Norad funded AquaPark Project Environmental monitoring and modeling towards sustainable aquaculture development in the Philippines, a follow-on-project-from EMMA Mid-term Progress ReportJanuary 2011

Identifying issues with farmers and owners during the stakeholder workshop

Environmental survey for Sual Mariculture Park

Panabo Mariculture Park plan

Scale model cages for mooring design trial

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IntroductionThe Bureau of Fisheries and Aquatic Resources (BFAR) has been aggressively promoting and establishing Mariculture Parks (MPs) throughout the country as a way of expanding aquaculture development in new areas of the Philippines and controlling the development in terms of number of licenses per park to be within the carrying capacity of the environment and locations for aquaculture development. It also fits in with the Governments development of the Mariculture highway to supply fish to the main markets of the Philippines and Asia. BFARs objective for establishing mariculture parks are as follows: To generate employment and alleviate poverty in the countryside; To promote marine fish culture as an alternative source of livelihood for marginalized and sustenance fisher folk; To develop an area with appropriate equipment and infrastructure that will allow fishermen-farmers and investors to operate cost effectively and securely; To promote the use of environment-friendly inputs and farm management practices. As of April 2010, BFAR has identified and established fifty eight mariculture parks (MPs) around the country, of these 58 MPs, 50 MPs are already operational. One of the problems has been that the selection of suitable sites has not always been based on the hydrographic suitability of the site and that the environmental carrying capacity for sustainable has not been based on validated models. However, some MPs have not been able to develop beyond the pilot stages while others either closed or scaled back operations. This proposal is a follow on from the Norad-funded project EMMA Environmental Monitoring and Modelling of Aquaculture in risk areas of the Philippines. The EMMA project undertook environmental surveys of 3 aquaculture areas in the Philippines that were at risk from fish kills. The project donated the necessary equipment and trained staff in survey methodology, data collection and analyses of data. It increased the scientific understanding of the impacts of aquaculture in the Philippines and built capacity within the government to monitor the impacts. The Norad-funded project AquaPark aims to utilise the equipment that has been donated to enhance the government s capabilities in identifying new aquaculture zones, calculate sustainable aquaculture carrying-capacity for these zones, and develop guidelines for good aquaculture practice in these zones. This will allow the government to plan the development of new aquaculture areas in a responsible and sustainable way based on the carrying capacity of the area for aquaculture. Objectives: Existing mariculture parks o calculate sustainable aquaculture carrying-capacity for these zones, o Recommend cost effective design of moorings and cages o develop guidelines for good aquaculture practice in these zones o Strengthen the planning and management of mariculture parks o Recommend optimal business model for Mariculture Parks 2

Re-organisation of existing aquaculture areas into parks o Assess the possibility and methodology of reorganising existing aquaculture production into aquaculture parks Assess carrying capacity Assess present production Assess most suitable sites o Discuss with stakeholders and LGUs on best way to organise the production to relocate to mariculture park area New areas o Develop the methodology to identify new aquaculture zones using Wave modelling Classification of site exposure GIS o Recommend optimal mix of multi-trophic integrated aquaculture Fish Mollusc seaweed To provide the local, regional and central Government of the Philippines the tools for planning responsible and sustainable cage culture. o Site selection o Carrying capacity o Cage design o Integrated aquaculture

Project Outputs The project outputs will allow the government to plan the development of new aquaculture areas in a responsible and sustainable way based on the carrying capacity of the area for aquaculture To optimise existing Mariculture park management and profitability Strengthen the management and benefits of the small business cluster model The project has selected three case study areas: 1. Existing mariculture park area: Panabo Mariculture Park 2. Existing aquaculture production area that could be incorporated into a mariculture park: Sual, Pangasinan 3. New potential areas identified for aquaculture development: Alabat, Perez, Quezon, Calauag, and Lopez, Quezon Province

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The project will select three case study areas: Panabo - existing mariculture park area Sual - existing aquaculture production area that could be incorporated into a mariculture park Quezon Provence new area identified for aquaculture developmentAquaPark Panabo Stakeholders meeting interim results

Summary of progressKickoff meeting was held with all partners in Troms 22 24 February 2010 (see Annex 1) Project web site operational from March 2010 www.aqua-park.asia Project reports can be downloaded from the web site First Survey (Environmental and Production) of 2 case study sites April 2010 (see Annex 2) Panabo Mariculture Park, Mindanao Proposed Sual Mariculture Park, Pangasinan Second Survey (Economic and Socio-economic) of 2 case study sites September 2010 (see Annex 3) Panabo Mariculture Park, Mindanao Proposed Sual Mariculture Park, Pangasinan Third Survey (Environmental Economic and Socio-economic) of third case study site scheduled for January 2011 (see Annex 4)

Activities and progress to datePanabo Mariculture Park (First Survey April 2010, Second Survey September 2010) Stakeholder meeting Technical and management committee meeting Identification of stakeholder issues Environmental monitoring survey Production survey Economic survey Socio-economic survey Wave modeling for new expansion area 4

Sediment impact modeling

Sual Mariculture Park (First Survey April 2010, Second Survey September 2010) Stakeholder meeting Technical and management committee meeting Identification of stakeholder issues Environmental monitoring survey Production survey Economic survey Socio-economic survey Wave modeling for new expansion area Sediment impact modeling The first survey and case study meetings were undertaken during April 2010. The following activities were undertaken; Stakeholder meeting Environmental survey Production survey Estimation of sediment output from cages o Milkfish o Grouper During the stakeholders meeting an analysis was made of Mariculture Park Issues Issues that were identified in Panabo Strategic Plan Care takers and farm owner operators Science Institutions The conclusions from the stakeholders meeting were that the AquaPark should provide the following technical assistance Carrying capacity estimation Site optimisation (layout) Identifying new areas for mariculture parks Improve mooring design Develop an Oil spill contingency plan

Generic Activities undertaken during the first yearDevelopment of oil spill contingency plan A working report was made which attempted to summarise the measures that Mariculture parks can take to be prepared to deal with oil spills. The reports summarises Biological impacts of spills on fish, shellfish and sensitive environments Oil spill contingency planning and response 5

Cleanup Compensation.

Development of Better Management Practices for cage operators Draft BMPs were developed which followed the culture process as follows Crosscutting issues 1. Planning and siting 2. Farm design and construction 3. Fry and Fingerling purchase or collection, nursery production and live fry transportation 4. Production management 5. Fish health 6. Fish quality and food safety 7. Harvest and post harvest management 8. Monitoring and record keeping 9. Social (staff training, health and safety) 10. Environmental management 11. Dive Operation in Marine Farms Improved mooring system for more exposed sites A 1/10th scale model of 4 cages was made and different mooring systems tested in a tank at NIFTDC in Pangasinan to find out comparative holding strengths. Validation of Tropomod predictive model The model was validated for intensive milkfish cage production and grouper cage production fed with trash fish Socio-economic survey This socio-economic survey analysed the positive (and negative) impacts either perceived or verifiable impacts of implementing Mariculture Parks for farmer-beneficiaries, upstream and downstream stakeholders, and local communities and LGUs During the field work in Quezon, the following activities were undertaken: 1. Meeting and interview with different stakeholders in Calauag, Quezon, i.e. MAO, Municipal Administrator, Municipal Planning and Development Office Head and Head of the Fishery Law Enforcement Team (FLET) and discussed matters related to the socioeconomic aspect of aquaculture initiatives, the development plans and perceptions of key LGU and BFAR officials in the area. 2. Workshop on Mariculture Park Planning and Development. The following outputs of the group was presented during big group plenary:

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ISSUE 1. Municipal Water-not delineated, no managemen t zoning & remain open access 2. No sufficient and updated coastal resources baseline data 3. Weak recordkeeping, documentati on, monitoring and evaluation system 4. Lack of training on mariculture park system

