Fisheries

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1. Introduction

Fisheries is a major industry of the Philippine economy which contributes 3.9

percent to the GNP at a current prices and provide about 5 percent of employment to the

national labor force. Products from fisheries accounts for 70 percent of the total animal

protein intake and 30 percent of total protein intake of Filipinos. The industry earned

P12.5 billion in foreign exchange for the country in 1994 (BFAR, 1995).

Philippine fisheries is classified into the municipal fisheries, commercial

fisheries and aquaculture subsectors. Municipal fisheries refer to fishing in coastal and

inland waters. Fishing in offshore waters (beyond 15 km from the shoreline) is the scope

of commercial fisheries while aquaculture is the farming of aquatic products in ponds,

cages, pens, and open waters.

The country’s aquatic resources being tapped for fisheries consist of 220,000,000

hectares of marine territorial waters (coastal and offshore) 588,393 hectares of inland

waters (including swamplands, lakes, rivers and reservoirs) and 253,854 hectares of

fishponds (Table 1). The Philippine ranked as the 12th top fish-producing country in the

world among 80 countries in 1993.

Despite the seemingly abundant aquatic resources of the Philippines and its world

status as a fish producer, the fisheries industry in the country is said to be approaching a

crisis situation. Overfishing and illegal fishing have led to decline in the marine

fisheries catch. There are also problems such as milkfish fry shortage, prawn disease and

red tides that have caused a drastic drop in the production from aquaculture.

There are about one million small fisherfolk dependent on fishing in the

Philippine as a means of livelihood. The quality of life subsistence fishermen and their

families has continued to deteriorate. The population growth rate of 2.3% in the county

is higher than the annual growth rate for fisheries of 1.47% (Bernacsek, 1966).

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The objectives of this paper are to assess the status of the fisheries industry in the

Philippines, identify the constraints for its modernization and recommend an agenda for

its action.

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2. Supply-Demand Situation of the Fisheries Industry

The fisheries supply in the Philippines as of 1994 was about three million tons.

Domestic production accounts for 92% of the total supply while 8% of the supply is imported

(Table 2).

The municipal fisheries subsector is the largest producer of fisheries products with 38%

of the total production. The fishes caught from municipal waters are small and large pelagics

and demersal species from coastal waters, and tilapia from inland waters.

The commercial fisheries subsector is the second largest contributor to the domestically

produced supply with 33% of the total. By definition, commercial fishing vessels weigh at least

three gross tons or more. There were 2,279 registered commercial fishing vessels in 1992. The

common types of fishing gear used are the bagnet, trawl, purse seine and ring net.

The aquaculture subsector contributes 29% of the total fisheries supply consisting mainly

of seaweeds, milkfish, shrimp and tilapia. The aquaculture production by selected species for

1990-1994 is shown Table 3. It should be noted that while seaweeds constitute more than half

of the total production, they are not utilized for human consumption but processed into

industrial products.

The top fisheries producing regions in the Philippines are Southern Tagalog, Western

Mindanao and Western Visayas for municipal fisheries; Metro Manila (NCR). Western Visayas

and Western Mindanao for commercial fisheries and the ARMM, Central Luzon and Western

Visayas for aquaculture (Table 4).

Fisheries production in the Philippines has been on a decreasing trend for the last five

years. An analysis of the annual growth rate (AGR) by subsector for the period 1990-1994

shows a decline from 2.47% to 1.99% for municipal fisheries, 9.95% to 4.73% for commercial

fisheries, and 6.64% to 2.51% for aquaculture (Table 5).

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In 1994, the Philippines imported 82138 tons of fish consisting of frozen sardines and

mackerel which well used as raw material for domestic canning and to supplement local supply

in the wet market during the low fishing season. Moreover, some 35,859 tons of frozen tuna

were imported to supply local canneries which export their products.

An analysis of the import-export trade for fisheries in the last five years indicates an

increasing trend for both import and export of fisheries products (Table 6). The volume of

export increased by 17% from 1990 to 1994 while the volume of import increased by 19% for

the same period. While the Philippines imports more fisheries products than what it exports in

terms of volume, it had a favorable balance of trade in terms of value.

With a population of 68,624,000 and food fish supply of 1,954,686 mt in 1994, the per

capita consumption for fish in the Philippines was estimated to be 28.48 kg. By the year 2010,

with a population of 93,874,000 the expected demand for fish will be an additional 719.120

metric tons over that of the 1994 level. Demand for export and non-food fisheries products are

also expected to increase by 24.12% and 9.12%, respectively, in 20 10 over those of 1994

(Bemacsek. 1996).

During the period 1989-1994. the average rate of decline of the per capita food fish supply

was 2.4% while the increase in fish supply only averaged 0.2% per Year for the period.

