US-AEP COUNTRY ASSESSMENT:
Republic of the Philippines

ACRONYMS

  1. ASEAN: Association of Southeast Asian Nations
  2. BOI: Board of Investments
  3. BOT: Build-own-transfer
  4. BPS: Philippine Bureau of Product Standards
  5. DENR: Department of Environment
  6. DTI: Department of Trade and Industry
  7. EIS: Environmental impact statement
  8. ENRA: Environment and natural resource accounting
  9. ENRAP: Environment and Natural Resource Accounting Project
  10. EO: Executive Order
  11. GOP: Government of the Philippines
  12. ISO: International Organization for Standardization
  13. LGU: Local government unit
  14. LLDA: Laguna Lake Development Authority
  15. MWSS: Metropolitan Waterworks and Sewerage System
  16. NEDA: National Economic Development Authority
  17. PD: Presidential Decree
  18. RA: Republic Act

 

1. ECONOMIC PROFILE

Demographic Conditions and Trends

The Philippines' population reached 73.3 million in 1995. The population growth rate has decreased from an average annual rate of 3.0 percent in 1970 and 2.7 percent in 1980 to the current rate of 2.4 percent. More than half the population lives in urban areas, up from roughly one-third in 1993. With a basic literacy rate of 95 percent, the Philippines is ranked among countries in the world with high literacy achievement.1

Economic Conditions and Trends

After ten years of stagnation�real annual per capita income in 1993 was lower than in 1977�the Philippine economy started a significant upward trajectory in 1993. An increased rate of investment and continued capital inflows from abroad have begun to signal strengthened confidence in the private sector. Chronic power shortages, which had been prevalent prior to 1993, were overcome, at least in the near term.2 Real gross national product grew by 2.8 percent in 1993, 5.3 percent in 1994, and 5.7 percent in 1995, whereas the average inflation rate was 8.2 percent during this period. The industry and service sectors led this growth (although the electric and gas utility subsector was the major growth leader, the manufacturing subsector saw significant growth with gross domestic product increases of 6.9 percent in 1995 and 5.0 percent in 1994).3

Total exports in 1995 totaled $17.4 billion,* an increase of nearly 29 percent during 1994. The largest markets for Philippine export products were (as they have historically been) the United States (35.3 percent) and Japan (15.8 percent).4

2. ENVIRONMENTAL PROFILE

Industrial and Environmental Development Background

A substantial amount of private sector economic activity is accounted for by a relatively small number of firms. According to the 1988 census, although more than 9,100 manufacturing establishments existed in the Philippines, fewer than 10 percent of these employed more than 200 people. Yet, these firms accounted for 64 percent of total manufacturing employment and 77 percent of manufacturing value added. In the general business sector, the top fifty corporations accounted for around one-fifth of gross domestic product.5

The Philippines' industrial sector primarily comprises agro-based industries (sugar and coconut mills) and resource-extraction industries (mining and mineral processing, and cement plants). Light manufacturing (textile mills, garment factories, and consumer products, including electronics), chemical plants, and some heavy industries (steel mills, copper smelters, and phosphatic fertilizer plants) constitute the rest of the industrial sector. More than two-thirds of the country's industrial facilities are located in Metro Manila.6

Environmental Conditions

Air and water quality_monitoring data are extremely limited. Air quality data for the Metro Manila area indicate that suspended particulate matter and lead exceed World Health Organization guidelines by substantial margins (in fact, Metro Manila's air has been called "among the most polluted in the world"). The suspended particulate matter problem is attributed largely to stationary sources and transportation, whereas transportation is clearly the major source of lead emissions.7

Almost half of all water quality_monitoring stations show pollutants in excess of the worst official Philippine classification of water bodies. The major water quality problem identified by the World Bank is low dissolved oxygen levels due to untreated discharges of domestic sewage and industrial organic wastes.8 All four major river systems in Metro Manila are biologically dead.9

Most industrial effluent in the Philippines goes untreated or only partially treated and is discharged into inland and marine waterways. The largest polluting industries by volume of effluent are those for coconut and vegetable oil, sugar milling, distilleries, textiles, iron and steel, mining, and cement. The most toxic polluters are smelters, petroleum refineries, petrochemical industries, pesticide/wood preservative industries, gold amalgam processors, industrial chemical industries, and fertilizer plants.10

Groundwater extraction for industrial processes and public water supply is a growing concern in Metro Manila. Although groundwater quality has not been monitored on a regular and consistent basis, salinity profiles have shown evidence of saltwater intrusion.11

Environmental Trends

Although data on environmental quality are sorely lacking, GOP monitoring activity is gradually increasing: 185 air quality_monitoring stations are in place; water quality data were collected from more than 400 water quality_monitoring stations on 146 water bodies in 1995.12 A system is not in place, however, to evaluate these data systematically and use them for program planning and priority-setting purposes.

The need for an integrated approach to watershed management is increasingly recognized in the Philippines; however, although serious discussions are taking place within the GOP about adopting comprehensive watershed management programs and policies, currently no national-level body exists to plan, coordinate, and monitor such an approach.13

3. GOVERNMENT

Key Agencies for Industrial and Environmental Matters

The Department of Trade and Industry (DTI) is the leading GOP agency for development and implementation of industrial development policy. The department is organized around three major groups: industry and investment, international trade, and consumer welfare. The most important organizations within DTI with respect to environmental matters include the following:

� The Board of Investments (BOI) promotes and provides incentives to producers and traders of nontraditional export products and enterprises that render services paid in foreign currency. BOI plays a key role in organizing trade missions.

� The Philippines Bureau of Product Standards (BPS) oversees certification for ISO (International Organization for Standardization) 9000 and 14000. The majority of ISO 9000 certifications (about 190 companies to date) have been conducted by private foreign certification companies, although BPS also performs certification. Although BPS is likely to have lead responsibility for ISO 14000, the Department of Environment and Natural Resources and Industrial Technology and Development Institute (both described below) will play major roles as well. DENR, although it has expressed an interest in working with BPS to oversee certification for ISO 14000, has too few resources to allow it direct involvement and will probably only participate in the multisectoral committee.14

The Department of Environment and Natural Resources (DENR) is the agency primarily responsible for protecting and enhancing environmental quality. Industrial environmental matters are within the purview of the Pollution Adjudication Board and the Environmental Management Bureau (see below). DENR is represented in the fourteen administrative regions of the Philippines by its regional offices. At the provincial and community levels are the Provincial Environment and Natural Resources Office and the Community Environment and Natural Resources Office, which are the implementation arms of DENR in provinces, cities, and municipalities.15

� The Environmental Management Bureau deals with the "brown side" of DENR; the bureau formulates environmental quality and discharge standards as well as standards for management of solid and hazardous wastes and toxic and hazardous substances. The bureau also provides technical assistance to the secretary and regional officers in implementing environmental and pollution laws.