ACTIVITY/SOLUTION TIME FRAME Finalize municipal water delineation and 2nd Quarter management zoning 2011 Identify the mariculture zone Define relationship and (Lopez, Perez & complementation of Ginyangan other management ) zones with the mariculture zone 1st Quarter Update coastal resources and fisheries 2011 (Lopez, baseline data Perez & Update coastal Ginyangan environment profile ) Attend / participate training about process documentation, monitoring and evaluation 1st Quarter 2011 (Lopez, Perez & Ginyangan )

RESPONSIBLE PERSON/OFFICE/INSTITUTION

MAOs of Perez, Lopez and Ginyangan through the SB Chairperson on Agriculture, Fisheries and Environment with BFAR and NAMRIA assistance

MAOs and MPDCs With BFAR assistance

MAOs and MPDCs With BFAR assistance

Request for municipalbased training on mariculture park

1st Quarter 2011 (Lopez, Perez & Ginyangan )

MAOs With BFAR assistance

3. Meeting with the mayors and Congressman of Quezon and visit to their Mariculture Park. The detailed report on the following can be found in Annex 5. Economic survey This survey investigated the economics and economic benefits of mariculture parks for the different types of locators and for the local Government/BFAR MP development, technical and infrastructure support in case study areas. It assessed and compared the economic 7

influence of MPs in the case study locations and the comparative regional differences for input costs and market prices The key components of this investigation assessed the economics of: Different aquacultural farming systems in the MPs; LGU and BFAR support for setting up and providing support of the MP Differences in regional input cost comparisons, Cost/benefit and breakeven analysis for support infrastructure Local and regional market analysis comparisons. The result of the financial analysis of Panabo Mariculture Park operations shows that it is economically viable. The cost structures differ as well but the proportion of the costs are much lower in PCMP. Operations with 1-3 cages are the most affected because while they have (mostly) 1 cage to tend to, stocking costs and feed costs contribute to around 50% of sales. It is good enough that fixed and other operating expenses contribute only 30% resulting to an average net profit of 24% after depreciation (4%) has been removed as an actual cash expense. On the other hand, the financial analysis of Sual Mariculture Park shows that having more cages for milkfish culture in the MP may not be beneficial. The desire to have more cages, stock these cages at twice the recommended stocking rate and feeding the fish ad libitum, the excessive number of stocks (more than 20 cages category) overloads the fixed expenses (cages, moorings and related paraphernalia) at 81% of sales, on the average. While feed costs and stocking costs (variable expenses) and the other operating costs remain manageable, the effective average net profit stands at Php 114,039 per cage (8% of sales). ROI is at a critical 13% which makes it sensitive to fluctuations in prices of both fixed and variable expenses. Operating between 11 to 20 cages, however, proves more profitable with variable expenses at 41% of sales. The remaining fixed costs and other operating costs contribute only 16% more allowing for an average net profit of 45% after depreciation costs had been added back to the returns. Each cage at this category provides a return of Php 301,437 (46% of sales). The average rate of return is 106% at just one cycle. With the expected 2 cycles a year, operating 15 cages only in SMP will provide a return of 212% return per annum, on the average. Obviously, no company operates below 10 cages in SMP. Details of this report is attached in Annex 6.

Wave modeling The Stwave model is set up for the Panabo area, and the model domain extends out till the open ocean. The bathymetry is generated from oceanographic charts. Wind forcing is found from observations and wave forcing is found from a global model (WAM). The model has been run for the Panabo area for the angle sectors where the Ocean surges originate from the open ocean.

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Same method is used for the Sual area. The Stwave model has been run for the waves coming from north (320 deg to 40 deg). The Stwave model has been simulating also the incoming ocean waves to the Lamon Bay area, in the same manner as for Sual and Panabo. This time all sectors have been covered. The illustrations and data results of these have been saved in format readable with Google Earth and GIS, respectively.

Environmental impact modeling In the first year of the project, the TROPOMOD model was validated with sediment trap and environmental survey data, set up with scenarios using existing cage layouts and data from the production surveys for both Sual and Panabo. In addition, proposed cage layouts and husbandry practices were tested for the Sual AquaPark. Model validation (tasks 6 and 7) to further increase confidence in TROPOMOD model predictions, model validation was ongoing in year 1. Sediment trap data from the Spring 2010 surveys were used to validate the model predictions of flux (g waste per m2 bed per day) for Grouper and Milkfish cages. In addition, useful relationships were established between predicted flux and indicators measured in the environmental survey for Sual. This will also be undertaken for Panabo in year 2. The model used as much site-specific data as possible, including results from production surveys and data from feed break up and faecal settling experiments. Optimal production plans for Sual and Panabo AquaParks (tasks 2, 3 and 5) following model validation of TROPOMOD for Sual, the model was set up with 3 areas of 10 ha each to determine an optimal production plan (Figure 1). A simple indicator (sea bed area resource available per cage) and TROPOMOD predictions were used to optimise cage spacing and husbandry practice. The preliminary results showed that 56 cages per 10 ha would improve the environmental conditions at Sual and these results were presented at the January 2011 mid-term meeting and feedback obtained. From these discussions, predictions will be revised using TROPOMOD to test an increase in each production area to 15 ha, maintaining good spacing between cages and husbandry practices. The following scenarios are to be tested in year 2: a). 3 areas of 15 ha each with 84 cages in each and b). 4 areas of 15 ha each with 84 cages in each. Determination of optimal layouts for Panabo are scheduled for year 2 and IMTA modules will also be added. Scenario testing (tasks 1 and 4) scenario testing was undertaken comparing high density Milkfish cages with low density Milkfish cages. In addition, Milkfish culture was compared with Grouper culture, using species-specific FCR, feed input and settling rates of feed and faeces. Slow settling Milkfish faeces were shown to disperse more widely, impacting a wider area than predicted for Grouper faeces. These results were presented at an FAO meeting by Patrick White in October 2010. TROPOMOD model was developed to allow testing of different IMTA culture types. Four Milkfish cages were set up in the model using typical husbandry information and Panabo current meter data. IMTA modules representing different types of integrated aquaculture were then added to determine how much waste discharged from the cages intersects the 9

IMTA. The percentage of waste feed and faeces intersecting suspended (e.g. oysters on rope/raft) and benthic culture (e.g. sea cucumber pens) was determined. Distance of the modules from the cages and optimum depth was tested. In addition, a plume of dissolved nutrients from the cages was also simulated to determine how much of the plume intersects seaweed culture at different distances from the cages and depth. Cage in a cage culture was also simulated, showing an inner cage containing Grouper surrounded by an outer cage of Milkfish. These scenarios were presented at the mid-term meeting in January 2011.

Environmental Survey Introduction Background and scope of the investigations Under the project Environmental monitoring and modelling of aquaculture II in Mariculture Park, Philippines environmental surveys was undertaken in Panabo and Sual. Fieldwork was carried out in April 2010. This document describes the field investigations that were carried out and initial findings on the observed environmental impacts. General environmental issues related to aquaculture The spatial extent and level of local environmental impact caused by a fish farm is determined by natural conditions such as bottom topography, sediments and currents, in combination with the size of fish production and operational practices. A major factor in preserving environmental quality is an optimal location and operation of the farm, conforming to the existing environmental conditions. Organic enrichment in the sediments is one of the most important environmental effects associated with fish farming. The primary causes are wasted food pellets and fish excrements. In areas with water currents insufficient to remove of spread this material over a larger area, organic material may accumulate on sea floor below or in the vicinity of fish farms and there can be a build up of nutrients leading to eutrophication and possibly algal blooms. Bacterial decomposition may lead to anoxic conditions in the sediments and overlying water and to formation of methane and hydrogen sulphide (H2S) gas. Both low oxygen concentrations the presence of methane and H2S have detrimental effects (eg. Reduced growth rates, increased disease frequencies) on fish in the cages near the impacted areas. Under extreme conditions, anoxic water and the toxic gasses may even cause mortality and algal blooms to develop. Environmental survey Analysis of the bathymetry of the area Profiling of temperature, salinity, and oxygen levels through the water Sediment analysis Survey of current speed and direction Hydrography The hydrographic data was measured with a electronic CTDO probe (YSI). The probe measures conductivity (salinity), temperature, depth and oxygen every 5 seconds as the probe 10

