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EXECUTIVE SUMMARY
1. Background. Laguna Lake (or, Laguna de Bay) is the largest lake in the Philippines
and one of the largest in Southeast Asia. In view of its multiplicity of uses and
benefits, its basin (or region) is the most important, dynamic and among the fastest
growing economic bases in the country. It has become the catch basin to Metro
Manilas population and urbanization/industrialization over-spill. As the region has
developed, the lake has suffered increasing levels of agricultural, industrial and
domestic wastewater pollution. The possible consequences of the rapid swelling
of population include food and water shortage, worsening traffic congestion and
environmental degradation, thus significantly affecting Laguna de Bay and its
environs.
2. Rationale. Programs and projects under the 1995 Laguna de Bay Master Plan
have been mainstreamed in the LLDA portfolio, some of which are pioneering and
tested in the Laguna de Bay Region, such as the Environmental User Fee System
(EUFS), Laguna de Bay Institutional Strengthening and Community Participation
(LISCOP) Project, River Rehabilitation Program, Zoning and Management Plan
(ZOMAP) and Laguna de Bay Carbonshed Project, among others. These have
been funded by a combination of corporate funds, user fees (fishpens/fishcage
fees, water abstraction fees), regulatory fees, national government funds through
the General Appropriations Act (GAA), loans contracted by the National
Government, and technical assistance grants.
3. Past and Recent Efforts on Plan Updating. After 20 years since the master plan
was put in place, efforts to update this plan were exhibited through the following
initiatives:
Development of the Framework for the New Laguna de Bay Master Plan:
Laguna de Bay Basin 2020: focus on the following tasks: (i) paradigm shift
to strengthen LLDAs regulatory mandate and intensify implementation of big-
ticket programs and projects to push economic growth and sustainable
development; (ii) financing new programs/projects following PPP approach; and
(iii) climate proofing the lake basin. It contains initial strategies to harness the
economic potentials of the Basin to ensure sustainable use of the Lake and its
resources.
Formulation of the Spatial Development Master Plan (SDMP) for the Laguna
de Bay Basin: Land and Water Use and Physical Development Plan 2011-
2020: translates/elaborates the Framework plan consisting of spatial and non-
spatial broad-based strategic policy and program directions towards the
reconfiguration of the development and management of the Laguna de Bay
Basin that will address existing and emerging natural resource challenges and
other issues such as climate change, disaster reduction, among others. SDMP
embodies 54 programs and projects, with project briefs, with total cost
estimated at P300 million to be funded through the GAA, corporate funds, loans
and grants, PPP, purely private initiatives with public incentives and market-
based instruments such as user fees.
4. Attributes/ Justification for Plan Updating. The three (3) attributes as rationale for the
current plan updating are: (i) environment and health risks that are posed to the citizens living
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in the basin particularly that segment of the population that are highly vulnerable to poor
environmental quality; (ii) institutional capacity challenges in balancing the wide range of
demanding interests and the supplying capacities; and (iii) lack of mechanisms and
capacities for development of environmental and water-related infrastructure that are
imperatives for sustainable water resources development.
8. From the long list of issues and problems discussed in detail in Chapter 3, the
following were prioritized as most critical for basin authorities to address given
the influence and control of contributing factors, impact on the lake, and urgency:
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opportunities
The WHAT? SO WHAT? IF NOT, THEN WHAT? Matrix summarizes these key issues
which are discussed in greater detail in Chapter 3.
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10. Future Trends and Scenarios. Over 14.6 million people are the users of the
invaluable resources in the region, about 3.35 million of them live in lakeshore
communities. In addition to uses that serve such common good purposes as irrigation,
drinking water, fisheries, recreational, and navigation, the Lake serves another but most
controversial purpose, a recipient of waste. The industries, businesses, and
households in the region continue to use the Lake and its tributaries as bodies of water
for open extraction and for waste disposal, almost indiscriminately. The trend of
population migration, industrialization, and urbanization certainly is not toward moving
away from the Lake and its watershed. Rather, it is anticipated that the region with face
more relocation within the watershed system in the form of land reclamation and
increased development activities (including agricultural) in the uplands of the Lake
watershed. The proximity of the Lake and its watershed to Metro Manila and the
growing industrial development in Laguna, Cavite, Batangas, and Quezon have and
will exacerbate the pressure on this delicate ecosystem.
