A joint report by the World Bank and the government's environment and natural resources department proposed "reducing fishing effort to allow degraded stocks to recover, and to provide alternative livelihoods" to poor coastal communities.

It described the Philippines' coastal and marine resources as "the richest in marine biodiversity in the world."

However habitat loss, unsustainable fishing practices including the use of dynamite and chemical poison to stun fish and trade in endangered species are key threats.

Manila has appealed for international help to contain some 200,000 liters (about 50,000 gallons) of industrial fuel that leaked from a tanker that sank amid huge waves off the central island of Guimaras on Friday.

The black sludge has contaminated more than 200 kilometers (125 miles) of coastline and damaged a marine reserve. The coastguard said the tanker's hold still contained 1.8 million liters (450,000 gallons) of fuel that could leak out if the tanks corrode or burst.

"The economic costs of environmental degradation of coastal and marine resources are significant," said Jitendra Shah, who monitors the marine sector for the World Bank here.

He said Philippine coastal resources yield about 3.5 billion dollars a year, with coral reefs alone contributing about 1.4 percent of the gross domestic product through fishing and tourism.

However, the report said only between four and five percent of the country's coral reefs remain in excellent condition.

More than 70 percent of the nation's mangrove forests, essential nursery grounds for reef fish as well as other commercial species of economic and ecological value, have been converted for aquaculture, logging, or other uses, while half the seagrass beds have been lost or severely degraded.

"Protecting these habitats from physical alteration as well as from excessive harvesting of resources is essential to maintaining the health and productivity of the entire coastal ecosystem," the World Bank said.

It said economic losses from overfishing in the Philippines amounted to 125 million dollars a year.

Premature deaths among the working population due to water pollution in Manila Bay cause productivity losses of six million dollars per year, it said.

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