is lowered from the surface to the bottom. CTDO measurements were collected at XX stations. This gives hydrographic profiles through the water column, which will reveal any stratification or oxygen depletion at the site. Current measurements The currents were measured with electronic current meters (type Aanderaa RCM9lw). The current meters were programmed to measure temperature, current-speed and current-direction every 10 minutes. Sampling and treatment of bottom samples Benthic sampling consists of two main components: 1. Sediment investigation (sediment chemistry, grain size and field notes of the visual and olfactory sediment characteristics) conducted at all stations. 2. Semi quantitative benthic fauna analysis. Sampling equipment Sampling was carried out with a 0.05 m 2 modified van Veen grab and a gravity corer Figure belove. The grab had hinged and lockable inspection flaps constructed of 0.5 mm mesh. The upper side of each flap was covered by additional rubber flap allowing water to pass freely through the grab during lowering, yet closing the grab to prevent the sediment surface being disturbed by water currents during hauling.

Grab

Gravity Corer

Sampling treatmentAt the semi-quantitative stations, one chemical and one biological grab sample were taken. 11

Sub-samples for analyses of organic carbon (Ignition loss) and sulphate were removed from the chemical samples. Each sample was visually inspected to ensure there was no sediment disturbance. Sediment for the chemical analysis was taken from the upper 2 cm layer. The samples were frozen. The volume of the sediment that contained the biological samples was recorded and gently sieved through a 1mm round hole sieve immersed in sea water. The fauna for the semiquantitative sample were then preserved in 4 % formaldehyde solution stained with rose bengal and neutralized with borax At the corer stations, one sample were taken. The corer was photographed and the black layer was measured, then the top 2-4 cm was taken for chemical analysis. The samples were frozen.

Sediment characteristicsEach sample was described with respect to sediment type, smell, color, larger living animals and any other obvious features (i.e. visible organic layer, bacteria, feces, fish food etc.). Sediment results of Panabo and Sual Mariculture Park is attached in Annex 7.

Activities presently underwayWave modelling. Undertake further wave modelling of Panabo and Sual to include the predicted waves formed by predominant winds. Draft report to be sent to all for comments by Mid November, final report completed before Christmas. Develop a site exposure classification along the lines of the Norwegian one but adapted to the Philippines Start to model the waves for the Quezon province area Environmental survey Finalise the Panabo environmental survey draft report and the Sual environmental survey reports. Adapt TROPOMOD to the recorded impacts in Sual. Draft report to be sent to all for comments by Mid November, final report completed before Christmas. Mooring design trial. Finalise the mooring trial, analyse results and make recommendations. Draft report to be sent to all for comments by Mid November, final report completed before Christmas. Tropomod modelling of sediment impact. Adjust TROPOMOD model for Sual and Panabo to reflect recorded impacts. Draft recommendations on change in cage layout for Sual (New mariculture park zones) and Panabo (enlarged mariculture zone and smaller fisher low density grouper cages inshore and higher density milkfish cages further offshore). Start planning for integrated multitrophic aquaculture in these two sites (oysters and seaweed).

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Better cage management Practices. Finalise the BMPs for nursery pond and fish cage operators ready to be tested by key operators on Panabo and Sual. Draft BMPs to be sent to all for comments by Mid November, final report completed before Christmas. Jocelyn to translate into simplified Farmer Tagalog language (January 2011) Production Data report. Finalise production data report including additional information from others. Send data to Chris to put into TRPOMOD for optimising Panabo and Sual layouts Oil spill contingency response report. Finalise generic mariculture park oil spill response guidelines and prepare format for individual Mariculture response plans for Panabo and Sual. Site selection criteria. Draft a set of site selection criteria that can be used as a basis for the GIS training and the site selection in Quezon Province Socio economic analysis. Send draft copy of the report to all in early November for comments. Finalise the socioeconomic analysis reports for Panabo and Sual by Christmas. Economic analysis. Send draft copy of the report to all in early November for comments. Finalise the socioeconomic analysis reports for Panabo and Sual by Christmas GIS training Plan GIS training with NAMRIA for BFAR staff

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Planned activities during 20113rd survey during January 2011 Identification of potential new areas for aquaculture using GIS Prioritising selected sites Verifying that highlighted areas are suitable for aquaculture Simplification of Better Management Practices into farmer language and translation into Tagalog Framework for Mariculture Park development and management Panabo Mariculture Park Specific oil spill contingency plan Carrying capacity estimation Optimisation of Park layout using Tropomod model Recommendations on Park layout for Integrated Multi-Trophic Aquaculture (IMTA) with fish, oysters and seaweed Sual Mariculture Park Specific oil spill contingency plan Carrying capacity estimation Optimization of Park layout using Tropomod model Recommendations on Park layout for Integrated Multi-Trophic Aquaculture (IMTA) with fish, oysters and seaweed Quezon Province Mariculture Park site selection Identification op potential sites Production survey Economic survey Socio-economic survey Wave modeling for new expansion area Sediment impact modeling Identification of potential new areas for aquaculture using GIS Site selection methodology was developed using GIS layers and buffers to identify suitable mariculture Park areas. The layers used included; Base map (map and Google Earth) Municipality, municipality water boundaries Bathymetry 15 50m Wave model output Roads Towns/villages Jetties and harbours Corals Planning next works Site selection Validation (January 17-19) 14

Validation of site selection o Depth o Corals o Waves o Access and infrastructure baseline environmental data collection Quezon Province o Sediment type and quality o Current speeds

Seminar and workshop for Local Government in Quezon Province (January 20) Undertake a seminar and workshop in Quezon Province that will be come the basis for the Local Government guidelines. Development of a MP framework (January 23 and 24) Development of a framework for MP development to ensure responsible planning and management January 24 and 25 insulation from politics development of generic Better Practice Guidelines (planning and management) for BFAR, LGU and Management Councils. Better Management Practices (January 26 and 27) BMPs for MP cage operators Simplify language Translate into Tagalog Identify key operators to try and implement Refine Finalise Oil spill response plan Panabo (January 27 and 28) Risk of oil spills o Where o What type oil Available equipment o Port o LGU o Davao Action plan Responsibilities Clean-up Planning next 6 months GIS training Wave modeling Mariculture Park production optimisation modelling Integrated Multi-trophic Aquaculture planning GIS training 15

4 staff from NIFTDC 4 staff from BFAR NAMRIA training 5 days 2 software packages

Wave modelling 1 software package STWave Demonstration o Panabo o Sual o Quezon Province Mariculture park optimisation Started work on trying to optimise Sual production Integration of IMTA Developing Integrated Multitrophic Aquaculture practice into Mariculture Parks Generic Activities Annual Project meeting in Manila, Philippines. Recommendations on site selection criteria for mariculture Parks Purchase of GIS software and training of BFAR staff in GIS for site selection Purchase of wave modeling software and training of BFAR staff Formulation of framework for Mariculture Park development and management Summary The project is presently on schedule and within budget. Annual project Meeting planned for Mid January 2011. Mid-term progress report will be sent to Norad by 31 January 2011.

