Name of the Organization

Cagayan Economic Zone Authority

Name of the Office/Unit that leads the implementation of this best practice entry

Community Affairs and Development Division

Focus Area of the Best Practice

Strategy, Inclusive Development, Social Innovation

Date the best practice was first implemented

14 March 2006 – up to present

Summary of the Best Practice

The Cagayan Special Economic Zone and Freeport (CSEZFP) was rife with environmental, social, economic, and institutional issues that impeded the area’s development and livelihood. However, Cagayan Economic Zone Authority (CEZA) saw that livelihood diversification could help address these problems and saw the opportunity to develop the area for tourism. To achieve these goals together, CEZA initiated a Community-Based Sustainable Tourism (CBST) Program, a pilot test in Palaui Island Protected Landscape and Seascape (PIPLS). Through a range of activities around organizational development, community management, and resource generation, the program managed to help secure livelihoods for its residents, beautify the area, and earn an income of over Php 50 million that benefitted the community.

The Challenge

In the early years of taking over the CSEZFP, CEZA was confronted with environmental, social, economic, and institutional issues that have impeded the area’s development. The rich biodiversity of the area was threatened by abusive and uncontrolled practices. The forest lands were slowly deteriorating due to illegal logging, timber poaching, and the conversion of forest lands into agricultural land for the daily needs of the local population. Similarly, marine resources were also exposed to illegal fishing, marine products extraction, and other activities that had detrimental effects. With the main sources of livelihood being fishing and agriculture and with limited livelihood and income opportunities available for the residents back then, there was a struggle between sustaining people’s needs and preserving and protecting the area’s natural resources.

CEZA recognized that livelihood diversification could help address the people’s problems. Moreover, in seeing the area’s natural beauty, CEZA also recognized the area’s potential to be a key player in the country’s tourism industry. To achieve these goals together, CEZA envisioned a Community-Based Sustainable Tourism (CBST) Program, and decided to have the Palaui Island Protected Landscape and Seascape (PIPLS) as their pilot site.

However, an assessment of the site revealed that there was a lot to be done. Being a protected area and a marine reserve, the management of PIPLS was under the purview of a multi-sectoral body known as the Protected Area Management Board (PAMB), and it complicated administrative affairs for the project, the area also lacked infrastructure to support a tourism industry, and the community was not yet open to the project. These were among the considerations that CEZA had to note in crafting its CBST Program.

Solution and Impact

On 14 March 2006, CEZA proceeded with a number of activities to mobilize the program.

  1. A resource-based inventory (RBI) for PIPLS was conducted to obtain baseline information about the chosen site for tourism development.
  2. CEZA also communicated pertinent topics, such as the program’s Business Model and principles of ecotourism, with stakeholders and community members through a series of consultations and IEC activities. At first, stakeholders and members of the community did not appreciate the concepts introduced under the CBST Program, especially its “high value, low volume” principle. However, this challenge was eventually overcome through public discussions, consultations, information, and education campaigns.
  3. A tourism planning workshop was also undertaken with the participation of stakeholders from government entities, non-government organizations, academe representatives, civil society groups, private partners, island leaders and residents.
  4. A visioning exercise was also conducted to discuss the activities, goals and objectives of the Program and provide a clear view of what CEZA intends to do with the Program.
  5. CEZA also facilitated the identification of tourism products and services that could be produced at the site.
  6. CEZA also helped establish tourism infrastructures and facilities by organizing resource generation campaigns and applications for grants/financial assistance.

Along the way, CEZA has also adopted the Palaui Environmental Protectors Association (PEPA), which was originally formed by the Department of Environment and Natural Resources (DENR). PEPA is composed of residents who have been volunteering to be the caretakers of the PIPLS. Since their adoption, they have also extended their role in the tourism development of the island.

Since then, CEZA has also expanded the program’s tourism products and services through the creation of seven PEPA sub-groups, namely (1) Palaui Island Guides, (2) Palaui Reef Ranges,(3) Palaui Women’s Catering, (4) Palaui Island Spa, (5) Palaui Weavers Association, (6) Palaui Island Honey Hunters Marketing Cooperative, and (7) Palaui-San Vicente Motor Boat Association. These community-assisted organizations were also provided interventions for organizational development and strengthening, capacity-building, resource generation, marketing and promotions. CEZA has also partnered with public and private sector organizations, which all have contributed to the successful implementation of the program.


The CBST Program now contributes to the environmental management of the CSEZFP and it has provided secure livelihoods for its residents. The community enterprises benefit by charging competitive prices in exchange for high-value tourism products and services. Since 2011, the income generated by PEPA and its sub-groups has already totaled over Php50 million. This could have been higher if not due to the COVID-19 pandemic.

With the success of the Program, it has been used to benchmark the 55 ecotourism enterprises in 22 sites of DENR-PAWB’s Integrated Coastal Resource ManagementProjects’ (ICRMP’s) ecotourism sites in the provinces of Cagayan, Davao Oriental, Cebu, Masbate, Siquijor, Zambales, Benguet, and the succeeding CBST initiatives of CEZA.

The CBST Program itself was also recognized many times. To name a few:

  1. PEPA was a two-time recipient of the prestigious Association of Southeast Asian Nationals (ASEAN) Community-Based Tourism Standard for 2017-2019 and 2019-2021.
  2. It was also awarded by DOT for its Outstanding Community-Based Tourism in March 2019.
  3. It was also a third-placer in the Para El Mar Award for its Outstanding National Integrated Protected Areas System – Marine Protected Areas in 2017, and a first-placer in the same category in 2019, obtaining a Php1 million cash prize.
  4. PEPA was also recognized as the Longest Running Federated Tourism Organization and ASEAN Awardee during the Regional Tourism Forum Awards Night in May 2022.
  5. During the Regional Tourism Forum and Awards Night in July 2022, CEZA was also recognized by DOT for its efforts to implement its programs, even at the middle of a pandemic.


The most rewarding and fulfilling remarks and actions on the tremendous success of the CBST Program come from the island residents themselves. They believe that the Program has empowered them through their active participation in the protection of their Island, and the availability of an alternative source of livelihood that they can count on. The satisfaction of the community beneficiaries is evident in the feedback they gave that rated the said Program with an “Excellent” adjectival rating.