NINETEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
HOUSE OF REPRESENTATIVES 
House Bill No._______ 
Introduced by Hon. Antonio B. Legarda Jr. 
AN ACT 
INSTITUTIONALIZING THE PHILIPPINE ECOSYSTEM AND NATURAL 
CAPITAL ACCOUNTING SYSTEM (PENCAS), MANDATING ITS USE IN 
POLICY AND DECISION-MAKING, DESIGNATING THE AGENCIES 
RESPONSIBLE FOR ITS IMPLEMENTATION, PROVIDING INSTITUTIONAL 
ARRANGEMENTS AMONG RESPONSIBLE AGENCIES, APPROPRIATING 
FUNDS THEREFOR AND FOR OTHER PURPOSES 
EXPLANATORY NOTE 
The connection between the economy and the environment is crucial. All the 
resources required for the economic production of goods and services are available 
in the environment. It is the driving force behind a nation's economic expansion, yet 
conventional accounting techniques neglect to account for the influence the 
environment has on a country's decision-making. 
Historically, a nation's economic development has been assessed using its 
Gross National Product (GNP) and Gross Domestic Product (GDP). The GNP and 
GDP provide data on the size and health of an economy, but they are only accurate 
for products and services produced, sold, and purchased within the economy. 
Climate change, waste management, and the existing rate of depletion and 
deterioration of environmental assets are not taken into account. For policymakers to 
create the responsive, pertinent, and efficient laws, policies, and programs required 
for national development, it should include both environmental and non-
environmental economic inputs and outputs to accurately gauge the economic 
growth of a country. 
Thus, in order to improve the distribution of environmental assets and 
encourage long-term sustainable economic growth, this bill seeks to institutionalize 
the Philippine Ecosystem and Natural Capital Accounting System (PENCAS) to 
July 27, 2022
4:40 pm
2604


reflect environmental inputs and outputs in the determination of national income 
accounts. 
In line with the policy adopted by its original proponent Senator Loren 
Legarda, this bill therefore likewise serves as a counter-part House Bill. It is for the 
reasons stated above that the passage of this measure is earnestly sought. 
ANTONIO B. LEGARDA JR. 


1 
NINETEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
HOUSE OF REPRESENTATIVES 
House Bill No._______ 
Introduced by Hon. Antonio B. Legarda Jr. 
AN ACT 
INSTITUTIONALIZING THE PHILIPPINE ECOSYSTEM AND NATURAL 
CAPITAL ACCOUNTING SYSTEM (PENCAS), MANDATING ITS USE IN 
POLICY AND DECISION-MAKING, DESIGNATING THE AGENCIES 
RESPONSIBLE FOR ITS IMPLEMENTATION, PROVIDING INSTITUTIONAL 
ARRANGEMENTS AMONG RESPONSIBLE AGENCIES, APPROPRIATING 
FUNDS THEREFOR AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
Section 1. Short Title. – This Act shall be known as the Philippine Ecosystem 
and Natural Capital Accounting System (PENCAS) Law of 2022, which shall adhere 
to the United Nations System of Environmental-Economic Accounting (SEEA). 
Sec 2. Declaration of Policy. – It is hereby declared the policy of the State to: 
a. Promote the common good, conserve and develop our patrimony,
as provided in the Preamble of the Constitution, natural capital
being the bedrock of the national patrimony;
b. Develop a comprehensive information system and accounting
framework that will take into consideration the role of our natural
capital, consisting of both environmental and natural resources,
and its impact on the country’s economy;
c.
Include and institutionalize natural capital accounting as part of the
national income accounting system, strengthening and building on
RA 10625 on environmental accounts and statistics;
2604