� The Pollution Adjudication Board sets fines for noncompliance with regulations regarding air and water pollution and issues notices of plant closures due to noncompliance with pollution control measures and regulations. The board is authorized to (a) issue cease-and-desist orders to compel compliance with environmental regulations, (b) require the discontinuance of pollution, and (c) serve as arbitrator for determining damages and losses resulting from pollution.

The Department of Health works to protect and monitor public health as it is affected by air and water pollution and quality and oversees the management of hospital wastes.

The Department of Public Works and Highways is responsible for traffic management, emissions control, maintenance of drainage systems for water and wastewater, and construction of sanitary landfills in Metro Manila.

The National Economic Development Authority formulates and supervises implementation of economic development plans at both the national and sectoral levels. These plans already integrate the concept of sustainable development. Within the National Economic Development Authority, the Philippines Council for Sustainable Development, chaired by the authority's chairman, coordinates development policies regarding sustainable development. The council reviews all major investment projects and provides input in decisions primarily through the environmental impact statement (EIS) process. The council is also formulating the Philippines Agenda 21 for sustainable development. The Philippines Council for Sustainable Development is a partnership between the government and the public but does not include businesses as direct members.16

The Department of Science and Technology is the premier science and technology body in the country and is charged with the twin mandates of providing central direction, leadership, and coordination for all scientific and technological activities as well as formulating policies, programs, and projects to support national development.

� The Industrial Technology and Development Institute is largely responsible for the technology development and technology transfer activities of the Department of Science and Technology. The institute is the leading government agency for testing and metrology and manages the Philippine Laboratory Accreditation System. The institute also manages most of the GOP's industry research institutes, except for private sector research institutes in the Philippines for textiles, metals, and forest products. The Pollution Control Division maintains information on environmental technologies (primarily end-of-pipe) and performs industry waste audits on request.17

The Department of Energy, created in 1992, is required to submit a long-term national energy program to Congress every year, outlining the energy requirements of the Philippines regarding achievable physical infrastructure and energy self-sufficiency targets.18

Other Key Institutions for Industrial and Environmental Matters

The Laguna Lake Development Authority (LLDA) is a public corporation created in 1983 to manage and control the resources of the Laguna de Bay, a 90,000-hectare lake near Metro Manila. LLDA has permitting and enforcement authority, issues and monitors compliance with standards for industrial and municipal dischargers, and issues cessation orders. LLDA has nearly 1,200 industrial establishments under its jurisdiction, of which 34 percent use water for processes.19

The Metropolitan Waterworks and Sewerage System (MWSS) is a public corporation with jurisdiction over all waterworks and sewerage systems in Metro Manila and surrounding municipalities. To privatize the system, the International Finance Corporation has agreed to supervise the Philippines' sale of MWSS and will design an operating and investment plan as well as oversee competitive bidding.20

The Local Water Utilities Administration is responsible for providing water supply and financial and technical assistance to local water districts outside the jurisdiction of MWSS.

Local Government Units (LGUs) are empowered to implement measures that will sustain the ecological balance within their jurisdictions, enforce laws and regulations on the environment, and enact ordinances to protect the environment and impose penalties for infractions. Under the Pollution Control Law, LGUs may impose higher standards for pollution control and mitigation than those provided by DENR, subject to DENR's approval.

4. POLICIES AND LAWS

The GOP has pursued a policy of deregulation, import liberalization, and tariff reduction, focused on lifting quantitative import restrictions and replacing them with tariffs. Environmental quality, to the extent that it is considered in industrial and macroeconomic policies, is generally perceived as a cost and externality.21 Environmental policy is based primarily on a traditional "command and control" approach, but industrial compliance with environmental regulations is extremely weak due to the GOP's historically weak enforcement regime. Industrial policy does not for the most part incorporate environmental concerns; the government programs intended to support the Philippines' growing industrial base have only recently begun to provide technical assistance on environmental matters. Recently, however, the central government has shown encouraging signs that it may be willing to take some bold steps to reshape its existing policies and programs.

Environmental Policies and Laws

An extensive body of legislation and regulations related to environmental and natural resource management exists in the Philippines. The regulatory framework created by those laws and regulations is complex, because the laws and regulations remain in place decades after promulgation, even though the circumstances have changed.22

The country's current environmental regulatory framework has two aspects: (a) EISs and environmental compliance certificates and (b) standards and regulations implemented through a permit system. Previously the GOP provided a tax incentive for purchase and installation of pollution controls; however, because this incentive expired in 1984 and has never been renewed, market-based instruments are not part of the government's environmental policy portfolio.

The government's current approach to industrial environmental management has serious deficiencies that are recognized by the World Bank and DENR itself. Although the command and control approach is greatly relied on, industrial compliance with applicable standards is extremely low and monitoring is not widespread. Even for many firms that have installed pollution controls, proper operation and maintenance has not been implemented. Furthermore, the EIS process is complex and burdensome, including a two-step approval process (i.e., a requirement for both approval to construct and approval to operate).23

Unlike DENR, which is hampered by legal limitations and burdensome administrative requirements, LLDA has more flexibility and autonomy. LLDA is currently establishing a new framework of water discharge permits, effluent charges, and monitoring requirements, which it plans to implement in the next year.24

The GOP developed the Philippine Strategy for Sustainable Development in 1989, in which it included eleven strategies and priority projects. The strategy, which is the major element of the Philippine National Environmental Action Plan,25 ratified in 1990, features the Residual Management System, which attempts to take a more comprehensive approach to pollution mitigation within a sustainable development framework.

The Pasig River Rehabilitation Program is a fifteen-year multisectoral high priority program led by the GOP to bring ecological health back to the biologically dead Pasig River, which stretches from Manila Bay through the heart of Manila to Laguna Lake. An important strategy for the river's rehabilitation is to control pollutants from the more than 2,000 industries that discharge into it. To that end, DENR and LLDA are developing a data base that will identify and characterize these industries.26

The Clean Air 2000 Program was created by the GOP to try to mitigate growing vehicular air pollution in Metro Manila. The program includes a public awareness campaign promoting unleaded gasoline and apprehension of "smoke belchers."

Industrial Policies and Laws

The industrial development environment in the Philippines has largely been shaped by the GOP's drive for economic liberalization, which has been greatly accelerated in recent years. The Ramos Administration has made attracting greater foreign investment a top priority. The most important action in this area has been relaxing restrictions on foreign investment and allowing full foreign equity in all but a few sectors that remain on BOI's "negative list."

DTI, through BOI, administers a system of incentives to encourage industrial investment; however, these incentives do not consider environmental concerns (and, as pointed out above, the one incentive previously in place to encourage imports of pollution controls expired long ago and was never renewed).