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Annex 1. Kick-off meeting agendaDates Venue Attendees 22 24 February 2010 Akvaplan-niva HQ, Framsenteret, Troms, Norway Akvaplan-niva (Aquaculture and Coastal Departments) Bureau of Fisheries and Aquatic resources (Central and NIFTDC) Map and Marine

Meeting schedule Monday 22 February Time Event 0900 - 0915 Welcome and presentation of APN 0915 - 0930 Signing of agreement between APN and BFAR 0930 - 1000 Presentation of BFAR 1030 - 1100 Presentation of NIFTDC 1100 - 1115 Presentation of Aquaculture Deapartment 1115 - 1130 Presentation of Coastal Deapartment 1130 - 1230 Lunch in canteen 1230 - 1330 Presentation of present status of Mariculture park development in the Philippines 1330 - 1430 Presentation of aims and objectives of EMMA 2 1430 - 1630 Discussion on case study sites Chris Cromey from Map and Marine arrives Tuesday 23 February Time Event 0800 - 0900 Webinar Link to Development Bank of the Philippines 0900 - 0930 Presentation on Tropomod model 0930 - 0945 Presentation of Wave model 0945 - 1000 Presentation of NYTEK 1030 - 1100 Discussion on survey data collection 1100 - 1115 Discussion on modelling work 1115 - 1130 Discussion on development of recommendations 1130 - 1230 Lunch in Canteen 1230 - 1330 Discussion of project partner inputs (staff and resources) 1330 - 1430 Discussion of timing for inputs 1430 - 1530 Any other business 1530 - 1600 Wrap up 17 Responsible Anton Giver Anton Giver and Asst Dir Adora Gil Adora, BFAR Asst Dir Westly Rosario, Chief NIFTDC Anton Giver Rune Palerud Asst Dir Adora Patrick White All

Responsible Rune and DBP Chris Cromey yvind Baard All All All All All All Patrick

Evening dinner (Skarven Restaurant) Wednesday 24 February Time Event 0900 Collection from Hotel 0930 - 1130 Meeting with Fisheries Department Aquaculture Management, Troms 1200 - 1300 Lunch 1300 - 1600 Visit to Troms Marin Yngel Cod breeding facility 1600 - 1630 Return to hotel Responsible Rune Jocelyn

Jocelyn

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Annex 2. First AquaPark Survey April 2010Schedule of activities: DATE 2010 March 26 April 6 April 7 April 7 10: April 9 April 11: April 12 16: April 16 April 19 - 22: April 23 April 25 April 19 (3rd wk): April 27 May June: ACTIVITY Deployment of current meters in Panabo Jocelyn and Rune travel to Panabo Patrick arrives Panabo Data collection at Panabo, Davao Afternoon - stakeholder workshop, Panabo Evening travel to Manila Travel to Dagupan NIFTDC (data processing) Travel to Sual Data collection at Sual, Pangasinan Afternoon stakeholder workshop, Sual NIFTDC (data processing) Rune returns Patrick Returns DBP National Workshop Pick-up of current meter, Sual Analysis of data (modeling) RESPONSIBLE AGENCY Regie, NIFTDC

EMMA 2 Team BFAR Regional Office (around 10 pax, FARMC, LGU, etc) EMMA 2 Team EMMA 2 Team BFAR Regional Office (around 10 pax, FARMC, LGU, etc) EMMA 2 Team EMMA 2 Team Regie, NIFTDC

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Annex 3. Second AquaPark surveySchedule for AquaPark during September 2010 Philippines September Wednesday 1 Travel to Panabo Thursday 2 Technical and Management Project meeting Friday 3 Stakeholders meeting Saturday 4 Economic and Socio-economic data collection Sunday 5 Economic and Socio-economic data collection Monday 6 Economic and Socio-economic data collection Tuesday 7 Economic and Socio-economic data collection Wednesday 8 Economic and Socio-economic data collection Thursday 9 Travel to Sual Friday 10 09.30 12.00 Project meeting 13.00 17.00 Stakeholders meeting Saturday 11 Sual Socio-economic data collection (socio-economist continues data collection) Sunday 12 Economic and Socio-economic data collection Monday 13 Economic and Socio-economic data collection Tuesday 14 Economic and Socio-economic data collection Wednesday 15 Economic and Socio-economic data collection Thursday 16 Economic and Socio-economic data collection Friday 17 Return to Manila Location Panabo Panabo Panabo Panabo Panabo Panabo Panabo Panabo Sual Sual Sual Sual Sual Sual Sual Sual Manila

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Annex 4. Proposed third AquaPark Survey 2011DATE October ACTIVITY Meteorological data from PAGASA Wave Modelling and other factors (access to roads, markets, GIS, LGU acceptability etc.) Deliberation of potential site in Quezon Travel to Philippines Project Meeting Meeting with Benjie re: GIS Aquaclimate Travel to Quezon Courtesy call to LGU Project Meeting, final logistics prep, mobilization of team Environmental Survey Socio-economic Survey Economic Survey Travel back to Manila Day off BMP Workshop with Farmers Travel to Davao RESPONSIBLE AGENY NIFTDC, BFAR LOCATION Quezon Selection of potential site in Quezon Potential MP in Quezon Quezon City Makati Quezon Quezon Quezon Quezon Quezon Quezon Quezon City Quezon City Davao CTDO, CM, sediment, water, bathymetry, drogue REMARKS/OUTPUT

November Dec 1st week Jan 13 - 14 Jan 14 (Friday) Jan 15 (Sat) Jan 16 (Sunday) Jan 17 (Mon) AM Jan 17 (Mon) PM Jan Jan Jan Jan Jan Jan Jan 18-21 (Tues-Fri) 18-21 (Tues-Fri) 18-21 (Tues-Fri) 22 (Sat) 24 (Sun) 25 (Tues), PM 26 (Wed)

APN (yvind), Rune, Jocelyn, Patrick, BFAR, NIFTDC NIFTDC, BFAR, APN APN, NIFTDC, BFAR Patrick, Rune, Jocelyn APN, NIFTDC, BFAR APN, NIFTDC, BFAR, BFAR IV APN, NIFTDC, BFAR, BFAR IV APN, NIFTDC, BFAR, BFAR IV, LGU (?) BFAR Researcher BFAR Researcher APN, NIFTDC, BFAR Jocelyn, NIFTDC, BFAR Patrick

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Jan 27-28 (Thu-Fri) Jan 26-28 (Wed-Fri) Jan 29 (Sat)

Workshop: Develop Panabo Oil Spill Contingency Plan Environmental Survey data analysis Travel back to Manila

Patrick, BFAR-RFTC, BFAR NIFTDC, Rune, Jocelyn Patrick

Panabo Quezon City Quezon City Id of animals, data uploading and processing

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Annex 5 Socio-economic ReportHIGHLIGHTS REPORT OF ACTIVITY IN QUEZON Introduction This report mostly covers the activities being undertaken during 6-days travel (Jan 16-22, 2011) to Quezon Province with members of the Mariculture Park (MP) Team for its continuing effort on Environmental Monitoring and Modeling towards Sustainable Aquaculture Development (AquaPark). Highlights of various events and activities including individual interactions were noted particularly on points related to the socioeconomic aspect of aquaculture initiatives, the development plans and perceptions of key LGU and BFAR officials in the area. Considering the limited time and the non-availability of secondary information, initial observations and findings are highlighted below.

