1st LRU RAC Meeting: The "FPE" Fund Story

The ‘FPE Fund’ Story

1st Luzon RAC MeetingMicrotel By Wyndham

UP Techno Hub, Quezon City

October 21-22, 2014

“Ang Kuwento sa

Kuwenta”

Presentation Outline

• Beginnings of the Fund- Establishment of the FPE Environmental Endowment Fund

• FPE Milestones- Creation of FPE and the MOU for Fund Management

• FPE Finance Highlights- CY 1994 to FY 2013-2014- Grants Approved- FPE Special Projects and Funds Facilitated

• Fund Valuation & Utilization

Beginnings of the Fund

US$125 Million

NRMP Grant Agreement Phase I signed on September 28, 1990

US$25 Million max

Natural Resource Protection Component – to conserve

biological diversity & enhance sustainable natural resources

management

Jan-1992: US$5 M

1st Debt Swap which bought debt papers worth US$7.97 Million

Sep-1993: US$13 M

2nd Debt Swap which bought debt papers worth US$13.76 Million

Beginnings of the Fund

Total Debt Swap + Bank of Tokyo

Donation

$21,731,745.40119,590.15

$21,851,335.55

FPE Endowment Fund

P566,532,293.243,276,772.00

P569,809,083.24

FPE Endowment FundIn US Dollars:

�USAID => $21,731,745.40 ~P26.069�Bank of Tokyo => 119,590.15 ~P27.400

US$ 21,851,335.55 ~ P26.0766

In Philippine Peso:

�USAID => P 566,532,293.24�Bank of Tokyo => 3,276,772.00

Php 569,809,083.24

FPE MilestonesJanuary 1992:

�FPE is registered with the SECJuly 1992:

�The officers and members of the first regular Board of Trustees (BOT) are elected to serve for 1992-1996. Fulgencio S. Factoran becomes the first BOT Chairperson

January 1993:

�Delfin J. Ganapin, Jr. becomes FPE’s first Executive DirectorMarch 1993:

�A MOU among the Philippine Government (DOF & DENR), U.S. Government (USAID), and FPE for the establishment of an Environment Endowment is signed. The MOU spells out the purpose of the endowment, stipulates the conditions for the transfer to FPE, and delineates the roles of the parties concerned in safeguarding the fund.

FPE Fund ManagementMemorandum of Understanding dated March 05 1993:

�FPE to contribute, encourage, assist, and provide technical, managerial, and financial support to NGOs, POs and communities for environment protection, natural resource conservation & management, and sustainable development�Only the investment income (interest & earnings) of the endowment fund shall be used for environmental activities of NGOs and POs in the Philippines specially focused on BCSD�Permissible Investments - Invest the Funds and any interest earned only in special series Central Bank bills; or in such other investments as the parties may agree to in writing�Up to 20% of the investment income received in a given fiscal year may be used for administrative purposes

FPE Fund Management

APRIL 1994:

�Establishment of the Endowment Fund which was placed in Central Bank special series bills

JUNE 1994:

�USAID transfers the full management of the Php569.8 million or US$21.8 million Environmental Endowment Fund to FPE

Memorandum of Agreement dated May 29, 1996:

�The DOF and FPE agree in writing to invest the Funds and interests thereon in such investment portfolio that will maximize earnings provided that such portfolio will have prior approval of the FPE BOT

FPE Fund ManagersAs of JUNE 30, 2014

20%

18%

15%10%

3%

3%

16%

9%

6%

20% AB Cap

18% RCBC

15% MBTC

10% BDO

3% BPI

3% UCPB

16% Falcon

9% LGT

6% Cr.Agrc

FPE Finance HighlightsTOTAL ASSETS:

�1994 => P634.2 million; 1997 => P711.4 million�2003 => P803.96 million; 2006 => P857.7 million�FY2007-08 => P765.8 million; FY2009-10 => P804.8 million�FY2012-13 => P855.32 M FY2013-14 => P834.85 M

FUND BALANCE:

�1995 => P610.9 million 2000 => P721.7 million �In 2006, the fund level of P792.6 million was on its way to breach P800M when the Global Financial Crisis struck in 2007-2008 bringing down the fund level to P712.7 million again�FY2012-13 => P789.32 M FY2013-14 => P774.89 M

FPE Statement of Financial PositionCY1994 to FY2013-14

0100000000200000000300000000400000000500000000600000000700000000800000000900000000