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3. Government Policies Affecting the Fisheries Industry

Government policies influence greatly the performance and efficiency of the industries

including fisheries supporting the economy. A review of the past, present and proposed

policy framework affecting the fisheries industry is presented.

a. Past Policy Framework

Commonwealth Act No. 4003 promulgated on December 5, 1993 is considered

the first legislation in the Philippines on fishing and/or fisheries. The Act charged

the Secretary of Agriculture and Natural Resources with carrying out its provisions

which included the establishment of a closed season in the catching of fish,

shellfish, or my other aquatic animal for a period of more than five years in any

specified area in the country. The Act also made unlawful the use of ex-plosives

and any obnoxious or poisonous substance in fishing and the taking or catching of

fry or fish eggs.

Republic Act No. 177 enacted on July 1, 1947 created the Bureau of Fisheries

under the Department of Commerce which gave the Director of the Bureau

technical and quasi-judicial powers.

Republic Act No. 424 enacted on June 7, 195 0 made illegal the possession,

sale or distribution of fish and aquatic animals stupefied, disabled or killed by

means of dynamite and other explosives or toxic substances and providing penalties

for such acts.

Republic Act No. 3512 enacted n March 20, 1963 created the Philippine

Fisheries Commission under the Department of Agriculture and Natural Resources

defining its powers, duties and functions, and fund appropriation. The Act

encouraged the promotion and conservation of fisheries resources to ensure a steady

and sufficient supply of fish and other fisheries resources for the increasing

population.

Presidential Decree No. 43, also known as the Fishery Industry Development

Decree of 1972, provided for the accelerated development of the fishing industry of

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the country. The Decree also provided government financing, training, extension

services, technical assistance and infrastructure for the production, storage,

processing, transportation, marketing and distribution of fish and fisheries

products.

b. Present Policy Framework

(1) Non-Tariff Policies

'The Fisheries Decree of 19't 5 (P.D. No. 704) revised and consolidated all

laws

and decrees affecting fishing and fisheries. Among others, the Decree allowed the

exportation of fish and fisheries products and gave the Bureau of Fisheries and

Aquatic Resources the responsibility for management, conservation, development,

protection, utilization and disposition of all fisheries and aquatic resources of the

country except those of municipal waters which are under. the municipal or city

government concerned.

The Decree also provided for the establishment of fish refuges, sanctuaries and

fisheries reservations, declaration of closed season by area specification, gear or

species and of fish leasing of public lands available for fishpond development and

the prohibition of all forms of illegal fishing such as use of explosives, poisonous

substances, finemesh nets, etc. The law has also imposed stiffer fines and penalties

for illegal fishing practices ,and determined the limit of municipal waters to 7 kin

from the shoreline.

Up to this date, P.D. 704 is still the main legislative framework that has

regulated the fisheries industry of the country.

P.D. No. 1599 issued on June 11, 1978 established the Philippine Exclusive

Zone ,which extended the country’s territorial waters to a distance of' 200 nautical

miles from the baseline from which the territorial sea is measured.

The Philippines was a signatory to the United Nations Conventions of the Law

of the Sea (UNCLOS). The country has established its 200-mile Exclusive

Economic

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Zone (EEZ) as an archipelagic state. However, no official map delineating the

Philippines EEZ has been drawn causing border conflicts with neighboring

countries. The Philippine responsibility, to determine the total allowable catch

(TAC) and capability to harvest the living resources in the EEZ home not been

exercised.

Executive Order 967 issued on June 30, 1987 reduced the Bureau of Fisheries

and Aquatic Resources into a staff bureau to formulate plans for the proper

management, accelerated development and proper utilization of the country's

fisheries and aquatic resources; undertake studies on the economics of the various

phases of the fisheries industry, render technical assistance and advisory services in

the proper procurement construction and operation of fishing vessels; and

recommend plans, programs and policies, rules and regulations on fisheries to the

Secretary of Agriculture and provide technical assistance in the implementation of

the same.

Executive Order No. 240 (1995) creating the Fisheries and Aquatic Resources

Management Councils (FARMS) has institutionalized the role of local fisherfolk

and other resource-users in the communitv-based planning and implementation of

policies and programs for management, conservation, development and protection

on fisheries and aquatic resources. FARMCs are to be established in all barangay,

municipalities and cities where ever relevant.

(2) Tariff Policies

The Investment Incentives Act of 1968 (R.A 5186) included the investment

policy for fisheries development for corporations qualified for Board of Investment

registration and entitlement to fiscal and non-fiscal incentives.

Executive Order No. 1073 enacted on January, 1986 prescribes safeguards for

domestic industries (including fisheries) upon the lifting of imports licensing for

certain productions. Domestic industries need to be assured of elective tariff

protection and efficient mechanisms against unfair trade practices of some countries

and/or unscrupulous activities of certain imposters. Certain provisions of the Tariff

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and Customs Code are used for the effective implementation of the anti-dumping

measure and customs valuation procedures.

Executive Order No. 1016 of July 24, 1972 restructured the rates of import

duties and amended the classification of certain articles under Section 104 of the

Tariff and Customs Code of 1978. The promotion of economic recovery and

sustainable growth requires the removal of structural impediments to enable the

private sector to operate in which market signals enhance its efficiency and

economic potential. The structural impediments that must be removed are import

restrictions that have not only hampered the flow of trade between the Philippines

and the rest of the World but have hindered the efficient development of local

industries.

