The Philippines is a country that is rich in biodiversity and natural resources. This island nation sits at the apex of the Coral Triangleâ€“a marine area in the western Pacific Ocean known for its astounding number of corals, which nurture large populations of turtle and fishâ€“and is thus considered the â€œcenter of the centerâ€ of marine biodiversity in the world.
Its total coastline, at 37,008 kilometres, is longer than those of China, the United States, and Japan. Various coastal and marine habitats can be found in the country, which include planted mangroves, seagrass, mudflats, tidal swamps, natural mangroves, and coral reefs.
This ecological bounty, however, has unfortunately not been fully utilised for economic development. The Philippine ocean economy only accounts for 7% of its gross domestic product (GDP), and yet increasing human activities and demand for natural resources have already contributed to its ecological degradation.
For instance, the Philippines is currently the third-largest source of ocean plastic. Combined with 70-90% of its illegally dumped waste ending up in the ocean, the country has been ranked as 121st among 221 countries in the Ocean Health Index, a comprehensive global measurement of ocean health that evaluates how well the ocean provides 10 key benefits to people, and how well people, in turn, protect the oceanâ€™s ability to do so in the future.
The Global Alliance for Incinerator Alternatives (GAIA) also estimates that almost 35% of the total waste generated in the Philippines came from only 10 of its biggest companies, which only shows that, â€œlittle effort has been made to reduce the production of single-use disposable plastics which results in this problematic waste stream.â€
Despite these problems, the Philippine government has not yet established a clear national strategy to address them â€“ unlike some of its neighbouring countries, which have made moves such as completely banning certain types of plastics, increasing taxes on plastic materials, and mandating producers to promote biodegradable packaging.
Impact Investing in the Blue Economy
Given these realities, the good news is that the Philippines is the second-largest impact investing country in Southeast Asia. The increase in impact investing activity, according to the Global Impact Investing Network (GIIN), was driven by the countryâ€™s macroeconomic stability and demographic trends.
The Philippines has one of the highest GDP growths in the region (at 6.2% in 2018) and is predicted to be the second-fastest-growing market in the next decade by Oxford Economics. The country is also considered an emerging economic powerhouse due to its uninterrupted economic expansion over the past two decades.
The Philippines, then, presents impact investors with several opportunities to venture into the blue economy, or the sustainable management of oceans to achieve accelerated economic growth, job creation, and poverty alleviation.
The United Nations recognises the blue economyâ€™s increasing importance through its Sustainable Development Goal 14: to conserve and sustainably use the oceans, seas, and marine resources for sustainable development. Likewise, according to Forbes, â€œthe blue economy sets a framework for the international community to actively work on conserving its ocean resources and develop more sustainable habits to protect ocean ecosystems.â€
Blue Economy Opportunities in the Philippines
1. Fisheries and Aquaculture
This sector contributed about 1.5% to the countryâ€™s GDP or about US$2.37 billion in 2016. There is an increasing number of fishers, but a decreasing number of fisheries production, which means impact investments can be more assertive in identifying best practices for sustainable fishing. As the consumption of fishery products continuously increases, impact investing can meet this demand whilst conserving natural resources and finding efficiencies in food and feed production.
2. Coastal and Marine Tourism
This sector contributed about US$3 billion to the countryâ€™s GDP in 2016, but its growth has made pollution, over-development, and habitat destruction among its biggest challenges. Notably, the Philippines ranked 14th out of 20 economies in the coastal governance index, signifying a need for improvement.
As tourism boosts economic activity in the country, impact investments can be made by jointly involving small businesses and communities in capacity development and preservation of marine and coastal heritage sites. Impact investors could also investigate creating jobs and improving local infrastructure.
3. Ports and Shipping
This sector contributed US$1.4 billion to the countryâ€™s GDP in 2016, but with the growth of ASEAN free trade and Chinaâ€™s One Belt, One Road initiative, impact investors can supply more efficient logistics management using blockchain and artificial intelligence. Green port operation and the use of renewable energy are also promising prospects within this space.
4. Circular Economy
The circular economy, or reduce-reuse-recycle, can help businesses maximise their chances of reducing ocean waste and their dependence on new raw materials. Given the Philippinesâ€™ plastic pollution problem, impact investors could investigate tackling the scourge of plastic waste and reducing single-use packaging, as well as establishing an environmental strategy with efficient enterprise management.
5. Climate Resiliency
Climate change has affected ocean health, with higher carbon dioxide and greenhouse gas emissions from various human activities contributing to its degradation. To help address this, impact investors could venture into businesses with projects such as community-based watershed management, mangrove-planting, reforestation, and agroforestry. Other options involve climate-proof development projects (i.e., retrofitting tide embankments, bridges, etc.), and adapting measures for aquaculture.
6. Marine Pollution Reduction
Ocean Conservancy and the McKinsey Center for Business and Environment have ranked the Philippines as the third-largest contributor to ocean plastic. Interested impact investors could focus on monitoring the water quality of rivers and coastal bathing waters and tap various cost-effective technologies to meet water quality standards with lower capital and operating and maintenance costs.
Indeed, there is hope in sight for saving our oceans. Impact investments can support a blue economy that will help conserve and sustain our marine resources and ultimately ensure the health of our oceans for generations to come.