Philippine Statement
By

Hon. MARGARITA R. SONGCO
Deputy Director General
National Economic and Development Authority

14th Session of the Commission on Sustainable Development
11 May 2006, New York

First of all, I would like to add my delegation’s congratulations and support to the Honorable Aleksi Aleksishvilli for his election as chair of this 14th session of theUNCSD. The smooth conduct of today’s meeting as well as the preceeding and parallel activities of the session are testimonies to your effective leadership and the thorough preparations of the support staff. The Philippine delegation, therefore, looks forward to actively participating in all the facets of the session with positive anticipation.

Strategic Framework

As part of the Asia-Pacific region, which serves as the main engine of growth for the world economy, the Philippines continue to make significant inroads in alleviating poverty. Although modest compared with the pace-setting economies in the region, our economic growth has, nevertheless, been firm and steady for more than 20 years. As a result, poverty incidence has steadily declined from 44.2% in 1985 to 24.7% in 2003. This translates into a total of nearly 4.5 million families emancipated from poverty during this period. We are, therefore, confident that the Philippines will meet most of its Millennium development goals (MDGs) targets, especially on poverty alleviation, by 2015.

Our confidence is partially based on the fact that the objectives and principles of the MDGs and sustainable development (SD) are firmly embedded in our development plans and programs. Aside from having a Philippine Agenda 21 with concrete and time-bound targets, president arroyo’s medium-term Philippine development plan, 2004-2010 explicitly states that poverty alleviation as well as broad-based and sustainable growth are the basic thrusts of her administration, to quote: “efforts shall be intensified to achieve the MDGs, particularly in the areas of poverty reduction and human development through a broad and strategic partnership among all concerned stakeholders, especially local government units (LGUs).”

Thus, as part of the 10-point agenda, she would like to have created, by the end of her term, 10 million jobs. About half of these are expected to come from the development of 2 million agribusiness lands and the support of 3 million micro, small, and medium enterprises (MSMEs), which are composed mainly of the poor. It should also be noted that MSMEs account for about 99.6 percent of the country’s business enterprises and 69.1 percent of employment.

Inadequate internal capacities and support access, however, limit the MSMEs’ contribution to total GDP to only about 32 percent for the past six years. Poverty and inequity, therefore, continues to be a serious challenge in spite of our progress. It also limits their adoption of cleaner production processes and technologies. Thus, environmental degradation and its attendant adverse health and social impact remain to be high especially in the sites where the poor live and work.

We have, therefore, sought to strengthen the value-chain structure of Philippine industries, especially the MSMEs, to promote high-value and environment-friendly products and activities by: 1) tripling of MSME loans by 2010; 2) providing a comprehensive package of assistance on products and services with demonstrated comparative advantage through a convergence of services by local government units (LGUs), national government agencies (NGAs) and the private sector under the one town one product (OTOP) program; 3) simplification of business registration procedures; 4) streamlining of systems that provide support programs and incentives for MSMEs; 5) loan assistance and technical support for start-up and improved MSMEs technologies, including cleaner production technologies; among others.

This broad-based re-structuring of Philippine industry away from resource-intensive and low-skill activities towards more skill and value-intensive enterprises will require a commensurate expansion in the capacity and reliability of its underlying support system, including energy generation and distribution. For this purpose, the Philippines seeks energy security thru a policy of energy independence, sustainability and efficiency. These will involve: 1) increasing oil and gas exploration; 2) strengthening of the Philippine national oil company (PNOC) to spearhead the development of indigenous energy resources and building global partnerships and collaborative undertakings; 3) pursuing the development of renewable energy such as geothermal, wind, solar, hydropower, and biomass, and the vigorous utilization of the cleaner development mechanism and the emerging carbon market; 4) the expansion in the use of natural gas; and 5) adoption of energy efficiency promotion strategies.

These inclusive and sustainable approaches to development management are expected to also reap social and environmental benefits through reduced air and other types of pollution and the concomitant beneficial effect on general health. Their positive effects on climate change are also expected to significantly reduce climate-related natural disasters.

Situationer

We are glad to report that these development strategies, particularly those involving the four themes of this session, are beginning to bear fruit.

A Business Agenda 21, a companion document to the Philippine Agenda 21, has been formulated and, for several years, been serving as the blueprint for the private sector’s role in advancing sustainable development. Under its guidance, environment management systems have been developed and piloted to promote industry self-regulation for sustainable development.