 
2 
d. Provide 
indicators 
that 
will 
facilitate 
the 
integration 
of 
environmental 
and 
natural 
resource 
concerns 
in 
national 
development planning and policymaking, in the allocation of 
budgets, and in designating statistics that will be produced 
regularly for an identified period of analysis. 
e. Establish and improve interagency coordination for the purpose of 
linking economic and environmental and natural resource 
information and efficient data management among concerned 
agencies and their partner institutions and establish an office to 
guide such coordination; and 
f. Include nature’s pricelessness, its intrinsic value, and its 
interdependencies in the implementation of the foregoing policies 
to consider that nature and ecosystems have intrinsic rights to exist, 
with an end view of recognizing legal rights that serve to protect 
endangered ecosystems and applying the precautionary principle, 
especially when economic values cannot be estimated; 
Sec. 3. Definition of Terms. – For purposes of this Act, the following terms are 
hereby defined as follows: 
a. Ecosystem - a complex community of living organisms, their 
physical environment, and all their interrelationships in a particular 
unit of space, and the biotic and abiotic components are linked 
together through nutrient cycles and energy flows 
b. Capital - a stock concept, which yields a periodic income, which is a 
flow concept 
c. Natural capital - the concept of nature as a stock that provides a flow 
of benefits to people and the economy. Natural capital consists of 
the stocks of natural assets – both biotic and abiotic. It includes air, 
water, soil, minerals, forests, coral reefs, seagrass beds, and all 
living things. It is from this natural capital that humans derive a 
wide range of goods and services, which make human life possible. 
The goods and services that natural capital provides, such as food, 


 
3 
water, energy, or climate regulation, are called ecosystem services. 
These provide people everywhere with the means for healthy lives 
and underpin all economic activity 
d. Ecosystem services - the flows of benefits, which people gain from 
natural ecosystems, while natural capital consists of the stock of 
natural ecosystems or stock of renewable and non-renewable 
natural resources from which these benefits flow 
e. The United Nations System of Environmental-Economic Accounting 
(SEEA) - a framework that integrates both economic and 
environmental data to provide a more comprehensive and 
multipurpose view of the interrelationships between the economy, 
the environment and ecosystems, and the stocks and changes in 
stocks of natural assets, as they bring benefits to humanity. 
Sec. 4. Philippine Environmental and Natural Capital Accounting System 
(PENCAS). – A System of Environmental-Economic Accounting is hereby 
institutionalized within the government bureaucracy. The Philippine Environmental 
and Natural Capital Accounting System (PENCAS) shall be based on the existing 
environmental accounting frameworks that are covered by the UN SEEA and are 
theoretically correct and accepted as evaluated based on international standards.  
Among others, the PENCAS framework shall include a list of the officially 
designated statistics on the depreciation of natural capital, environmental protection 
expenditures, pollution and quality of land, air and sea, environmental damages, 
and genuine savings. It shall conform to and expound, expand and localize the UN 
SEEA. A roadmap and manual for further development of these indicators for each 
of the terrestrial (land and freshwater) and blue (marine) economies shall be 
formulated. The draft roadmap and international manuals shall be customized to the 
ecosystems in the Philippine archipelago that support the terrestrial (land and 
freshwater) and blue (marine) economies. All these data shall constitute the 
Philippines’ natural capital, the conservation of which shall be paramount. 
Sec. 5. Objectives of the PENCAS. – The PENCAS shall supplement the current 
System of National Accounts and shall have the following major functions: 


 
4 
a. To support economic-environmental policy development and 
decision-making; 
b. To generate the Philippine version of the UN SEEA satellite 
accounts covering both the Central Framework and the Ecosystem 
Accounts; 
c. To serve as a comprehensive data framework in the generation of 
PENCAS statistics; and 
d. To ensure that ecosystems and habitats, especially the ones in 
critical danger of irreparable damage, are conserved and restored, 
in line with the objectives and timelines of key Multilateral 
Environmental Agreements, including the United Nations Decade 
of Ecological Restoration and the 2030 Agenda for Sustainable 
Development. 
Sec. 6. Involvement of Government Agencies. – The following agencies and the 
concerned offices under or attached to them shall be involved in the establishment 
and institutionalization of the PENCAS: 
a. Department of Environment and Natural Resources (DENR); 
b. Department of Agriculture (DA); 
c. Philippine Statistics Authority (PSA); 
d. National Economic and Development Authority (NEDA); 
e. Department of Energy (DOE); 
f. Department of Tourism (DOT); 
g. Department of Transportation (DOTr); 
h. Department of Public Works and Highways (DPWH), 
i. Department of Health (DOH); 
j. Department of Interior and Local Government (DILG); 
k. Department of Science and Technology (DOST); 
l. Department of Human Settlements and Urban Development 
(DHSUD); 
m. National Water Regulatory Board (NWRB); and 
n. Other agencies, as necessary. 