Central Bank Circular No. 1356.(1992) liberalized the importation of fishery

products such as milkfish, cod, anchovies, herring, mackerel, sardines, tuna and

roundscads, while such importations have been restricted to lean fishing months in

the country, in practices they have posed a threat to local fish producers because of

their lower costs and better quality.

c. Proposed Policy Framework

A Fisheries Code is now being crafted in both houses of Congress. The Code

hopes to codify all fisheries laws and consolidate the agencies and their functions

concerned with fisheries and aquatic resources, aims to promote maximum

sustainable yield and optimum utilization of fisheries resources and ensure

ecological balance. It also advances the rights of subsistence fisherfolk and the

popular and equitable participation of Filipinos in the use, management and

development of fisheries and aquatic resources. The establishment of a Philippine

Fisheries Administration under the Office of the President to replace the Bureau of

Fisheries of Fisheries and Aquatic Resources (House of Representatives version) or

a Department of Fisheries (Senate version) is proposed.

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With the ratification by the Philippine Senate of the Uruguay Round Final Act,

the Philippines has become a member of the World Trade Organization (WTO).

The provisions of the GATT Agreement on Agriculture requires member-countries

to tarify all quantitative import restrictions in agriculture. To prepare the country

for a more liberalized world market under the WTO, certain infrastructure, support

services and policy reforms are needed (Figueroa-Geron and Ver-Pap, 1995).

The reforms needed to enhance the country's comparative advantage in

fisheries include increased access of farmers fisherfolk to postharvest and

processing facilities throught the provision of ice plants and cold storage facilities,

creation of a more conducive rural credit policy environment, and strengthening

research and development on and the extension of appropriate production and

postharvest technologies.

Although fish and fisheries products are not among the commodities that

would be directly affected by the GATT Uruguay Agreement, certain trade

incentives in the Agreement such as the following can be of help: reduction of

tariffs, duties and taxes for the importation of fishing vessels, pails and equipment;

upgrading of quality control procedures to the level acceptable for major importing

countries as required under the Agreement; and active exchange with GATT

member-countries on relevant information on technology and trade.

In complying with the WTOGATT' Agreement of the application on sanitary

and phytosanitary measures (SPS), the Philippines has also committed itself to

harmonize its SPS measures with those of the Codex Alimentarius Commission and

Office International des Epizooties for processed fishery products and live aquatic

animals, respectively. The SPS measures include all relevant laws, decrees,

regulations, requirements and procedures applied to protect animals or plant life or

health within the territory of the member-country of the WTO from risks arising

from entry, establishment or spread of diseases, disease carrying organisms or

disease-causing organisms. Quarantine treatment includes the relevant

requirements associated with the transport of animals or with materials necessary

for their survival during transport (Guerrero, 1996).

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4. Constraints of the Philippine Fisheries Industry for Modernization and Government

Programs

There are various support systems and mechanisms necessary for the modernization of

the fisheries industry. Among these are human resources, market access, the institutional

framework, public investments natural resources, credit and government programs. The

weaknesses of such support systems/mechanisms or constraints are discussed in this

chapter.

a. Human Resource Development (HRD)

Education, research and extension services play an important role in the sustainable

use and management of the country's fishery and aquatic resources (Ventura, 1995).

Skills enhancement particularly of subsistence fisherfolk is essential for their social

upliftment from poverty.

An appraisal report of the World Bank in 1977 defined the Philippine Agriculture

Education System (including fisheries) as a "a crisis of quality". There are 74 schools of

fisheries in the country, 33 of which are state colleges and universities. As of 1993, there

was a total of 129 fisheries programs offered in tertiary schools. Despite the proliferation

of fisheries schools and programs, there is a mismatch between the number and quality

of manpower outputs from these schools leading to unemployment and underemployment

of mediocre fisheries graduates (Fernandez, 1995).

A survey conducted by the Technical Panel for Agricultural Education in 1993

found that of the 35 fisheries state colleges and universities offering fisheries programs,

only 34% has 60-79% compliance with the minimum standards for faculty quality,

physical facilities and financial resources. Most of the institutions had lack of funds for

faculty development and research. There were very few teachers who had graduate

degrees in their respective fields of specialization.

It is ironic that while there appears to be an oversupply of fisheries graduates in the

labor force, employment of these graduates in the fisheries industry is not evident because

of the substandard fisheries educational programs available. While fisheries education

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is influenced by the development of the fisheries industry, there is demand for well-

trained manpower required for fisheries development.

The manpower for fisheries research and development in the country has been

assessed by the Philippine Council for Aquatic and Marine Research and Development.

As of March 1993, a total of 829 researchers were involved in fisheries and aquatic

resources R&D. Out of this total, 54 were PhDs, 221 were MS degree holders and 444

were BS graduates. The distribution of the researchers according to field of

specialization is shown in Table 7.

