Logging Versus Fisheries and Tourism in Palawan

Logging Versus Fisheries and Tourism in Palawan

Primary Country: Philippines
Ecosystem: coral reef
Sample Value Estimates:
Economic comparison of fishing, logging, and tourism sectors under two different policy options: ban on logging in the Bacuit Bay area of Palawan and continued logging in the area
  1. $47,415: gross tourism revenue with no logging
  2. $8,178 : gross tourism revenue with logging
  3. $28,070: gross fisheries revenue with no logging
  4. $12,844 : gross fisheries revenue with no logging
  5. $12,885: gross logging revenue
  6. $33,907: gross revenue of all industries with logging
  7. $75,485: gross revenue of all industries without logging
  8. $41,578: welfare loss with continued logging
Region: Asia
Data source: NOAA's Coral Reef Valuation Database

Publication information

Hodgson, G. Dixon, J. “Logging Versus Fisheries and Tourism in Palawan” Occasional Papers of the East-West Environment and Policy Institute., 1988

Addtional Notes

Assumes that continued logging results in increased sedimentation in Bacuit Bay and calculates gross revenues and present values using a 10% and 15% discount rate

Occassional Paper

Hodgson, G.//Dixon, J.

1988

Logging Versus Fisheries and Tourism in PalawanOccasional Papers of the East-West Environment and Policy Institute

Paper No.7East-West Center

USAPhilippines/coral reefs/extractive use/tourism/fisheries/economics/pollution/sedimentation/sector analysis The pollution of rivers, lakes, and sea by sedimentation is a growing problem throughout the world. Sedimentation pollution of coastal marine areas is especially serious in Southeast Asia where fish harvested from coastal waters serve both as a major source of protein for human consumption and a significant source of foreign exchange through exports. One major cause of sedimentation is logging. In 1985 a logging operation was begun in the watershed bordering Bacuit Bay (El Nido), Palawan, Philippines. Bacuit Bay is also an important resource for two other foreign exchange earning industries -- tourism and marine fisheries. The effects of logging-induced sedimentation on the bay's previously pristine marine environment were the subject of a 1-year ecological study. By the end of the study, only 11 percent of the available commercial forest had been logged, but high rates of accelerated erosion due to logging had already resulted in dramatic increases of sediment transport and discharge into the bay. Sedimentation damage to bay coral reefs and associated fisheries was rapid and severe. In order to examine the economic effects of sedimentation pollution on tourism and marine fisheries, predictions of future revenue production based on two development alternatives are presented. The development options are (1) to ban logging in the bay's watershed or (2) to allow logging to continue as planned. The first option would prevent further damage to the bay's ecosystem due to logging-induced sedimentation and thus the tourism and marine fisheries dependent on it. The second option would maximize logging revenue but reduce revenue from the other industries. The results of the economic analysis are striking and project a reduction in gross revenue of more than $40 million over a 10-year period with continued logging of the Bacuit Bay watershed as compared with gross revenue given implementation of a logging ban. The difference is due to projected losses from tourism and fisheries. Present value analysis was performed using both a 10 and 15 percent discount rate. Even with the higher discount rate, the present value of lost revenue exceeds $11 million under Option 2-- continued logging. Sensitivity analysis shows that significant deviation from predicted effects of sedimentation damage do not alter the conclusion. In addition to these quantitative results, consideration of qualitative factors reveals that the social, economic, and environmental benefits of fisheries and tourism outweigh those of logging in this location. The study demonstrates that the combined use of ecological and economic analyses can provide useful information for government planners seeking to maximize net economic benefits while minimizing social and environmental costs. Recommendations are made regarding application of these results to similar resource conflicts in other regions. Gross Tourism revenue (no logging): $47,415. Gross Tourism revenue (logging): $8,178. Gross Fisheries revenue (no logging): $28,070. Gross Fisheries revenue (logging) $12,844. Gross logging revenue: $12,885. Gross revenue of all industries with logging: $33,907. Gross revenue of all industries without logging: $75,485. Welfare loss with continued logging: $41,578.

Economic comparison of fishing, logging, and tourism sectors under two different policy options: ban on logging in the Bacuit Bay area of Palawan and continued logging in the area.

Bacuit Bay, Palawan, Philippines

Coral reef systems of Bacuit Bay and forested area of Palawan subject to logging (and draining into Bacuit Bay)

Tourism, diving, fishing, logging

Economic records kept by hospitality, fishing, and logging industries and the government of the Philippines.

1987-1996

Gross Tourism revenue (no logging): $47,415. Gross Touris revenue (logging): $8,178. Gross Fisheries revenue (no logging): $28,070. Gross Fisheries revenue (logging) $12,844. Gross logging revenue: $12,885

Gross revenue of all industries with logging: $33,907. Gross revenue of all industries without logging: $75,485. Welfare loss with continued logging: $41,578

Records review

Study simulated lpercent osses to the tourism (diving and other) and fishing industries under the assumption that continued logging results in increased sedimentation in Bacuit Bay, and ultimately, losses to tourism and fishing industries. Study then calculates gross revenues and present values (10% and 15% discount rate) of the fishing, tourism, and logging industry under the option of (1) continued logging, and (2) ban on logging.

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