Responsibility for ISO 14000 rests with BPS. Although its program is still in its infancy and the Philippine private sector has not shown great interest in ISO 14000, the bureau recognizes the importance of ISO 14000 and plans to promote it aggressively.27

The Industrial Technology and Development Institute provides technical assistance to Philippine industry in conducting waste audits and providing information on environmental technologies. Although the technology effort is currently directed almost solely toward end-of-pipe solutions, the institute has a great interest in moving its activity up the production stream.28

In summary, the central government's industrial development and research agencies are not currently engaged in clean technology efforts but are beginning to recognize the importance of the environment as a factor of competitiveness in the global marketplace. A number of recent promising developments in this regard are discussed below.

Public Information Policies and Laws

Industrial reporting to DENR on air, water, and waste discharges is poor. Further, the limited information that is available is not in a form that is readily accessible to or usable by the public and nongovernmental organizations (NGOs) for meaningfully addressing industrial environmental problems.

Some limited efforts have been made to use reputational incentives to promote improved industrial environmental performance. DENR, through its regional offices, has worked cooperatively with NGOs in developing a rudimentary ranking of companies with poor performance (called the "Poison Award"). DENR has listed companies in the past as members of the "Dirty Dozen"; however, much of DENR's public outreach activities with respect to "brown" issues are being devolved to LGUs.

One encouraging sign in this regard is DENR's recent announcement of its intention to initiate a business performance rating system (see below). This system�evidence of the department's recognition of the importance of public opinion as a policy tool for fostering improved industrial environmental management�may signal the department's willingness to address its current serious informational deficiencies.

Legal and Policy Developments of Particular Relevance to Industrial and Urban Environmental Management

Several emerging developments in industrial and environmental policy are of particular interest to US-AEP:

� The Secretary of DENR is championing the idea of integrating environmental concerns into industrial policy. This includes a greater sharing of responsibilities within the government (e.g., with DTI and LGUs) and outside government (e.g., with industry associations). Some of the major initiatives under consideration include29:

� Moving the EIS process toward a programmatic orientation instead of the current facility-by-facility approach (e.g., streamlining EISs to a programmatic or sectoral level, such as EISs for ecological zones or industrial estates; updating and strengthening monitoring guidelines; and including pollution management audits and consideration of technology choice as an integral component of EISs).30

� Developing a balanced mix of environmental policies, including market-based instruments (see below) and streamlining components of the current command and control system (e.g., reduced penalties for prompt correction of violations).

� Giving greater priority to pollution prevention (e.g., providing technical assistance to industry to reduce pollution loads while increasing efficiency and competitiveness).

� Using the power of public opinion by making more information publicly available (e.g., business performance ratings, as discussed above; incentives for industry disclosure; and publishing of trends in ambient environmental quality).

� Use of third-party certification as an alternative regulatory track for some industrial firms (e.g., for those that are ISO 14000 certified).

� The World Bank is assisting DENR in implementing two of the initiatives described above. Beginning in October 1996, a bank consultant will work within DENR to assist the department in planning and implementing a business performance rating system, along the lines of Indonesia's PROPER system, to rank companies according to their environmental performance and to announce the rating results publicly. The consultant will also work with DENR in planning and implementing an effluent charge scheme for industries discharging to Laguna Lake, to be administered by LLDA.31

� DTI has recently reconstituted its environmental committee and elevated it to report directly to the undersecretary and chairman of BOI. The department is reconsidering its policy regarding importation of used industrial equipment, such as possibly initiating a policy in which BOI would require further justification for adopting older, inefficient equipment and adopting economic incentives for investments in clean technologies.32

� Although the GOP has made no concerted effort to encourage companies to participate in ISO 9000 and 14000, BPS, which has the lead role in ISO 9000 accreditation and certification, conducts monthly ISO Awareness Seminars for small- and medium-sized firms. BPS is interested in expanding the scope of these seminars to include ISO 14000.33

� Industrial estates are a particularly important component of the GOP's industrial development strategy.

� A potentially important near-term development is the release of the Philippine program for implementing its sustainable development policy, Philippines Agenda 21.34 One of its likely recommendations is promotion of shared and negotiated environmental standards.

 

5. URBAN ENVIRONMENT AND INFRASTRUCTURE35

Increasing urbanization in the Philippines has been characterized by the dominance of Metro Manila; however, although the lion's share of existing industry is located in Metro Manila, an increasing trend is to invest more heavily in development zones and industrial estates outside of the National Capital Region. This is evidenced by the dramatic industrialization of the CALABARZON (an area consisting of five provinces south of Manila). All industrial estates are expanding quickly; although most operating estates are in Metro Manila, the government's development policies are directed to siting the majority of new industrial estates in other provinces.36

The GOP has a keen appreciation for the need for private financing for urban infrastructure and has been active in promoting and supporting infrastructure projects under private sector arrangements. The Philippines' Build-Own-Transfer (BOT) Law was amended in 1995 to expand the areas allowed for BOT enterprises and to provide for unsolicited proposals under certain circumstances. Furthermore, the National Water Crisis Act of 1995 (Republic Act 8041) was passed to address problems of supply disruption, finance, privatization, conservation of watersheds, and waste and pilferage of water.37

The following summarizes the status of development of Philippine environmental infrastructure:

Water Supply

Only 62 percent of households in Metro Manila have access to potable water. Sixty-seven to 70 percent of the rest of the population has access to potable water. Lack of sewerage service for 90 percent of Metro Manila is a major contributor to the region's water pollution problem.38 Cebu, the Philippines' second largest city, has the worst water supply problem.

Wastewater

Less than 10 percent of the population of the six cities and thirty-one municipalities in Metro Manila have sewerage connections, whereas not a single municipality discharging to Laguna Lake has a sewage system.39 The International Finance Corporation will design and implement an investment plan and oversee competitive bidding for privatization of MWSS, which provides services to 10 million residents in five of Metro Manila's cities and towns. MWSS is conducting the Metro Manila Sewage and Sanitation Metro Plan, which consists of five construction phases extending to 2007.

Solid Waste

Most solid waste generated in the Philippines is openly dumped, some is disposed of in landfills, and only a small amount is incinerated because of the high cost. Metro Manila currently generates 11,135 tons of solid waste per day (industrial, domestic, commercial, and other sources). Of an estimated 5,500 tons of domestic solid waste per day, about 15 percent or 817 tons end up on river banks and in bays, vacant lots, storm drains, and streets. Of an estimated 4.6 tons per day of hospital waste, 92 percent is being disposed of together with residential waste. Four open dump sites exist in Metro Manila; two sanitary landfills are used outside the metropolis. The two landfills reportedly may not operate longer than six more months due to lack of budget.

