1.1 Highlights of Social and Economic Situation
1.2 Highlights of Long-Term Objectives/Goals on Place of Forestry in National Development
1.3 The Role of the Country in Forestry in a Regional Context
1.4 Major issues relevant to forestry development in the country
1.1.1 Population
1.1.2 A Background on the Economy
1.1.3 Recent Economic Performance
The Philippines has an estimated total population of 68 61 million in 1995, two thirds of which live in the rural area. The average population growth rate is among the highest in Asia at 2.4% per annum.
The people of the Philippines are diverse in origin but the majority are descendants of the Malays who started to arrive in the islands over 1,500 years ago. The Philippines is home to 10 major cultural groups and many ethnic minority groups. Nine of the major cultural groups are of Malay extraction, while the tenth is Chinese. Eight of the major Malay groups - the Tagalogs, Cebuanos, Hilongos, Warays, llocanos, Bicolanos, Pangasinense, and the Pampangos have adopted Christianity. The ninth Malay group comprises the Muslim Filipinos or Moros, which is further-sub-divided in ten major groups, some of them regarded as cultural minorities.
The agricultural sector plays a dominant role in the economy of the country. The average share of the sector in real gross domestic product (GDP) from 1987 to 1991 was 23%, compared with 35% for the industrial sector. The industrial sector derives a large portion of its raw materials from the agricultural sector.
The economy of the Philippines grew constantly during the 1960s and 1970s, during which period internal structural imbalances remained unchanged. A combination of negative external factors, beginning with the second oil price shock of 1979, followed by falling commodity prices and rising interest rates, placed severe strain on the balance of payments. In 1983, commercial banks cut back on credit lines to the Philippines, and the Government was forced to declare a moratorium on principal payments on external debt supported by the International Monetary Fund (IMF). The Government undertook a comprehensive programme of structural reforms and stabilization and achieved stability with elimination of balance of payment deficits, a reduction in the inflation rate, and control of public sector deficits. However, GDP fell, unemployment rose and incomes declined to 1975 levels. A major consequence was civil unrest which led to the downfall of the Marcos Administration in 1986.
The Government under President Corazon C. Aquino accelerated the adjustment process and GDP grew by 4.7% in 1987 and 6.2% in 1988. While growth led by the private sector continued in 1989, further political uncertainty precipitated by coup attempts in 1987 and 1989 saw a deterioration of the fiscal situation and widening of the current account. Infrastructure came under increased pressure resulting in breakdowns in transport and power supply.
These developments have continued until 1990, and were worsened by a series of exogenous shocks. First, a drought in early 1990 severely affected agricultural production which declined by 5% in the first semester. Second, an earthquake in July 1990 caused over 1,600 casualties and an estimated US$600 million in damages to public infrastructure. Third, the Gulf crisis dislocated about 50,000 Filipino workers and resulted in a significant decline in workers' remittances by about US$50 million and increased the oil import bill by about $500 million in 1990. Fourth, the eruption of Mt. Pinatubo in June 1991 resulted in substantial damages to public infrastructure of about US$332 million. The agriculture sector of the area (including forestry) was affected by the eruption resulting in damage of about US$426 million. The total agriculture loss from 1991 to 1994 is estimated at about US$890 million.
In 1991 the economy was in recession resulting in a sharp decline in investment activities and a fall in real terms of government spending. GDP has dropped 1% and the prospects for a resumption of early growth seem unlikely. In 1991 the economy was characterized by double digit inflation and restrictive government fiscal and monetary policies.
Starting 1992, however, the economy took a turnaround towards modest growth. The new government, under President Fidel V. Ramos, has committed itself to maintaining the stabilization programme agreed to with the IMF which calls for fiscal and monetary restraint including a reduction in public deficits. The Government is actively seeking to develop an economic framework that will create a more attractive investment climate and stimulate private sector business activities. The current policy attempts to establish a more deregulated and competitive economy with administrative and regulatory structures that widen the scope for foreign investment and lower tariff rates.
Under a more stable environment, the GDP grew consistently from zero growth in 1992 to 4.25% in 1995 and was projected to rise to 7% in 1996.