Initial Observations and Findings1. Municipality of Caluag, Quezon

Initial results of a days visit and interactions with the Municipal Agriculturist of the Caluag Municipal Agriculture Office (MAO), the Municipal Administrator, the Head of the Municipal Planning and Development Office (MPDO) and the Head of the Fishery Law Enforcement Team (FLET) briefly show the following information: About year 2007, the BFAR introduced barangay-based seaweed farming (Eucheuma) to 3 areas which accordingly was expanded recently to 10 barangays with undetermined fisher beneficiaries. After 2-3 months, seaweeds are harvested and dried which recently has a market price of PhP55.00 per kilogram. In some areas, the culture of seaweeds have been periodically affected by the toxicity of cyanide and became white and ultimately die due to the application of cyanide by some fishers during fishing near the seaweeds culture areas. Seaweeds culture is only viable for 6 months during southwest monsoon (March to Aug) not during the northeast monsoon (Sept to Feb). Additional information reveal that the LAMPARA Fishers Association in barangay Bantolinao considered by the municipality (MAO) as most active peoples organization is currently managing a 5 ha fishponds with prawn (sugpo) and mudcrab (alimango) culture; There are undetermined numbers of people engaged in mud crab fattening where various sizes of mud crabs caught from the wild are placed in prepared cages and feed with trash fish caught from the wild; and when reached at medium-size after 1.5 month it has a price of PhP800 per kg in the local market. Costs of inputs, time elements, net profits and number of people benefitted is yet to be determined; One person was mentioned to have cultured a high-valued groupers ( Epinephelus species locally called lapulapu) with unknown area and undetermined number of cage units where live fish are harvested and sold at high price. However, the need

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for trash fish as the source of feeds for this species are already getting scarce within the area; Blast fishing and the use of poison in catching fish are still rampant in the area coupled with periodic intrusion of commercial fishing boats inside the municipal waters; yet, there is no verifiable record of cases filed in court except verbal reports about apprehensions and evidence of payment of penalties which to most opinions from people in the area is a recurring issue for many years and one possible root cause of declining fish catch.

With the above initial information and other related data that are still to be generated, a snapshot of socioeconomic conditions of this area can be drawn; and, as to whether the area meets the range of criteria for AquaPark establishment is yet to be determined.2. Meeting at BFAR Provincial Office

The meeting which lasted for over half day with province-based key officials participating had disseminated the information about the concept and practices of a sustainable Mariculture Park. The inputs from the visiting team about the eligibility criteria to establish a MP created range of discussions about the current situation of the province and the prospects for MP establishment. There was an agreement to continue gathering baseline data at field level to also determine the environmental suitability of the area. Considering the strange weather conditions (rains and winds) in the area that made impossible to cross open seas to conduct ground-truthing and to generate necessary information from 3 pre-identified municipal LGUs (Perez, Alabat & Quezon-Quezon), it was agreed that a One-Day Orientation Workshop about Mariculture Park will be conducted with pre-identified coastal LGUs and its key officials (especially the Municipal Agriculturists, Municipal Planning & Development Officers [MPDOs]) to be officially invited to attend and participate. About 10 sub-topics for inputs in the upcoming Orientation Workshop were discussed and agreed during the meeting where most presentations will come from the members of the visiting team. The inputs of BFAR to cover on: a) technical support, b) financial support and c) policy support was also agreed. A quick personal visit to the Provincial Agriculture Office resulted to have a printed list of undated Provincial Fisheries Profile initially summarizing basic information on fisheries covering 33 municipalities and 1 city. The said list is still under review to determine its contents for subsequent socioeconomic documentation and reporting.3. One-Day Orientation Workshop

The primary objective for this event was to orient the concerned LGU officials about mariculture practices and the mariculture park (AquaPark) system for sustainable aquaculture development in the Philippines; and to solicit information from them on necessary of baseline information to be generated to serve as the sound basis for decision-making and strategic planning for the establishment and development of Marine Parks and likewise for strengthening the existing fish cage culture already established in some few municipalities within Quezon Province. 24

About 9 municipal LGUs represented by its respective Municipal Agriculturist (MA) and some few Municipal Planning Development Officers (MPDOs) had attended the orientation workshop. Invited officials from the Provincial Agriculture Office (PAO) and from the Land Bank of the Philippines (LBP) were also present. The whole morning session was devoted to presentations (power point) and discussions/clarifications of various topics and sub-topics such as: 1) the mariculture concept its organization, economic issues/potentials, socioeconomic issues/potentials; 2) production system citing various practices like monoculture, polyculture of various suitable fish species and other aquatic products, etc.; 3) site selection criteria; 4) use of GIS for site selection; 5) environmental impact of aquaculture settlement, water quality, sensitive impact, etc.; 6) carrying capacity of the delineated/allocated municipal water area(s); 7) site optimization e.g., fish seaweeds, oysters, etc.; 8) socioeconomic benefits e.g., opportunities to poor local residence and marginal fishers, upstream and downstream activities including those after effects impacting the communitys peripheral surroundings, etc.; 9) economic impact net profit value and spread of benefits; and, 10) BFARs mandate on technical, financial and policy support. A representative from the LBP also talked about working capital, development loan portfolio and basic procedures for interested individuals and peoples organizations to avail on aquaculture projects. Also mentioned briefly are the schemes on relending, rediscounting, fixed assets and the 85% promissory note. The highlights of the 4-member Group ((i) MAO from Perez LGU, (ii) MAO from Ginyangan LGU, (iii) MAO from Lopez LGU and (iv) a representative from BFARRFTC) that I have facilitated during the afternoon workshop session are the following: Participatory and interactive discussions covered the following: 1. Current Trends: a) Municipal LGUs initiatives on coastal fisheries management; b) LGUs responsibilities on fisheries related programs and projects including fish cage culture; c) POs (fishers organizations) performance on government-initiated fisheries related projects; d) Private sectors initiatives on fish cage culture; and, e) Strategic spread of benefits from fisheries (capture fisheries, fish processing and marketing) and from fish cage culture practices (if any) in the area. 2. Recent Major Accomplishments: a) LGUs and BFAR partnerships in managing the fishery and the fish cage culture; b) LGUs and private sectors partnerships in promoting fish cage culture and status of investors towards fish cage culture establishments; c) Preparedness of LGUs about necessary policy support and regulations for sustainable fishery management and fish cage culture implementation; and d) Technical advisory(ies) from BFAR to LGUs about systems approach and policies on fish cage culture implementation with considerations to: (i) management zones implementation based on institutionalized or legitimized municipal water zoning; (ii) coastal habitat and marine biodiversity protection; (iii) integration of coastal resources and fisheries management and watershed management including soil conservation and river bank rehabilitation to prevent/minimize coastal siltation; and, (iv) implementable regulation on the exploitative catching of the so-called trash fish for feeds to those who engaged in grouper cage culture a trend that may lead to growth overfishing and the unregulated catching of mother fish spawners that may lead to growth overfishing. 25

3. Strengths and Opportunities (in fisheries management, integrated coastal resources management and mariculture management): (i) LGUs flagship development programs and projects on its municipal water management zones; (ii) LGUs yearly budget allocations supportive to fisheries management and mariculture management project; (iii) Competency level and identification of competency gaps of LGUs staff in-charge to fisheries management and mariculture management; and, (iv) LGUs performance in record-keeping, documentation, monitoring and evaluation. 4. Weaknesses and Threats: (i) Area suitability for Mariculture Park to match the eligibility criteria and to ensure sustainability; (ii) Collective political will (level of complementation between LGUs Executive and the Legislative); (iii) LGUs good local governance and transparency practices particularly in the permitting and licensing system and fiscal management. From above interactive discussions, the following brief information emerged: Established marine sanctuary in Perez municipality (area unknown) A two- hectare Seaweeds (Eucheuma species) project in Perez municipality most of the 55 beneficiaries are rebel returnees. There is also a 1-ha seaweeds nursery established in the area. The seaweeds project is commonly called at the local level as One Town One Product (OTOP). Functional fish landings equipped with ice plant, jetty, and accessible for land transportation are located in Atimonan, Lucena City, Dinahican, Infanta, Quezon. Illegal fishers are proliferating everywhere in the whole province and the Fishery Law Enforcement Team cannot cope with their tasks to stop; besides, municipal records of apprehensions are always not available Aquaculture / fish cage culture are already established in Perez municipality such as: (i) two (2) cage units initiated by BFAR as techno-demo for pompano fish cage culture with 4m X 4m X 4m measurements was established in 2009 and had a record of 90% survival; (ii) in 2010, 4 fish cage units were managed by associations, 2 cage units were stocked with pomapano fish and the other 2 cage units were stocked with bangus. The pre-arrangement was for the fisher associations to provide the materials and labor, the BFAR to provide the required fingerlings and the LGU to provide the feeds. During workshop, theres no available record or information about the total costs incurred, the volume of harvest, the gross sales and net profit and the benefits to association members. Perez municipality has 9 fishermens associations 25 to 80 members per association Beginning 2011, a private investor had established 4 cage units in Perez municipality and already stocked with pomapano fingerlings Municipality of Ginyangan indicated an interest to establish 2 fish cage units and likewise to further strengthen the system of the 30 households backyard fish drying mostly sardines and herring fish species caught in portion of Ragay Gulf. Initial calculations reveal that a minimum of 2,000 kg of dried fish which cost PhP110,00/kg were sold as far as Manila at time between February to March every year. 26

