THE FORESTRY CRISIS IN THE PHILIPPINES: NATURE, CAUSES, AND ISSUES Genweuio M. BAUTISTA WHE 1970s can be considered one of the watersheds in Philippine economic I istry. Among other things, it ushered in « process of debt accumulation Which contributed to the much publicized fnancial and politial crisis of the 1980s, This period also coincided with the continued loss of forest cover, aggravating the cxistng related problems of dwindling timber resources. and ccological imbalance, While natural resource depition and the worsening state ‘of the environment have not absorbed the public mind as intensely as the nancial or political ess, it has nevertheless aroused interest and concern among various ‘roups in the country. "This paper explores the nature and causes of the problem as well as some of the issues which need to be confronted over the short and medium term. Tt delves into the role of different agents, i. the state, loggers, and upland residents in deforestation. In the course of the discussion the diferent positions in a growing public debate are outlined, 1. BACKGROUND: THE STATE OF THE PHILIPPINE FORESTS Historical accounts indicate that the original vegetation of the Philippine archi- ‘elago represented a “continuous forest of one type or another." Spanish coloaiat officals estimated the forest area in the country te be from 19.5 million to 20.9 nillion hectares or at-most about 70 per cent of the country’s 29.6 million hectares" ‘Hesvily forested atthe start of the century, the Philippine landscape was greatly transformed in subsequent decades. Based on the 1920 Ametican colonial gov- ferment statics, there Were about 16.6 millior and 2.1 milion hectares of commercial and noncommercial forest lands, respecvely [17] and about 0.26 million hectares of mangroves. Together, these comprised approximately 64 per + Brown aod Mattows [5]: Dikeron [9]. Dickaron for insane, wrote “in the open ousry and in the secondary forest ofthe Pippin, specie species endemism lest than 10 pr ces Whe inthe pelnary fess, it exeeds 80 per cent This condition ‘erly emphasis the fact tha the prary fore epesnt the indigenous Hore of the ‘Arcislago..-ltmny, wih tetonabe efety, be asumed atthe iin septation ‘of the Philppice Ina before man resched the Arhipelago was couinuous Tore of le pe or another” (eed in Safe [22]) 1 Ths eemates of forestlands by Spunih ofcials were ctl by the ead of the Bares (of Fore, George Abers, io is anual tepor dated July 30, 1901.68 ‘THE DEVELOPING ECONOMES TABLE I CChnsice Fonesr Lan Anzu nr Forest Tyee, 1954-85 (ion testers) Fos Tipe Tie shoe swe TS 1980198 ~Oiésiowih dptoarp «107 «Mia 44—S3—=SRT 299 099 ‘Seasoal eolave a Broad leaved 25 Residual cgterocarp, 2nd growth ba 250 3433 moe Pine as 05 03 02 na, na Om Mossy, unproductive 0726 178mm Sobmurgial ase Mangrove ne 03 0203. aoa, Sssronal without mole Os Bamboo 003 id mountain a a "Taal forest wea ine a0 oo 105" ae % of tial counuty wen '593 $6736 HO BATHS ‘Soarcer 14a: Ganapin [10]. Based oa ofl data of former Ditesor of Forestry Are Fister. saab: ‘Revla (21). Based on fret map. 1968s: ML. Booka and A.V. Rel Based ot large-scale photogrpb The Philippine Foret Rewurcer 1976-2026, PREPP Tecalal Report Nov (1978). 19695: Exrapolated fom dia fn Department of Eoviroameat and Natural Resoures, Phllpine Forsry Stats. 191s: Foret Minsgement Bares 1980: Forest Managemeat Bueno, 1968: Pulppine- German Fores Resources Inventory Prof, Nanna Foret Resoures ofthe Pippin cent of the county’ total land area. By 1934, however, forest lands covered close {0 17 millon hectares, making up about 57 pet cent of the total (10]. Table T further revels that relative to the 1934 figures, che area end proportion of forest to total lands continued to decline after the wat. Tho latest nationwide iaventory sorvey [13] shows that by 1988 the country’s forests have shrunked to 6.5 million hectares or 21 per cent of the Philippine’ total land area "The most severly afected forest type isthe naturally grown dipterocarp forest ‘ace dominating the country’s silvicultural pater, it now stands marginally in only four out of twelve regions. From 1934 to 1988, the size and proportion of the old-growth natural forest dectined from between 11.1 and 13.6 mallion becears (of 65 per cent of forestlands) to about 0.99 milion hectares (or 15 per The apc provinces i each region are Cagayan, Lobos, and Kalings-Apayao in Region 2:atawan and’ Aurea in Region 4 Agusta del Sar nd Bukéoon io Region 10; end evao det Nove and Suna dl Su ia RegionFoResrey cnists 0 TABLE Avanos Avant. Loo Propucno, Exot, Grown RAT, ‘ho Exrast or Usonazanre> EXPORTS “ees AG Share at Gah Tas of poiots Al, fants! "Ep raion gow rereina® Gomme [a iis a7 BS wie it 26 63 BS ss ganas 8 ao iar 36. wae2s 1307 wr us wo. isso S05 2898 a 721989 jess 6003S oo 81S tye 157s 7865508 or Bi Ser its 10176340 32 Ba ines "73300080104 812 Sa wees 43e5 ity 108 31 1986 S34 a2 3 os no be ue ‘ns 39 3, ss 3.308 im as 47 THIER data dbiained teen Buea of Commerce and Tndasy, Sta! Bulletin aroun Sues, 95888. data obtained from Plllypie Foresry Saree aad Philippine Trade Stasis » Based onthe ratio of Piipine export volume of Jogs and Japanese import dis ‘The laner nas oblaed from Minty of Pinaes, Amal Return of the Forisn Trade ef Jean cent of forest lands). In other words, as much as 93 per cent of the natural Sipterocarp forest in the mid-1930s were either cleared or transformed info Sesidual or submargial forest areas, unproductive mossy fields, or open cogon ‘and brush lands by the 1980s. "The coatinuous decline in forest area overtime highligh the following observa sont Fist, the loss of forest lands did not bepin during the postwar period but ‘can be traced back to the early part of the century when the country was under ‘American colonialism, From the 1920s to 1934, the annual loss of forest lands ‘yas atleast about 140,600 hectares, This rate of deforestation was only slightly Towee than the estimated annual loss of 172,000 hectares from the 1950s to 1973 [4] ‘Second, deforestation partly reflects the grow of log production and export demand. ‘Te average annual log production inthe postwar years greatly exceeded prewar levels (Gee Table I). This parly aocounts for the faster rate of deforesta~ {Gon in the period after World War TT. Log production, which reached its peak jn the late 1960s, was induced by extemal demand as reflected in the annual ‘growth in fog exports by 42 per cont and 23 per eznt respectively in the frst and second half ofthe 1960s (Table I), ‘Several pois regarding the information ja Table IK are worth noting: (1) The share of expors in ealier decades are not shown in the table. They cannot be0 {TUE DEVELOPING BcoNonitES estimated because of the unavalability