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ECONOMICS OF THE STINGLESS BEE, TETRAGONULA BIROI (FRIESE),

PRODUCTION IN THE PHILIPPINES

Article · May 2021

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 ECONOMICS OF THE STINGLESS BEE, TETRAGONULA BIROI
(FRIESE), PRODUCTION IN THE PHILIPPINES

Anna A. Locsin1,2,*, Agham C. Cuevas2,3, Elmer A. Polintan4, Jessica B.

Baroga-Barbecho2,5, and Cleofas R. Cervancia2,6
1
Researcher, University of the Philippines Los Baños Foundation Incorporated, College,
Laguna, 4031 Philippines
2
Member, Bee Program, University of the Philippines Los Baños, College, Laguna, 4031
Philippines
3
Dean and Professor, College of Economics and Management, University of the Philippines
Los Baños, College, Laguna, 4031 Philippines
4
Instructor, Bicol State College of Applied Sciences and Technology, Naga, Camarines Sur,
4400 Philippines
5
University Researcher, Office of the Vice Chancellor for Research and Extension, University
of the Philippines Los Baños, College, Laguna, 4031 Philippines
6
Professor Emeritus, College of Arts and Sciences, University of the Philippines Los Baños,
College, Laguna, 4031 Philippines
*Corresponding author: aalocsin@gmail.com

ABSTRACT

This study evaluated the feasibility of establishing a stingless bee farm in

the Philippines by calculating the Net Present Value (NPV), the Net Benefit
Cost Ratio (BCR), the Internal Rate of Return (IRR), and the Payback Period
(PP) of the honey, pot pollen, and propolis produced from five commercial
meliponaries. Among the species of stingless bees present in the country,
Tetragonula biroi Friese was selected because of its high productivity rates in
terms of colony population build up and honey, pot pollen, and propolis
production. Our survey from 2017 to 2019 revealed that stingless bee-keepers
are spread in the three main island groups of the country, most of which are
found on Luzon (n=1,969), followed by Mindanao (n=260) and Visayas (n=195).
However, the present economic analysis was based only on five stingless bee
yards that had over 1,000 colonies. Analysis showed that the investment
yielded an NPV (USD 42,758) which is greater than zero, thus the investment is
feasible. Likewise, the IRR is 21%, which is higher than the interest rate of 6%
and as shown in the value of BCR (1.25) and PP of 2.91, the investment for
stingless bee-keeping can be a sustainable enterprise in the Philippines.

Key words: Benefit–Cost Ratio (BCR), Internal Rate of Return (IRR), Payback
Period (PP), Philippine stingless bee, Tetragonula biroi

8
 INTRODUCTION

The commercial propagation of stingless bees (meliponiculture) is

relatively new in the Philippines. This surge of interest on meliponiculture is
generated by the increasing awareness of the value of stingless bees in the
pollination of high-value crops, such as mango (Fajardo et al., 2008), bitter
gourd (Deyto & Cervancia, 2009), and mangrove (Almazol & Cervancia, 2013
& 2014). One of the products produced by stingless bees is propolis, which
is known to have potent medicinal properties. The chemical properties of
propolis from the Philippine stingless bee, Tetragonula biroi (Friese), have
been analyzed and characterized (Matienzo-Macale et al., 2011; Belina-
Aldemita et al., 2013; Alvarez et al., 2013; Ragasa et al., 2015; Cumbao et
al., 2016). Owing to the high antimicrobial and antifungal activities of
propolis (Sanchez et al., 2015), its extract is used in making soaps and other
cosmetic products. The propolis and honey from this species are potential
neuroprotective agents against ischemic stroke (Desamero et al., 2017).
Moreover, propolis has tumor-suppressing potential (Desamero et al., 2019).
Furthermore, the pot pollen (Vit et al., 2018) from stingless bees has high
nutritive value. A total of eight pot pollen samples from T. biroi was analyzed
by Belina-Aldemita et al. (2019) and found to contain soluble proteins, free
amino acids, fructose, glucose, sucrose, and small amounts of di- and
trisaccharides; besides sucrose, mannitol was highest in concentration
among all analyzed carbohydrates and sugar alcohols. The predominant
fatty acids were palmitic, α-linolenic and linoleic acids, while major elements
quantified were calcium and magnesium.