 
5 
Sec. 7. Duties of Specific Bureaus within the Agencies. – The following Bureaus 
shall have special mandates for natural capital accounting herein based on their 
primary functions: 
a. Bureau of Fisheries and Aquatic Resources; 
b. Bureau of Soils and Water Management; 
c. All Bureaus of the DENR, including the National Mapping and 
Resource Information Authority (NAMRIA), and National 
Water Resources Board (NWRB); 
d. National Renewable Energy Board (NREB); 
e. Research and Development Institutes and Science and 
Technology Services of the DOST; 
f. Philippine Coconut Authority (PCA); 
g. Philippine Rice Research Institute (PhilRice); 
h. National Irrigation Administration (NIA); 
i. Philippine 
Atmospheric, 
Geophysical 
and 
Astronomical 
Services Administration (PAGASA); and 
j. Philippine 
Institute 
of 
Volcanology 
and 
Seismology; 
(PHIVOLCS) 
Sec. 8. Creation of the Natural Capital Units. – Natural Capital units shall be 
created within the organizational structure of the DENR, DA, PSA, NEDA, DOE, 
DOT, DOTr, DPWH, DTI, DOH, DILG, DOST, DHSUD, and other agencies as 
necessary. 
The head of the Natural Capital Units in the foregoing government agencies 
should be a Division Chief or higher level. The Department Head shall designate 
existing personnel within the Department or hire new ones within its budget to 
operate its Natural Capital Unit. 
Sec. 9. Staffing Pattern for Natural Capital Units. – The agencies concerned shall, 
as much as practicable, utilize existing qualified employees for staffing the Natural 
Capital Units. In case, however, of a lack of qualified employees who have the skills 
and capabilities required for the functions of the Units, the concerned agency shall 


 
6 
be allowed to include new plantilla items in accordance with the prescribed 
procedures therefor. 
Sec. 10.  Functions of the Philippine Statistics Authority (PSA). – The Natural 
Capital Unit at the PSA shall have a pivotal role in the implementation of the 
PENCAS: 
a. Compile and collate PENCAS Accounts, and study and formulate viable 
approaches and methodologies for the PENCAS; 
b. Formulate templates, guidelines, and digital aids to ensure that all units, 
especially local governments, generating PENCAS data do so in a 
manner that can be efficiently consolidated, compared and analyzed, 
and ensure public accessibility for these tools; 
c. Explore ways and means to modify and improve current environmental 
and economic statistics, in coordination with the concerned data 
producers and users, including those in the academe, private sector, and 
non-governmental organizations; 
d. Include natural resource and environment-related questions in the PSA's 
census and surveys, such as, but not limited to, Census of 
Establishments, Annual Survey of Philippine Business and Industry, 
Family Income and Expenditure Survey, Labor Force Survey, Survey on
 Tourism Establishments, Surveys of Household and Establishment 
Energy Consumption, Fisheries and Aquaculture Surveys, Agriculture, 
Livestock and Poultry surveys, Community-Based Monitoring System, 
and any surveys these may change into or be added to them. 
e. Collect data up to the fourth-digit level of the Philippine Standard for 
Industrial Classification, particularly for data needed in the ocean 
accounts, and update the Input-Output and Supply and Use tables 
regularly. 
f. Develop a satellite account for the oceans, including ocean-based and 
ocean-related economic activities or sectors, coastal and marine 
ecosystems (e.g. mangroves, seagrass, coral reefs, tidal flats, etc.), and 
marine water quality; 