Most of the local people both in Perez and Ginyangan municipalities have enough awareness about endangered species like butanding (whale shark) and the pawikan (marine turtle) A representative from the municipality of Lopez was so shy and seems not knowledgeable on matters being discussed and rarely shared ideas during the discussions. The following outputs of the group was presented during big group plenary: ISSUE 5. Municipal Water-not delineated, no managemen t zoning & remain open access 6. No sufficient and updated coastal resources baseline data 7. Weak recordkeeping, documentati on, monitoring and evaluation system 8. Lack of training on mariculture park system ACTIVITY/SOLUTION TIME FRAME Finalize municipal water delineation and 2nd Quarter management zoning 2011 Identify the mariculture zone Define relationship and (Lopez, Perez & complementation of Ginyangan other management ) zones with the mariculture zone 1st Quarter Update coastal resources and fisheries 2011 (Lopez, baseline data Perez & Update coastal Ginyangan environment profile ) Attend / participate training about process documentation, monitoring and evaluation 1st Quarter 2011 (Lopez, Perez & Ginyangan ) RESPONSIBLE PERSON/OFFICE/INSTITUTION

MAOs of Perez, Lopez and Ginyangan through the SB Chairperson on Agriculture, Fisheries and Environment with BFAR and NAMRIA assistance

MAOs and MPDCs With BFAR assistance

MAOs and MPDCs With BFAR assistance

Request for municipalbased training on mariculture park

1st Quarter 2011 (Lopez, Perez & Ginyangan )

MAOs With BFAR assistance

27

4.

Visit to the municipality of Padre Burgos In response to the verbal request of the Quezon Provincial Governor to orient the mayors in coastal municipalities about Mariculture Park system with GIS and mapping as a tool for baseline survey and for decision-making, the assessment team went to the municipality of Padre Burgos. Very much delayed from the agreed schedule of 11:00 AM due to late arrivals of most municipal mayors, the power point presentation facilitated by Mr. Regie Regpala of BFAR-NIFTDC started at 2:10 PM with MP concept and practices. As the first presentation was about to end, the Congressman arrived and attentively listened the presentation. The second presentation was about the GIS and maps; this is where the congressman started to asked many questions and after having the basic idea he suddenly suggested to stop the presentation and requested everybody to proceed to the cage culture because according to him that was the main purpose for the mayors coming. The assessment team joined all the visitors in visiting the locations of the fish cage culture with stocked of bangus and pompano fishes. And, it was learned later that these cage units are the techno-demo units of BFAR and LGU which was marked as the BFAR-LGU Mariculture Zone. As the boat moved to the area marked Private Mariculture Zone, it was observed that about 8 to 12 cage units were left without fish stocks; and most seems abandoned for so long as evidenced by the conditions and status of the structures itself. One glaring observation was the presence of fish corals within the supposedly designated mariculture zone.

5.

Immediate Concerns about Socioeconomic in Quezon

During this assessment, it was observed that most coastal municipalities has no sufficient records about coastal and fisheries profiles to relate to socioeconomic conditions of the fishing communities in the area. It requires survey and interviews of key informants to generate such information Existing cage culture established in some municipalities like Perez, Padre Burgos and Tagkawayan has no immediate information on the socioeconomic spread of benefits to local communities Considering the complexity of the Mariculture Park system and considering also the capacity of most LGU officials in this endeavor, it is proper that series of in-depth orientation and follow-up training will be conducted in municipalities that met the required eligibility criteria for Mariculture Park establishment. Training to LGUs may include modules on process documentation, monitoring and evaluation.

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Socio-economic Interview GuideFor Quezon Province

Interview Guide IICAGE CULTURE/MP/AQUACULTURE (AquaPark) PROJECT ASSESSMENT Socio-economicsFOR KEY OFFICIALS OF THE GOVERNMENT AGENCIES and NON-GOVERNMENT ORGANIZATIONS (e.g., BFAR, LGU, DEVELOPMENTAL NGOs, CIVIC/CHARITABLE INSTITUTIONS) ==================================== =================Respondents Name: ____________________________________________________ Age:_________Sex:________ Position/Designation: _________________________________________________________________________________ Location/Address: ________________________________________________________________________________ Name of Agency/Organization/Unit: ____________________________________________________________________ Contact Numbers: Telephone No.: ___________________________________________________________ Mobile Phone No.: ________________________________________________________ Fax Number: _____________________________________________________________ E-mail Address: __________________________________________________________ Place, Date and Time of Interview: __________________________________________________________

=============================================== =========== Sir/Maam, please tell me about the following information: Q1. Principal dimension of the municipalitys fishery sector: Sector 1. Marine Fishing:1.1 Commercial Fishing 1.2 Small-Scale Fishing

No. of Unit

Production (_____Year)Volume (kg) Value (PhP)

No. Employed / Employment (_____Year)Full-Time Part-Time Men Women

2. Fish Processing2.1 Bangus fish deboning 2.2 Fish Drying 2.3 Fish Salting

3. Marine Aquaculture3.1 Bangus cage culture 3.2 Pampano cage culture 3.3 Siganid cage culture 3.4 Lobster cage culture

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3.5 Lapu Lapu cage culture 3.6 Culture of other species

4. Brackishwater Aquaculture4.1 Bangus Culture 4.2 Prawn culture 4.3 Culture of other species

5. Inland Aquaculture4.1 Tilapia culture 4.2 Shrimp culture

6. Inland Fishing6.1 Lakes, Dams & Rivers

7. Mariculture Feed Supplier 8. Fry/Fingerlings Supplier 9. Fish Traders / Fish Vendor 10. Other Fishery sector TOTAL Q2. Population & Number of Barangay: 2.1 Total Population of the Municipality / City: ____________________ (______Year) 2.2 Total No. of Households: ___________________________________(______Year) 2.3 Total No. of Voters: _______________________________________ (______Year) 2.4 Total No. of Barangays: ____________________________________ (______Year) 2.5 Total No. of Coastal Barangays: ______________________________(______Year) 2.6 Total No. of Island Barangays: _______________________________ (______Year) Q3. No. of Fishers Fisherfolks Organization / Association: ________________ (______Year) 3.1 Total No. of Members: __________________________ (______Year) 3.2 Total No. of Women Members: ____________________(______Year) Q4. Total No. of Marine Fish Cage Operators / Owners: ___________; as of ___________(Month) _________(Year) Q5. Total No. of Marine Fish Cages presently in operation: _________; as of ___________(Month)_________(Year) 5.1 Total No. of people benefitting the Marine Fish Cages: _____; as of __________(Month)_________(Year) 5.1.1 Operations Manager: ___________ Mode of Payment: _______________ Cost/Value: _________ 5.1.2 Cage Caretaker: _______________ Mode of Payment: _______________ Cost/Value: __________ 5.1.3 Fish Feeder: __________________ Mode of Payment: _______________ Cost/Value: __________ 5.1.4 Cage Maker: __________________Mode of Payment: _______________ Cost/Value: __________ 5.1.5 Net Maker: ___________________Mode of Payment: _______________ Cost/Value: __________ 5.1.6 Net Cleaner: __________________Mode of Payment: _______________ Cost/Value: __________ 30