To address this critical problem, Secretary Ramos of DENR has set a goal of developing one solid waste management project in each region of the Philippines. BOT projects have been announced in Metro Manila; additional development opportunities exist in Cebu, Iligan, Cagayan De Oro, and General Santos.

Hazardous Waste

The lack of any central hazardous waste treatment, storage, and disposal facilities has been a critical obstacle to implementing DENR's hazardous waste regulations under Republic Act 6969. DENR is interested in pursuing a BOT-financed facility in the Metro Manila area; several private consulting firms are engaged in hazardous waste guideline and feasibility studies.

6. PRIVATE SECTOR AND ACADEMIA

Industry

At present, no visible industrywide thrust exists for clean technology and environmental management generally or for ISO 14000 specifically. On the positive side, it is important to note that the Philippines has more environmental professionals in active practice than a number of its neighbors, including Singapore. One way of reaching this base of professionals is by tapping into the numerous industry associations in the Philippines, for example:

The Philippine Quality Production Movement, a parastatal organization that includes major corporations as members, has been an active partner with BPS in publicizing ISO 9000 and is expected to continue this relationship for ISO 14000.40

The Pollution Control Association of the Philippines, consisting of pollution control officers of Philippine companies, currently has more than 3,000 members.

The Philippines Environmental Industry Association brings together companies and individual environmental professionals practicing in the Philippines. The association is linked to similar environmental industry associations in other countries, such as the international Environmental Industry Association.

The Philippines Chamber of Commerce and Industries has more than 18,000 members.

In terms of technology transfer, the Philippines has a good model of industrial extension. MERALCO, the Philippines electric power distribution company, is aggressively pursuing a customer-oriented energy and environmental outreach program to its commercial and industrial customers. Energy and environmental technology centers are an important part of MERALCO's strategy.41

Academic and Research Institutions

The Asian Institute of Management has strong ties to and recognition of the academic community. The institute is initiating a program on industrial environmental management. Given its stature, this program has the potential for major impact throughout the industrial sector.

Universities have not generally focused on industrial environmental concerns, although university research on water pollution has provided much of the water quality data that currently exists in the Philippines. University-level environmental curricula in the Philippines are new but growing (e.g., UP Los Banos has recently established a simulation modeling program). Most environmental science programs are at the B.S. degree level.42

Financial Institutions

The banking community has given a strong vote of confidence in the Philippine infrastructure privatization effort. In addition, a small movement is growing within the financial community for

greater concern regarding the environmental implications of project financing, as illustrated by the following examples:

The Land Bank of the Philippines has established the first environmental unit in the entire Philippine banking industry. A major incentive for establishing the unit was the Land Bank's participation in the World Bank's Second Rural Finance Project.43

The Bangko Sentral Ng Pilipinas (The Central Bank), established in 1994 as a key effort by the GOP to reform central banking, can initiate fiscal policies on interest rates and favorable terms and conditions for financing of capital-intensive pollution control projects.

The Development Bank of the Philippines has established an environmental unit and has recently launched a policy-based lending program to support investments in projects that reduce industrial pollution and improve industrial efficiency. This program, the Environmental Infrastructure Support Credit Program, is open to manufacturing and service industries and provides financing for pollution controls and environmental management systems. The bank plans to monitor the progress of this program with both quantitative measures (reduction in pollution and solid waste and improved process efficiency) and qualitative measures (enhanced pollution abatement and industrial efficiency and compliance).44

7. ENVIRONMENTAL AWARENESS AND PUBLIC INVOLVEMENT

General Public Awareness of Environmental Issues

The U.S. Information Agency reported in 1992 that:

. . . most Filipinos are worried about the economy; few see the environment as their countries' most important problem; however, nearly all are personally concerned about the environment, and large majorities see negative health effects from environmental pollution, both now and in the future. A large majority believe the Philippines has serious environmental problems, and they most often identify `loss of natural resources' as their country's most important environmental issue. . . . The public is well aware of such local problems as inadequate sewage, sanitation, and garbage disposal; water pollution; and overcrowding.

Furthermore, many Filipinos see a proactive role for both government and individual citizens in protecting the environment.45

LLDA has recently launched a river rehabilitation program for the rivers that feed Laguna Lake. The program includes a major public outreach/involvement effort designed to mobilize citizens and communities, including sampling water quality and participating in the development of watershed management plans and river cleanup programs.46

Public and Nongovernmental Organization Participation in Environmental Matters

Awareness of and support for the growth of NGOs is increasing, because they are viewed as vehicles for effective and increased information flow in supporting pollution abatement, resource conservation, and environmental protection. In recent years, a number of NGO leaders have obtained key government positions; NGOs have experienced an elevation in stature by government agencies. The majority of NGOs are "green" oriented, but a number of organizations have historically been active in urban environmental issues.47

The most common vehicle for NGO participation in "brown" issues is through the EIS process. Furthermore, a decision of the Philippine Supreme Court in 1993 affirmed the right of citizens to institute a legal action against the government for violating citizens' rights to a balanced and healthful environment.

Some of the key NGOs in the area of industrial and urban environmental management are described below. This list is not intended to be all-inclusive but only to illustrate the range of NGOs, including business-oriented groups, professional associations, and advocacy organizations:

Philippine Businesses for the Environment has opened a channel for public/private partnerships for improved industrial environmental management. Formed initially in response to the United Nations Conference on Environment and Development's Agenda 21, the organization's major mission is to "mainstream" environmental concerns into business management practices. Philippine Businesses for the Environment has the lead role in coordinating the Philippine Business Agenda 21, the Philippine business community's strategy for implementing Agenda 21.

The Water Environmental Association of the Philippines, launched in September 1995 with the assistance of US-AEP and the Water Environment Federation, provides a forum for environmental professionals to network with their counterparts in the Philippines and abroad. Currently, the majority of members are from the business community, but the organization hopes to expand its membership to include more government, NGO, and trade groups.

The Aboitiz Foundation, headquartered in Metropolitan Cebu, has a program called the Eco-System Program, which strives to organize communities to become active in campaigning for better provision of potable water, the proper disposal of water, and better sanitation services.

Tanggol Kalikisan is the environmental defense law office of the Haribon Foundation, founded in 1987. The office intends to popularize recourse to environmental law for increased environmental protection.

The Center for Investigative Journalism exposed Shemberg, the Philippines' largest seaweed firm, for attempting to farm seaweed in the country's only national marine park.