With the implementation of the Local Government Code, more than 18,000

agricultural technicians of the Department of Agriculture were devolved to the local

government units under the direct supervision of local executives. Lack of funding and

skills development has limited the extension services of these personnel to fishfarmers

and fisherfolk. The Agricultural Training Institute of the DA with its 7 regional

fishermen’s training centers (R.FTCs) and 17 farmers' training centers is servicing the

training needs of LGU technicians and farmers/fisherfolk on fisheries technology

development, conservation, coastal resources management, cooperatives, enterprise

development and fishery law enforcement.

b. Market Access and Development

The bulk of fish supply (67%) produced in the country is used for local

consumption. Fisheries exports constitute 24% of the supply while the remaining 9% is

for non-food use. The most important fishes consumed are sardines, roundscad,

anchovies and frigate tuna from marine waters and milkfish and tilapia from aquaculture

and inland waters. The main exported products are tuna from commercial and municipal

marine fisheries, and shrimp and seaweed from aquaculture.

Fish supplies 60% of the animal protein requirement of the Filipinos. In 1994,

with a population estimate of 68,624,000, the per capital supply of fish was 28.48 kg

which is lower than that of 1990 with 32.06 kg. Demand for fish is increasing in the

Philippines

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due to population growth, increasing world demand and increasing domestic

production of livestock (Bernacsek, 1996).

Changes in the real prices of fish are affected by changes in consumer purchasing

power, product substitution, increasing production costs, stock depletion or growth of

new fisheries and pond culture. Fish index price in the country increased from year to

year (except for a decrease in 1987) by an average of 7.63% per annum (Table 8). Over

the decade, the overall price increase was 156% (from P21.94 to P56.16/kg).

Fish is cheaper than pork, beef or chicken. Fish price increased on the average by

7.63% annually while pork increased by 8.82%; beef by 9.72% and chicken by 9.93%.

Imported fishery products for local consumption competes with domestic products

in wet markets during the low fishing season. Local fishing operators claim that the low

prices they realize during the high season do not allow them to make a profit even if their

products have high prices during the low season with the competition posed by lower

priced and better quality imported products.

To meet the demand (by import) in the future, a high level of fish export

performance is seen. The key policies recommended for improving competitiveness of

local fish exporters are:

1. Removal of all regulations constraining free trade and easy access to markets.

2. Setting exchange rates at realistic or market levels

3. Improving access to foreign exchange to import selected fisheries inputs

4. Setting fair prices (without subsidies) for commodities, feeds, water and energy

that allow cost recovery

5. Deregulation of markets and encouraging private commercial initiatives.

It is government policy for trade to be generally liberal, open and highly

sustainable. Removing the remaining barriers against fish importation should be

considered and local fish producers must improve efficiency of their operations for them

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be more competitive.

c. Institutional Framework/Bureaucracy

With the enactment of Executive Order 292 (1987) which reorganized the

bureaucracy, the Bureau of Fisheries and Aquatic Resources was transformed from a

line-agency into a staff bureau. The mandate of the Department of Agriculture over

fisheries as a natural resource was turned over to the Department of Environment and

Natural Resources (DENR). The DENR was also given the authority to promulgate

rules, regulations and guidelines on issuance of licenses, permits, concessions, lease

agreements and other priveleges concerning the development, exploration and

utilization of the country’s marine, freshwater and brackishwater, and overall aquatic

resources of the country. The fisheries statistics gathering function of the BFAR was

transferred to the Bureau of Agriculture Statistics.

The fisheries law enforcement function of the BFAR was transferred to the

Department of Interior and Local Government Philippine National Police for municipal

waters under Republic Act 6975 while jurisdiction for fisheries law enforcement in the

country’s oceanic waters was given to the Philippine Coast Guard of the Philippine Navy

(Department of National Defense).

With the Local Government Code (LGC), local government units (LGUS)

absorbed provincial and municipal agricultural offices and the extension/management

functions of the BFAR. The LGC empowered the LGUs to grant fishing privileges

within municipal waters, enact ordinances subject to approval of the Provincial Board,

issue licenses for municipal fishing boats (less than 3 gross tons) and prescribe penalties

for illegal fishing. The BFAR retained the authority for issuing licenses for commercial

vessels above 100 GT, research and issuance of fishpond licenses.

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The absence of a fisheries line-agency has weakened the government’s thrust for

the development of the fisheries sector. While LGUs have been expected to take over

the municipal fisheries resource management and development, they have been

constrained by their lack of capability and expertise.

There is need for strengthening of the present bureaucracy for responding to the

needs of the fisheries sector. The upgrading of the BFAR into a line agency or the

creation of a Philippine Fisheries Administration or Department of Fisheries are options

being considered.

In the area of research, the Philippine Council for Aquatic and Marine Research

and Development of the Department of Science and Technology has been revised by

E.O. 128 (1987) to monitor, plan and evaluate fisheries and aquatic resources and

development. In keeping with this mandate, the PCARRD has established the National

Aquatic Resources Research and Development System (NARRDS) composed of four

national centers, five zonal centers and over 30 fisheries R&D institutions (both public

and private).