of data, (2) The computed percentages ‘of expors in the table are not accurate becaute of the presence of unreported, ‘legally shipped log exports. ‘The last column in Table TI in fact reveals the extent fo which the volume of log exports from the Philippines to Japan are underreported, relative to Japanese impor statistics. ‘Third, the continous loss of forest lands over time reflected not only the growth Of log production but the limited reforestation acivitis as well, Forest resource extraction was hardly guided by the principle of susained-yeld manage- ment, Moreover, despite the huge profits generated from log production and export, very litle was allocated to forest regeneration. Iti estimated that private Togging concessioaires have reorested only 250,000 hectares as of 1986 [21]. Finally, as increasing portions of the natural growth forests were logged over, timber production began to contract by the later part of the 1970s. To offset the declining supply of timber amidet continued demand, more forest lands had to be exploited and consequenty, lost. Tt was estimated that about 319,000 hectares were lost annually from 1968 to 1984 [4]. “The uncessing exploitation of the forest has thus transformed the country's physical landscape and a supposedly renewable resource into a shrinking stock ‘endowment. This has, in torn, brought about an impending timber shortage and fan environmental problem which threatens to become increasingly more severe. "The timber shortage and environmental degradation accompanying deforestation represent two forms of the forestry criss in the Philippines. These problems were ‘ot as apparent in earlier periods because of the seemingly localized effects of forest destruction. However, as the timber shortage and the effects of environ- ‘menial destruction begin to be felt nationwide, the crisis has become more real inthe public's consciousness. In the immediate future, the country’s timber requirements will be drawn primarily from the remaining old-growth forest because the tees in the residual, second-growth forest are sill too young (with an average age of only 14.3 years [251) or ste harvestable only in 15 to 20 years. However, the stock from the remaining old-growth forest i inadequate in the medium te-m. Given its poteatist Yield of 46 milion cubic meter roundwood equivalent, anc a 14 per cent annual ‘omeste demand growth ate for timber, the old-growth forests by 1994 cannot provide suficient supplies to meet domestic nesds.' If foreign demand for wood Js added to the picture and i the historical rates of deforestation persist, the accessible stock in the natural forest may be exhausted cater. The country may ‘so completely lose its old-growth dipterocarp forest by 1993, if not sooner. “According 19 Schade [23], the remaining oldarowth forest Is sil to yilé total Tog prototon of 46 millon cable meer in the coming yeu. Given the domestic demand for ter fe 1985 at 3.348 millon cabic meters and snntal demand growth rte of 1 per cet, he svalablesoply for lsalcoasumption wil sot be sues up to 1994. Tf the expert of wood products is Ialoded (mili euble metre anneal), log appl” ‘The Asa Development Bank [2] extinaes « lee supply ep of 39 million cole sneer in 1995FORESTRY CRISIS n Histoccally, the commercialization and eventual loss of the natural forest have impsied the reproducibility ofthis resource and reduced the productive potential fof the entire ecological system. Apart from feling tres, logging operations, including the construction of access roads, have resulted in the exposure of the Totes foor to the elements, the eventual loss of biomass, nutrients, or precious top soil, and the progressive removal ofthe best seed bearers or potential mother ‘of elite tees. Genctical degradation has further constrained forest regeneration. [As forest lands are disturbed, they lose their natural eapacity to conserve soi. “The rate of soil erosion rate can go as high as 300 to 400 tons of material per hectare annually, depending on the extent of forest and vegetative cover los.’ ‘The Department of Environment and Natural Resources has conservatively esti- ‘mated soil erosion to be about 100,000 hectares of land at one meter deep annually. Out ofthe fifty provinces in the country, fourteen have atleast SO per ‘ent of their Iands eroded.* Extensive soil erosion as, in turn, resulted in the sitation of watersheds, reseroits, and dams, shortening their productive life span in the process. A ‘riden appraisal of the Magat reservoir, for instance, reveals that because of erosion arising from upstream activity Cogging, siting cultivation, and cattle raving in the deforested uplands) its probable life span of 100 years has been fut 108 fourth [7]. The degraded’ watershed arees have not been able to retain fnd store water allocated for ierigation and hydmelectic power. As a conse~ ‘quence, foods have prevailed in the rainy montts while drought periods have become more common and extensive in the dry season. Agricultural and industrial prodction have thus certainly suffered a5 a result of deforestation and watershed, degradation. "At present, there is a paucity of comprehensive studies on the costs and effects of sol erosion and watershed degradation in the country. Available researches merely describe the extent of siltation in certain localities. For instance, some frees fa the Agno River Basin of Luzon ate said to be so sited that they have ‘become much higher than the surrounding rice felds [19]. On the other hand, the only available quantitative study on sll erosion estimates the cose of nutsient Joss in terms of the required amount of chemical ferilizer (about US.$50 per Ihectate per yas) to restore soi ferity (7) In the alnonce of radical changes in forest management and massive forest renewal efforts by both the government and forest land eoncessionaires, the yearly Toss of a portion of the remaining natural fores. is expected to continue and further aggravate the existing environmental problems. Most of the existing +The annval soi os in undistrbed fort lands ison ie average ot to per haste per Sean degrade secoary fore, the vas of sol erosion ean be ei ints the above «MSs Go per cent (89 milion hectare) of otal allgaie and cnposble ands (which ‘foie Sefeutre nds) are std to be severely ened, whe Bly ad mountainous Tands (2 alin heaares) ate highly susepuble fo soll erosion. They both consiate bout 59 per cat of the sounty’s total land are. 1 Jn the late 1970 a lett? millon hectares of te S milion hectares of deforested lands trove in eel tered ares.n ‘Tue, pevetoriNe Beowontes ‘TABLE Mt [Nose on Thuan Licease AcrEEMENTS (TIA) AvoCALLY Guaeren ‘s0iCE 1971 ano Fousst Atta Unoen Concession (1.000 nectar) var Neola Ciulive gare