resources Management

Natural resources are primary energy sources and take many forms, including fossil
energy-- like oil, coal and natural gas-- and renewable sources like wind, solar,
geothermal and hydropower. These primary sources are converted to electricity, a
secondary energy source, which flows through power lines and other transmission
infrastructure to your home and business. Fossil energy art likewise converted to fuel for
the transportation sector.

Energy may be considered an instrument for poverty reduction and social equity, as it
serves as a basic necessity to fuel economic growth and an enabling factor to channel
grassroots development with the delivery of the much-needed public services to
marginalized and disadvantaged sectors of our society. Hence, the availability of natural
resources that could be tapped as an energy source is very important for the country.

Energy Resources

The country's energy self-sufficiency level in 2013 declined to 56.7 percent from the
previous year's level of 60.2 percent. The reduction was attributed to a decreased share
of natural gas and an increased importation of oil to meet the increasing domestic
requirement for the transport sector, as well as coal and other finished petroleum products
for power generation.

The figure below illustrates the use of the country's different indigenous energy resources
vis-à-vis the use of imported fuel.
Use of Indigenous Energy Resources and Fuel Importation
The country has coal, petroleum (oil and gas) and natural gas reserves, of which the
potential for long-term domestic use should be further explored and assessed.

Coal
Worldwide, coal is a sought-after energy source. It has the largest reserve and is often
the cheapest of fuel options. The Philippines has a vast potential for coal resources, just
awaiting full exploration and development. Coal deposits are scattered across the
Philippines, but the largest deposits are located in Semirara Island, Antique. The
country’s largest coal producer is Semirara Mining Corporation, which is responsible for
about 96.9% of the local coal production. Coal mines are also located in Cebu,
Zamboanga Sibugay, Albay, Surigao, and Negros Provinces. Local demand for coal is
not limited to power generation. The cement industry utilizes around 20% of the
country's coal supply. Other industries and products that utilize coal are alcohol, sinter,
rubber boots, paper and chemical manufacturing, fertilizer production and smelting
process industries.
Oil and Gas
The potential petroleum resources of the Philippines are located in the 16 sedimentary
basins situated all over the country, summarized in table which indicates the area,
potential reserves and wells drilled as of 2012.
Basin Location Area Potential Well Drilled
(sq.km.) Reserve
s (Million
BBOE)
Ilocos Shelf 19,500 19 1
West Luzon 24,000 23 0
Mindoro- Cuyo 58,000 832 15
Northwest 416,000 2,318 11
Palawan 0
Recto Bank 71,000 440 7
Southwest 44,000 1,35 24
Palawan 5
East Palawan 92,000 443 4
Central Luzon 16,500 902 23
Sulu Sea 115,000 203 26
Cagayan 24,000 396.4 37
Bicol Shelf 32,500 44 6
 Southeast Luzon 66,000 301 52
West Masbate- 25,000 5 10
lToilo
Visayan 46,500 1,260 17
4
Agusan-Davao 33,000 196 3
Cotabato 14,000 158 14

Most of the areas are offshore. Some areas are partly onshore such as the Sulu Sea
and the West Luzon Basins.
Renewable Energy

The harnessing and utilization of renewable energy (RE) is a critical component of the
government’s strategy to provide enough energy for the country. Among the renewable
energy resources in the country are hydropower, geothermal power, biomass, solar,
and wind power.
The abundance of water resources makes hydropower an important part of the energy
sector. Hydropower is an important component in the energy supply mix of the country,
especially in Mindanao where it accounts for 57.7% of the total power source (2010).
Drought, however, such as what was experienced during the summer months of 2010,
severely affected the power supply, causing prolonged power outages.
Next to the United States, the Philippines is the second largest producer of geothermal
power in the world. Historically, among the country's indigenous resources, it is the largest
supplier of electricity!3”. Apart from providing a substantial amount of electricity,
geothermal resources, at the same time, help the country save huge amounts of foreign
exchange through the displacement of a large fraction of imported fuels.
Despite minimal use of wind energy in the Philippines, the potential is strong. As per the
National Renewable Energy Laboratory (NREL) Wind Atlas, the Philippines could
potentially generate 76,600 MW from available wind resources. The survey identified 47
provinces, with the potential to generate at least 1,000 MW each. The wind resources are
greatest in the north and north-east of the country. The largest wind farm in Southeast
Asia, at 25 MW, was inaugurated in June 2005 at Bangui Bay, Ilocos Norte, which is the
first wind farm to be fully operational in the Philippines.
The demand for solar and wind energy sources is foreseen to grow with the
implementation of the program to invigorate the market for solar water heaters and locally
fabricated solar dryers and wind pumps. The household and agriculture sectors are the
largest users of biomass resources, particularly in cooking and crop drying.
The depletion of energy resources is a complex phenomenon. It is not a process of simply
“running out”, but instead is a complex process of technological change and adaptation.
This adaptation can lead to development of new energy resources, which are often of
lower quality, more costly to process, or more difficult to access (e.g. Deepwater oil
resources, shale oil, or bitumen) in the case of the Philippines, which is highly dependent
on imported fuel. Because of the rising cost of imported fuel, exploration of indigenous
energy sources are currently being undertaken. Furthermore, indigenous non-renewable
energy resources have not tween thoroughly developed. Hence, there is not much issue
on the depletion of energy resources. The issue is more on the capability and resources
necessary in converting these primary energy sources into actual utilizable energy.
Management of the Use of Indigenous Energy Resources