In the Fisheries Sector Program of the DA-BFAR, the establishment of a National

Fisheries Research Institute (NFRI), has been proposed. The NFRI is envisioned to

prioritize fisheries research in the country, a function already being performed by the

PCAMRD. A national network of fisheries R&D institutions proposed by the NFRI will

also be duplicating the NARRDS being coordinated and managed by PCAMRD.

d. Public Investments/Infrastructure

The Fisheries Act of 1975 states the policy that the fisheries industry is a preferred

area of investment. The Omnibus Investment Code of 1987 (Executive Order 226)

includes investment policies and incentives, rules and regulations for investment

priorities in feeds for aquaculture, marine products, modernization/upgrading of fishing

vessels, aquaculture and common service facilities for cold storage and canning

facilities.

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For infrastructure, the government through the Philippine Fisheries Development

Authority (PFDA) of the Department. of Agriculture has invested in fishing ports. There

are seven fish ports operated by the PFDA throughout the country in addition to 23

municipal fish ports. The largest government -run fish port is in Navotas, Metro Manila

which processes 800-900 MT of fish landed daily and supplies over 60% of fresh/chilled

-fish supply to consumers in Metro Manila, Central and Northern Luzon ( Abella and

Baltazar, 1995).

With the privatization thrust of the government fisheries infrastructure assets such

as fishing ports, ice plants, cold storage facilities and government-owned fishponds with

fishpond lease agreements (FL.As) may eventually be privatized as government limits its

role in the fisheries sector to a supportive one.

For the period 1988-1994, a total investment of P482.31 million was spent for

fisheries research and development. Of this total, 58.85% came from foreign grants and

loans; 40.27% from government appropriations and 0.8811/o from the private sector.

Fisheries technology is made available to the industry users through extension,

training and information dissemination programs of government and non-government

organizations.

With the devolution of the extension function of the Department of Agriculture to

the LGUS, extension services to fishfarmers and fishers are now the responsibility of

agricultural technicians of municipal city and provincial agricultural offices under the

supervision of local executives. Technical and budgetary constraints, however, have

limited the effectiveness of such services.

State colleges and universities with fisheries programs are also active in fisheries

technology transfer through technical assistance and information dissemination. With

the National Aquatic Resources Research and Development System (NARRDS),

managed by

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the PCAMRD-DOST, technology demonstrations, trainings and technical assistance,

through consultations and site visits have been rendered to various industry clientele.

The four National Centers of the NARRDS and their respective areas of specialization

are:

1. University of the Philippines in the Visayas College of Fisheries (Miagao,Iloilo)

Areas of specialization: Marine Fisheries and Biotechnology

Brackishwater Aquaculture

2. University of the Philippines

Marine Science Institute (Diliman, Quezon City)

Areas of Specialization.. Marine Science and Oceanography

3. Central Luzon State University

Freshwater Aquaculture, Center

Areas of Specialization: Freshwater Aquaculture and Reservoir Fisheries

4. University of the Philippines at Los Baños College of Ms and Science

Mayondon Limnological Station

Area of Specialization: Inland Waters (except reservoirs)

Zonal Centers (ZCs) were also established in the NARRDS to serve as focal

points for R&D coordination, training and information centre for industry. 'Mese ZCs are

located in the Don Mariano Marcos Memorial State University in Bacnotan, La Union

(Zonal Center I), University of the Philippines at Los Baños, Laguna (Zond Center II).

University of the Philippines in the Visayas, Miagao, Iloilo (Zonal Center M), Mindanao

State University-Naawani in Misatnis Oriental (Zonal Center IV) and the Zamboanga

State College of Marine Science and Technology in Zamboanga City (Zonal Conter V).

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In addition , the Agricultural Training Institute and the Bureau of Fisheries and

Aquatic Resources of the Department of Agriculture have conducted training courses on

fisheries technologies for fishfarmers and fishermen. The Southeast Asian Fisheries

Development Center’s Aquaculture Department in Tigbauan, Iloilo regularly offers

training courses for technicians and researchers on aquaculture-related areas.

Other public institutions and private organizations have also taken part in making

fisheries technology accessible for industry through various development modalities. The

Technology and Livelihood Resource Center conducts training courses on aquaculture

commodities such as milkfish, tilapia and mudcrab to potential investors and

fishfarmers. The Chamber of Fisheries and Aquatic Resources of the Philippines has

linked up with the PCAMRD in conducting technology transfer seminars and regional

fora in key aquaculture areas.

e. Natural Resource Endowments/Enviromnent

The Philippines is a maritime country composed of more than 7,000 islands. Richly

endowed with aquatic resources, the country'’s territorial waters are more than five times

in area compared to its total land area.