1.2.1 Goals
1.2.2 Objectives
1.2.3 Current Programmes
1.2.4 Accomplishments
The long term goals for the Philippine forestry sector is contained in the Master Plan for Forestry Development. The plan which has a time horizon of 25 years starting in 1990 seeks to attain in the long run the following general goals:
· Equitable access for all Filipinos to opportunities to develop and manage the forest and partake of benefits derived from it;· Scientific management, conservation, and utilization of forest resources by a mix of managers from the private and the local communities in partnership with the government;
· In appropriate ways and on a sustainable basis, satisfaction of the needs of the people for forest-based commodities, services and amenities.
Reflecting the thrust of the general goal, the objectives of the Plan are:
· To conserve the forest ecosystem and its diverse genetic resources;· To promote social justice and equity;
· To meet the needs for wood and other forest products by placing all of the country's production forest under sustainable management;
· To protect the land and its resources against degradation such as disertification, soil erosion, floods and other ecological calamities through proper land management and practices;
· By properly managing the upland watersheds, to help in the production of food, water, energy and other basic needs;
· To contribute to employment and growth of the national and local economies.
In pursuit of the above objectives, the government has thus far put in place through appropriate policies and legislation the following programmes:
· The National Forestation Programme
· The Industrial Forest Management Programme
· The Community-Based Forest Management Programme
· Forest Protection and Conservation Programmes
· Rationalization of the Wood Industry
· The National Integrated Protected Areas Systems
As of 1995, the following had been accomplished:
· Reforested a total of 394 thousand ha. of denuded and open-lands from 1990-1994 (i.e. equivalent to 98,500 ha/year (editor));· Boundary delineation: 109,262 ha. of old-growth forest for protection;
· Granted to the private sector some 632 thousand ha. for development under Industrial Forest Management Agreements (IFMA);
· Awarded 8,076 ha. under the Forest Land Management Agreements;
· Protection of 139,525 hectares of plantations for future turnover to FLMA holders;
· Implementation of 86 watershed rehabilitation projects nation-wide:
· Awarded 21 Community Forestry Management Agreements covering 58,021 ha. benefiting 5,500 families.
The Philippines, in departure of its previous role as a net exporter of traditional forest products e.g. logs, lumber, plywood and veneer not only in the Asia Pacific area but in other parts of the world as well, has now become an active importer of these products from other countries. In light of this situation, the country has begun exploring joint ventures and cooperation in forestry development with neighbouring countries such as Indonesia and Myanmar. Among the objectives of these cooperation efforts is to secure a steady supply of wood materials for the country's wood-based industries.
The Philippines is also an active member country of the International Tropical Timber Organization (ITTO), an organization of 26 tropical timber producing and 26 consuming countries. It abides to the underlying spirit and philosophy of the organization that is to strike a balance between utilization and conservation of tropical forests through sustainable forestry.
1.4.1 Lack of funding for forestry development programmes
1.4.2 Logging Ban Issue
1.4.3 Increasing Population
1.4.4 Uncertainty Brought about by Changing Trends in Tropical Wood Products Trade
Because of the huge financial requirements of funding various forestry development programmes, the country is beset with problems in this regard. The cost of the forestry aspect of the medium term Philippine Development Plan (1995-2000) has been estimated at PHP 4.30 billion annually. In this regard, the country can only prioritize its various programmes as far as providing funds is concerned.
To a large extent, some segments of the forestry sector has been on a point of uncertainty due to the logging ban bill now pending in the legislative branch of the government. The forest industry sector is specifically affected by this impasse as demonstrated by declining level of investments in the sector.
The logging ban bill has also affected the passage of the Philippine Forestry Code which seeks to improve on existing forestry rules and regulations towards forestry development.
Because of a burgeoning population, the country's forest-lands are under constant pressure to be converted to other land-uses. Shifting cultivation remains to be a big problem with the presence of some 30% of the country's total population within and in the fringes of forest areas.
In some instances, forest areas have been covered by tenurial instruments issued by other government agencies other than the Department of Environment and Natural Resources such as the Department of Agrarian Reform. This results in land-use conflicts as forestry concerns in the management of these areas are given less importance in favour of agriculture.
Increasingly, trade of wood products in the international market is being influenced by certain trends. Eco-labelling requirements imposed by major consuming countries in Europe is slowly gaining acceptance in other countries.
Unpreparedness to comply with rules of the World Trade Organization (WTO), which are still being formulated, and the possibilities of not being able to compete on an "imposed playing field" is another concern in the wood-based industry.
Lastly, the increasing adoption of a log export ban policies of log exporting countries may possibly interrupt continuous supply of wood products to the country's wood-based industries which are now relying partly on imported wood raw materials thus imperilling their viability.