The Laguna de Bay Basin will continue to play a significant role in the countrys economic
development, considering its strategic location, resource endowments particularly the lake
providing an enormous resource base. The following are the future trends/ scenarios and
the remaining development challenges that need to be confronted in the lake basin.
Therefore, they should be considered in the plan updating.
Land cover changes/loss of forest cover
Continuing rapid urbanization and industrialization
Informal Settlements Along River Banks and Lake Riparian Environment
Development of major infrastructure projects with significant impacts to the lake basin
ecosystem
While these proposed projects are yet subject to feasibility studies and detailed
engineering design during the plan period, it is important to take the perspective of the
lake basin ecological implications therein and to actively engage the stakeholders,
including LLDA and its partners, in an open and transparent consultation process. It is
anticipated that the these projects will impact on the more sensitive areas of the basin,
e.g., the buffer zone, the lake water resources itself, and to the fishery and agriculture
sector, water supply and sanitation sector, among others. These projects will intensify
the role of LLDA to rehabilitate, protect and conserve the basin resources. Therefore,
this basin master plan and its policies and strategies should guide the proponents of
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such infrastructure projects and should drive their design elements, rather than these
projects dictating the nature and scope of the basin plan.
11. Overall Development Framework: The 2016-2026 Laguna de Bay Master Plan
Development Framework. Building on RBM but amplifying it using other
ecosystem-based frameworks such as watershed management, integrated water
resources management (IWRM), ILBM has converged these approaches in an
integrated fashion. The modified ILBM for Laguna de Bay Basin highlights the
principles of implementability or attainability; sustainability; quality of life;
comprehensiveness and interconnectedness; and evidence-based/technology-
adaptive (Laguna de Bay Basin Spatial Development Master Plan, 2011).
The updated basin plan sets the key development directions from 2016-2026 whose
goal focuses on the integration of human and natural environment, so that the lake
basin can perform its four-fold functions (provisioning, regulating, supporting and
nurturing) leading towards sustainable development and management of the basin.
In the workshop that ensued in May 2015, the LLDA Management Team headed by
Secretary J.R. Nereus O. Acosta formulated the formal Board-approved vision and
mission statements to a resonant, concise, easily recalled translation (including a
vernacular) which can relate to all sectors/stakeholders, and authentically meaningful
and truly reflective of their aspirations, as follows (Sec. Acosta, August 3, 2015):
The LLDA has engaged the services of the Development Academy of the Philippines
to put in place a duly accredited Quality Management System
(http://www.llda.gov.ph/index.php?option=com_content&view=article&id=600&Itemid=
1067). This initiative has a long-standing intention, being a component of the
institutional re-engineering of the LLDA.
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Under this initiative, the LLDA came up with its Institutional Vision/ Quality Policy,
stating that:
we commit to:
To achieve its vision/mission and exhibiting its core values (love of the environment,
leadership/professionalism, disciplined and science-driven, adaptability and
innovativeness. Attaining this will adopt a process flow model (shown below) that is
depicted in a spherical form to represent dynamism, linkages and interactions among
the different units, and the continuity of operations
This process flow will have significant contribution to make an effective and dynamic
lake management institution in terms of integrated approaches, stakeholder
engagement, partnership building, planning and implementation.
LLDA Mission
Based on its legal mandate and functions as enunciated in its Charter (R.A. 4850 as
amended by P.D. 813 and E.O. 927), and cognizant of the current and future conditions
and trends, the LLDA mission is:
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This mission is noteworthy for the following reasons: (i) it aims to strike a balance
between environmental sustainability and biodiversity conservation on one hand, and
economic development and resource utilization on the other hand; (ii) it puts into action
the principles of integrated water resources management that spouse multi-
functionality of resources requiring multi-disciplinary approaches, stakeholder
engagement in conflict resolution and decision making, and sustainable development;
and (iii) it seeks to optimize the use of natural resources to generate the greatest good
for the greatest number, and attain sustainable development; and finally, (iv) it brings
the LLDA into focus as a catalyst in translating the vision into actions in ways that are
climate sensitive.