5.1.7 Net Mender: __________________Mode of Payment: _______________ Cost/Value: __________ 5.1.8 Harvester: ____________________Mode of Payment: _______________ Cost/Value: __________ 5.1.9 Fish Handler/Transporter: _______ Mode of Payment: _______________ Cost/Value: __________ 5.1.10 Fish Processor: _______________Mode of Payment: _______________ Cost/Value ___________ 5.1.11 Fish Trader: _________________ Mode of Payment: _______________ Cost/Value ___________ 5.1.12 Others: _____________________ Mode of Payment: _______________ Cost/Value: __________ Q6. Who/Which among the above people/beneficiaries/employee came from the municipality/barangay where fish cages are located? Please indicate: ______________________________________________________________________________ _________________________________________________________________________________________ __________ Q7. Kind/Type of payment for every one cage made by Fish Cage Operator/Owner to the municipality: ____________________; Cost of payment made: _______________(PhP yearly); ______________(PhP Monthly); ______________(PhP Quarterly) Q8. State the qualifications/eligibility criteria of a person or association or corporation to put up/construct a fish cage or fish cages within the coastal water of the municipality: ____________________________________________________________ _________________________________________________________________________________________ ___________ Q9. Legal basis of the municipality/city for the payment of fees and for the establishment/construction/placement of fish cages within the municipal water: __________________________________________________________________________ Q10. Compelling issues and/or problems the municipality is facing regarding the fish cages: ______________________________ _________________________________________________________________________________________ __________ Q11. Current issues and/or problems the fish cage operators are facing regarding the fish cages: __________________________ _________________________________________________________________________________________ ___________ Q12. Current issues and/or problems the local people/beneficiaries are facing regarding the fish cages: _____________________

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_________________________________________________________________________________________ ________ Q13. Knowing your area very well, please say something and/or share briefly your insights / opinions about the following: Q13.1 Aquaculture and mariculture activity: ________________________________________________________ _______________________________________________________________________________ _______ Q13.2 Fish and seafood processing: _______________________________________________________________ _______________________________________________________________________________ ________ Q13.3 Tourism and recreation (local and visitors): ____________________________________________________ _______________________________________________________________________________ _________ Q13.4 Port and shipping (people and goods) activities, including ship-building: _____________________________ _______________________________________________________________________________ _________ Q13.5 Fishing (commercial, artisanal, recreational) activities: ____________________________________________ _______________________________________________________________________________ _________ Q13.6 Agriculture practices, Reforestation projects, River bank rehabilitation: _______________________________ _______________________________________________________________________________ __________ Q13.7 Provincial / Municipal based Coastal Resources Management initiatives / practices: ____________________ _______________________________________________________________________________ __________

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Annex 6 Economic Analysis ReportECONOMIC ANALYSIS OF MARICULTURE PARK OPERATIONS In embarking on the assessment of the economics of the different aquacultural systems including that of the different sizes of farming operations, financial and sensitivity analyses were performed. In doing so, the definition and features of MPs as described above were taken into consideration. Results of other objectives shall be included in the next report. Financial Analyses Panabo City Mariculture Park (PCMP) Operations As mentioned previously, the total area assigned to the park is 1,075 hectares. As of 2006 a total of 153 units of cages were built by 7 locators from the marginalized group (17 cages) and by 4 locators/investors from the private investor group (136 cages). The average number of cages operated by the marginalized group is 2 to 3 units; while the private investor group operate an average of 34 cages per locator. Results of financial analysis are shown in Table 1 (Please see Annex 3, pages 3-5 for details). Table 1. Results of Financial Analysis in PCMP Criteria Less than Cages Average Fixed Expenses (% of 24% sales) Average Variable Expenses (% 50% of sales) Average Other Expenses (% sales) Operating 6% (4%) 24% 17% 26% 14% (3%) 46% 230,507 117% 17% 29% 5% (2%) 51% 287,776 112% 10-20 10 cages More than 20 Cages

Recovery from Depreciation Average Net Profit (% of sales)

Average Net Profit Per cage 185,741 (Php) Average Return on Investment 72%

Based on the above results, the PCMP operations are economically viable. The cost structures differ as well but the proportion of the costs are much lower in PCMP. Operations with 1-3 cages are the most affected because while they have (mostly) 1 cage to tend to, 33

stocking costs and feed costs contribute to around 50% of sales. It is good enough that fixed and other operating expenses contribute only 30% resulting to an average net profit of 24% after depreciation (4%) has been removed as an actual cash expense. Operating with more than 20 cages, this time, is very profitable in PCMP. Total expenses stand at 49% of sales leaving a very comfortable net profit margin of 51%, valued at Php 287,776 per cage, corresponding to an ROI of 112% per cycle. On an annual basis, an operator in PCMP can expect a return of 224% per annum. The best results, however, is still operating between 10-20 cages or an average of 15 cages. Total expenses stand at 57% of sales resulting to an average net profit return of 46% of sales after depreciation has been adjusted. The corresponding average net profit per cage stands at Php 230,507 but the Return on Investment stands at 117%, 5% higher than investments in more than 20 cages. On an annual basis, the ROI for an investor stands at 234%. The PCMP includes two polyculture operationsmilkfish and siganids (danggit) in two cases. The earnings from danggit culture contribute to bigger sales but are not substantial to be evaluated separately. Grouper Culture in PCMP. Two cases of grouper culture were noted in PCMP using 1 cage per operation. Compared to the other mariculture projects, returns in grouper culture are favorable considering the cost structure given in Table 2 below (Please see Annex 3, page 3 for details). Table 2. Results of Financial Analysis of Grouper Culture in PCMP Criteria Average Fixed Expenses (% of sales) Average Variable Expenses (% of sales) Less than 10 Cages 16% 35%

Average Other Operating Expenses (% 17% sales) Recovery from Depreciation Average Net Profit (% of sales) Average Net Profit Per cage (Php) Average Return on Investment (5%) 37% 286,363 47%

The increased share of Other Operating Expenses is noticeable particularly with the additional floaters and nets, as well as transportation costs but the selling price at Php 350 per kilo more than compensates for the increased costs. Overall, average net profit per cage is Php 286,363 (37%) with an average return on investment of 47%. On an annual basis this corresponds to 94% per annum.

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2. Sual Mariculture Park (SMP) Operations As of September 15, 2010 there were 405 cages in Sual Mariculture Park which are owned by 9 companies. The samples represent 173 cages or 43% of the owners. As mentioned above, the operators in the SMP double the recommended stocking density thus increasing significantly the feeds requirement of their cultured species. This is in order to achieve abovemaximum returns. To validate the correctness of this assumption, the operations in SMP were evaluated according to results based on the number of cages operated: (1) below 10 cages (2) >1020 cages and (3) above 20 cages. The samples below (Table 3, See also Annex 3 pages 6 14 for details) were obtained from Sual where 15, 28, 32 and 84 cages were in operation. Is having more really beneficial?