Abra ‘ ae sans 08) 58 338 wet : ws Sen ae ° ua 9s ns x 2s ass = 3 Gu ss & ume Sosa Se a m8 -B 0-1 Sake 3 “ns Gee 3 “me Gio jon a a ee ee 3 1m ie sas -i sur SST " we Same ket $ aS ge BSD <5 tis Ss SS <3 Im Sse =a es Sours: Piippne Forestry Sis, various years. ‘old-growth and secondary forests (54 milion out of the 6.3 million hecteres as ‘of 1987) ere under timber Icense agreements which entte holders to extract timber resourees for the domestic and extemal market, Apart from effecting timber shortage crisis, the exploitation of the remaining natural forest shall ‘certainly have adverse ecological consequences because these natural forests are ‘mainly located in eritical watersheds and steeply.sloped mountainous areas. [1]. AS the timber shortage, the loss of the remaining natural forest and its more _gencralized environmental consequences begin to be felt nationwide, an imminent forestry crisis will become more obvious unless the limits on state action in this ‘matter are widened. The unfoiding exss is likely to lcom larger because of possible conflicts between upland residents, affected lowland communities, and environmentalists on one hand, and timber license holdes, the wood industry, and the government on the other, “he following sections explore the forestry crisis in greater detail, They spe- Tae is eT “hone Tor iam Sadia reine 308 210 no Pucated and approved under Sar 353 23 Tease ota ~ Sar oa 13 2a Hlomesesd 230150 ar ree atest, Rat 169 ins Special pent 2 at Asotin pending 108 “Approved applition not pteted/cancaiad 59 ‘Unaccounted plete aor 209 Remaining dspale lands am ms 2 9d Souree: Bureau of Lands, anpblched date the Philippines obtained its political independence from the United States, the public domain covered about 71 percent of total lands while privately owned lands mounted to about 24 per cent of the total The former consisted of claiied forest lands (10.3 per cent) and unclassified forest and other public lands (61 per cent) ‘With its control over a substantial land area, both the colonial and post-colonial states had the capacity to determine overall land use pattems and to bestow Jandownership of leasing rights to aspiting users. The increase in the proportion of privately owned lands and the commercial exploitation ofthe couaty's forests both reflect not only the state's role in the forestry issue but in the ereation and promotion of properted famalies and groups as well Given the extensive area of unclassified public lands, the classification of such lands through time by the state became the mechanism for setting the pattern of public land use and the manner of dispensing ownership or lease sights. In general, Inelassiied public lands are categorized as either “alienable and disposable” or forest lands. The former are either sold, given as homesteads, ot leased to individuals or Filipino corporations (Table V). Classifee forest lands, on the other hand, are either placed on reserve, held by particular government agencies land corporstions, like the National Development Corporsiion (NDC), or leased ‘ut to the private sector for exploration, development, and exploitation Although presidential administrations eve differed in the pace with which "The data nest tat the Indboling perm ws eet efuesod by th atin ofthe Celocal and postcolonial ate and that labd ‘arte ransictoe in sary boreal pais teenie in‘ rltively small pon of total lands or within sapponod public laFORESTRY CRISS 15 ‘TABLE VI “tue Atsocinion oF Newoy Classen Lavos to ALIENABLE/DISPOEARLE Of ‘Punic Fons Lavos txoen DirriXint PRSSOSNTI ADMINISTRATIONS i ee Peed ot Tey Almaty rye RRSP wesigc: htt, «ete Fagg _ ASEie Sas) PGS @@ Barwa i306 3 iow (aetino) dy as) s330/s3-1956 238 tatoos (stag) yaa Inse/stise0 2818 om 1886 89 aa (Garis) oss) a Ioea-1964 vas alr aa oms (Macs ain can toes 196" 40 ‘08 as oo 47 (ares) ei) an) ts6n/-1972 106s a ™ 2296 (ota em om) ienrn-in6 oe pa ‘as ear Graces er) ss76777-1080 os ° as 47 {arco ret dsuoi-ises 0s dass us (tren 8) Inasc-19e7 ws 350 (Gein) cass) Sourcex” Deparment of Environment and Nard Resources Pilipine Forcty Shots, yrs snaual volumes ‘Nowe Figwes in pares sow percentage the unaccounted 30,00 esars shows up i the next period they classed lands under the public domain and their preferred allocation of newly clasifed lands? an overall bias in favor of retaining these lands within the public domain or designating them as forest lads is quite apparent. Note for instance that about 72 per cent of newly classified lands from 1957 to 1985 were allocsted to the forestry sector (Table VD. "The precse uses of clasfed forest lands cannot be accurately determined at present. While the Department of Environment and Natural Resources is in harge of monitoring all forest lands, various agencies exercise jurisdiction over Darialar forestry related concems. Up to the present, the area of the public the pact of pubic land casienton was elavely faserdurag the presidental admins {Eaton of Mogoyisy, Gate, and Mares. The lst fe yes of Marcos is, howeves, STpurteed Aer the mi-l9S0u the forestry scar claimed a reter potion of newiy had land.6 ‘THE DavELorING RoONOMIES rece Uses of CLaseD FOREST Ls 1s or DSceuBen 1985 = Sa ay pee Foret Land Use lian Gmc, ocular _ Mae) Aen) ara) per cote Foret nds under Fee — Forest reees aa us atonal pk fine ss 128 90 tary eres 09 __ Sit reserves 2 . Sokal sites — = Foret ngs unde tas = “Timer Heese oo oa 169 ae Otter tinker a0 36 « Pasure and grazing 047 34 9 +0 Indust ee ‘station os a a7 a8 Mining les cotraet 020, 14 2s 100 Stewardship conract 016 10 1s as Aro‘oresty pt 00? os M ons Fispoad tee as os os 2 Special we Toresry permit 0 oz on 22 ‘Tree farm prot m2 oa 3 Be Quaey mining Teo 0002 oo 003 s Inna ing ‘ole 2.001 oot 28 a" nc ~ Bisccouied 66a ~ ia ‘Sourses; National Feoaomie and Development Autot, Pippin Seatieal Year ‘ook, 1986. Deparmeat of Esvirnment and Natural Resurer Philip Pores Sti, 1995. Bureau of Mines and Ceosiences,snpublied recone ‘domain held specifically by government corporations is not known, Moreover, in some public forest lands which theoretically cannot be leased out, eg, forest reserves, national parks, and military reserves, logging and mining activities heve ‘canspised. Given these imitetions, Table VII roughly reccnstruets from differeat -goveinment sources the various uses of classed forest ands as of December 1985. Despite the data limitations, however, three observations can be abstracted from the table Fist, about 56 per cent of clasiied forestlands in 1985 were under one formPORESTRY CRISIS 1 of lease or another. Corporate interests, including foreigners, have been able to Secure timber license agreements, pasture leases, mining licenses, mangrove and ther forest product