12. Management Areas. Translating the lake basin vision into planning goals, and in
consonance with the LLDAs institutional vision, management of ecological system serves as
the integrating element as ecosystems are both sources of environmental goods and services
as well as loci of natural relationships in the lake basin (SDMP, 2011). Called management
areas by law, they are the key result areas to assess efficacy and efficiency of management
interventions. These are:
Translated into schematics, the vision for the Laguna de Bay Basin is stated as follows:
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13.Laguna de Bay Basin Strategic Planning Areas. The vision and objectives of the Laguna
de Bay Basin Master Plan are cross-cutting outcomes. Implementation of these outcomes will
require actions across different areas.
The scope of the strategic policy areas/ planning systems is described below.
Basin Planning Area/System Focus
Protection and conservation Hydro-ecological system of the water resources and natural
system assets, including protection of the aquatic ecosystem health,
water quality fitted for abstraction of lake and river water for
different uses, and areas declared protected by existing laws and
needing proactive conservation measures.
Lake and river water use and Water use systems, water infrastructure, particularly around
development system abstraction, storage or regulation of basin water resources for
economic or social development.
Disaster risk reduction Impacts associated with flooding, pollution incidents, and other
management system extreme events
Institutional management Strengthening basin management and institutional
system arrangements, sustainable financing, improvement of laws and
regulations, monitoring/surveillance and enforcement.
However, this plan recognizes that there are many overlaps and linkages between systems.
For example, institutional management and the relevant aspects of disaster management are
present in all strategic areas. These strategic areas bridge the broad vision to more concrete
measures, objectives and actions which will ultimately contribute towards achieving the vision.
From the core issues, the following overall goals were formulated with stakeholders
participation:
1. Restore the Laguna de Bay Basin (i.e., watershed, shoreland, and lake);
2. Rationalize water uses; and
3. Harness the lake basin as a high-value resource for broad-based development.
The general approach to attain these goals is through co-management among stakeholders
of the Laguna de Bay Basin, through collaborative measures and partnerships, including
public-private initiatives for both hard (infrastructure) and soft interventions.
15. Strategic Policy Areas. The following are the strategic policy planning areas:
a) Protection/Conservation
b) Rehabilitation
c) Lake-sensitive development
It is significant to note that the Laguna de Bay Basin has been considered one of the most
vulnerable in the country due to climate variability and water-related disasters (PDNA, 2009).
This has profound impact to the nature of the basin plan and its focus policy areas. This has
made the entire basin as a climate-vulnerable area requiring more expansive and more intense
rehabilitation work. Therefore, policy area for rehabilitation and protection is more vast,
Therefore, the role of LLDA will be more rehabilitative and protective while its development
efforts would primarily have lake-sensitive orientation and geared towards supporting
rehabilitation and protection/ conservation.
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The following presents the scope of the policy areas:
The Core Issues and the Management Strategies in the Laguna de Bay Basin
Core Issues Protection/ Rehabilitation Development
Conservation
Deterioration of water quality
Vulnerable lakeshore
Settlements
Limited access to economic
Opportunities
These management strategies are not mutually exclusive. Core issues can have two or
three spatial management strategies. The strategies can be implemented in phases.
Core issues for rehabilitation can be addressed in 3-5 years. However, they can be placed
for protection/conservation after the management areas have been rehabilitated.
The specific strategy for conservation seeks to preserve critical areas for their vital
functions, as follows: 1) critical watersheds; 2) critical river systems; 3) critical water zones
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on the lake; and 4) critical shoreland areas. These are called Protection/Conservation
Zones.
The specific strategy for rehabilitation focuses on restoring and on mitigating damage
to degraded sections of ecosystems. These areas are labeled as Areas Needing Special
Protection: 1) denuded forestland; 2) encroached shoreland; 3) areas with high rate of
erosion; 4) areas with large volume of solid and liquid waste; 5) lakeshore areas subject to
flooding; and 5) lake areas with shallow depth due to sedimentation/siltation.
Among the management strategies for these areas include the following:
Protection/Conservation:
Rehabilitation:
Lake-Sensitive Development:
Horizontal and Vertical Alignment. Because of the increasing pressure on the lakes
resources, its water has taken increasing importance across different development priorities.
In fact, its water resources has been considered as a catalyst of social and economic
development not only of the basin itself but of the country as well, and at the same time a
building block of environmental sustainability. The Laguna de Bay Basin Planning expects to
contribute to broader social, economic and environmental goals at the national, regional
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(CALABARZON) and river basin levels. The lake basin plan sets out the key management
objectives at lake basin scale, and acts as a point of integration for those national and regional
plans. The basin plan shall sit within the hierarchy of planning from national to local levels
(Figure _). Therefore, horizontal alignment of the plan with development planning dealing with
different development issues within the updated LdBR master plan is crucial. The current plan
gives way to this alignment.