Table 3. Results of financial analysis in SMP

Criteria

Less than Cages

10-20 10 cages

More than 20 Cages

Average Fixed Expenses (% of None sales) Average Variable Expenses (% None of sales) Average Other Expenses (% sales) Operating None None None

10% 41% 6% (3%) 46% 301,437 106%

81% 22% 5% (16%) 8% 114,039 13%

Recovery from Depreciation Average Net Profit

Average Net Profit Per cage None (Php) Average Return on Investment None

35

As indicated in Table 3 above, having more cages for milkfish culture in the MP may not be beneficial. The desire to have more cages, stock these cages at twice the recommended stocking rate and feeding the fish ad libitum, the excessive number of stocks (more than 20 cages category) overloads the fixed expenses (cages, moorings and related paraphernalia) at 81% of sales, on the average. While feed costs and stocking costs (variable expenses) and the other operating costs remain manageable, the effective average net profit stands at Php 114,039 per cage (8% of sales). ROI is at a critical 13% which makes it sensitive to fluctuations in prices of both fixed and variable expenses. Operating between 11 to 20 cages, however, proves more profitable with variable expenses at 41% of sales. The remaining fixed costs and other operating costs contribute only 16% more allowing for an average net profit of 45% after depreciation costs had been added back to the returns. Each cage at this category provides a return of Php 301,437 (46% of sales). The average rate of return is 106% at just one cycle. With the expected 2 cycles a year, operating 15 cages only in SMP will provide a return of 212% return per annum, on the average. Obviously, no company operates below 10 cages in SMP.

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Annex 7 Environmental Survey ReportSediment results from Panabo

Sediment sampling stationsSediment samples were taken with Grab and Gravity Corer, in the stations given in the Table and Figure.Date 07.04.201 0 07.04.201 0 07.04.201 0 07.04.201 0 07.04.201 0 08.04.201 0 08.04.201 0 08.04.201 0 08.04.201 0 08.04.201 0 08.04.201 0 08.04.201 0 08.04.201 0 08.04.201 0 08.04.201 0 08.04.201 0 08.04.201 0 08.04.201 0 08.04.201 0 Latitud e N 7,28113 9 7,27236 1 7,28347 2 7,28583 3 7,28758 3 7,28442 7,2844 7,28456 7,28474 7,28468 7,28465 7,28479 7,28394 7,28491 7,28339 7,27996 7,27994 7,27991 7,27114 Longitu de E 125,697 5 125,695 8 125,698 7 125,701 125,704 5 125,698 7 125,698 7 125,698 7 125,699 125,699 125,699 125,698 9 125,699 1 125,700 2 125,702 2 125,700 3 125,700 3 125,700 2 125,694 3 Depth (m) 6 10 21,6 24,4 22 Equipm ent Grab Grab Grab Grab Grab Corer Corer 10,8 14,1 15,6 15,8 14,2 24,2 27,3 48,4 28,6 28,2 27,7 33 Corer Corer Corer Corer Corer Corer Corer Corer Corer Corer Corer Corer

37

SedimentResult from the visual description of the sediment. Stnr St 01 St 02 St 03 St 04 St St St St St 05 07 08 09 10 Equipme nt Grab Grab Grab Grab Grab Corer Corer Corer Corer Corer Corer Corer Corer Description Black fine sand Polychaeta Ophiuroidea No smell Grey sediment Some polychaeta No smell Black on surface, grey longer down Crustacea A little H2S smell Black whole grab No visible animal Some H2S smell Blackish surface grey longer down in the sediment Fish No smell Dark grey Some H2S smell Grey - dark grey A little H2S smell Dark grey A little H2S smell Dark grey Some H2S smell Dark grey upper 15 cm with H2S smell, A little smell Grey longer down no smell Dark grey upper 10 cm with H2S smell, Some smell Grey longer down no smell Dark grey sediment some H2S smell, grey at bottom very little h2s smell Dark grey upper 12 cm with H2S smell, Grey longer down no smell. Area with 12 months fallow. CTD stn 1 38

St 11 St 12 St 13 St 14

St 15 St 16 St 17 St 18 St 19 St 20

Corer Corer Corer Corer Corer Corer

Dark grey upper 20 cm with H2S smell, Grey longer down no smell. Area with 3 months fallowed. CTD stn 2 Dark grey surface sediment no smell, lighter under no smell Dark grey surface sediment no smell, lighter grey under no smell Dark grey surface sediment no smell, lighter grey under no smell Brownish surface sediment, light grey clay under no smell

Result of the chemical analysis from some of the stationsStnr ST01 ST02 ST03 ST04 ST05 ST06 ST07 ST08 ST09 ST10 ST11 ST12 ST13 ST14 ST15 Ig Loss (%) 550 0 % Dry Wt C 75,912 3,042 52,881 4,635 47,829 7,910 42,886 9,980 42,024 8,811 53,590 5,873 52,334 5,617 59,420 4,338 54,730 8,359 40,900 9,699 53,242 7,246 48,409 7,610 40,233 11,422 41,162 11,002 40,077 9,980 Ig Loss (%) 850 0 C 6,217 9,027 10,525 12,108 12,076 9,894 10,325 9,344 10,267 12,563 9,049 10,702 13,888 30,623 11,559 Total Sulfate (mg/g) 0,137 0,024 0,462 0,478 0,663 0,269 0,208 0,034 0,000 0,054 0,087 0,000 0,052 0,053 0,107

39

ST16

38,066

9,558

12,140

0,058

40

Sediment results from SualSediment sampling stationsSediment samples were taken with Grab and Gravity Corer, in the stations given in the Table and Figure.Station SS01 SS02 SS03 SS04 SS05 SS06 SS07 SS08 SS09 SS10 SS11 SS12 SS14 SS15 SS20 SS21 SS22 SS23 SS24 SS25 SS26 Date_ti me 14.04.20 10 14.04.20 10 14.04.20 10 14.04.20 10 14.04.20 10 14.04.20 10 14.04.20 10 14.04.20 10 14.04.20 10 14.04.20 10 14.04.20 10 14.04.20 10 14.04.20 10 14.04.20 10 15.04.20 10 15.04.20 10 15.04.20 10 15.04.20 10 15.04.20 10 15.04.20 10 15.04.20 10 Latitud e 16,1205 16,1205 6 16,1208 1 16,1210 1 16,1217 5 16,1224 6 16,1246 16,1272 5 16,1276 9 16,1136 9 16,1135 8 16,1121 16,1054 2 16,1028 16,1016 2 16,1008 9 16,0999 3 16,0998 8 16,0988 16,0974 9 16,0977 7 Longitud e 120,1054 6 120,1054 1 120,1058 4 120,1060 7 120,1065 1 120,1075 1 120,1074 4 120,1080 4 120,1079 9 120,1020 6 120,1021 6 120,1045 120,1085 2 120,1112 1 120,1112 3 120,1117 4 120,1121 7 120,1121 4 120,1129 9 120,1140 1 120,1133 2 Equipment Corer Corer Corer Corer Corer Corer Corer Corer Grab Corer Grab Corer Corer Corer Corer Corer Corer Grab Corer Corer Grab

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SedimentResult of the sediment analysis from some of the stationsStn % Dry Wt 25,678 29,155 31,732 32,151 35,497 35,756 39,960 41,164 39,753 26,073 23,756 24,044 30,316 38,950 30,401 36,844 28,835 30,055 Ig Loss (%) 550 0 C 6,338 17,849 7,933 7,507 12,844 13,425 7,008 4,477 9,311 15,096 6,966 15,348 10,919 12,493 12,055 11,556 8,280 8,589 Ig Loss (%) 850 0 C 17,488 19,099 17,513 18,338 15,528 16,363 15,609 4,597 11,985 19,748 11,974 21,029 13,697 18,431 16,251 14,333 13,614 12,514 Total Sulfate (mg/g) 4,135 1,807 2,623 1,539 1,448 0,579 0,159 0,236 2,479 3,835 6,555 0,156 2,532 3,343 0,057 bdl bdl bdl Black layer CM 20 15 13 13 16 16 5 0 13 20 20 45 23 7 22 22 21 12

SS1 SS2 SS3 SS4 SS5 SS6 SS7 SS8 SS10 SS12 SS13 SS14 SS15 SS16 SS17 SS18 SS20 SS21

42

SS22 SS24 SS25

34,711 41,994 41,356

7,184 6,726 6,819

11,335 68,931 10,077

bdl bdl bdl

12 2 0

43

44