In the past, the European honey bee, Apis mellifera L., was locally
propagated for commercial beekeeping, and this enterprise had been
financially viable (Magsaysay et al., 2004). However, owing to the negative
effects of climate change (Cervancia, 2009), mites (Anderson et al., 2004;
Beaurepaire et al., 2015), small hive beetles (Cervancia et al., 2016),
diseases, such as American Foulbrood (Cervancia et al., 2013), and a narrow
genetic pool, its population drastically declined. This experience has led to a
paradigm shift in harnessing the potential of native bees (i.e., Asian honey
bee and stingless bees) for pollination and livelihood opportunities
(Cervancia et al., 2012). The UPLB Bee Program has developed several
technologies, such as use of stingless bees for pollination, bee product
harvesting and processing, ( UPLB 2015a; b) and automated pollen
classifier (Recario et al., 2015). It has also developed mathematical models
for determining the optimal location of beehives and pollinator diversity
assessments (Rabajante et al., 2020).

In Brazil, guidelines were drafted on how to optimize stingless bee-

keeping for sustainable development (Jaffe, 2015). To date, no study has

9
been conducted yet on the feasibility of propagating stingless bees given that
most previous studies and enterprises focused on honey bee species.

Thus, this study aimed to determine the feasibility of commercial

stingless bee-keeping in the country, with a particular emphasis on the
Philippine stingless bee, T. biroi. This work mapped the locations of stingless
bee-keepers and recorded their colony holdings.

MATERIALS AND METHODS

Survey

A complete enumeration-based survey of meliponaries in the

Philippines was conducted from 2017 to 2019 to determine the annual
production of honey, pollen, and propolis in the country. Ninety percent of
the beekeepers were interviewed on site while 10% were accessed through
online platforms. In 2016, the category of a commercial operation was only
500 colonies (BAFS, 2016), however, with the current cost of operation and
production rates, 1,000 colonies were deemed to be the optimal number for
an economic study (Locsin et al., 2017). Hence, in this study, meliponaries
with 1,000 colonies were used.

The production for three years was monitored. Harvesting of honey, pot
pollen, and propolis was done during summer months to ensure that the
honey pots are already ripe. The harvesting methods were based on the
protocol developed by the UPLB Bee Program (UPLB, 2015b). All the
meliponary sites were located in farms practicing natural farming system
where pollen and nectar sources are abundant. The field survey in Visayas
and Mindanao was facilitated by the respective LGUs of the municipalities.

Economic Analysis

The economic analysis was based on 1,000 colonies, which is

considered as the commercial threshold under the Philippine setting. The
total fixed investment in terms of colony holdings was USD 59,488.00. Other
costs covered equipment, rent for the property, labor, and fuel. Revenues
were derived from sales of honey, pot pollen, and propolis. The feasibility of
melipona beekeeping was based on the values computed from net present
value (NPV), internal rate of return (IRR), and benefit–cost ratio (BCR).

The assumptions of this feasibility study were as follows: a) bees are

free from pests and diseases; b) colonies are of equal strength and density; c)
adequate bee pasture within the foraging zone; d) skillful beekeepers; e)
favorable weather conditions; f) absence of environmental contaminants,

10
especially pesticides; g) compliance of management practices with the
Philippine National Standard (PNS) for code of good beekeeping practices
(BAFS, 2016); h) no splitting and selling of colonies; and i) uniform selling
price of honey, pollen pot and propolis.

RESULTS AND DISCUSSION

Survey

A total of 2,424 stingless bee-keepers are spread in the three main

island groups of the Philippines, the majority of which are found on Luzon
(n=1,969), followed by Mindanao (260), and Visayas (195) (Table 1 and
Figure 1). However, only five manage more than 1,000 T. biroi colonies, and
all of them are located on Luzon. All the production colonies were strong,
free of pests and diseases, consisted of double brood chambers, and followed
the PNS code for good beekeeping practices. T. biroi was the preferred
species for commercial beekeeping owing to its high productivity rates in
terms of population build up and honey, pot pollen, and propolis production.
Most stingless bee-keepers are concentrated on Luzon because of the
abundance of wild populations of T. biroi on the island. By contrast, T.
laeviceps is more predominant in Visayas and Mindanao.