CY94 CY97 CY00 CY03 CY06 FY

09-

10

FY

12-

13

Liab Gen Fund Restricted

Statement of Financial PositionComparative Results: FY13-14 and FY12-13

ACCOUNTS FY2013-2014 FY2012-2013 Variance

Cash, A/R & Others 16,853,148 20,472,347 (3,619,199)

Fund w/ Invst. Mgrs. 806,657,304 827,096,501 (20.44M)

Property & Equip. 11,334,553 7,754,525 3.58M

TOTAL ASSETS 834,845,005 855,323,373 (20.48M)

Total Liabilities 59,952,062 66,005,460 (6.05M)

Total Fund Balance 774,892,943 789,317,913 (14.42M)

TOTAL Liab. + FB 834,845,005 855,323,373 (20.48M)

Statement of Financial PositionComparative Results: FY13-14 and FY12-13

Liab. & Fund Bal. FY2013-2014 FY2012-2013 Variance

A/Payable & Accruals 6,418,750 9,585,808 (3.17M)

Funds-held-in-Trust 3,746,425 3,191,569 554,856

Grant Liabilities 36,724,224 39,173,523 (2.45M)

Gen Grant Provision 13,062,663 14,054,560 (991,897)

Total Liabilities 59,952,062 66,005,460 (6.05M)

Restricted Fund 584,391,064 578,057,383 6.33M

General Fund 190,501,879 211,260,530 (20.76M)

Total Fund Balance 774,892,943 789,317,913 (14.42M)

TOTAL Liab. + FB 834,845,005 855,323,373 (20.48M)

FPE Statement of Comprehensive IncomeCY1994 to FY2013-14

0

10000000

20000000

30000000

40000000

50000000

60000000

70000000

80000000

CY94

CY96

CY98

CY00

CY02

CY04

CY06

FY08-0

9

FY10-1

1

FY12-1

3

Admin PDME Grants Revenues

FPE Budget PerformanceFY2013-2014 (Audited)

Revenues =

P62,481,979

Grants App. 40,976,950

PDME 14,235,206

Admin 11,645,477

Total Expenditures =

P66,857,633

Excess R-E =

(P 4,375,654)

GA

62%

PDME

21%

Adm

17%

Exc

0%

FPE Budget PerformanceJUNE 1994 to FY2013-2014

Revenues =

P1,179,872,486

Grants App. 743,260,600

PDME 176,958,909

Admin 225,980,449


P1,146,199,958

Excess R-E =

P 33,672,528

GA

63%

PDME

15%

Adm

19%

Exc

3%

FPE Grants ApprovedJUNE 1994 to FY2013-2014

Total Grants =

P743,260,600

Luzon 198,102,336

Visayas 172,374,996

Mindanao 146,261,511

National 178,977,024

EO/Insti 47,544,733

LRU

27%

VRU

23%MRU

20%

EO

6%

Nat'l

24%

FPE: Funds Facilitated / MobilizedYear Amount Amount Particulars

Aug1997 $75,000 PhP 1.709M Ford Foundation – Management of National Protected Area Sites

Nov1997 $350,000 PhP 9.224M John & Catherine MacArthur Foundation –Community Forest Program (CFP)

Jun1998 $38,557 PhP 1.177M Keidanren Nature Conservation Fund

Sep1998 $214,939 PhP 8.598M USAID-Phil. Network on Climate Change

Dec1998 $141,609 PhP 5.544M Royal Netherlands Embassy – EnDefense thru Radio Communication Network

Mar1999 $25,000 PhP 951,250 MacArthur Foundation

Jul1999 $25,000 PhP 957,499 UNDP – preparatory for BMTP

Jan-Aug 2003

PhP 525,440 Haribon, WWF-Phils., CI, DAI Eco Gov –Counterpart funds for TFCA -> PTFCF


Feb&Nov2004

PhP 1.200M Philip Morris Philippines – PMI Fund for Indigenous Peoples’ projects

Feb2004 PhP 100,000 Mirant Philippines – Mt. Banahaw POs

Aug2005Jun2006

$10,044 $17,010

PhP 562,315 Php 898,835

Washington State University (WSU) for Dasol Mangrove Rehabilitation

Nov2007Feb2008

PhP 315,000 Php 360,000

UNDP thru DENR-ENR CORE for Zambales IP project (PASS)