permits, and approval of agroforestry, industrial tree planta- tion, or tree farms projects from specific government bureaus. Most forest occu pants, however, have not been able to secure documented use-ishs ‘Second, while the table dacs not specly the public forest lands held by govern- ment corporations, it is posible that a substantial rortion ofthe 940,000 hectares (6.7 por cent) of classed forest lands which eanaot be accounted for are held fr leased by the National Development Corporation to the private sector If {his isthe case, then the proportion of classified forest lands under Tease is larger than what has been speciied. “The speculation regarding the conteol and subsequent leesing of forest lands to private individuals or groups by NDC is based on the historical experience of this corporation. Historically, since it was established by the American colonial ‘administration in 1918, NDC bas been able to hold public agricultural and mineral fands in exeess of the Iimit imposed on private corporations, associations, and persons by the Constitution and laws of the country. Under the martial law Fesime of Marcos, the NDC was specifically empowered to hold, develop, oF Gispose of lands soqured by Americans under the Parity Amendment, as well Togged-over public lands. Earlier ia the 1960s, it was also able © acquire “unpatented” of “cancelled patents and applications" for alienable and disposable Tands, which were later eased out to agsbusiness interests [11]. Given the consittional limit on landholdings and the extensive areas of deforested public lands, the NDC has effectively served as the enity point of foreign and local capital into the public domain or its joint ventare pater. ‘Third, Table VIC reveals that a substantial area of forest lands (47 per cent) hhave been leased out for logging and other forest product extraction activites ‘The increasing allocation of newly-clssiied public lands to che category “forest land facilitated the opening of public forest lands to licensed loggers. Table TI shows the number of timber license agreements (TLAS) granted on an annual basis in the 1970s and 1980s. While out 40 per cent of forest ands were leased tut by 1970, the proportion held by licensed loggers steadily increased during the ‘martial law period, After only four years, the mail law regime had already allocated 167 out of the total 192 licenses granted during the entire postvar petiod up to 1987. By 1977 or halfway through the Marcos term, almost 90 per ent of forst lands were under a TLA. “The post-1970 figures in the frst column of Table IIT represent the increase or seduction in the number of TLAs. The negaive numbers indicate cither of two things: that agreements granted in the past, ie. during the 1950s and early 1960s, had expired, or that those granted in later years were cancelled by the authorities due to violations or voluntarily turned over by the licensees “According to one study, most forest concessiorares (66 per cent) hold on to 1 Aside from the NDC, a numberof poernment sgenses snd corporations control public finds wih they eiheroperte indpeadeally oF in beeps wih private corporations oF Aiich Whey fase out to Totland freien basa ineess8 ‘TH DEVELOPING RoONOMEES theis TLAS for an average of only nine to ten years [16]. Considering that each ‘TLA is valid for twenty-five years and renewable for another twenty-five, the carly voluntary return of leased lands may reflect the capacity of licensed holders to exhaust the standing timber within their concession area, as well as thet lack of interest in replanting and sustaining yield. The declining proportion of forest lands under license after 1977 may thus be indicative not only of the expiration, cancellation, or tumover of existing TLAS* but also of the diminishing supply of timber resources, Despite the above trend, new TLAs covering extensive arees were agsin made available after 1980, following the designation of newly-dassifed public lands as forest lands. Given the large-scale loss of forest lands, the allocation of newiy- classed public lands to the public forest land category, was, in retrospect by n0 means a desire to conserve or develop the country's forest cover but to feilitate their exploitation ‘With the rapid and extensive disposition of timber license agreements in the 1970s and early 1980s, 5.4 million hectares (about 85 per cent) of the remaining forest lands in 1987 are under a license agreement (Table IID. ‘The Philippine ‘Wood Products Association acknowledges that concesionsres control most of the remaining old-growih dipterocarp forest, as well ss the residual second-growth forest [18] 2. Taxation of acess and exportation of tinber [Apart from the government's public ind clasication policy and bias in favor of forest resource exploitation, low forest charges and export tax policies partly sccount for the high demand for forest concessions and the monetary incentives to the wood products industry. These policies have facilitated the unceasing ‘exploitation of forest lands by the private sector. Based on the volume of timber removed, forest charges! as an ad valorem rate averaged only 6.3 per cent of fog valve (wholesale price) in the 1950s. It was even reduced to only about 2 per cent of the wholesale price of logs before 1981/82. Thereafter, it amounted fo only 5 to 6 per cent. Low cutting charges have thus virtually made access to timber resource exploitation close to being fre, thereby coafercing rent incomes to the logging concessionaies.* With respect to domestic sales and export tax, no amount was levied in the 1950s and 1960s. A 10 per cent tax on domestic and export sales of wood was ‘only imposed in 1970. In order to induce the processing of logs and. generate grealer value added in the industry, the tax rate on Tog exports was Inte increased The desing proportion rfc the incessialy unproductive stats of the county's Supposed forest Inds fore 1980, forest charge for promium species was 3.5 pesos per enc meter. In 1980, "was ried 10 9.35 puso (lr domestic te) or 13.25 pose Gf exored). By 1986, ‘as 30 pus epee of destinations ' Crux an de los Angles [6]. The panting of foret concessions as historically been fnsrumental Inthe Pros of lite formation inthe country. Moat of the prone Twsnesmen were oe tine fret concsslonizes Local and nena poieal fread thei asoeiaes have also been reclients of fretless,FORESTRY CRISIS % 10-20 per cent by 1980 while a smaller rate was imposed on processed products per ceat for fumber and veneer, and 2210 for plywood. As a proportion of ‘ficialy-eammed export valu, taxes from wood exports amounted to only 10 per ‘ent before the Inte 1970s and about 20 per cent thereafter. ‘Government revenue from forest resource extaction, in