 
7 
g. Enhance the water accounts to include both water resources (quantity) 
and water quality for surface water and groundwater (water asset 
account) and water supply and use account, including water supply in 
relation to climate trends 
or 
extreme climatic events 
in
 coordination with DENR (Environmental Management Bureau and 
National Water Resources Board), and DPWH (Bureau of Research and 
Standards); 
h. Update the Input-Output tables regularly, incorporating the PENCAS 
accounts; and; 
i. Serve as a repository of all PENCAS-related data and materials through 
the National Statistical Information Center and make the PENCAS data 
available on the PSA website; 
Sec. 11. Natural Capital Units at National Agencies. – The Natural Capital Units 
at the DENR, DA, NEDA, DILG, DOE, DOT, DOTr, DPWH, DTI, DOH, DILG, 
DOST, and DHUSD shall: 
a. Develop and apply, with its various offices, attached agencies, GOCCs, 
and beneficiaries, the data collection, development and compilation of 
resource or natural asset and ecosystem service accounts, environment 
and emission accounts and ocean accounts, relevant to each agency’s 
mandates, and formulate viable data development approaches and 
methodologies in coordination with PSA; 
b. Collaborate with the science community in conducting studies and 
research in support of policy development related to PENCAS; 
c. Ensure 
that 
sustainable 
development 
principles, 
especially 
regenerative resource use/resource conservation and climate and 
environmental and indigenous biodiversity considerations, are 
integrated into all its bureaus and offices and in their policy, national 
and project planning, and implementation based on PENCAS results; 
and Strengthen its statistical capabilities, especially regulatory 
monitoring, to provide environmental and natural resources data and 


 
8 
accounts to other national government agencies, local government 
units, private sector, civil society, and other data users; 
d. Prioritize the data generation for the PENCAS accounts for the blue 
economy, particularly for areas of national patrimony most in danger 
of exploitation and appropriation, such as the West Philippine Sea and 
the Philippine Rise; 
e. Institutionalize open data for the studies and research in support of 
policy development related to PENCAS. 
The DILG shall assist the local governments in building capacity and 
performing the above functions as far as they are able in order to build their own 
PENCAS accounts. It shall also consolidate local government data and statistics and 
compare these with the national accounts as generated by the other agencies. 
Sec. 12. Duties of Specific Bureaus within the Agencies. – The following Bureaus 
shall have special mandates for natural capital accounting herein based on their 
primary functions: 
a. Bureau of Fisheries and Aquatic Resources 
b. Bureau of Soils and Water Management 
c. All Bureaus of the DENR, especially the National Mapping and 
Resource Information Authority (NAMRIA) 
d. National Renewable Energy Board (NREB) 
e. Research and Development Institutes and Science and Technology 
Services of the DOST; 
f. Philippine Coconut Authority (PCA); 
g. Philippine Rice Research Institute (PhilRice); 
h. National Irrigation Administration (NIA); 
i. National Water Resources Board (NWRB); 
j. Philippine Atmospheric, Geophysical and Astronomical Services 
Administration (PAGASA); and 
k. Philippine Institute of Volcanology and Seismology (PHIVOLCS) 
 


 
9 
Sec. 13. Functions of the National Economic Development Authority and the NEDA 
Board. – The Natural Capital Unit at the NEDA shall: 
a. Coordinate the conduct of consultations, orientations, trainings, and 
seminars on the PENCAS and its implementation for the national 
government agencies, local government units, and other concerned 
institutions as well as on request by the private sectors and civil society 
organizations, upon their request; 
b. Coordinate the conduct of studies and research in support of policy 
development related to PENCAS and provide training for non-
governmental entities on generating natural capital data and statistics; 
c. Establish a mechanism for integration of environmental and 
regenerative resource conservation considerations in national, regional, 
local and sectoral planning, policy, project development, and 
implementation based on PENCAS results, particularly assuring that 
legally extracted resources and energy are sufficient for the plans for 
their sustainable use; 
d. Formulate and update indicators on the economy-environment 
interactions and regenerative and sustainable development indices; 
e. Provide technical services to the (i) Presidential Commission on 
Natural Capital, (ii) Development Budget Coordination Committee 
(DBCC) for the integration of environment, ecosystems, natural capital, 
and climate change in macroeconomic planning and allocation of 
expenditures and capital outlays,  (iii)  Investments  Coordinating  
Committee  that  would  review the completeness of project-evaluation 
and ensure that it is inclusive of economic benefits and costs, sources of 
proposed natural resources, risks and uncertainty due to climate 
change, natural capital, environmental, biodiversity and social 
safeguards, justification of use if nonrenewable resource, and matching 
of natural capital supply and demand, and (iv) any Task Forces or 
deputized or contracted entities, which the Presidential Commission  
on  Natural  Capital  may  create  or  partner  with  for  the coordinated 