All the commercial meliponaries surveyed herein utilized the standard

hive developed by the UPLB Bee Program (Figures 2 and 3). The hive design
allows easy harvesting of bee products as they are stored in the uppermost
chamber (Figures 4 and 5). During harvesting, only the upper chamber is
removed, thus the products can be easily and hygienically processed. The
production system conforms to the PNS for code of good beekeeping
practices.

Economic Analysis

A five-year cash flow for a stingless bee business derived from the data
gathered from commercial beekeepers is shown in Table 2. For Year 0, the
net revenue (i.e., profit) is expected to be negative because of the initial fixed
investment of USD 59,488. However, a net financial revenue of USD 32,918
is expected to be earned at Year 1. If everything else is held constant, a
steady flow of the same net revenues can be expected. Assuming a discount
rate of 6% (equivalent to the 5-year average commercial bank lending rate),
the present value of the future net revenue flows are as follows: USD 31,055
(Year 1), USD 29,297 (Year 2), USD 27,639 (Year 3), USD 26,074 (Year 4),
and USD 24,598 (Year 5). The present value of the streams of net revenues
indicates how much the streams of future income are worth had they been
earned today (in today’s value). Given that the business venture requires a
large amount of fixed investment (USD 59,488), the time the initial fixed

11
investment would be recovered must be determined. Given that a constant
stream of net revenue is expected in the next few years, computing the
payback period would be simple. In this case, because the net revenue is
USD 32,918, the payback period is 2.91 years which is almost the same as
the report of Elpawati (2017) in Indonesia.

Table 1. Number of beekeepers and their colony holdings surveyed for

this study.
Total number of Total number of
Island Province/Region
beekeepers colony holdings
Luzon Antipolo City 5 60
Baguio City 12 250
Bataan 7 200
Batangas 37 500
Benguet 40 400
*Bicol region 560 8000
Bulacan 28 150
Caloocan City 24 100
Cavite 89 600
Ilocos Norte 10 120
*Laguna 603 4500
Manila/Quezon City 3 70
Marinduque 3 300
Masbate 2 150
Mindoro 5 700
Nueva Vizcaya 3 80
Palawan 9 370
Pampanga 8 110
Pangasinan 5 80
*Quezon Province 464 5000
Rizal 52 500
TOTAL 1969
Visayas Antique 11 75
Bohol 59 450
Cebu 53 650
Iloilo 23 350
Leyte 36 500
Negros Occidental 9 100
Romblon 4 70
TOTAL 195
Mindanao Bukidnon 60 350
Cagayan de Oro 13 150
Davao 78 450
General Santos 11 200
Lanao del Norte 50 700

12
 Misamis Occidental 13 75
South Cotabato 7 300
Surigao 6 90
Zamboanga 22 70
TOTAL 260
* Major producers of stingless bee colonies

Figure 1. Distribution map of meliponaries in the Philippines. Those

marked by stars are the major producers of stingless bee colonies.

13
Figure 2. The UPLB Bee Program’s T. biroi Pollination Hive (UPLB-TPH)
design.

Figure 3. A meliponary in a farm applying good agricultural practices in

Calamba, Laguna.

14
Figure 4. A super that is full of honey and pollen ready to be harvested.

Figure 5. A box of propolis ready to be harvested.

15
Table 2. A five-year cash flow for a stingless bee business based on the data
gathered from commercial beekeepers. Amount in USD; 1 USD = Php
50.9532. Source: www.exchange-rates.org/Rate/USD/PHP/5-1-2020

COSTS Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Capital Investment            
1,000 colonies 59,488          
Processing room with equipment 8,924          
Bee Pasture Development 9,915          

Motorcycle with side car 2,975          

Operating Cost            
Rental Cost 3,570 3,570 3,570 3,570 3,570 3,570
Empty hives (300 boxes/year @ $10 each) 3,000 3,000 3,000 3,000 3,000 3,000
Labor Cost 4,859 4,859 4,859 4,859 4,859 4,859
Electricity and water 595 595 595 595 595 595
Fuel/Oil 794 794 794 794 794 794
Bee pasture maintenance   1,983 1,983 1,983 1,983 1,983
Vehicle maintenance   496 496 496 496 496
Other Cost            
Business permit and clearances 595 595 595 595 595 595
Bookkeeping/Accounting services 1,190 1,190 1,190 1,190 1,190 1,190
Total Cost
95,905 17,082 17,082 17,082 17,082 17,082