Dec2009 PhP 227,824 UNDP – SGP Writeshop for Proj.Partners

May2010 PhP 750,000 PLDT-SMART Foundation – Punlaang Bayan for Marikina Watershed Initiative

TOTAL $897,159 PhP29,620,544 + 3,478,264 = PhP33,098,808

FPE: Special ProjectsYear Amount Amount Particulars

2002 to Jun2007

PhP 30,907,763 UNDP Bohol Marine Triangle Conservation Project

Oct2008-Nov2013

PhP 9,160,881 EU-AnthroWatch Project; Conso. IP Forest Corridor thru Sustainable Ancestral Domain Mgt. (CIPFC-SADM)

Mar2010-Dec2013

E647,991 P 36,929,328 EU-FUNDESO Project; Mainstreaming IP Participation in Environmental Governance (MIPPEG); Ext.-NOV2014

Sep2011-Aug2013

$1.172M P 52,942,543 USAID-FPE Project; Up scaling Forest Restoration Efforts in KBA; DEC2013

Aug2014-Jun2017

P9.11M PhP 1,287,349 UNDP GEF SGP5 Responsible Party

TOTAL P 131,227,864 SPECIAL PROJECTS

Fund Valuation & Utilization

� P 569,809,065 $ 21,851,336P 789,317,913 (Jun-2013) $ 18,271,248*P 774,892,943 (Jun-2014) $ 17,752,416**

Ref. ForEx rate: *Jun-2013 = P43.20/ $ **Jun-2014 = P43.65/ $

� P 1,921,092,901 as of Jun-2014

Total Grants Approved => P 743,260,600 64.9%Total PDME Costs => 176,958,909 15.4%Total Admin Expenses => 225,980,449 19.7%

P 1,146,199,958 100%� P1,179,872,486 => Cumulative Revenues from Jun-1994

Size of the FundOriginal Fund Balance:

�P 569,809,065 1.0

As of Dec-2001 As of JUN-2012 As of JUN-2014�Fund Bal. P719.44M 1.26 P748.87M 1.31 P774.89M 1.36�Expenses P456.46M 0.80 P 1.013B 1.78 P 1.146B 2.01

Total* P1,175,898,871 P1,762,447,373 P1,921,092,901

2.06 3.09 3.37

*Total Accumulated Value of the Fund

THANK YOU!

www.fpe.ph

THANK YOU!

www.fpe.ph

Statement of Comprehensive IncomeComparative Results: FY13-14 and FY12-13

FY2013-2014 FY2012-2013 % inc/(dec)

REVENUES 62,481,979 70,845,138 (11.8%)

EXPENSES (66,857,633) (66,244,411) 0.93%Other Operating and Comprehensive Incomes:

For Ex Gain 2,418,603 43.65 vs. 43.20

8,827,415 43.20 vs. 42.12

Market Valuation (17,175,911) 6,844 vs. 6,465

25,885,825 6,465 vs. 5,246

Actuarial Gains 3,302,537 -0-

Net Income (Loss) (15,830,425) 39,313,967

FPE MilestonesNovember 1989:

�A Philippine Mission, led by then President Corazon “Cory” Aquino goes to the U.S. to seek further development assistance; among the government delegation is DENR Secretary Fulgencio Factoran who was joined by NGO leaders led by Maximo Kalaw and Corazon “Dinky” Soliman

September 28,1990:

�The US$125 million NRMP Grant Agreement Phase 1 is signed with a Natural Resource Protection Component to conserve biological diversity & enhance sustainable natural resources management, up to a maximum of US$25 million, the facility through which the fund for the debt swap could be accessed

FPE MilestonesJanuary 1992:

�FPE is registered with the SEC. The first debt swap worth US$5 million buys debt papers worth US$7.97 million at face value. The Bank of Tokyo donates US$200,000 to WWF in trust for FPE

July 1992:

�The officers and members of the first regular Board of Trustees (BOT) are elected to serve for 1992-1996. Fulgencio S. Factoran becomes the first BOT Chairperson

January 1993:

�Delfin J. Ganapin, Jr. becomes FPE’s first Executive Director

FPE MilestonesMarch 1993:

�A Memorandum of Understanding among the Philippine Government (DOF & DENR), U.S. Government (USAID), and FPE for the establishment of an Environment Endowment is signed. The MOU spells out the purpose of the endowment, stipulates the conditions whereby it will be transferred to FPE, and delineates the roles of the parties concerned in safeguarding the fund.