Further, the planning process for the updating of the Laguna de Bay basin master plan ensures
vertical alignment of the plan within relevant sectors, e.g., environment and water sectors,
across different scales (national, regional/basin, and local. Such alignment contributes to
making the plan coherent and contributing to broader economic and environmental goals and
objectives. The updated master plan vision, objectives and actions are consistent with and
give effect to the national policies, strategic directions (MTPDP 2011-2016 of the Aquino
Administration, the National Water Strategy, etc.). Insofar as plans at regional, provincial and
local levels, the LdBR Master Plan includes those which implement key aspects of the basin
strategies.
On the plans/programs/projects of other agencies, the LLDA updated master includes the
different master plans of government agencies for the region such as those of NEDA IV-A
(CALABARZON Regional Development Plan), DPWH (NSSWMP and Flood Control Master
Plan for Metro Manila), MMDA (Metro Manila Development Master Plan) as well as the
Comprehensive Land Use Plan (CLUPs) and Development Plans of the Local Government
Units. Strong representation by LLDA should be given to make sure its master plan
programs/projects are considered in their master plans.
How horizontal and vertical alignment is achieved within the lake basin plan is shown below:
The lake basin plan sets its objectives and actions that will be implemented through more
detailed strategic plans developed on a sub-basin scale or thematic plans. As presented in
Chapter 1, it is the strategic intent to make the updated master plan to be an umbrella basin
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plan to be translated at a later point in time during the plan period, into more detailed sub-basin
or thematic plans. The strategies and actions translated into programs and projects in Chapter
7 are those which address/have basin-scale needs/ impacts and categorized as urgent.
Indicative Thematic/ Sub-Basin Plans. The thematic plans may include plans related to
rehabilitation, protection/conservation, and lake-sensitive development, disaster risk
management and institutional development aspects of the basin plan. Certain aspects of these
thematic plans have been brought into the strategies within the basin plan, but will need to be
translated into more specific and detailed plans.
Similarly, sub-basin plans should provide strategic objectives and actions for river basin
management, dealing with issues that require attention at a river basin scale, including
environmental targets and/or river water quality objectives, and infrastructure development to
address climate change impacts in the basin. Sub-basin plans may include institutionalization
of sub-WQMA in each of the 24 sub-basins and the concomitant river basin management
plans, among others.
16.General Land and Water Use Plan. Shown in Figure _ is the general land use plan
of the Laguna de Bay Basin, derived mainly on the basis of land suitability analysis. The
land suitability of the lake basin was analyzed based on slope, soil and elevation. Thus, it
can be seen that
One-third (70,065 hectares) of the land area of the basin is suitable for urban use and
these can be seen mainly in the northwestern and southeastern sections of the basin.
A fairly large strip can be seen in the southeastern part of the basin. This urbanizable
area with the slopes of less than 18 percent and elevations below 500 meters above
mean sea level can be used as expansion area for light industrial, commercial,
residential, and institutional land use activities.
Close to a third (66,109 hectares) of the study area is suitable for agriculture and this
can be seen mostly in the eastern half of the basin in the towns of Laguna province
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Production forest (69,071 hectares) with slopes of 18% to 50% and elevations ranging
from 500 meters to 1000 meters above mean sea level is distributed mostly in the
eastern half and southwestern section of the basin.
The map further shows the protected shoreland area surrounding the lake. This is the part
of the land adjacent to the lake which is alternately covered and left dry by the rising and
ebbing of the lakes water level as caused either by the amount of rainfall or by the tidal
cycle. The shoreland area also includes the salvage buffer zone of 3 meters measured
from the high-water mark of the lake. The whole surrounding strip of foreshore land is an
ecologically-fragile area that ideally should be left vacant or free of human activities.
There is a need to relieve the shoreland area of its current load of industrial, residential,
and agricultural activities that contribute to the deterioration of the lakes ecosystem.
Also indicated on the map are the lands reserved by the national government for certain
uses. There is the Marikina Watershed Reservation in the north designed for flood
protection, water use and forest conservation. A military reservation can be seen in
Tanay, Rizal. The forest reserves designed to protect important sub-watersheds are
located in the Los Baos Mount Makiling area, Mount Banahaw area, Lake Caliraya area,
and in the Kalayaan, Lumban, and Cavinti areas of Laguna province. Small unclassified
public forest and communal forest areas can be found north of the lake.