8. U.S. GOVERNMENT ACTIVITIES

The U.S. Agency for International Development (USAID), with the presence of its mission and US-AEP field headquarters in Manila, has extraordinary contact with industrial and environmental institutions in the Philippines. Recent activities relevant to industrial environmental management and environmental infrastructure include the following:

� Industrial Environmental Management Project. This project, which ends in spring 1997, has three components: (a) pollution prevention, (b) capacity building, and (c) policy studies and public/private dialogue. The project has largely focused on ten industry subsectors in which 130 pollution management appraisals (audits) have been conducted. The project is currently conducting a study to assist DENR in formulating a management plan for toxic and hazardous waste substances and in drafting implementation rules and regulations for Republic Act 6969, including compilation of a list of chemicals to be regulated as hazardous. The USAID mission is currently developing plans for future industrial environmental management support to the Philippines.

� BOT II. This project will focus exclusively on municipal environmental infrastructure. BOT II will work with eight to ten municipalities.48

� Studies on Water and Wastewater Infrastructure Financing. During the last three years, USAID has provided $10 million in technical assistance to finance studies on water and wastewater infrastructure financing in the Philippines and policy options for facilitating private sector participation in the solid waste management sector, among others.

� The Environment and Natural Resources Accounting Project is a major Philippine effort to modify the conventional national economic accounting system to account better for interactions between the economy and the natural environment. The project is about to enter phase IV.49

US-AEP Activities in the Philippines

US-AEP has supported 53 environmental exchanges, processed 267 trade leads, and sponsored 40 technology grants through the National Association of State Development Agencies, in addition to an environmental technology initiative through the Council of State Governments. With the U.S. Environmental Protection Agency, US-AEP has supported environmental action teams and short-term technical assistance.

9. OTHER BILATERAL AND MULTILATERAL ORGANIZATION ACTIVITIES

European Union

The European Union gave the GOP a grant to conduct a two-year Metro Manila Toxic and Hazardous Waste Study to establish the policy framework and identify appropriate sites and treatment and disposal options for toxic and hazardous waste.

Japan

Water Control Treatment Facility. Sponsored by the Japanese Grant Facility, the project cost is 7.4 million yen. The project's areas of concern are water control treatment facilities and an information education council.

Japan Green Aid Plan, supported by Japan's Ministry of Industry, Trade, and Investment, is intended to promote industrial energy efficiency. The cost is $20 million.

Germany

Industrial Pollution Control, Cebu. At a cost of $5.1 million, the project is addressing toxic and hazardous waste (Republic Act 6969) implementation by DENR and LGUs.

Other Countries

The Canadian International Development Agency is providing institution-strengthening and capacity-building assistance to DENR. Denmark has provided funding for the Pasig River Rehabilitation Project.

World Bank

The Metropolitan Environmental Improvement Project has provided a wide range of policy and institutional capacity-building support to DENR and LLDA for the Metro Manila area.

Brown Fund. The objective of the fund is to support community-based approaches to waste management. A request for proposals has been issued.

Institution strengthening of DENR. The World Bank and DENR have jointly designed a strategy to address industrial pollution, focusing on (a) strengthening monitoring and enforcement, possibly through establishment of a self-financed Environmental Management Corporation, (b) creating financial incentives by introducing a pollution charge scheme, (c) offering soft loans for pollution abatement investments, and (d) facilitating technology transfer activities such as training and plant-level advisory services.50

Water Resources Development Project. Implemented by the National Irrigation Administration (in Quezon City, the Philippines), DENR, Department of Agriculture, and the National Water Resources Board, this project intends to encourage formulation by the GOP of a national water resource management strategy, including adoption of a watershed management approach.51

Manila Second Sewerage Project. This project intends to help the GOP improve the quality of sanitation services and to encourage MWSS to expand its septage management program radically.52

Industrial Efficiency and Pollution Control (World Bank and U.S. Trade and Development Agency). The project is intended to reduce pollution, minimize waste, and promote clean technology.

Asian Development Bank53

Evaluation of Environmental Standards for Selected Industry Subsectors. The project will assist the Environmental Management Bureau of DENR in developing environmental standards and regulations that can be more realistically enforced, identify incentives for introducing clean technologies, and evaluate the involvement of the private sector and NGOs in laboratory analysis and monitoring of violators.

MWSS support. In recent years, the Asian Development Bank has provided technical assistance to MWSS to strengthen its operations, reduce nonrevenue water, and plan for privatization. A $75 million loan is planned for 1997 to improve the MWSS water supply system. Another loan that is focused on the northeastern section of Manila is scheduled for 1999.

Global Environment Facility

Begun in 1994, the project is concerned with curbing the use of ozone-depleting substances in industry and promoting clean energy and clean industry.

10. OPPORTUNITIES TO SUPPORT A CLEAN REVOLUTION

Policy Framework

Development policy. The newly elevated Environment Committee within DTI may offer a major venue for top-level department management to promote policies and programs that integrate industrial goals and environmental concerns. DENR's expressed intent to devolve environmental functions to DTI makes this committee even more important.

Pollution intensity. Under the USAID mission's Industrial Environmental Management Program (IEMP), pollution load factors (water effluent per unit of production) are being developed for seven industry subsectors, based on facility audits. This work could potentially be a starting point for promotion of a policy of using pollution intensity as a distinct criterion in the Philippines industrial development policy.

Business performance rating. DENR's plans to launch a business performance rating system could provide a potent force for improved industrial environmental performance. The department faces a plethora of obstacles in implementing such a program, not the least of which is the inexperience of DENR in working with the industrial sector�75 to 80 percent of the department's staff have a "green" or "blue" background. This fact, combined with critical gaps in monitoring data and reporting systems, could undermine this promising initiative. Although the World Bank is currently assisting DENR in addressing these obstacles, additional support may be required, such as supporting exchanges between the Philippines and other countries that have implemented rating systems (e.g., Indonesia and Taiwan).

Effluent charges. LLDA's plans to implement an effluent charge scheme later this year is fraught with implementation problems, particularly given the fact that existing monitoring and reporting systems require substantial improvement. If LLDA can overcome these problems, taking advantage of donor assistance such as that currently being provided by the World Bank, this scheme could provide a laboratory to promote the concept throughout the Philippines.

Environmental impact assessment. DENR's current review of the EIS and permit renewal process offers a major opportunity for government policy to positively affect the Philippine's industrial technology base and siting selection, especially because the department is considering integrating pollution management audit requirements into the EIS, upgrading monitoring guidelines, and (possibly) including technology choice as a discrete project evaluation factor.

National environmental accounting. The environmental accounting system implemented by the National Economic Development Authority could provide a powerful model for other countries in the region as a demonstrated tool for integrating environmental costs and benefits into industrial and economic development policies. Donors should explore with the Government of the Philippines possible opportunities for sharing the Philippine experience throughout the region.

Strengthening scientific base of NGOs. NGOs in the Philippines need a stronger scientific/technical capability to address "brown" environmental issues (e.g., clean technology and pollution prevention, monitoring, and evaluating the linkages between environmental pollutants and health and environmental impacts). This need will become even more critical as DENR implements new policies designed to use the power of public opinion to affect industrial environmental performance positively, such the business performance rating system discussed above.

