Valuation Study

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Value of Marine Fishery

Attributes

Medium: Animals, Plants and/or Others

Country: Philippines

Analytical Framework(s): Market Price of Output

Unit(s): Economic Rent

Study Date: 1994

Publication Date: 1998

Major Result(s)

Resource/Environmental Good PHP, per year
(1994)
PHP, per year
(2014)1
USD, per year
(2014)2
MER from commercial fisheries at MEY3 15,205,500,000.00 31,711,374,360.00 709,020,658.41
MER from commercial fisheries at MSY4 9,672,690,000.00 20,172,588,448.80 451,030,024.17
MER from municipal fisheries at MEY 7,092,080,000.00 14,790,674,681.60 330,698,183.63
MER from municipal fisheries at MSY5 -773,817,000.00 -1,613,810,829.84 -36,082,485.87
MER from overall marine fisheries at MEY 19,689,700,000.00 41,063,263,144.00 918,115,422.58
MER from overall marine fisheries at MEY 4,091,360,000.00 8,532,613,107.20 190,776,939.99

About the Inflation Adjustment: Prices in Philippines (PHP) changed by 108.55% from 1994 to 2014 (aggregated from annual CPI data), so the study values were multiplied by 2.09 to express them in 2014 prices. The study values could be expressed in any desired year (for example, to 2022) by following the same inflation calculation and being sensitive to directional (forward/backward) aggregations using your own CPI/inflation data.

Functional Transfer: Four general types of models can be applied in analyzing overfishing, namely the single species and constant price models; single species and variable price models; multiple species and constant price models; and multiple species and variable price models. Primarily due to data constraints, this study employed the single species and constant price model. Two such models are popularly employed in empirical research: the Gordon-Schaefer (GS) model, and the Fox model. The results from the GS model were used in computing for the total revenues, total costs and economic rents in the study by valuing the fish catch and fishing effort quantities in 1994 prices:Y = 0.8572 E - 0.0000002338 E2 for commercial fisheries, Y = 0.5536 E - 0.0000000724 E2 for municipal fisheries, and Y = 0.6552 E - 0.0000000595 E2 for overall marine fisheries,where Y = fish catch (coefficients significant at the 1% level) and E = fishing effort. It must be noted, however, that the GS and Fox models consider fishing effort as the only factor influencing fish catch (learning/technology has been imputed as a factor). Other factors such as fishery policies and/or annual changes in weather were excluded, and the authors recommended that the extent by which these and other factors influence fishing be investigated in future studies.

Study Note: Both the GS and Fox models generated the expected signs and significance for the coefficients, suggesting that the fisheries are overfished. Moreover, the reported values are largely dependent on the price of fish and cost of effort assumed in the analysis. A decrease in the price of fish or an increase in the cost of effort, for example, may substantially reduce the value of the estimated economic rent that can be generated from the sector, and vice-versa. As such, the authors recommended that future studies use more accurate data reflecting variable, instead of fixed, fish and effort prices, though the price data employed were considered the best estimate in the absence of any other source. In addition, some of the annual data were simply estimated through regression, possibly affecting the reliability and accuracy of the final data used. A re-estimation in the future using more reliable catch and effort data is welcome.

Study Details

Reference: Israel, Danilo C. & Banzon, Cesar P. 1998. Overfishing in the Philippine marine fisheries sector. EEPSEA Research Report Series, No. 1, 1-32.

Summary: Approximately 5% of the Philippine Gross National Product is accounted for by the total output of the fisheries sector. However, the sector currently faces overfishing, despite the sector's economic significance. The study looked into the issue of overfishing using a sectoral The fisheries sector has grown steadily in recent years in terms of output, and has also been a steady dollar earner. Overfishing was seen as a trend of falling catch per unit effort over time. Results confirmed that the marine fisheries sector and its two sub-sectors, commercial and municipal fisheries, are already overfished. The maximum economic and sustainable yields have been reached during the early 80s to the early 90s. If the marine fisheries sector is operated at sustainable levels, substantial economic rents can be had, though substantial reduction in fishing effort will be required to attain such levels of sustainability in the marine fisheries. As such, the needed substantial decreases in fishing effort for the attainment of sustainability will likely yield unemployment as a serious potential side effect. Problems must be addressed immediately, like imposing more effective licensing schemes, employing mass education for the technical and economic empowerment of the fishermen, and others.

Site Characteristics: Secondary time-series data covering the period 1948-1994 (from the Bureau of Fisheries and Aquatic Resources, Bureau of Agricultural Statistics, and past studies) were employed in the study, statistically adjusting for inconsistencies.

Comments: Though the statistical analyses and adjustments made were sound and theoretically approvable, care must be taken in applying the results of this study to other possible contexts.

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