 
10
functioning of the data-generating agencies and quality decision-
making; and 
f. The NEDA Board and its instrumentalities shall ensure that PENCAS is 
considered in all its policy decisions and project evaluation systems. In 
order to ensure this, the composition of the NEDA Board shall always 
include the departments that generate the most crucial data on 
PENCAS accounts, such as the DENR and DA. 
Sec. 14. Data and Research Support. – The PSA, in coordination with the 
involved agencies, shall designate the required environment and economic statistics 
in the agencies and bureaus that shall be responsible for generating such data. The 
Department of Budget and Management (DBM) shall ensure that such research and 
data management are supported to prevent government spending that would 
unduly compromise PENCAS accounts and ecosystem services or the deterioration 
of the national patrimony. 
Sec. 15. Creation of the Presidential Commission on Natural Capital Accounting. – 
A commission is hereby created to ensure the fulfillment of the objectives of this law 
and coordinate the performance of the functions of the agencies enumerated. It shall 
have the following composition: 
a. 
The President or his appointee to the Commission as Chair; 
b. 
An Economic statistician 
c. 
An Environment and Natural Resources Economist 
d. 
A Terrestrial ecologist who shall ALSO cover freshwater 
ecosystems; 
e. 
A Marine ecologist who shall cover coastal and marine 
ecosystems; 
f. 
An Environmental Lawyer; 
All Commissioners shall be appointed by the President from nominations by 
the agencies or civil society conglomerations. 
Sec. 16. Functions of the Commission. – The Commission shall provide 
directions for the coordinated functioning and implementation of the Natural 
Capital Units. It shall create ad-hoc or permanent inter-agency committees and task 


 
11
forces that will support the data and technical requirements of the departments and 
their Natural Capital Units. It shall ensure that the Officials, as well as other 
instrumentalities of government, have access to PENCAS data and endeavor to 
ensure that such data are used in policy and decision-making, taking care, however, 
that there are security measures to prevent poaching or any foreign intrusion that 
could impact our utilization and enjoyment of our natural resources.  
The designated Undersecretary level officials in charge of policy and 
planning in their agencies shall represent the member agencies for DENR, DA, DOE, 
DOT, DOTr, DPWH, DOST, DTI, DILG, DOH, DHUSD, NEDA, and PSA in all 
technical working groups constituted by the Commission.  
The Commission shall compile existing surveys and data generation activities 
of all government agencies to ensure that the information needed for generating the 
accounts are efficiently captured, including but not limited to existing physical 
accounts and monetary accounts, data from the Community-Based Monitoring 
System, DENR’s Biodiversity Assessment and Monitoring System and Socio-
Economic Assessment and Monitoring System, and monitoring data from projects, 
such as the Wealth Accounting and Valuation of Ecosystem Services (WAVES), 
Environment Natural Resource Accounting Project (ENRAP) and the National 
Greening Program, the Department of Agriculture’s Ocean accounts, data submitted 
by license, permit and certification applicants, and the like.  
Sec. 17. Government Planning Mechanisms and the Environmental Impact 
Assessment System. – In all government planning, considerations of PENCAS shall be 
included. In the Environmental Impact Assessment System, the DENR shall ensure 
that the natural environment, ecosystem services, and natural capital are framed as 
opportunities, benefits or assets as opposed to being merely a constraint or backdrop 
to absorb impacts. The Commission shall ensure a wide availability of tools, 
methods and skills that can support the consideration of ecosystem services as part 
of the Environmental Impact Assessment and ensure the inclusion of such in the 
development of the Implementing Rules and Regulations (IRR), further including in 
such rules accounting for activities that may degrade the natural capital 
considerably despite not being under the coverage of the Philippine EIS System. 