the form of forest charges, domestic sales, of export (axes, constitute a’ certain portion of the potential resource rent or excess profits which the forestry sector generates. Based fn specific price, cost, and profit assumptions. the potential resource rent can be calculated aa residual, With these assumptioas and government's low forest charges and taxes in the easly 1980s, government revenue amounted to only bout a fourth toa third ofthe rental income. Als, with a fixed export tax rate, ‘the share of government becomes smaller, and the greater i the differential between the domestic and export price. In the absence of any substantial taxation on ‘natural espurce use, the state has in effect opted to hand over a substantial portion fof the potential resouree rent or excess profs to loggers and exporters. Tt has thus provided a source of “primitive” capital accumulation.” Furthermore, it tmay be hypothesized thet on an inter-sectoral level these profit opportunities" have also skewed the dstbution of profit rates, bence diverting capital from the ‘normal profit rate area, ike food crop production, to the extractive industries B. The Practices of Loggers and Exporters Specific practices in the industry reflect the limited, and short-term concerns cof most TA holders. For instance, the use of powerful equipment and large tackines is common in the logging operations of TLA holders because. the Technology faelitatcs timber extraction or the immediate capture of gains. The thigh cont of extraction per unit volume associated with the technology as. lso tmade logging operations intensive, In most areas, selective logging has hardly been practiced because intensive logging operation is easier and its cost of extrac- tion per unit volume lower. "TLA holders have also not tndertaken silvicultural treatments on the residual forests [25] nor the requied replanting activity because such conservation Schemes impinge on their profs. After exhausting the timber within their con- ‘cession, many timber Hcensees have considered forest management on a sustained 1261 com of proton is 4025 peso per cubic meer, prof it 25 percent of cost, and the gomnste prc for timber i 1,0 while the fore price Is 1,310 to 2,000 pesos pee (SASSRREE fin the cues prot il respectively be #9680 peso, 107-10 fo 149890 futon "Assonlag foros charges af 30 poe per cube meter snd the mesic sees {aX ESD per cent wile the export tax i 20 pe cen then the share of goverament In the eat fom domes tt fs 36 pr cet, whe Is sate in exporttasel ren 29 (0 33, Fv tings this form of peintve capital aeeumulaton from the clasiat one is {he ole ofthe stein the provision of legal secs fo resource exploitation and of nos ‘Bedacsdmeaca of prodacton or atoral Tesoarss i the cretion of spa, 1» Bred on te stad ot Marian de low Angeles, the proft rte fom the sle of domestic lors (avn percentage of production son) may reach 157 per cet whe that of exported loss say be 268 per ext80 ‘THE DEVELOPING ECONOMIES vield basis as economically unviable, and have abandoned their areas [8] ‘Most concessionares apparently ave not considered their involvement in the industry as @ going concem. They have ether sought new concession areas or simply left the industry. Few have availed of regulated tree plantation arcas. ‘The cost of establishing a new plantation, together with the ten-year gestation petiod of fas-growing tree species, pales in comparison to the excess. profs ‘armed from merely extracting from the natural forest. ‘As a result, very Title reforestation activity has been caried out in the deforested areas. The 1986 Forestry Statistics has esimated 741,000 hectares of reforested areas for both government and forest land licensees. ‘This figure, however, needs to be validated. According to one forestey specialist [21], the more realistic «stmt is probably 300,000 to 400,000 hectares of reforested (not just planted) lands. While about a third to a fourth of theso ate in government projects, the rest are in private forest censoes' plantations. The later (200,000-250,000 Ihectates) constitutes only about 2 per cent of “deforested forest lands” (otal forest area less the productive area, including the residual forest) in 1987, ©. The Weak Enforcement Capacity of the State and Its Overall Weakness ‘The massive loss of forest lands against the meager replanting efforts indicates ‘hat most licensed loggers have not complied withthe sstained-yield requirements of theic TLA. Specifically, they have not undertaken selective cutting and replant- ing actives. ‘The state, for its part, has aot been able to enforce such requite- ‘ments. It has also falled to enforce avowed conservation policies, such as a selective logging ban and the limitation in June 11, 1979 cf log exports to 25 per ‘eat of the allowable cut (Presidential Decree 1159). Thus, despite the ban of logging activites in Zambales, Mindoro, Romblon, Marinduque, and Leyte, or in regions 5, 6, and 7, deforesiation has persisted and even intensfed at a higher ‘The state's weak enforcement capacity is also reflected in the illegal shipment fand undervaluation of logs and other wood product expors, at illustrated in the discrepancy between Philippine export statistics and the trade data of importing, Countries. In the late 1970s and early 1980s, for instance, log shipments based ‘on official Philippine statistics were only 46 10°73 per ceatof their value in Japan (able 1). ‘These undervaluations may suggest that a portion of experters’ rent incomes has ‘pone to some district forest officers, national government bureaucrats, local govern- ment ofcials, miltary officers, and soldiers. Aside from corstreiing the collection ‘of public revenue, such practices within the bureaucracy als) depict a state unable to counter the limited, short-term concerns of loggers and exporters, coatrol the ‘overseas fight of locally realized profits from natural rescurce exploitation, and prevent the depletion of the countess natural resoures, 1 The lover rae of deforestation in TLA ates ia conta to the white logging hasbeen bummed, ike in. Negros Oriental, unercally ted st an agumest fo support the ‘nisteance of existing TLAS The jutinton, omever fae to coosder the eae! of forest cover inthe resiced areas atthe tine of the Sun, snd the exeat fo Which the iatrnchised logging interes continued this operations, egy hs tineFORESTRY CRISS sr ‘The dominance of commercial concerns and the shsence of any appreciation for the environment and the interest of the nation aad future generations has un- fortunately undevted forestry policy formulation, In an avowed attempt to change this thrust, a log export ban was decreed (President Decree 705) on May 19, 1975 while the policy of promoting processed wood exports was maintained.