The major natural resources of the Philippines contributing to fisheries

production are its marine and inland fisheries. Marine fisheries consist of the pelagic

(surface-dwelling) and (mid-water and bottom) species that are caught in coastal and

oceanic waters by sustenance and commercial fishermen. The farming of seaweeds,

fishes and invertebrates in enclosures or open water in the sea is included in marine

fisheries. Inland fisheries, on the other hand, refers to the harvest of fishes and other

aquatic products from inland waters such as wetland, lakes, rivers and reservoirs. It also

includes the culture of fishes and other products in ponds and enclosures (pens and

cages) in open inland waters.

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Tunas, small pelagic fishes (e.g. mackerel, sardine and roundscad) and coral reef

fishes make up the bulk of the marine fisheries production of the country. The maximum

sustainable yield (MSY)of the Philippines' small pelagic fisheries has been estimated to

be 540,000metrictons per year. For the demersal fisheries, the MSY was estimated to be

300,000-325,000 metric tons per year. Various estimates of the potential yields of the

major marine municipal country have shown them to be either fully -exploited and over-

exploited (Daizell, et al 1987).

Coral reef are one of the most productive aquatic ecosystems that contribute at

least 10% to the total marine fisheries production (Murdy and Ferraris, 1980). The

ecosystem is formed by massive deposits of calcerous materials produced by living

colonies of marine animals (scleratinians). When these animals die, they leave their

stony-like structures as the substrates for other animals and plants to live on. Coral reefs

also serve as shelter and areas for feeding, breeding and nursery of more than 2,000

species of fishes, invertebrates and plants (White, 1987). There are an estimated 27,000

square kilomenters of coral reefs in the Philippines. Because of blast fishing and other

destructive methods, only 30% of the coral reefs are in good or pristine condition

(Carpenter and Alcala, 1979).

Among the inland fisheries resources of the country, the mangroves are the most

productive in terms of contributing to municipal or sustenance fishing . Mangroves are

made up of trees and other plants adapted to the estuarine environment of the coastal

zone. They constitute an important ecosystem for the breeding and nursery of various

fishes, crustaceans, and mollusks that enhance the productivity of coastal waters.

Mangroves also protect the land mass against strong waves and winds, and serve as a

collector of sediments coming from the uplands (Mercer and Harnilton, 1984).

Of the 450,000 hectares of mangroves recorded in the country in 1920, only an

estimated 140,000 hectares remain due to conversion into fishponds, salt-beds and

exploitation for timber and fuelwood. The annual depletion rate for Philippine

mangroves has been estimated to be 4,572 hectares (Forest Management Bureau, 1988).

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0ver 70% of the country's population lives in coastal areas. Mismanagement and

overexploitation of the country's land-based resources (i.e. forests, soil and minerals)

have caused severe stresses on aquatic ecosystems in the form of denudation, siltation and

water pollution.

The pollution of the country's coastal waters is attributed to domestic, industrial

and agricultural wastes. Contamination of aquatic food products with pathogenic

organisms and toxic wastes as pesticide residues and heavy metals has been reported in

the Philippines. Red tides caused by blooms of harmful dinoflagellates have become a

major human health problem in the country since 1983.

f. Rural Credit and other Fiscal Matters

Credit is an important support service for fisheries development. The availability

and access to credit by small fisherfolk have been problematic in the country.

The Agriculture Credit Policy Council (ACPC) reported that in 1994 the total

fisheries loans mostly by private commercial banks was P7.4 billion. For 1990-1993 out

of the projected loan volume of P32 million of the Fisheries Sector Program, only P25

million or 78% of the total was actually disbursed. The ACPC report also indicated that

only one-third of the total fishing households have access to credit services, and of those

with credit access, a third is being serviced by formal credit institutions while the rest rely

on informal lenders.

The three public institutions that provide credit assistance to the fisheries industry

are the Land Bank of the Philippines (LBP), Development Bank of the Philippines (DBP)

and the Philippine Crop Insurance Corp. (PCIC). The LBP provides loans and collection

service to organized fisherfolk under the Coastal Resources Management Component of

the FSP under its Integrated Rural Financing Window. Ale DBP through its Socialized

Lending Window services the financial needs of aquaculture farms. The PCIC provides

guarantee requirements of fisheries credit.

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In 1994, the LBP granted loans amounting to P473.623 million to 621 fishermen's

cooperatives and 32,254 individual fishermen. There were few eligible

borrowers/beneficiaries due to the absence of organized fisherfolk in priority areas.

Fisheries cooperatives facilitate and serve as conduits of basic services,

technology transfer, credit facilities, production, processing and marketing services. As

of 1995, there were 430 registered fisheries cooperatives in the country, representing only

1.4 % of the total registered cooperatives (Lozada, 1995).

As a mechanism for the institutionalization of people empowerment fisheries

cooperatives can play the follow roles in the development of the fisheries industry:

(1) Resource generation through continuous savings and capital build-up to generate

investible funds that will finance cooperative projects

(2) Undertake research and development studies supportive of the cooperative's programs

and projects.