September 1993:

�The second debt swap amounting to US$13 million buys debt papers worth US$13.76 million, concluding the exchange between the Philippine and U.S. governments for the establishment of FPE. The aggregate value of the two debt swaps stands at US$18 million which bought debt papers worth US$21.8 million at face value.

FPE Endowment FundIn US Dollars:

�USAID => $21,731,745.40�Bank of Tokyo => 119,590.15

US$ 21,851,335.55

In Philippine Peso:

�USAID => P 566,532,293.24�Bank of Tokyo => 3,276,772.00

Php 569,809,083.24

FPE Fund ManagementMemorandum of Understanding dated March 05 1993:

�FPE to contribute, encourage, assist, and provide technical, managerial, and financial support to NGOs, POs and communities for environment protection, natural resource conservation & management, and sustainable development�Only the investment income (interest & earnings) of the endowment fund shall be used for environmental activities of NGOs and POs in the Philippines specially focused on BCSD�Permissible Investments - Invest the Funds and any interest earned only in special series Central Bank bills; or in such other investments as the parties may agree to in writing�Up to 20% of the investment income received in a given fiscal year may be used for administrative purposes

FPE Fund ManagementAPRIL 1994:

�Establishment of the Endowment Fund which was placed in Central Bank special series bills

JUNE 1994:

�USAID transfers the full management of the US$21.8 million Environmental Endowment Fund to FPE

Memorandum of Agreement dated May 29, 1996:

�The DOF and FPE agree in writing to invest the Funds and interests thereon in such investment portfolio that will maximize earnings provided that such portfolio will have prior approval of the FPE BOT

FPE Finance HighlightsFUND BALANCE:

�In 1995, fund balance reached P610.9 million �By 2000, fund has attained P721.7 million�In 2006, the fund level of P792.6 million was on its way to breach P800M when the Global Financial Crisis struck in 2007-2008 bringing down the fund level to P712.7 million again�By the end of FY2012-13, fund balance stands at P789.32 million

TOTAL ASSETS:

�1994 => P634.2 million; 1997 => P711.4 million�2003 => P803.96 million; 2006 => P857.7 million�FY2007-08 => P765.8 million; FY2009-10 => P804.8 million�FY2012-13 => P855.32 million

FPE Finance HighlightsINVESTMENT REVENUES:

�Highest Annual Revenues of P75.42 million in 2004, followed by P70.85 million for FY2012-13 and P70.66 million in 2003�Lowest in 2002 amounting to P40.06 million and P41.01 million in FY2008-09 at the height of the Global Financial Crisis �Cumulative Revenues hit the P1.0 billion mark in Sep-2011 and amounted to P1,046,982,708 by the end of FY2011-12�Cumulative Revenues as of FY2012-13 => P1,117,827,846

BUDGET PERFORMANCE – Cumulative as of FY2012-2013:

�Total Grants Approved => P 702,283,649 65.1%�Total PDME Costs => P 163,323,513 15.1%�Total Admin Expenses => P 214,215,107 19.8%�Total Disbursements => P1,079,822,269 100%

FPE Budget PerformanceFYJUL-2012 to JUN-2013

Revenues =

P70,845,138


PDME 11,181,016

Admin 9,304,309


P66,244,411

Excess R-E =

P 4,600,727

GA

65%

PDME

16%

Adm

13%

Exc

6%

FPE Budget Performance with Special ProjectsFYJUL-2012 to JUN-2013

Revenues =

P106,590,295


Sp.Projects 37,282,228

PDME 11,181,016

Admin 9,304,309


P103,526,639

Excess R-E =

P 3,063,656

GA

43%

PDME

10%Adm

9%

Exc

3%

SpPr

35%

FPE: Special ProjectsYear Amount Amount Particulars

2002 to Jun2007

PhP 30,907,763 UNDP Bohol Marine Triangle Conservation Project

Oct2008-Nov2013

PhP 6,577,273 EU-AnthroWatch Project; Consolidating IP Forest Corridor thru Sustainable Ancestral Domain Mgt. (CIPFC-SADM)

Mar2010-Dec2013

E527,961 P 33,339,883 EU-FUNDESO Project; Mainstreaming IP Participation in Environmental Governance (MIPPEG); Ext.-DEC2014