 
12
 
Sec. 18. Role of the Local Government Units. – In their planning and local 
legislation duties, local governments shall endeavor to create and populate PENCAS 
accounts, in compliance with templates and guidelines from the PSA and DILG, and 
in addition, employ other innovative measures and methods of resource valuation, 
damage estimation, ecosystem services and natural capital accounting to highlight 
their ecological competitive edge. 
Sec. 19. PENCAS in the Educational System. – The Department of Education 
(DepEd) shall cause the crafting of modules in all levels of the formal and non-
formal education spheres to ensure that all citizens, and especially the academe, are 
able to help change the definition of economic success towards defining wealth 
inclusively, to generate, analyze and use the PENCAS to its maximum effect and 
assess the systemic extent of nature-related financial risk. The CHED shall include 
PENCAS in all curricula and the DepEd shall ensure that PENCAS is incorporated 
in current courses on these subjects with the objective of generating credible, 
decision-grade data, which government, businesses and financial institutions and 
civil society can use to fully integrate nature-related considerations into their 
decision-making and assess and disclose their use of and impact on nature.  
The Professional Regulation Commission (PRC) shall ensure that PENCAS is 
included in all professional examinations. 
Sec. 20. Rights of Nature. – Nothing in this Act shall be construed to mean 
that nature has no intrinsic value separate and distinct from its economic value, or 
that it loses interdependencies and pricelessness by such valuation. Whenever data 
or accounts tend to show that the valuation of ecosystems or discrete and identified 
life-support mechanisms will commodify and or degrade them, any citizen is 
authorized to submit a registration to the Commission for the latter’s recognition of 
such intrinsic value and the right of such ecosystem or mechanism to exist and 
maintain its integrity, which registration the Commission is required to accept. The 
generated data and accounts can still be used but only for the purpose of the 
recognition of such rights rather than for commodification or ecologically 
unacceptable trade-offs. 


 
13
 
Sec. 21. Participatory Mechanisms and Citizen Remedies. – Each Natural Capital 
Unit shall institute consultative mechanisms, mass collaboration measures, and 
digital comment and recommendation solicitations to effectively popularize 
PENCAS and ensure wide comprehensibility and usage of the accounts.  
Any citizen shall have to right to information on any accounts generated 
under this Act, have the standing to compel the performance of any of the mandates 
under this Act, and seek justification from any government agency who may have 
ignored or neglected PENCAS data in their policy or decision-making. Major 
PENCAS accounts, results on nature’s wealth and the economic value of ecosystem 
services shall be released along with all releases of national economic data, such as 
GNI, GDP and other often-released measures of the state of the country’s economic 
health and highlight the contribution of resources and ecosystems to the economy, 
incomes and employment. 
Sec. 22. Appropriations. – The creation and initial funding of the Commission 
shall be Two Hundred Million Pesos (Php 200,000,000.00) to be sourced from 
excesses in funds, such as, the funds under RA 9147, RA 8749 and similar special 
accounts, especially the ones that have remained dormant.  Two Billion Pesos (Php 
2,000,000,000.00) shall be apportioned by the Department of Budget and 
Management for the performance of agency functions required herein for the 
generation of data through expeditions and scientific investigations in the 
terrestrial/freshwater and marine disciplines. Eight Hundred Million Pesos (Php 
800,000,000.00) shall be apportioned to the agencies for the creation and 
improvement of their Natural Capital Units. The apportionment and allocations 
shall be based on the plan and priorities decided by the Commission in coordination 
with the agencies performing the functions. These shall be included in the budget 
preparation of each agency to be incorporated in the annual general appropriations 
act under separate fund items. 
Sec 23. Implementing Rules and Regulations (IRR). –The Commission shall 
constitute an interagency working group to craft the IRR and is hereby given the 


 
14
authority to adopt such IRR, the adoption of which shall constitute its inclusion as 
part of the administrative rules and regulations of all members of the Committee. 
 
Sec. 24. Separability Clause. – If any provision of this Act is declared 
unconstitutional or otherwise invalid, the validity of the other provisions shall not 
be affected thereby. 
Sec. 25. Repealing Clause. – All other laws, decrees, orders, rules and 
regulations, other issuances, or parts thereof inconsistent with the provisions of this 
Act are hereby repealed or modified accordingly. 
Sec. 26. Effectivity. – This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a newspaper of general circulation. 
 
Approved,