(3) Undertake continous education and training programs to improve capabilities of

officers and staff members

(4) Pilot test and serve as a channel for the transfer and application of new technologies

relevant to cooperative operation

(5) Own, operate and manage production, processing and marketing facilities

(6) Access and provide financing and credit facilities to its members

(7) Assist in the enforcement of laws, rules and regulations relevant to the protection and

enhancement of fishing grounds and marine resources.

g. Government Programs

The Fisheries Sector Program of 1990-1995 was a major public investment of

$140 million for addressing the problems and issues confronting the coastal fisheries,

aquaculture and offshore fishing, The program, had six components, namely: Fisheries

Resource and Ecological Assessment, coastal Zone Management, Research and

Extension, Law enforcement, Credit Program and Infrastructure.

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The first components of the FSP concentrated on 12 priority bays, 17 provinces

and 146 coastal municipalities, Aquaculture investment, on the other hand, was focused

on six priority regions (I, IV, V, W and IX). The research and extension component

funded priority research studies and provided for M.S. and PhD. scholarship and training

programs. The Law Enforcement Component provided logistics support (patrol boats and

communications equipment) and training for fisheries conservation officers/law enforcers

, fishers and local government units.

Credit Component of the, FSP provided the seed fund which supported the credit

for poverty alleviation in coastal communities through income diversification, and the

intensification of aquaculture production.

The last component of the FSP for Infrastructure and Marketing Support provided

for the construction or rehabilitation of municipal fishing, ports, ice plants and cold

storage facilities to reduce post-harvest losses and to enhance product quality and of

meeting export standards.

The Medium Term Agriculture Development Plan (1993-1998) of the Department

of Agriculture has a fisheries component known as the Medium Term Fisheries

Management and Development Program (MTFMDP) concerned with conserving and

improving productivity of fisheries resources in the coastal areas and inland waters of 40

provinces. With a total budget of P 19.2 bi11ion the MTFMDP hope to achieve the

following: double aquaculture productivity from 1-2 MT per hectare per year to 2-4 mt

double the number of Coastal Resources Management (CRM) priority bays and gulf from

the current 12 to 24 improve operation efficiency of the commercial fishing fleet by 7

percent in line with international standards. Organize fishery law enforcement and

provide support facilities to 50% of coastal municipalities; and reduce post-harvest

losses by 5% and promote value added products.

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5. Domestic and Export Market Potentials of the Fisheries Industry

The main Philippine fisheries products of importance for domestic consumption

are anchovies, sardines, roundscad and frigate tuna from coastal marine fisheries and

milkfish and tilapia from aquaculture. For the export market, the major fisheries

products of the-. country are tuna, shrimp and seaweeds.

With the country’s population growth in the next five years and beyond, demand

for fish is expected to increase. Considering the limits of production from fisheries, the

future supply of fish for consumption will have to be filled by imports and/or substitution

with other food products.. Between 1994 and 2010, the expected increase: -- population

is 25,250,000 . An additional fish supply of 719, 129 metric tons will be needed for

consumption assuming an increase in the population of 37% from the 1994 level.

The fish production potential of the Philippines has been estimated to be

2,500,000 MT (Table 9). With sustainable development measures such as fisheries

management, improved seed production, disease control and water pollution abatement,

the projected total fisheries production for local consumption is 2.2 million metric tons by

2010.

The projected production of the six major fishes that supply about 51% of the total

fish consumed. In the country for the years 2000 and 2010 is presented in Table 10. The

figures show that with sustainable development, fisheries production for these species of

975,000 MT in 1995 can be increased to 1,123,000 MT in 2000 and 1,470,000 MT by

2010.

The declining tuna stocks in the offshore fishing grounds of the country due to

over fishing do not indicate a positive trend for export in the next five years and beyond.

Tunas are straddling fish that are shared internationally. Unless the country's fishing

fleets compete with their foreign counterparts in international waters, local production of

tuna for export will continue to decrease.

With the milkfish fry shortage problem brought about by the overfishing of wild

broodstock, pollution and the slow transfer of hatchery technologies, little hope is seen

23

in the next five years for a full recovery of the milkfish production industry. More

research and extension efforts are needed to improve the productivity of milkfish farms in

the long term.

Tilapia is seen as the foodfish with the brightest prospects for further production

to supply the domestic and export markets in the short and long terms. Growth of tilapia

farming has consistently increased for the last 10 years. The culture of tilapia in

brackishwater ponds and seacages will further expand production areas in addition to

freshwater ponds and cages . The Philippines hopes to be the world leader in tilapia by

the year 2000.

The production of the tiger shrimp (Penaeus monodon) in the country reached its

peak in 1994 with 90,426 metric tons. However, export of the commodity decline from

22,767 mt in 1989 to 22,418 mt in 1994. The limiting factors in the production of shrimp

from aquaculture are disease and water pollution. The high cost of feeds and other inputs

make local shrimp producers less competitive in the export market. The prospect for the

local shrimp industry to recover from its present slump is dim unless interventions such

as lowering the imported feed tariff and abatement of water pollution causing diseases are

implemented.