Moreover, the country’s drive for energy independence has raised the share of indigenous energy to total energy supply from 45 percent in 2000 to 54 percent in 2004. Conventional indigenous energy sources, such as natural gas and oil, however, posted the highest average annual growth rates at 151.2 and 64.5 percent, respectively from 2001 to 2004.

We, nevertheless, also posted improvements in energy sustainability as a result of programs promoting the use of renewable energy . It accounts for the biggest share of indigenous energy in the country (47.2 % in 2004). In fact, we are one of the biggest users of geothermal energy in the world and are at the cutting edge of technology on tapping this resource. However, we have lately not been moving forward as fast as we would want to in exploiting renewable energy sources. Power generation from this source has only been growing by an annual average growth rate of 3.1 percent from 2000 to 2004.

Meanwhile, air quality in the Philippines, particularly in metro-manila, is getting better. This is shown by the 16 percent reduction in total suspended particulates (TSP) from its 2003 level (176.4 µg/ncm vs. 159.7 µg/ncm in 2005). This was attributed to the stricter enforcement of the clean air act of 1999 (CAA) and the implementation of Programmes supportive of the CAA such as on total lead phase- out.

The reduction in air pollution helped the country mitigate the possible effects of human-induced climate change. Thus, to further build on these accomplishments and in line with its commitment to implement the provisions of the un framework convention on climate change (UNFCC), the government designated the department of environment and natural resources (DENR) as its national authority (DNA) in 2005 to: (1) develop criteria and indicators for the CDM assessment process; (2) provide tools for the evaluation and approval of projects; and (3) monitor approved CDM projects.

Twenty (20) CDM projects are currently being evaluated: 18 projects on waste management, two on renewable energy (wind & geothermal), with an estimated total green house gas (GHG) reduction of 230,290 tons (CO2-e) per year. The most noteworthy of these projects is the the Northwind Bangui bay project which has been issued a letter of approval by the Philippine DNA and is now at the final stages of validation by the operational entity in preparation for its official registration by the CDM executive board under the UNFCC.

Issues and concerns

A more detailed listing and description of examples of our initiatives on the four themes is appended as an annex of this country statement and is also being distributed for your reference. The Philippines welcomes information exchange and will seriously consider partnerships to advance our commitments especially in these areas.
This is because, in spite of our steady progress in the four themes, our journey has neither been as smooth nor as fast as we would have wanted. There are obstacles and bottlenecks along the road that we believe can effectively be addressed through collective action by the international community, including the major groups.

This collective action must, however, adopt an integrated approach since the themes are highly inter-related. Industrial development requires energy. Industrial and energy development, in turn, impact on atmosphere and climate change, and vice-versa. Thus, common or cross-cutting challenges should be given special attention during this session in a coordinated and complementary manner. These challenges include concerns on 1. Capacity building; 2. Financing; and 3. Appropriate technology development and transfer. Let me give you a few illustrations.

Our economies are expected to continue to mainly depend on conventional fossil-based fuels in the forseeable future. Depleting fossil fuel reserves, among other factors, makes the prospect of lower oil prices unlikely. Morever, the high initial cost for renewable energy continue to limit their more widespread use. Thus, a combination of technical and financial innovations are, therefore, needed to increase the affordability of technologies that improve the efficient use and conservation of fossil-based fuels and that effectively tap renewable energy sources .

At the institutional level, there is limited participation in the implementation of the clean development mechanism (CDM) , especially among developing countries, due to the weak capacity of the DNA to comply with CDM requirements. There is a need to strengthen the DNA’s capacity, particularly with regard to establishing project baselines, (types and level of affixing baselines), and determining types of additionalities for a project to qualify as CDM .

To provide some focus in our interventions, it should be noted that financial, technological and capability-building needs are especially acute among the MSMEs in any country, particularly in the developing world. They comprise the bulk of the population and the poor and must, therefore, be a priority target if we want to see significant improvement in poverty alleviation, energy use, air pollution mitigation and climate change adaptation.

There are many good practices and success stories that are being presented in this session. The challenge is how we can organize and work together to work out the means to upscale and replicate these practices by addressing financing, technological and capacity challenges and constraints.

Conclusion

The Philippines continues to be faithful to the principles of sustainable development. We remain to be a staunch supporter of the Rio and Johannesburg commitments. But we realize that we can attain greater progress in partnership with all SD advocates among the CSD-member countries, the international development agencies, and the major groups. This is the reason, for instance, why we joined the task force on sustainable public procurement led by the Swiss government. We, therefore, actively seek and look forward to further collaboration with all of you.