* [Loggers and exporters strongly opposed the export ban even if it did not extend to processed products. To justify their poston, the wood industry merely argued that the ban would deprive the country of foreign exchange earnings, that the existing processing plants would not be able to absorb the Togs, and that the domestic market isnot capable of absorbing the procesed products, The last two frgiments meant that the logging interests were not even open to limiting their extractive activities ‘Succumbing to the pressures of the wood industry, the Marcos administration suspended the ban and allowed logging to continue in certain selected areas/ provinces. After a partial log export ban was elected in June 1979, 2 total export ban was re-contemplated in May 1982, but again, it did not materialize, Instead, 28 noted earlier, TLAs were granted in both periods, and logging has been allowed in selected provinces. “Tn summary, the facors underlying the forest exsis are related. Policies on public land classification and use formalized the state's preference for continued control over forest lands and exploitation through lease. Together with its Tow forest charges and export tax, these policies provided the context for greater private incentive for forest exploitation, ‘State policies, however, cannot sulficiently account for excessive logging. There hhave been government policies as well which have sought to constrain exploitation for promote sustainable yield. Moreover, by giving excess profits to the legal users, the liberal policies on land access and export tax provided them the wherewithal to invest in reforestation. The fact that they did not reflects something about the nature of both the private forest users and the stat. ‘As revealed in their practices, loggers and exporters have limited financial ‘concerns and time horizon, while the state has a weak enforcement capacity, or is dominated by the private interest of some bureaucrats and enforcements agents. Hence, it has been unable to enforce the terms of the TLA contmects, prevent Togging in forest reserves, or illegal shipment and export undervelaatin, ‘Apatt from the limited organizational character of the state, its ideological ‘orientation also underlies the forestry crisis. The dominance of forest resource exploitation in its policy orientation or its fallue <0 formulate even @ minimum ‘conservation policy indicates that the primary, if rot the sole component of the State's cost-benefit caleatation in natural resource use as been the financial benefits fof extraction and processing. The costs of the externalities of forest resource According to sconomle goley advisers the processing of tnber which generates greater {tive added enaleg the Coury to relze ie compraite advange promtes elton? of reuree use, apd thereby promotes fret comsermaton (Power and Tumebeat (21) “Tis vows however, select te fact that increased demand for chesp pocened wood feces reqirer fore resources natural txoice exanion whieh Tay not 86 Sccomplshed unde soaled-yslé manapeneet,2 "THE DEVELOPING ECONOMIES extraction and of resource depletion islf have never bees a consideration in state ‘polices, With its limited concern for the financial benef, this state orientation hhas wedded it to the private commercial interest of resource exploiters. Since it has never been autonomous, the relative power of private interest over the public interest has dominated state policy and strecare. TIL. EMERGING CONFLICTS A. Over the Public Domain ‘The county's public lands have increasingly become the site of conlict between indigenous residents and upland migrant-sctlers on one hand, and those with legal claims to the lands, such as certain goverament agencies and corporations, agri ‘business corporations, or timber Hoensees on the other. Various factors account for this observation, among which are the following: ‘Firs, state control and classification of a substantial land area a historically ‘been premised on the assumption of a largely uninhabited public domain, as in “America atthe start of the century. However, since some of the forest lands were ‘actually populated, their allocation for other uses consequently deprived teal ‘minorities end indigenous resideats oftheir subsistence source (14. ‘Second, state clasication of public lands and ther Tease to concessonsires, ‘together with the control of state corporations over a substantial portion of these Tends, have set off an enclosurelike process which has thereby restricted the access of aspiring setters and small cultivators and undermined the tenurial rights ‘of indigenous residents. "The area potentially available for alienation and disposi- ‘ion with the exclusion of those already judicially registered in 1985 and 1987, amounted to only 37 to 39 per cent (Table V) of the country’s land area.* Moreover, the inefcieney of a poliized bureaucracy has also limited the dis- positon of designated slienable lands. About 3.3 milion hectares of such lands in 1985, for instance, had not been processed while ancther 3 million hectares could not be accounted for. ‘Uncertain control over alieaable and disposable (ad) lands has resulted in cconficts, informal settlements, or migration to coafict-prone areas within the public domain, Since th total atea applied for exceeds the available area of ad ands (Table V), some applicants have occupied and cultivated idle Tands 10 ‘ensure their claims. ‘The lands they virtually claimed, however, have beea sub- Sequently granted to newly registered owners, patent holders, or those with approved sighs, Felling to establish an informal setement, such as a tenancy ‘arrangement, the displaced have been more likely to encroach on the forest reserves or the partly logged-over lands eis interesting (0 note the difference of about 1.2 million hectares between ‘the total area of cultivated croplands or plantations and the area of “slionable 16 The area poleatly avilable for ainaion is nite parly tecause of the exence of large holding eit tho udcallyTegsered Ids and more importantly, by the sester ‘popoton of lands kept ander tbe pale dol,PORESTRY CRISIS 3 and disposable” lands If the discrepancy were not solely due to errors of catimation, it strongly suggests that cultivation has been carried out in many portions of the “unaccounted” forest lands, in unclassified public lands, in partly logged-over, if not deforested areas under license, or in forest reserves. In the residual, pary-logged-over forest lands, conflict, if it sill has not ensued, has a high probability of transiting as forestland concessionires seek to protect their property rights and secure their residual harvest, and forest occupants do likewise. ‘Apart from the