Territorial use rights and economic efficiency: the case of the Philippine fishing concessions

Abstract

This paper discusses the mechanics and implications of municipal concessions in the Philippines which govern the use of municipal waters for fish corrals, oyster culture beds and gathering of milkfish fry. These concessions or territorial use rights are awarded annually by the resource owner (the municipality) to the highest bidder. In the case of milkfish fry gathering, the concessionaire assumes monopsonist rights of first purchase from fry gatherers. The implications of this system for economic efficiency and equity are discussed theoretically with supporting data from milkfish fry concessions in Antique Province. It is concluded that the system increases economic efficiency in resource use and generates significant income for municipalities which they can then redistribute as they see fit, and therefore not necessarily for the special benefit of fishermen.