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The recommended locations of some of its components are shown on the map. The area
occupied by the proposed fishpens observe the recommended limit of 10 percent of the total
lake area the limit that represents the carrying capacity of the lake for fish production and
consistent with the set limit under the Philippine Fisheries Code (R.A. 8550). Further, this
proposed lake water use plan will need detailed study and modification as the modification of
the zomap to conform with the prescribed carrying capacity under ra 8550, and the alignment of
the proposed Laguna Lake Expressway Project would have been determined. The large
fishpens can be seen in the left and middle finger of the lake while the small ones can be
seen on the fringe areas of the lake near the shoreland. The waters outside the fishpens are
to be used for open fishing. There is a fish sanctuary in the middle of the lake where native
fish species can be raised and protected and where fingerlings can be raised for restocking
the lakes fish population.
17. Priority Programs and Projects. The strategies and actions translated into programs and
projects in Chapter 5 are those which address/have basin-scale needs/ impacts and categorized
as urgent. The LLDA Technical Working Group revisited the SDMP project prioritization scheme.
This was however finetuned on the basis of the results of the September 11, 2015 Stakeholders
Consultation Workshop as well as new/recent information and project ideas in response to
emerging issues and concerns.
Table 7 shows the project title, problems to be addressed and rationale; indicative location and
costs and possible funding source. The total cost of the urgent prioritized projects amounts to
around Php 86 .0891 Billion, excluding the cost of big ticket infrastructure projects. The
government will fund Php 2 9 . 83 7 1 Million while funding with public- private partnerships
(PPPs) schemes totaled Php 56.2520 Billion.
There should be no massive dredging in the lake that would significantly impact upon and/or
alter the lake ecology and biodiversity. The need for lake environmental dredging must be
further evaluated as available information lack sufficient details. However, site-specific
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and limited lake dredging may be considered, subject to strict requirements, only under
the following circumstances: (i) when handling large volumes of contaminants from the
lake if it is found out that they are a threat to the environment; (ii) development of large
and small scale infrastructure developments involving reclamation;
Dredging of river tributaries along downstream section and river mouths should be a
priority (such dredging must be preceded by the removal of garbage waste); Garbage
waste, which covers the river embankments and the riverbed, must be removed and
stored separately before starting the dredging operations as described above.
Dredging of upstream sections of rivers may be allowed for improving water management
(It is expected that the upstream sections of the tributaries will not be contaminated
because these are flushed during the rainy season).
When dealing with contaminated sediments, information must be required on the type and
degree of contamination, as well as the volume to be dredged, to be able to determine the
appropriate method for treating the dredged spoils.
Local storage areas for dredged spoils from tributary dredging should be required, such
areas should be selected in order to assess the feasibility and economy of dredging
operations.
The need for lake environmental dredging must be further evaluated as available
information lack sufficient details. If environmental dredging is required, it is very important
to assess the nature and thickness of the soil as well as the thickness of the contaminated
soil/sediment layer in order to be able to select the optimum dredging method and to
determine the required storage volume.
LLDA shall ensure that proper and timely maintenance of rivers and drainage and that
maintenance dredging will be undertaken at river mouths, clogged waterways, channels and
outlets, and constricted water flows. Dredging will address the reduced carrying capacity of both
higher-and lower-order drains and rivers due to lack of maintenance, Including dredging of silts
and cleaning of solid waste, and encroachment of banks of the rivers, drains, and floodways.
Further, LLDA and implementing partners shall ensure proper treatment and disposal of dredged
materials to prevent contamination due to toxic and hazardous pollutants.
18. Implementation Plan
As stated earlier, the updated Laguna de Bay Basin Master Plan is envisioned to change the way
that the basin is managed. Implementing the basin plan will require transforming it into detailed
implementation plan. Implementing the updated master plan will benefit from the following: (i)
the legal statute (R.A. 4850 as amended) providing the policy and legal context for ILBM; (ii)
existence of the LLDA clothed with a clear mandate to manage the lake basin across
administrative provincial, city and municipal boundaries, thus providing an institutional home and
an effective implementation monitoring system.; and (iii) critical basin concerns that calls for
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meaningful interventions to address priority basin issues. All these also provide built-in advantage
to situations requiring cooperative arrangements to effectively implement the basin plan.