movement of displaced setter, particular lowland grasian features and developments have algo induced migration into the public domain, ‘Among these are the historically-established tenarcy system; the limited scope ‘and success of land reform; the low productivity ani labor absorptive capacity of agriculture resulting from the limited flow of eapital to crop farming: the contrac- tioa of hired employment opportunities in rice faring; the limited availability of nonfarm rural employment opportunites; and the keen competition for employment ‘a a rest of the sheer growrh of the landless population [3]. Migration, whether of displaced setlrs or poor lowlanders, has also been facilitated by earlier intensive logging activity which paved the way and opened formerly foresed areas to settlement and sgriculure. ‘To a large extent, the ‘movement of capital has preceded the movement of landless migrants. The pattern and consequence of migration into the uplands is crucial in the implicit ongoing debate on the culprit(s) inthe country’s forestry or ecological eis B. The Debate on the Nature of the Forestry Problem, the Culprit behind Deforestation, and the Required Response ‘While this paper has defined the countrys forestry problem as both the depletion ‘and imminent shortage of a supposedly renewable rsource and the accompanying ‘degradation of the environment, the dominant view in the Philippines as em- pphasized the timber shortage, dlsrogarding the adverse ecological outcomes of Geforestation® Environmentalist, on the other hand, who coastitute a less ‘powerfal group, stress the Inte. "The ongoing debate within the country dichotomizes the forestry problem as ther a "prospective timber shortage” or an “ecological crs.” The diference between the two views and the proponents’ adherence to exch side of what other- vise are complementary postions, stems mainly from their conflicting proposals for action and varying perspectives on the cause of deforestation. 1. The imminent timber shortage view ‘he “timber shortage view” recognizes the possible timber shortage faced in ‘the medium term and the threat it imposes on the life of the remsining natural forest. However, the proponents hold the view thatthe shortage is not inevitable 2 tn 198, for isan, there were 145 millon bestares of aemble and diposble Inds, bit the aes of elated lands aud plnttons amouwed to 158 wlio [15] Top oa of the DENR, polisymaters, ecnamis, and some foreare have empatiznd the yonpective aber sortge, Tit ewe ave mpl in Leoert and Usbabor [13] ‘snd 'in the "Potion Paper onthe Proposed Total Lopalag Ban” (1988), computer pinouti ‘Tue DEVELOPING ECONOMIES fad that the life span of the county's forest can be extended if the following proposals are followed: (I) a reduction of the rate of extraction which is tant= amount to a partial logging ban; (2) the protection of the forest from illegal Jogging and continued upland migration; and (3) the practice of sustained-yeld management by timber license holders. ‘The proposed program of action directly proceeds from its analysis of the problem or its pereeption of the culprit behind the deforestation, Both local and external proponents of the “prospective timber shortage” view generally cite the following as the major factors responsible for the destruction of the forest: (1) shifting cultivation and encroachment by lowland migrants; (2) illegal logging; And (3) the noncompliance of concessionares with the provisions of their timber license agreements. ‘Some proponents tend sot to rank the above causes. Others, however, are sore explicit, The UN Food and Agriculture Organization, for instance, singles ‘out illegal loggers asthe culprit behind forest destruction. The World Resources stitute WRN, together with the World Bank and UNDP, on the other hand, point to the uplanders and upland migran's as the primary cause of tropical Seforestation. In its 1987 report, WRI reiterates a “tragedy-of-the-commons” argument [27] Jt isthe ruml poor themscles who are the primary agests of destruction as they clear the forest for agricultural lands, fuel Wood and other aecesites. Lacking other ‘means fo meet their daily survival needs, rural people ae forced to scaly erode the capacity af the natural eavironment fo support them, ‘There is, howover, no confit between the FAO and WRI position because the rural poor are after al unlicensed i their clearing activi ‘Like their foreign counterparts, local foresters, some academicians, and depart- ment oficials agree (but with a stronger tone of symputby and understanding) ‘that shifting ealtivation, as the only means of subsistence by landless, uninformed ‘upland migrants, isthe main cause of forest destruction, Questionable estimates ‘of upland population, together with government statistics on the extent of de- {orestation due to shifting cultivation, fires, Mogal logging, pest, and diseases, are 2 The poston paper, enone in foto 21, refered to ive nus of forest derction tnd fevoures depletion” These se’ (1) the luporance of the growing number of poor “plan migrate with rent the anproprite elation toges in thir new sth, (2) he sence of cea of secu Property ets whieh resus In ack of teres 1 omar the sosionbty ofthe Ind.) th eadertaton ofr Fespaers (4) the itadowacy of goverment resurec and (8) the sbence Of 4 comprehensive lind We ithe reainsip of the thie factor 10 the ast of the se or i overall weakest rst tte privat nt nthe sero bower, nt spectes.‘There a m0 ‘antve acon of te sae, nor any meason of the roe of logger and exporters a {be eeorewadon problem. In the postion paper the vate i mery character? a ting both ivequpped to enfres forex rues and Teglatons and burdeped wit “sn ‘ices of forest protection reglons”oRESTAY CRISIS 8s ‘uncritical forwarded as evidence in support of ths contention Tn its Primer, the Philippine Wood Products Assciaton also expresses the view that poor upland- cers are the culprits [18]. "Even if one assumes that the “prospective timber shortage” view is not ide- ‘logically motivated* i can be faulted for omitting to take the following factors into consideration First, most proponents of the view have immediately singled out voiceless and Iaeraly foance is atte, the implct loslogical view that the situation inthe forest tector doesnot rest the primary coardetion which revolutionary ation mt sites, and the sonzeament oe lnsgndcance of non produce! metas of production ‘tin i plz economic frameworksPORESTRY CRISIS 91 forests. Groups living in these areas have a greater potential of being mobilized. ‘But what could be thei interest ia protecting the forest apart from the abstract notion of preserving the nation’s petrimony? The potential of their protective role ean omly be actualized if