Thank you for your attention and interest.

ANNEX
LIST OF SAMPLE PHILIPPINE INITIATIVES BY UNCSD14 THEME

Sustainable Industrial Development

“Sulong” Program
This seeks to improve the micro, small and medium enterprises’ (MSMEs) access to loans from various sources. As of 2005, a total of P31.6 billion was spent by the government to fund 14,930 MSMES, surpassing the target for 2005 by 108.4 percent. This brings the total amount lent in 2004-2005 to 18.9 percent of the total cumulative loan target of P309.98 billion for the period 2004-2010, higher than the 17 percent target for the period.

“One Town, One Project“ (OTOP) Program
This involves the development and promotion of a product or service where a town has competitive advantage. Its interventions include the provision of a comprehensive package of assistance to MSMEs and Overseas Filipino Workers (OFWs) through a convergence of services by local government units (LGUs), national government agencies (NGAs) and the private sector in product/design development, skills and entrepreneurial training, marketing assistance and introduction of appropriate technologies. To date, a comprehensive package of assistance was formulated for 16 regional pilot models which include skills and entrepreneurial training, advocacy, registration of OTOP logo, promotional activities (i.e., SME expo), and product development. OTOP products were sold in 663 market outlets, 83 “pasalubong” (a gift brought home from a trip) counters nationwide as well as in 319 OTOP corners, booths, and kiosks built during regular provincial, regional, and national trade fairs. In 2005, the OTOP generated 23,826 home-based and 46,613 community-based new jobs while sustaining the 45,949 jobs generated since the start of the program. A total of 2,022 new MSMEs were provided with development assistance/interventions.

Simplification of Business Registration Process
The government implemented programs to streamline registration procedures for SMEs such as 1) speeding up of business name registration (BNR) in partnership with internet cafés in Metro Manila; 2) provision of assistance to clients in using its online BNR service called WEBNRs; and 3) finalization and distribution of a compendium of good practices in the simplification of civil application system to the LGUs for adoption in their business registration system.

PRIME project
This UNDP- funded project sought to strengthen the role of the private sector, including the MSMEs, in environmental management to complement government regulatory mechanisms through its four (4) thrusts, namely: 1) the development of a business agenda 21 that will serve as a blueprint for the role of the private sector in environment as the country joins the club of newly industrializing countries in the region; 2) support to cleaner production and waste minimization through the adoption of industrial ecology in the development of industrial estates; 3) promotion of industry self-regulation through the implementation of environmental management systems; and 4) encouragement of private investments in the provision of environment services. Its accomplishments include 1) documentation and promotion of innovative environmental management and production processes; 2) introduction of new concepts such industrial ecology in industrial estates, product ecolabelling, and ISO 14001EMS IN SMEs; 3) provision of systematic technical support in environmental laboratory accreditation and establishment of environmental practitioners’ networks; 4) development of databanks and online information exchanges like the SME Desk, by-product exchange and environmental technology referral system; and 5) advocacy and networking among various stakeholders.

* Environmental Management Programme for Industry Competitiveness (EPIC)
A UNDP-funded follow-on initiative to the PRIME project which sought to make SMEs more globally competitive by enabling them to be more productive, efficient and sustainable through cleaner production technologies and techniques, a conducive policy environment and regulatory system, and increased capacities to respond to a more demanding global regime and local consumer base in terms of environmental requirements. Its accomplishments include 1) institutionalization of the EMS; 2) a baseline study on the impact of environmental management tools and technology on SME competitiveness including a roadmap on how to use the Industrial Competitiveness Indicators for Industries; 3) assistance in the establishment of the Philippine Environmental Auditors’ Registry Association (PEARA) including its national accreditation; 4) assistance in the development of product criteria for the Ecolabelling Program; and 5) publication of the Green List of environmental requirements that serves as guide for industries and other organizations

* Other programs such as the Department of Science and Technology’s Integrated Program on Cleaner Production Technologies and the Department of Environment and Natural Resources’ Industrial Initiative for Sustainable Environment

Energy for Sustainable Development

- Seismic Data Acquisition and Interpretation
Seismic data acquisition was conducted in Ragay Gulf and South China Sea and interpretation of seismic data over Top Nido Horizon in Calamian, NW Palawan and two (2) major seismic horizons in offshore West Balabac were completed.