Implementation Strategies
Iterative Process
For some of the development goals/objectives, translating the plan into detailed
implementation plans will require close integration with major basin actions and thematic
plans such as infrastructure development plan and water supply development plan. For
other objectives, there may be a need for specific plans to be developed such as
wastewater treatment plans. This will require an iterative process over time that will assess
relationship between development and environmental priorities, identifying key issues and
deciding on trade-offs using scenarios. This process will also be a mechanism for
engaging a range of decision-makers and stakeholders.
This iterative process of assessing scenarios and revising plans builds flexibility into the
basin plan implementation. With developed and tested tools and using scientific
information generated by LLDA and other agencies, scenario assessment can provide the
basin plan greater chance of remaining coherent and actionable in the face of a dynamic
lake basin system like Laguna de Bay.
Go for immediate Wins for current prioritized issues and adoption of a phased
approach to achievement of long-term goals
Some basin issues are of higher priority than others. Further, it is not possible to address all
the issues at the same time throughout the basin. Attempts to do so can lead to the most
important issues not being addressed. Similarly, management measures/interventions may
be prioritized according to technical, financial and institutional feasibilities. It may be important
to consider those issues that have a high political profile, and those that can create momentum
through immediate wins, or so called low-hanging fruits.
Once approved and implemented, in consonance with the nesting approach discussed in
Chapter 5 (Overall Development Framework), the updated basin master plan will provide an
overarching strategic framework to sub-basin/ thematic plans to ensure consistent objectives,
alignment of policy and institutional cooperation around the interrelationship and
interdependencies between/among the thematic and sub-basin plans. These plans translate
the strategic intent of the umbrella Laguna de Bay basin plan into implementable activities
and interventions. The thematic plans can include plans related to protection, conservation
and rehabilitation, disaster risk and institutional aspects of the basin plan. On the other hand,
the sub-basin plans will deal with the institutional arrangements for management of the 24
sub-basins, e.g., creation of sub-WQMAs and formulation of detailed sub-basin management
plans.
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Implementation Arrangements
The basin planning process and plan implementation have a remarkably good chance of success
because of a supportive legal and institutional context, i.e., the LLDA Charter that serves as the
plans institutional home. Thus, it is important to recognize the importance of a clear and
coherent legal and institutional arrangements and capacity within which the basin plan is
developed and implemented. The institutional arrangements and capacity are described as a
partnership arrangement which defines the roles and responsibilities of LLDA and its
implementing partners in the plan implementation. This collaboration will be institutionalized
through an Institutional Memorandum of Agreement (I-MOA) to be executed by the parties
concerned. Aside from formalizing their participation in plan implementation, the I-MOA will be a
legally binding document which shall transform the roles/responsibilities of implementing
agencies to accountabilities and obligations, including resource commitments to ensure the
successful implementation of the basin plan.
Implementation Timetable
The time period covered by the updated master plan follows an adaptive approach,
recognizing that the plan may require modifications over time due to the following:
The updated Master Plan for the Laguna de Bay Basin has a 10-year timescale (2016-2026)
considering the new vision/ mission of the LLDA for the region, and 6-year planning cycle for
strategies based on the results of periodic monitoring and review of plan implementation and
assessment of conditions.
Furthermore, the Plan encompasses a longer-term vision, envisaging the state of Laguna de Bay
basin 20-30 years from now. This necessitate flexible operation and, if necessary, revisions in
response to environmental, climate-related, socio-economic and other changes. This plan has
been set as the first stage (2016-2026). The objective of the first stage is to promote
environmental conservation through steady yet flexible implementation of ongoing initiatives,
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The LLDA can also make recommendations to the proper government agencies on the peso or
dollar financing requirements of its mandated functions, technical support, the level of priority to
be given to certain projects, and accordingly solicit assistance from the national Government or
any of its instrumentalities.
The Charter of the LLDA further allows it to receive sovereign guarantee for the payment for
principal and interest of the loans, bonds, debentures and other obligations of the Authority.
While the LLDA Charter provides for broad opportunities to expand its financial base, these are
limited and hampered by the long, tedious and multi-layered approval process of the National
Government through the Investment Coordination Council and NEDA Board, thus affecting the
proper timing and provision of financing for long-term sustainability of the lake and watershed
resources.
