News & Updates

Understanding the Philippine Ecosystem and Natural Capital Accounting System Act

Hannah Rose Marian U. Furigay

The Philippine Ecosystem and Natural Capital Accounting System (“PENCAS”) Act, officially designated as Republic Act No. 11995, marks a significant legislative milestone. It institutionalizes the integration of ecosystem and natural capital considerations into economic and policy frameworks, aiming to promote sustainable development by acknowledging and valuing the country’s natural assets.

Overview of the PENCAS Act

The PENCAS framework is built upon internationally accepted environmental-economic accounting frameworks. It includes a comprehensive list of statistics that monitor the depletion, degradation, and restoration of natural capital; assess pollution levels and the quality of land, air, and water; evaluate environmental damages; and calculate adjusted net savings.

Objectives of the PENCAS Act

The Act is designed to:

  1. Enhance the development of economic, environmental, and health policies through informed decision-making;
  2. Establish a systematic approach for the collection, compilation, and analysis of physical and natural capital data, serving as a vital tool for development planning, policy analysis, and decision-making;
  3. Create a robust data framework to generate natural capital statistics and progressively integrate them into macroeconomic indicators;
  4. Develop tools and measures that aid in the protection, conservation, and restoration of ecosystems;
  5. Conduct valuations of ecosystem services, including provisioning, regulating, maintenance, and cultural services.

Citizen Remedies

The PENCAS Act guarantees every citizen the right to access any account generated, to compel the performance of any mandates under this Act, and to demand explanations from any government agency that fails to consider PENCAS accounts and indicators in their decision-making processes.

Significantly, major PENCAS accounts and evaluations of nature’s wealth, along with the economic value of ecosystem services and the costs associated with natural disasters or climate change, will be published alongside national economic data releases. These publications will emphasize how natural resources and ecosystems contribute to the country’s economy, incomes, and employment.

Rights of Nature 

Section 12 of the Act clarifies that nature possesses an inherent and intrinsic value, separate from its economic utility, underscoring a fundamental respect for the natural world beyond its financial implications.

Significance of the PENCAS Act

The PENCAS Act marks a pivotal shift towards acknowledging and incorporating the natural environment into governmental and economic planning. It aims to preserve and enhance the health and wealth of the Philippines’ natural ecosystems for future generations. For citizens, this translates to tangible benefits such as cleaner air and water, better-managed resources, and a more sustainable economic framework that respects and conserves the nation’s rich biodiversity.

The Act sets a global benchmark in environmental stewardship and economic resilience. It not only safeguards the environment but also fosters a balanced approach to economic development and ecological preservation, positioning the Philippines as a leader in sustainable growth.