The management of indigenous energy resources is governed by provisions in RA 7638,

otherwise known as the “Department of Energy Act of 1992,” which aims to ensure
continuous, adequate, and economic supply of energy with the goal of ultimately
achieving self-reliance in the country's energy requirements. Among the strategies to
ensure this as stipulated in the law are the following:
• Integrated and intensive exploration, production, management, and development
of the country's indigenous energy resources
• Judicious conservation, renewal and efficient utilization of energy to keep pace
with the country's growth and economic development and talking into
consideration the active participation of the private sector in the various areas of
energy resource development
• Rationalized, integrated, and coordinated implementation of various programs of
the government towards self-sufficiency and enhanced productivity in power and
energy without sacrificing ecological concerns
The Department of Energy (DOE), being the lead implementing agency for energy
resources management, issued IRRs which contain details on how these and other
provisions of the law is implemented. The DOE Office or their website have a compilation
of these and other relevant laws and IRRs.
Like mining projects, energy projects, in general, are required to conduct EIAs and secure
ECCs prior to implementation. This is to ensure that potential adverse impacts to the
environment are identified and corresponding measures are integrated into the project
design. The DOE also promotes the use of cleaner fuels and technologies to minimize
adverse impacts of energy projects on the environment.
Monitoring and Evaluation of the Use of Natural Resources

The monitoring and management of the use, stocks, and quality of natural resources are
undertaken by mandated government agencies. However, there is a need to improve
disclosure of the systems and standards used, as well as the results of the monitoring.
Highly technical survey methods such as those for mineral resources tend to limit the
public participation and understanding of the status and trends on the use of the natural
resources.
For mineral reserves, the publicly available government data (1973-1996) are said to
account for only about 10% of the country's total mineral wealth. Nevertheless, the Mines
and Geo-Sciences Bureau (MGB) is continuously updating and upgrading the country's
mineral estimates, especially the metallic sector. Arriving at this estimated value of
reserves is a very difficult accounting process. This kind of inventory is necessary and
logical in view of the government's plan to revitalize the mining industry.
As a concrete step towards promoting good governance in the extractive industries, the
Philippine Government expressed its commitment to participate in the Extractive
Industries Transparency Initiative (EITI) through Executive Order (EO) 79 and EO 147.
The EITI is a global standard of transparency that requires oil, gas, and mining companies
to publish what they pay to the government, and the government to publish what they
collect from these companies. The Philippines was admitted as a candidate country by
the EITI Board on May 22, 2013 at the EITI Global Conference in Sydney, Australia and
has recently published its First EITI Country Report.
Aside from providing monitoring information on the use of natural resources, the report is
also intended to simulate public debate and improve the citizens' understanding on how
their natural resources are and should be governed. Revenue generation is considered
under EITI as among the important parameters for monitoring the use of natural
resources. The disclosure of participating companies for the first EITI report revealed
discrepancies in the total payment to government according to government reports with
the report of the mining companies. The EITI Report recommended the development of
a centralized database to consolidate information from satellite offices like that of MGB
and NCIP. A centralized database will facilitate consolidation of data and the development
of accounting and reporting standards for use as monitoring parameter for the evaluation
of compliance with the measurable objectives in managing the use of natural resources
The estimation of stocks of natural resources could be guided by the environmental and
natural resource accounting system developed in the 1990s, the principles of which were
discussed in Module 2 of this book. The environmental accounts can be used to develop
sound and sustainable national policies. Economic policies, for example, can be
formulated with due consideration for the capacity of the environment to supply the
demand for raw materials. Environmental accounting would also provide indicators on
how much the government is earning by way of taxes for the use of our natural resources,