Financing Schemes/Strategies
Corporate Funding. Most of the soft interventions under the Master Plan, such as
regulatory tools and market-based instruments, community-based environmental and
natural resource management measures and IEC programs, will be funded through
corporate funds.
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Under the ODA set up, the LBDC would establish an Infrastructure Development Fund
(IDF). In this mechanism, financing assistance from donor agencies such as the World
Bank and Asian Development Bank would be secured, and the funds channelled to project
preparation and/or co-financing for their implementation. The LLDA Charter does not
allow it to manage the IDF directly as this is legally untenable within the existing regulatory
framework of the LLDA. As a regulatory body, LLDA could not act as a funding
intermediary that re-lends funds to borrower who are at the same time its regulated clients
(LLDA-Tetra Tech EMI. Final Report No. 2 Trunk Infrastructure Priorities and
Implementation Strategy Through Private Sector Participation: Review of Past Studies and
LLDA Institutional Re-engineering. April 2008).
Through Public-Private Partnership (PPP). In the Philippines, the PPP modality has
opened the possibility of long-term finance from domestic and international sources due
to improved and continued reforms in corporate governance and the stock and bond
markets. Further, the most successful models for the geographically focused agencies,
such as lake/river basin authorities, in other countries, e.g., Tennessee Valley Authority
in the United States, rely on commercially based project development concepts. These
experiences combined with increasing favorable capital market environment and the
support of multilateral agencies put LLDA in a unique position to carry out the necessary
re-engineering process toward meeting its original mandate, that is, development
(environmental) and sustainable management of the water resources in the Lake and its
watershed.
The new institutional re-engineering model of LLDA segregates overtime the regulatory
functions from the development mandates. As part of the re-engineering effort, LLDA may
pursue infrastructure development projects through the PPP approach through either the
following tracks:
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Track 2: Proceed directly to joint-venture arrangement with interested and capable private
sector investor under the PPP modality.
In both tracks, based on the institutional re-engineering program, the LLDA may create the
Project Development Facility (PDF) within its organization. In the new rationalized
organizational set up as approved by the Department of Budget and Management, the Project
Development and Management and Evaluation Division (PDMED) has been established
which may take the role of the envisioned PDF. The PDMED/PDF may also include additional
part-time support assigned to the PDF either from within the LLDA or outside consultants.
Depending on the skills set of the PDMED/PDF members as finally constituted, it would be
wise to retain one outside financial advisor to support the process (LLDA-Tetra Tech EMI,
Final Report No. 4 Detailed Plan for Developing Larger Trunk Infrastructure Development
Project by LLDAs PDF Using Private Sector Participation. April 2008).
Efficient Use of User Fee Collections Through the ETF
The LLDA intends to make efficient use of effluent charges (EUFS) and resource user fees by
establishment of various trust funds. Trust funds are widely used worldwide as a financing
mechanism to fund water resources management and environmental protection. It is easy to tract
and could earn interest. Given the legal basis in its existing Charter, LLDA could target specific
initiatives to be funded out of the trust funds, as follows:
Lake Rehabilitation Trust Fund
For projects that directly clean the lake water system
Counterpart money for establishment of sewerage systems in the municipalities
Recycling Initiatives Trust Fund
For projects that focus on recycling and solid waste management
Municipal Waste Water Treatment/STP Counterpart Trust Fund
Counterpart financing for construction, repair, rehabilitation, or replacement of
new and existing waste water treatment facilities, sewage treatment systems,
septage treatment systems, etc.
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environmental fees, fines and penalties, sources of international or domestic grants to enhance
the environmental management program in the Region; (ii) Trustee a bank or other financial
entity qualified to hold and invest such funds; and (iii) Beneficiary recipients of the fund, LGUs
or other partners.
Development of Raw Water EUFS
It is also an important direction for LLDA to develop its Raw Water EUFS. A water market pricing
approach would be difficult to implement because of the analytical problems that such a concept
would create. The adoption of a user fee system rather than a pricing based on scarcity
argument will provide LLDA with the flexibility, thus the need for LLDA to review the premise of
its current water pricing scheme. It is the intention of the Authority to earmark the fees collected
for their intended use, i.e., for the protection of the water source. This practice not only ensures
that the system achieves it actual objective, it facilitates public acceptance of the fee.
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