Public reporting. Although few legal barriers appear to exist to public access to information on industrial discharges and environmental quality, major practical barriers do exist. First of all, information is seriously limited; DENR does not publish reports on a routine basis for public use. Donor assistance to DENR in implementing a focused public disclosure effort (e.g., publishing reports on industrial discharge data under the Pasig River Rehabilitation Project) could yield major results.

Comparative risk assessment. The Philippines provides fertile ground for a comparative risk assessment initiative intended to help government officials as well as NGOs and the private sector to sort out environmental priorities. A program exposing them to basic risk assessment concepts, for example, through the University of the Philippines or through the Department of Science and Technology could be an important start toward a systematic approach to priority setting.

Enhancing the Philippines environmental professions. The Water Environment Association of the Philippines, established last September with the assistance of the US-AEP Professional Association Development initiative, is off to a good start. This organization of environmental professionals could provide an important venue for sharing information among environmental professionals in the public, private, academic, and NGO sectors.

Industrial Environmental Management

ISO 14000. Collaboration with BPS in implementing ISO 14000 should be vigorously pursued. BPS is extremely interested in becoming proactive on ISO 14000, although little has been done to date. Donor assistance to BPS and other agencies involved in ISO (e.g., DENR and ITRI) could be leveraged to promote ISO 14000.

Industry-led environmental initiative. Philippines Business Agenda 21 indicates industry's commitment to environmental management. This industry-led initiative could provide a catalyst for mobilizing public/private partnerships to directed to improved industrial environmental performance.

Technology transfer. The Industrial Technology and Development Institute is aggressively pursuing programs to make the institute more directly relevant to the private sector. The institute recognizes the need to become more proactive in assisting industry with technology transfer activities concerning clean technologies and has a need for better access to clean technology information (much of its environmental technology orientation is currently to end-of-pipe options).

In addition, DTI's expressed interest in promoting environmental extension programs should be pursued. Furthermore, extension programs that are already in place, such as MERALCO's outreach program, might benefit from the experience of environmental technology extension in the United States.54

Environmental considerations in the financial sector. The Philippine banking industry has clearly begun to appreciate the importance of environmental risks, as evidenced by the establishment of environmental programs within Landbank and the Development Bank of the Philippines. Support to other financial institutions in implementing environmental due diligence programs could provide major environmental returns.

Environmental Infrastructure

Privatization. The USAID's BOT Center has been effective in the Philippines. BOT Law (Republic Act 7718) allows the private sector to build, own, and operate necessary public infrastructure and addresses issues to allow for a market-based rate of return. The BOT Center has been primarily focused on power projects but has designated about 10 percent of its pipeline projects to the water and waste sectors. In a remarkably short period of time, BOT financing arrangements have become the norm in the Philippines. According to officials at MWSS, thirty small cities are active in privatization. Eighteen BOT projects, costing a total of more than $2.5 billion, are either complete or under construction.

Investment in environmental infrastructure. The overall potential infrastructure market is estimated at $4 billion, with current activities totaling about $400 million. USAID has largely focused on Mindanao in the water and solid waste sectors and is now assisting the GOP in finding investors. USAID has made more than $1 million available primarily for feasibility studies and contract management. Projects tend to be too small, so USAID is seeking ways to package them to help bring in investors. In addition, according to local industry contacts, Mindanao appears to be an investment opportunity because of the good rainfall and climate, close proximity to shipping and the new airport at General Santos. The best opportunities, in order, are at General Santos, Davao, Cacayan De Oro, Iligan, and Zamboanga (site of tuna industry).

In addition, the Philippine National Oil Company (PNOC) is a government-owned energy company that has established a separate subsidiary (PNOC Petrochemical Development Corporation) to develop a petrochemical industrial estate in Bataan. The estate may ultimately reach $1-2 billion in investments. Petrochemical facilities in the industrial estate will require water supply and treatment and wastewater treatment.

Training. Training is needed to improve utility operations and reduce nonrevenue water use.

Philippines water utility managers need training on trends in municipal finance and the range of possible financial instruments for private operations.

REFERENCES

Allen, Jamie. 1992. Asia/Pacific and the Environment: Investing in the Future. Hong Kong: Business International Asia/Pacific.

Asian Development Bank (ADB). 1996. Welcome to the Asian Development Bank WWW Server. Home page. (Internet: http://www.asiandevbank.org). Manila.

Association of Southeast Asian Nations (ASEAN). 1992. Asian Environmental Markets: Opportunities for U.S. Equipment and Service Companies. US-ASEAN Council for Business and Technology. Washington, D.C.

���. 1993. ASEAN Wastewater Treatment Market Assessment: Opportunities for U.S. Businesses. ASEAN Environmental Improvement Project. Manila (March).

���. 1994a. A Preliminary Review of Key Environmental Institutions and Personnel of the ASEAN Member Countries. ASEAN Environmental Improvement Project. Manila (December).

���. 1994b. A Review of Environmental Policy, Regulations, Programs, and Institutions of the ASEAN Member Countries. ASEAN Environmental Improvement Project. Manila (December).

���. 1996. Status of ISO 14000 in the Countries of the Association of South East Asian Nations (ASEAN). ASEAN Environmental Improvement Project. Manila (January).

Philippines. 1990. National Environmental Action Plan: Philippine Strategy for Sustainable Development Part 1: A Conceptual Framework. Report E 0022. Manila (January).

���. 1994a. Philippine Energy Plan 1994_2010. Department of Energy. Manila.

���. 1994b. "Republic Act No. 7718." Text from session of the Congress of the Philippines (July 26, 1993). Amendments approved May 8, 1994.

���. 1995. Industry Environews 3(2) (April_June). Environmental Management Bureau.

���. 1996. The President's 1995 Socio-Economic Report (March).

Rodwin, Loren. 1995. "Trip Report for Period Covering October 6_25: Travel to Thailand, Indonesia, Singapore, and Philippines. Washington, D.C.: United States-Asia Environmental Partnership (December 12).

United States-Asia Environmental Partnership (US-AEP). 1995a. US-AEP in the Philippines. Washington, D.C.

���. 1995b. "Environmental Indicators: In the Right Direction?" Trip Report: Taiwan and Philippines, October 30_November 9. Washington, D.C.

���. 1996a. Philippine Business Plan FY `96. Technology Cooperation Office. Washington, D.C.

______. 1996b. "US-AEP/USCS Environmental Infrastructure Strategy: Philippines." Washington, D.C. (August).

U.S.-ASEAN Council. 1994. ASEAN Market Sector Report Series: Environment, 1993_94. Washington, D.C.