The production of seaweeds in the country for export has been on the upswing

from 1985 with 182,940 mt to 403,856 mt in 1994. With the opening of new markets in

Europe of Philippine Natural Grade or semi-refined carrageenan, demand for the product

is expected to increase. There is good potential for further expansion of growing areas in

the coastal waters of the Sulu Sea. Kappaphycus/Eucheuma production can be expected

to double in the next 5-10 years.

24

6. Recommendations for Strategies to Modernize the Fisheries Industry

a. Investment strategies

For fisheries, the areas recommended for investment are fishing tuna and small pelagics.

There is need, however, to modernize the country's fishing fleets for tuna to fishing fleets

enable them to compete with those of other countries in international waters such as those

of the West Pacific.

Better management of the country's municipal fisheries on a sustainable basis by LGUs

and FARMCs will have to be effected to provide small fisherfolk with sustainable and

productive livelihood from fishing small pelagics and demersal fishes. Fisherfolk should be

organized into cooperatives and provided with technical and credit assistance to upgrade

their skills and efficiency.

For aquaculture , the areas with high potential for investment are tilapia and seaweeds.

Brackishwater culture of tilapia and seaweeds. Brackishwater culture of tilapia in ponds

and cages in appropriate areas is highly recommended for providing alternative livelihood to

small fisherfolk and increasing fish supply. There are technologies that have been developed

locally and are already commercialized for the production of sex-reversed hybrid tilapia in

brackishwater pond and cages placed in estuaries (rivers and bays).

The demand for export of carrageenan from the seaweed, Kappaphycus/Eucheuma, is

expected to increase in the future. Further expansion of culture areas in Mindanao and

Central Visayas can contribute to supply. 'Me Philippines is a world leader in the export of

dried Euchema and its by-products.

The other aquaculture commodities that can be considered for investment are milkfish

and shrimp. Due to the shortage of milkfish fry at present, production of milkfish has

drastically declined in the country. It is hoped that with refinement of the hatchery

technology for species and the establishment of private hatcheries, production of the food

fish will normalize within the next 5 years.

25

The shrimp culture industry of the country is at present seriously affected by

disease and water pollution . While contributing significantly to the country’s fisheries

export in the early 1990s, production of shrimp is on the decline. It is recommended that

intensive operations for shrimp culture to be toned down to lower production costs and

make local growers more competitive.

An estimated 30% of the total fisheries catch in the country is spoiled and wasted

because of poor handling and transport methods, and lack of storage facilities to minimize

such spoilage and wastage, modem methods and facilities should be adopted by

industry

with government support.

b. Workable Modalities

The three basic factors for boosting productivity and global competitiveness on a

sustainable basis for the Philippine fisheries industry are capital, technology and availability

of inputs.

For the modernization of the country's fishing fleets for tuna fishing in

international waters , huge capital investments are required. Government should assist the

private sector (commercial fishing companies in negotiations with foreign funding sources

as the EC(e.g. Spain and Italy) for soft loans or BOT/BOD schemes.

A more efficient technology delivery system or extension is urgently needed by

the fisheries industry. Many farmers and fisherfolk have no access to the technology or

cannot avail of the limited services available , if any, coming from LGUs and other

institutions. It is recommended that the Bureau of Fisheries and Aquatic Resources be

strengthened to address this need or be replaced with a more responsive organization such

as the proposed Philippine Fisheries Administration in the impending Fisheries Code.

27

4. The country's EEZ should be defined and negotiations with neighboring countries

should be pursued to settle boundary, issues.

5. Fisheries education in the country should be rationalized and made more responsiive to

the manpower needs of the industry. Professionalization of fisheries graduates in the

tertiary level is recommended.

6. More support for fisheries research and development should be given to provide

technical services and information for policy formulation and effective management of

fisheries resources.

7. Infrastructure for fish ports, markets and storage facilities and processing plants should

be improved and privatized.

8. Organization of fisheries cooperatives should be promoted and encouraged to enable

small fisherfolk to have more access to training, technology and credit.

9. There is urgent need to improve the fisheries statistics information system of the

Bureau of Agricultural Statistics. For instance, there is no up-to-date information on the

total number of municipal fishing boats in the country.

d. Recommendations for Executive Action'

Fish is a staple food of Filipinos and should be given as much attention and priority

as rice or at least be second priority in die national food security system.

In the present bureaucracy, fisheries is considered only as a subsector of agriculture and is

ranked 5th in priority after rice, corn, coconut and livestock by the Department of

Agriculture. With the creation of a Philippine Fisheries Administration under the office of

the President as proposed in the Fisheries Code, die fisheries industry will hopefully get the

attention that it deserves for its full development.

28

A National Fisheries Productivity Program should be initiated and launched to

equal that of the Gintong Ani Program for Rice and Corn.

In the final analysis, it will be strong political will at all levels of the Executive

Branch of Government that will spell the difference between real development of the

fisheries industry or its stagnation.

29

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