- Oil Exploration
Agreements were made with various oil companies for joint exploration in areas in North Calamian and offshore Mindoro. A joint marine seismic undertaking with CNOOC and PETROVIETNAM was also undertaken to jointly acquire geoscientific data and assess petroleum resource potential of certain areas in south china sea.
· Demonstration Program to Expand the Use of Natural Gas in the Public Tranport Sector
Under the Natural Gas Vehicle Program for Public Transport (NGVPPT), the following policy directives were issued: 1) Department Circular 2005-07-006 Directing the Enhanced Implementation of the NGVPPT and the Development of CNG Supply and Infrastructure; 2) Executive Order 290 which provided the institutional framework in the implementation of the CNG Program; and 3) Executive Order 396 which offered incentives such as the negotiated CNG price of Php14.52 per diesel liter equivalent (subject to foreign exchange fluctuation) for the first 200 CNG-fed buses (set to arrive in 2006) for a period of seven years and zero-rated import duty on the acquisition of the 200 completely-built-unit (CBU) CNG buses, NGVs and CNG-NGV industry-related facilities, equipment, parts and components.

Renewable Energy Sources Development
Capacity Building to Remove Barriers to Renewable Energy in the Philippines (CBRED)
This UNDP-assisted project is being implemented to help remove key market, policy, technical and financial barriers to renewable energy development through a rationalized program. More specifically, it seeks to: 1) strengthen the capacity of government agencies to enact and implement sound renewable energy policies; 2) provide information for targeted stakeholders to build a renewable energy market; 3) create a ‘one-stop-shop’ market service center for preparing and promoting renewable energy project; 4) increase coordination among organizations concerned with renewable energy; 5) assist the market in the penetration of the renewable energy in remote, off-grid communities by providing incentives for innovative market delivery and financing mechanisms; and, 6) improve the quality of renewable energy technologies and systems through assistance with standard setting. An important accomplishment to date is the provision of technical assistance to the reformulation of the renewable energy bill whose consolidated version was approved by the house of representatives (i.e., committee on energy) on 28 February 2006.

- Alliance for Mindanao Off-Grid Renewable Energy (AMORE)
This seven-year (2002-2009) project, funded by the United States Agency for International Development (USAID), provides a sustainable approach to bring electricity to the remote communities in Mindanao by using renewable energy. It seeks to establish sustainable renewable energy systems in at least 360 remote rural communities of former rebel combatants in Western and Central Mindanao. Strong community participation in designing and operating renewable energy systems is encouraged. It also builds strong local technical and financial capacity to effectively collect user fees and maintain and expand renewable energy systems in remote rural barangays. Through this program, 227 “barangays” or villages have already been energized in the Autonomous Region of Muslim Mindanao (ARMM) region for the period 2002 to 2005

- Geothermal projects
The country is currently implementing six (6) geothermal projects which account for 60 percent of the total country-installed geothermal capacity of 1,977.7 MW. Given results of recent studies on the country’s proven reserves (1,849.6 MW) and potential reserves (4,339.6 MW), more programs are foreseen to be implemented in the future that would further support the country’s move towards sustainability.

- Hydropower Projects
The government is currently supervising five (5) ongoing mini-hydro (MHP) projects and in coordination with the state-owned company, it is working on the conduct of feasibility studies on seven (7) hydroelectric power (HEP) projects.

- Wind Energy Projects
The country has commissioned Northwind’s 25-MW wind power project along the Bangui Bay area in the northern part of the country. To date, about 40 percent of the province has been supplied with electricity. Another notable project is the 180-kw wind-diesel hybrid plant in the northern part of the country consisting of three vergnet 60-kw wind turbines and two 500-kw diesel generators designed to provide uninterrupted power supply to the area.

- Solar Energy Projects
1. Solar Homes Systems Distribution Project. A total of 8,005 solar home systems (SHS) have already been installed in target areas.
2. Renewable Energy-based Village Power System. This provides electricity to 200 households in Palawan.
3. Multi-purpose Pilot PV Wind Turbines Hybrid System Electrification in the Philippines. This has supplied electricity to a fishing village starting in 2005.

Energy Efficiency

- Issuance of Memorandum Circular (MC) no. 55 in 2004, directing all departments, bureaus, agencies and instrumentalities of the government, including government-owned and controlled corporations, to incorporate the use of one percent by volume of coconut methyl ester (CME) in their diesel requirements

- Pushed for the passage of the following bills: (i) Biofuels Act of 2006 (Senate Bill No. 2226) which mandates the blending of coco-biodiesel or coconut methyl ester (CME) in all diesel fuel and bioethanol in gasoline sold across the country; and, (ii) Biodiesel Act of 2005 which requires a minimum blend of 1% biodiesel in all locally refined and imported diesel fuel.

