Funding

Another institutional weakness is the funding sources and mechanisms for any proposed flood management solution. Currently, the funding – and implementation – of major flood abatement projects are provided by the national government and from grants and loans from multilateral and bilateral foreign sources. Aside from that DENR  under its Enhanced National Greening Program is also active in supporting the activities of the municipalities to develop the mangrove areas in the North of Manila Bay. The provincial and municipal LGUs also participate in these activities by providing the maintenance.

However, the main ones most affected by the flooding are the people and small businesses with the least resources to realize long-term and permanent solutions to the problems associated with flooding. The municipal and provincial governments in the North Manila Bay heavily rely on the national government and the Office of the President, usually through representation to the Regional Development Council. Acquiring budget via this route requires use of political skill and capital on the local chief executives as they have to compete with the needs of other LGUs in the region.

Examples of large-scale projects carried out:

• In 2016, the government – through the DPWH – launched its PHP 2 Billion projects to build a 40 km levee to protect six towns of Pampanga. This included the takeover of fishponds at the cost of PHP 10 Million.

• PHP 20 Billion to rehabilitate the Pampanga Riverbank Dike to protect the region from Apalit to Arayat municipalities.

It has been observed that in most flood protection works, the focus is on the capital expenditure costs (CAPEX) and less so on the life cycle costs of a project. In order for an area to grow economically, life cycle costs are very important. This is where Nature-based Solutions can play a vital role; the solutions proposed have cheaper life cycle costs than traditional engineering solutions. This fact should be a catalyst for funding and should raise the interests of various agencies. On the back of this, this strategy advises updating the DWPH design standards with an engineering guideline for Nature-based Solutions, see Appendix 4.

It is important to note that the budgetary cycle in the Philippine government requires new budgets to be applied before November of each year. Any funding strategy routed through the Philippine government should therefore be submitted before November 2022.

The following sections provide alternatives for funding of Nature-based Solutions in the North Manila Bay area.

Option 1: Integrated Coastal Management

The current existing frameworks can be the source of funding for the Nature-based Solutions projects, as shown in this strategy. As reported in Section 6.4.2, the Integrated Coastal Management policies should provide support and funding from national agencies such as DENR and DPWH. There are obvious problems with this route as explained in this strategy, of which the most important problem is that the LGUs do not have the capacity to request/process funding/support applications. This strategy will help in providing the theoretical basis. But still the LGUs will need to be proactive and look for contact with the national agencies.

Estimated implementation difficulty: hard
Estimated implementation lead time: 4 years
Estimated budget size: Big (10-20 B PHP)

Option 2: DPWH infrastructure project

DPWH has ongoing projects in Bulacan and Pampanga such as roads and dredging activities. DPWH also completed several big flooding protection schemes in the region. During the stakeholder meetings DPWH expressed their interest in the implementation of Nature-based Solutions and promised active follow/assessment on any requests received.

Estimated implementation difficulty: medium
Estimated implementation lead time: 2 years
Estimated budget size: Big (10-20 B PHP)

Option 3: LGU funded projects

LGUs are also able to bear the costs of self-developed projects. During stakeholder meetings, it became clear that some LGUs would be able to fund projects up to sizes of about 20-30 M PHP. This would be a viable option for the implementation of small-scale pilot projects. Also, it is expected that the road to approval of the project is less complex.

Estimated implementation difficulty: Easy
Estimated implementation lead time: 1 year
Estimated budget size: Small (<30 M PHP)

Option 4: People's Survival Fund 

The People's Survival Fund (PSF) was created by Republic Act 10174 as an annual fund intended for local government units and accredited local/community organizations to implement climate change adaptation projects that will better equip vulnerable communities to deal with the impacts of climate change. LGUs can apply via an application portal for funding, they will need to submit financial statements and a basis for the plan. The basis could be this strategy.

Estimated implementation difficulty: Easy
Estimated implementation lead time: 2 years
Estimated budget size: Medium (up to 200 M PHP)

Option 5: International financial institutions, Overseas grants, and loans

Overseas Development Assistance (ODA) and bilateral and multilateral grants can also be the source of funding. It is a fairly common mechanism in the Philippines that funding like this is used for bigger projects or used as a mixed of grants and loans. This strategy can be presented to the IFI’s such as ADB and WB, and it might be the basis for further development/funding from their side. ADB also has the possibility to submit unsolicited proposals and the DENR as the Focal Point proposing grants from the Global Environment Facility (GEF) to the Philippines.

Another example is the Carbon Credit Facility of the United Nations. Mangroves and intertidal mudflats are far superior in sequestering carbon than e.f. Terrestrial forests and, as such, an attractive candidate for carbon credit. This mechanism is not yet firmly established in the Philippines and may require a partnership through DENR or the Climate Change Commision with an entity already accredited with the U.N. Facility. This is also connected to the Green Climate Fund.   which support themes such as   improved resilience in vulnerable communities and climate-resilient ecosystems

Estimated implementation difficulty: Medium to Hard
Estimated implementation lead time: 2-5 years
Estimated budget size: From small to large (< 50 M to >5 B PHP)

Option 6: Private funding

Most of the publicly available Environmental Impact Statements provide a strategy that is called “environmental offsetting,” practically meaning that any impact of such a project gets mitigated in a different area. This is the case for the New Manila International Airport but also for some of the reclamation projects in Manila Bay.. The offsetting targets shall align with the creation of habitat and ecosystems restoration which complement flood protection (through the use of Nature-based Solutions).Solution tools and methods

Another example of private funding is carbon crediting, most where multinational companies try to offset their carbon footprint by dealing with carbon credits. This also makes carbon credit funding a financing source, or even a possible financial model for LGUs. As discussed earlier in the report, mangrove planting and mudflat restoration as  tools of Nature-based Solutions can be leveraged for carbon credit funding.

Estimated implementation difficulty: Medium - Hard
Estimated implementation lead time: 2 - 5 years
Estimated budget size: Varying