REVENUES            
Revenue from Honey (750 grams/colony) @
  30,000 30,000 30,000 30,000 30,000
$40/kg
Revenue from Pollen (1.5 kg/colony) @
  15,000 15,000 15,000 15,000 15,000
$10/kg
Revenue from Propolis (250 grams/colony)
  5,000 5,000 5,000 5,000 5,000
@ $20/kg
Total Revenue   50,000 50,000 50,000 50,000 50,000
Discount factor
1 1 1 1 1 1

Net Revenue -95,905 32,918 32,918 32,918 32,918 32,918

PV Net Revenue -95,905 31,055 29,297 27,639 26,074 24,598
Internal Rate of Return (IRR) 21%
Net Present Value (NPV) 42,758
Benefit-cost ratio (BCR) 1.25
Payback
Period 2.91
@6% discount rate
(average commercial
lending rates from
2015-2019)
COSTS Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Total Cost 95,905.00 17,082.00 17,082.00 17,082.00 17,082.00 17,082.00

Discount factor 1 1.06 1.12 1.19 1.26 1.34

15251.785
Discounted Cost
95905 16115.09434 71 14354.62185 13557.14286 12747.76119
REVENUES            
Total Revenue 0 50,000 50000 50000 50000 50000
Discount factor 1 1.06 1.12 1.19 1.26 1.34
Discounted Revenue 0 47169.81132 44499.822 41980.96415 39604.68316 37362.90864

16
which was 2.7 years. The analysis indicates that the initial USD 59,488
investment can be recovered almost 3 years after the start of operation.

Several criteria are often applied to assess whether a certain investment

is worth pursuing or not. The NPV of an investment/project is the sum of all
the present values of all the costs and revenues (net revenues) of the project.
If the NPV of the project is positive, then it is accepted; if it is negative, then
it is rejected. Based on Table 1, the project yields an NPV of USD 42,758.
Based on this criterion, the investment is clearly worthwhile.

The IRR is the discount rate that makes the NPV equal to zero. If the
IRR is higher than the market interest rate (IRR > r), then the investor can
make borrowed resources (or money) grow at a more rapid rate than their
opportunity cost—the choice given up. The income generated will be more
than sufficient to pay for the debt incurred, and the project is accepted.
Conversely, if the interest rate exceeds the IRR (r > IRR), then the project is
rejected. As shown in Table 1, the computed IRR is 21%, greater than the
market interest rate/discount rate of 6%.

Finally, the BCR is the ratio of the sum of the present value of revenues
(benefits) to the sum of the present value of costs. The BCR is an approach
to identify the average performance of the resources invested as a way of
assessing the efficiency of the project. If the present value of the benefits
exceeds the present value of the costs of an undertaking, then the BCR is
>1, and the project is deemed to be feasible. As shown in Table 1, the
computed BCR is 1.25. Therefore, the project is feasible.

As demonstrated by the economic analysis, propagation of T. biroi on a

commercial scale is feasible in the Philippines. The major factors that will
ensure the successful colony establishment of this species are (1) the wide
genetic pool of this species as it has abundant wild populations, (2) its
resistance to pests and diseases because this species is native to the
country, and (3) its ability to exploit more floral resources compared with
honey bee species (Almazol & Cervancia, 2013; 2014).

The absence of wild populations of A. mellifera in the country makes it

difficult to establish a sustainable breeding program for this species because
of the need to import queens from Hawai’i, Australia, or other countries with
no known Africanized honey bee. Moreover, obscure government policies on
queen bee importation and quarantine regulations are a major setback to A.
mellifera production.

17
 ACKNOWLEDGEMENT

This study was funded by the Department of Agriculture-Bureau of

Agricultural Research, and the University of the Philippines Los Baños Bee
Program. The authors are grateful for the assistance and accommodation of
Angelina Mead King, Luz Gamba, Patricia Bravante, and Pedro Jose de
Castro as well as all the stingless bee-keepers for allowing us to use their
meliponaries for this study

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