Sep2011-Aug2013

$1.120M P 47,183,897 USAID-FPE Project; Up scaling Forest Restoration Efforts in KBA; DEC2013

TOTAL P 118,008,816 SPECIAL PROJECTS


Aug1997 $75,000 PhP 1.709M Ford Foundation – Management of National Protected Area Sites

Nov1997 $350,000 PhP 9.224M John & Catherine MacArthur Foundation –Community Forest Program (CFP)

Jun1998 $38,557 PhP 1.177M Keidanren Nature Conservation Fund

Sep1998 $214,939 PhP 8.598M USAID-Phil. Network on Climate Change

Dec1998 $141,609 PhP 5.544M Royal Netherlands Embassy – EnDefense thru Radio Communication Network

Mar1999 $25,000 PhP 951,250 MacArthur Foundation

Jul1999 $25,000 PhP 957,499 UNDP – preparatory for BMTP

Jan-Aug 2003

PhP 525,440 Haribon, WWF-Phils., CI, DAI Eco Gov –Counterpart funds for TFCA -> PTFCF


Feb&Nov2004

PhP 1.200M Philip Morris Philippines – PMI Fund for Indigenous Peoples’ projects

Feb2004 PhP 100,000 Mirant Philippines – Mt. Banahaw POs

Aug2005Jun2006

$10,044 $17,010

PhP 562,315 Php 898,835

Washington State University (WSU) for Dasol Mangrove Rehabilitation

Nov2007Feb2008

PhP 315,000 Php 360,000

UNDP thru DENR-ENR CORE for Zambales IP project (PASS)

Dec2009 PhP 227,824 UNDP – SGP Writeshop for Proj.Partners

May2010 PhP 750,000 PLDT-SMART Foundation – Punlaang Bayan for Marikina Watershed Initiative

TOTAL $897,159 PhP29,620,544 + 3,478,264 = PhP33,098,808

Fund Valuation & Utilization

� P 569,809,065 $ 21,851,336P 748,869,516 (Jun-2012) $ 17,779,428*P 789,317,913 (Jun-2013) $ 18,271,248**

Ref. ForEx rate: *Jun-2012 = P42.12/ $ **Jun-2013 = P43.20/ $

Total Grants Approved => P 702,283,649 65%Total PDME Costs => 163,323,513 15%Total Admin Expenses => 214,215,107 20%

Total Disbursements P 1,079,822,269 100%

� P 1,869,140,181 as of Jun-2013

Size of the FundOriginal Fund Balance:

�P 569,809,065 1.0

As of Dec-2001 As of JUN-2012 As of JUN-2013�Fund Bal. P719.44M 1.26 P748.87M 1.31 P789.32M 1.39�Expenses P456.46M 0.80 P1.013B 1.78 P1.080B 1.89

Total* P1,175,898,871 P1,762,447,373 P1,869,140,181

2.06 3.09 3.28

*Total Accumulated Value of the Fund

THANK YOU!

www.fpe.ph

FPE Grants ApprovedCY1994 to FY2012-2013

0

10000000

20000000

30000000

40000000

50000000

60000000

CY94 CY96 CY98 CY00 CY02 CY04 CY06 FY

08-09

FY

10-11

FY

12-13

LRU VRU MRU PDU/EO

FPE Investment StrategiesInvestment Objectives:

�Responsive & tactical asset allocation for sufficient and maximized returns�Inflation protection to preserve the value of the principal and/or for asset growth�Sensible cash flow (liquidity) management�Judicious and prudent handling of expenses

Investment Guidelines/Parameters:

�Conservative; Low risk tolerance�Investment horizon is long-term�Restricted investments in equities; in terms of sectors to invest in and asset allocation�Diversification to guard/hedge against risks

FPE Fund ManagementFirst Steps:

�Establish/decide Investment Objective (endowment vs. sinking fund; risk tolerance; liquidity requirements; revenue stream vs. capital preservation )�Determine number/select fund managers (consider fund size, costs-trust/management fees, discretionary vs. advisory portfolio)�Train/capacitate Investment staff re: set-up of asset/portfolio allocation, monitoring reports/worksheets (ROI, maturity schedules, asset &/or currency mix; assessment & evaluation tool for fund managers, etc.)�Set meetings &/or proposal presentations with a view to establish Trust Accounts &/or Investment Management Accounts, etc. with selected fund managers

www.fpe.ph