- Introduction of the first CME pre-blended diesel in the country. As of December 2005, envirotek bio-diesel premium blend is sold in 34 Flying V stations nationwide and was granted with accreditation to repack and sell CME.

- Promotion of energy labeling and efficiency standards (e.g., fuel efficiency rating labels in automobiles, appliances and other equipment) as well as energy audits and demand side management to promote consumer awareness on fuel vehicle efficiency

- Philippine Efficient Lighting Market Transformation Project (PELMTP). This five-year project aims to address the barriers to widespread utilization of energy efficient lighting systems in the Philippines. It covers energy efficient versions of linear fluorescent lamps (standard versus the slim tubes), compact fluorescent lamps (CFLs), high intensity discharge, lamps, ballasts (low loss electromagnetic and electronic), and luminaires.

Air pollution mitigation and climate change adaptation

-Implementation of the Clean Air Act of 1999 (CAA)

- Linis Hangin (Clean the Air) campaign consisting of three (3) major projects covering air pollution control for vehicles, industrial firms, and households.

-“Smoke-free” campaign in establishments such as malls. This initiative has contributed to the lowering of TSP level in Metro Manila. This policy is complemented by the conduct of emission testing of public transportation vehicles in terminals within the mall premises.

- Roadside testing and apprehension. In coordination with the NGOs, concerned authorities go out in the streets three (3) to four (4) times a week and report smoke-belching cases made online and through short message service (SMS).

- Making the Department of Environmnent and Natural Resources as the Designated National Authority (DNA) in 2005 to: 1) develop criteria and indicators for CDM assessment process; 2) provide tools for evaluation and approval of projects; and 3) monitor approved CDM projects.

- Evaluation of the following CDM projects: 15 on waste management; and six (6) on renewable energy (wind), of which four (4) harness the wind powertwo (2) make use of hydropower. The most noteworthy out of the 21 projects is the the northwind Bangui Bay project which is now awaiting official registration from the CDM Executive Board. These potential CDM prospects can potentially generate carbon credits from the reduction of green house gases (GHGs) emission that can create an avenue for revenue generation and promotion of sustainable development for the country.

- Provision of Alternative Livelihood for Indigenous Peoples (IPs) to stop the traditional livelihood of charcoal-making. The Management Association of the Philippines (MAP) and the TOWNS foundation have joined hands with the Gawad Kalinga Community Development Foundation, Inc. to help build the first of several ecologically sound villages for indigenous peoples under the MAP-TOWNS Kalinga IP Program. The project provides ecologically sound livelihood opportunities for the Aetas, such as the planting of high-value vegetables and crops, e.g., jatropha, a source of oil. With these new opportunities, the Aetas will be able stop their traditional livelihood, charcoal-making, a major source of forest denudation in the area.

- Promotion of Sustainable Lifestyle and Addressing Climate Change
The EARTH Institute Asia, Inc., a newly formed organization initiated by Filipinos who have served the UN, Earth Council, and Institute for Global Environmental Strategies, is promoting sustainable lifestyle among Filipinos and addressing environmental issues through the participation of local communities in energy conservation measures and collection and proper disposal of used batteries from personal equipment, such as cell phones and watches; and household appliances, such as flashlights.

Sustainable living also includes avoiding, reducing or being prepared for both potential natural and man-made disasters, such as the Mt. Pinatubo eruption, which caused dropping of the global temperature by 0.7-1.1 degree F in 1991-93. Hence, the Institute has started to implement a program on ecological and risk profiling for local communities with the end in view of identifying both natural and man-made risks to the environment, including climate change, and the public and developing and implementing effective risk communication, assessment, and management. The program is now on an initial run in Pasig City, Metro Manila.

Promotion of Sustainable Cities 2030
A group of organizations from both the public and private sectors and the League of Local Governments are now working to continue the efforts initiated by UN-Habitat and UNDP to define sustainable urbanization in the Philippines and to develop a technical assistance framework to help Philippine cities become more sustainable. They are undertaking an inter-sectoral “inquiry” to look into the full range of issues of sustainable urbanization, including climate change and air pollution, and to formulate an action agenda to address these issues.

The basic rationale for this inquiry is the urgent need for the Philippines to chart a new course of action as the country rapidly approaches an unprecedented urban future. The Philippines’ total population is already more than 50% urban, and if the current urban population growth rate of over 3% a year continues, more than 80% of Filipinos will be living in cities before the year 2050.