they have access to the residual forest lands around the old-growth and can depend on agricultural acvities in pars of these lands for thet subsistence. ‘This then requires redefining the access rights of diffrent partes in these lands. At present, TLA holders have legal access to most, if not fl ofthe residual and old-growth forests 4. On the financial and organizational requirements for forest renewals In financing the necessary reforestation, the government apparently depends ‘mote on extemal funds than oa interal sourees. The only current interually~ funded plan, the Forest Renewal Trust Fund, is drawn from TLA holders who ‘ate supposed {0 deposit an amount for undertaking the required replanting within their concession. Since the fund merely ensures compliance with the replanting requirement of the TLA, its coverage is limited to areas presently under the TLA. “Very litle government budgetary resources are directly applied to reforestation Decause a substantial chunk (40 por cent of the 1988 budget) is annually allocated for debt servicing.” While external debt payment is an apparent constraint chere is intemally no eal for “burden sharing” amoog those who have benefited from past forest exploitation, Probably because of is view on the culprit behind Seforestation, the government has not conceived of any plan to mobilize the ‘wood:processing industry and major importing nations to share in the cost of forest renewal. "The state has shied away from texing past TLA holders and Iogying violators party because of the possible poieal repercusscns of such an act. Tnsta Opis to depead on the World Bank, Asian Development Bank, and most especially fon Japanese oficial development assistance (ODA) for whatever financial support fand type of reforestation program. It should be noted, however, that environ- mealal conservation has not been the preference of ODA flows. ‘On the organizational agency for forest renewal, present polices as well as the proposed Master Plan give the TLA holders priority in the extraction, evelopment, and protection of the forest. The preference for TLA holders is tuided by the legality ofthe TLA contract and the economic pressure of supplying both domestic and international timber demand. They also have the technology for tiniber extraction and processing. The local population, on the other hand, fare neither organized nor technically equipped to meet timber demand. Further fmoce, they may be too tied up with eking a liring to bother about seriously regenerating the forest. Some of those in their ranks can even be contracted to ‘Cut trees legally fom both the old-growth and residual forests to augment their “However, to continve denying the local populaion access on the besis of the 1 The debtforture piogram of the World Wide Find (WWE) for Natuse with the FPhiigpincs cover USS20 alll of the couasys exe det, In promoting hs Prortns WWF depends on pate donations, te magaude of which probably she Eons fo is objective (Kent (12).cy ‘THE DEVELOPING ECONOMIES above factors, does not only transgress against the value of equity but reinforces ‘the denudation of the forests through ilegal means. In addressing both poverty and the eavironmenial problem, it is almost imperative to develop intcgrated Schemes which will enable the community to provide is own subsistence while regenerating the forests. This means that over the short run, while the exviron~ ment is still being upgraded and while nether the residual forests and upland ‘agricultural areas are productive for harvesting, these communities wil have to ‘be organized in search of alternative soutces of income, 5._On the valuation of domestic forest resources versus wood Importation ‘The role of the remaining natural forest as the primary source of timber in the short run is based on the assumption of the wood products association and the DENR that imports are more costly then available local supplies. In terms ‘of market prices, the assumption is empirically valid, However, the valuation of natural resources in market terms has certain limitations. The domestic pice of timber, for instance, does not reflect the damage or Toss of resources associated With i extraction." also fails to provide an assessment of the value of the resource not only in the current ecosystem but also in that of the future. The limitations of market valuation, in other words, indicate that it exits separately from and possibly also in contradistinction to alternative valuation process outside of the market framework. For some natural scientists, environmentalists, farming aad fshing communities, the value of the natural forest lies in the function it performs for human existence ‘or forthe life of this planet. This distinct valuation implies that the forest es an ‘essential part of the ecological system has value which is realized not in the ‘market but in its non-use or non-commoditization. AS an altemative basis of valuation, ths view is definitely a threat to commercial interests, and poses certain ‘demands on society, if not on the world community. For instance, the adoption ofthis perspective leads f0 the conclusion tha the loss of en important ecologicl Zone weighs much more thn the cost of imports, ‘Aside from threatening the current income source of loggers end wood exporters, this conclusion also requires the rest of society to bear the burden of reatvely higher import value within the medium term in order ‘0 subsidize forest or ‘environmental renewal, Dependence on imports for domestic forest resource conservation, however, is based en 8 parochial and shortsighted strategy and on faith in technological innovation. The strategy merely replicates the practice of developed countries 10 conserve their own natural resources while depleting those of endowed but poorer nations. The availabilty of other sources as traditional ones are exhausted prob ably accounts for the absence or slow development of timber substitutes. ‘The ‘depletion of the resource base of former timber-supplying ccuntries has apparently ‘not induced technological developments. The liitations cf the nation-state ap proach to resource conservation and technology development, therefore, call for 4 global approach to the problem of deforestation and mankind's present and future timber requirements.FORESTRY CRISIS 93 {In the meantime, itis urgent for Filipinos in government and popular organiza tions to besin mapping alternative strategies which address the related problems ff forest resouree depletion, environmental destruction, inequitable access 10 forest lands, and poverty inthe uplands, which are cognizant of polities, ide- logical, and pragmatic considerations. REFERENCES, 1. 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