U.S. Information Agency (USIA). 1992. Research Memorandum: Filipino Public Opinion on the Environment. Washington, D.C.

United Nations. 1992. A Report on Philippine Environment & Development: Issues and Strategies. A National Report for the 1992 U.N. Conference on Environment and Development. New York.

Williams, Brad. 1994. "Environmental Project Profile: Philippines Natural Resource Management Program." Arlington, Va.: USAID, Environment and Natural Resources Information Center (October 28).

World Bank. 1993. Philippines Environmental Sector Study: Toward Improved Environmental Policies and Management. Industry and Energy Division, Country Department I. East Asia and Pacific Region (December 8).

���. 1994a. Philippines Private Sector Assessment (PSA). Industry and Energy Operations Division, Department I, East Asia and Pacific Regional Office (July 12).

���. 1994b. Philippines: Recent Macroeconomic Developments and Reform Efforts. Country Department I, East Asia and the Pacific Region (June 30).

���. 1995a. Facing the Global Environment Challenge: A Progress Report on World Bank Global Environment Facility Operations. Washington, D.C. (June_August).

���. 1995b. Philippines Public Expenditure Management for Sustained and Equitable Growth. Country Operations Division. Washington, D.C. (September 5).

���. N.d. "Philippines: Water Resources Development Project." Project Information Document. PHPA4613. Washington, D.C.

���. N.d. "Philippines: Manila Second Sewerage Project." Project Information Document. PHPA4611. Washington, D.C.

���. N.d. "Philippines- Second Rural Finance Project." Project Information Document. 4PHLPA209/PHPA04614. Washington, D.C.

ENDNOTES

1. Philippines (1996).

2. World Bank (1994b).

3. Philippines (1996).

* Unless otherwise indicated, all dollar amounts are U.S. dollars.

4. Twelve sectors account for about 70 percent of exports in 1995: garments, textiles, yarns, and fabrics; basketwork; holiday decor; decorative ceramics; jewelry; furniture; processed food; marine products; seaweeds; marble; electronics; and metal products (Philippines 1996).

5. World Bank (1994a, 4_6).

6. ASEAN (1993); Lisa Lumbao, commercial/environmental specialist, US-AEP, Manila (September 19, 1996).

7. World Bank (1993, ii); ASEAN (1994b, 120).

8. World Bank (1993, ii).

9. ASEAN (1994b, 128).

10. ASEAN (1993).

11. World Bank (1993, 21).

12. Philippines (1996, 55_56).

13. World Bank (1995b, 37).

14. ASEAN (1996).

15. ASEAN (1994a).

16. Narcisa Umali, director, Agriculture Staff, Philippines Council for Sustainable Development, National Economic Development Agency, Manila (April 30, 1996).

17. Dr. Rogelio A. Panlasigue, director, Industrial Technology and Development Institute, Manila (May 2, 1996).

18. See Philippines (1994a) for the most recent National Energy Plan.

19. ASEAN (1994a).

20. World Bank (N.d., PHPA4613).

21. Philippines (1996, 33).

22. The bulk of Philippine environmental legislation was enacted during the Ferdinand Marcos era (middle to late 1970s) in the form of presidential decrees (PD), rather than acts of Parliament. The laws laid down general principles: "There is now an urgent need to formulate an intensive, integrated program of environmental protection" as stated in PD 1151 (the Philippine Environmental Policy); but it remained vaguely worded and lacked clear guidelines (Allen 1992, 253). The major laws and decrees relevant to industry and urban environmental management include:

� PD 1151, Philippine Environmental Policy (1977)

This law is a vague and brief recognition of the need for measures to protect the environment and introduced the requirement that private corporations and national agencies, including government-owned corporations, must submit environmental impact statements (EISs) for planned projects that will have a significant impact on the environment. The EISs must include (a) a detailed statement noting any potentially adverse impacts of the proposed project, (b) alternatives to the proposed project, and (c) a determination that the short-term use of the environmental resource is consistent with its long-term productivity (ASEAN 1994b, 132)

� PD 1152, Philippine Environmental Code (1977)

Broader in scope than PD 1151, this decree notes the "need for controls and standards of pollution and the `rational exploitation' of natural resources" (Allen 1992). This code led to the development of a comprehensive environmental protection and management program, including provisions for establishment of standards and regulation of air quality (including noise), water quality, land use management, natural resource management and conservation, and waste management (ASEAN 1994b, 132). It provides incentives for importation of pollution control equipment and offers tax credits for the purchase of locally manufactured pollution control equipment as well as tax deductions for expenses incurred for research and development on the manufacture of pollution control equipment. It is important to note, however, that these incentives and credits lapsed in 1984 and were never reinstated by the GOP (ASEAN 1994b; Allen 1992)

� PD 1586 (1978)

Established a system of EISs, which was meant to address the increasing pollution problems inherent in industrial growth. In principle, only those projects and areas deemed "environmentally critical" fall within the purview of PD 1586.

� EO (Executive Order) 192 (1987)

Created the Department of Environment and Natural Resources (DENR) from the already existing Department of Environment, Energy, and Natural Resources as well as the Environmental Management Bureau and the Pollution Adjudication Board. DENR is charged with promoting sustainable use and sound management of natural resources and the protection and enhancement of environmental quality. DENR is empowered to promulgate rules and regulations for the control of air, water, and land pollution as well as for ambient and effluent standards for water and air quality, including allowable levels of other pollutants (ASEAN 1994b).

� RA (Republic Act) 6969 (1990)

This act addresses risks posed by chemicals either imported to or manufactured in the Philippines. With the development of the Philippine Inventory of Chemicals and Chemical Substances, DENR has screened out the chemicals and chemical substances that potentially pose unreasonable risks to public health, the workplace, and the environment (Philippines 1995); however, although the act requires generators of hazardous waste to dispose of it in approved hazardous waste treatment/storage/disposal sites, not a single site yet exists in the Philippines (Philippines 1995).

� National Air and Waters Law, RA No. 3931 (1964)

This was the first comprehensive law on air and water pollution in the Philippines. It "declares as national policy the maintenance of reasonable standards of purity for the waters and air of the Philippines" (ASEAN 1994b, 132)

� RA No. 7718 (1994)

This act amends portions of RA 6957, which authorizes ". . . the financing, construction, operation, and maintenance of infrastructure projects by the private sector, and for other purposes." The government, in this act, recognizes the "indispensable role of the private sector as the main engine for national growth and development in the Philippines" and allows for the private sector to pursue build-own-transfer and other infrastructure projects with minimal interference from the government. The act was approved May 8, 1994, and was amended in 1995 (Philippines 1994b).

23. In its 1993 review of the Philippines' environmental policies, the World Bank identified four generic issues:

� The implicit policy goals are ambitious; they attempt comprehensive coverage across all sources. Air and water standards apply to all industrial facilities regardless of size or pollution intensity. Similarly, although the EIS process applies to environmentally critical projects, the manner in which it is implemented in effect could require every investment project to obtain an environmental compliance certificate.

� The regulatory framework relies on standards applicable to all sources irrespective of type of industry or process.

�� The policies currently in place are all command and control in nature and do not price environmental damage.

�� Some of the environmental regulations are contradicted by other aspects of the sectoral policy regime (e.g., the pricing of fuels favors diesel fuel oil, and domestic coal to the detriment of air quality) (World Bank 1993).

Fines are imposed for discharge of pollutants, however, these fines have not been adjusted since 1976, despite several devaluations of the peso, leaving the fines largely ineffective as a deterrent to industrial polluters. Government-led spot monitoring has led to some factories installing wastewater treatment systems; the government has recently issued a number of cease-and-desist orders that have sent signals to the industry that DENR may be becoming more aggressive; however, existing wastewater treatment systems, most of which can be found in industrial enterprises located in and around Metro Manila, are often not properly operated or maintained. Other deterrents to industry's investment in pollution abatement, as noted in a 1995 World Bank report (1995b), include weak enforcement of environmental standards, lack of incentives to invest in abatement equipment, and lack of information about cost-effective abatement strategies. Further, DENR water discharge standards are based on concentrations of pollutants rather than on total loadings to water bodies, allowing dilution as a means of compliance.

24. Floro R. Francisco, assistant general manager, Laguna Lake Development Authority, Manila (May 2, 1996).

25. The key components of the strategy are the following (ASEAN 1994b; Philippines 1990):

� Establishment of environmental goals, policies, and standards, taking into account location, pollution control, waste management, occupational health and workers' safety, energy and raw materials usage, and disposal of toxic wastes

� Support of policy, research, and economic and market-based instruments to promote recycling and reuse of industrial raw materials and by-products

� Relocation of industry to locales outside of major urban centers through rural infrastructure development

� Fiscal measures such as tax incentives, subsidies, pricing policies, and so on to encourage adoption of pollution control technologies by large- and small-scale industries

� Vigorous enforcement of the EIS system in industry planning.

26. Maribelle Zonaga, senior program specialist, US-AEP, Manila (June 7, 1996) and Grace Favilo, executive director, Philippine Businesses for the Environment, Manila (May 7, 1996).

27. Jesus Motoomull, director, Bureau of Product Standards, Manila (May 2, 1996).

28. Dr. Rogelio A. Panlasigue, director, Industrial Technology and Development Institute, Manila (May 2, 1996).

29. Owen Cylke, US-AEP assessment team (September 25, 1996).

30. Owen Cylke, US-AEP assessment team (September 25, 1996); Antonio Oposa, Jr., attorney, Manila (May 2, 1996).

31. Shakeb Afsah, environmental economist, Policy Research Department, World Bank, Washington, D.C. (September 5, 1996).

32. Owen Cylke, US-AEP assessment team (September 25, 1996).

33. Jesus Motoomull, director, Bureau of Product Standards, Manila (May 2, 1996).

34. As of October 1996, Philippines Agenda 21 had not been published in final form.

35. Unless otherwise indicated, information in this section was taken from US-AEP (1996b).

36. World Bank (1993, 7).

37. Philippines (1996).

38. See "Philippines: Manila Second Sewerage Project" (World Bank N.d. PHPA4611).

39. ASEAN (1993); World Bank (N.d., PHPA4613).

40. ASEAN (1996).

41. US-AEP (1995a).

42. Dr. Ben Malayang III, professor, Institute of Environmental Science & Management, University of the Philippines at Los Banos, Laguna (May 3, 1996).

43. US-AEP assisted Land Bank in establishing its environmental unit by supporting an exchange between the bank and the Bank of America.

44. Maribelle Zonaga, senior program specialist, US-AEP, Manila (June 7, 1996).

45. USIA (1992).

46. Floro Francisco, assistant general manager, LLDA (May 2, 1996).

47. In the Philippines, two generic types of nongovernmental institutions exist: NGOs, which are service or issue-based, and peoples' organizations, which are geographically based. Peoples' organizations often rely on NGOs to provide technical assistance on specific issues. It is not uncommon, for example, for an NGO with expertise on a particular technical or legal issue to support a wide network of peoples' organizations.

48. Rodwin (1995, 18).

49. The Environment and Natural Resources Accounting Project (ENRAP) IV will have four components (Juan Seve, senior manager, International Resources Group, Washington, D.C. [September 16, 1996]):

� Policy reform and advocacy

The major groups served will be DENR, the U.S. Agency for International Development, the National Economic Development Authority, and the Philippine Council for Sustainable Development. DENR is reassessing its environmental management strategies; ENRAP IV will be able to provide timely and relevant policy inputs as required. The National Economic Development Authority has an ongoing long-term development planning exercise, which is expected to become more intensive and get more involved at the sectoral and regional levels. ENRAP should continue to play an important role in providing relevant information for the drafting of the Philippine Agenda 21. Another of ENRAP's tasks, which will have to be jointly coordinated by DENR and the National Economic Development Authority is the formulation of full-cost pricing mechanisms for environmental and natural resources. ENRAP IV's analysis will include formulation of specific economic instruments for full-cost pricing of these resources, focusing not only on policy objectives but on assessment of the enforcement/transaction costs, equity issues, and the likely degree of implementation.

� Generation, updating, and monitoring of environmental natural resource data and indicators

ENRAP III generated a micro-level, geographic-based data base, linking data on economics and environment. ENRAP IV will continue with data collection to fill gaps in the information on damage estimates for water and air pollution, trends in costs and demand for environmental quality, and estimates for the demand for direct nature services.

� Institutionalization of environmental and natural resource accounting

The objective is to ensure the sustainability of the Philippines environment and natural resource accounting (ENRA) process by encouraging and working toward institutionalization of the ENRA data system for use by those in government who are involved in analytical and development work. This process will involve continuation of ENRAP III efforts to link information systems and improve data development to allow for continuous tracking of economy-environment interactions at various levels.

� Local and international linkages

ENRA staff will work to enhance the skills of DENR personnel in building capacity for developmental work as DENR evolves from a primarily regulatory body to a development agency. This will include assisting DENR in shifting environmental and resource management away from command and control approaches to include instruments such as resource price rationalization, changes in investment planning processes, and enhancement of EISs with extended cost-benefit analysis.

50. World Bank (1995b, 89).

51. World Bank (N.d., PHPA4613).

52. World Bank (N.d., PHPA4611).

53. Lisa Lumbao, commercial/environmental specialist, US-AEP, Manila (September 20, 1996).

54. US-AEP (1995a).

 

 

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