1
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ____ 
Introduced by CIBAC Party-List Representative 
HON. EDUARDO “BRO. EDDIE” C. VILLANUEVA 
AN ACT  
INSTITUTIONALIZING THE PHILIPPINE ECOSYSTEM AND 
NATURAL CAPITAL ACCOUNTING SYSTEM (PENCAS), 
APPROPRIATING FUNDS THEREFOR AND FOR OTHER 
PURPOSES 
EXPLANATORY NOTE 
National income accounts measure a country’s economic activity and 
economic wellbeing, including the flows from production to consumption, 
foreign trade, and asset accumulation, which are useful in economic 
analysis, decision-making, and policy formulation. The broadest and most 
widely used measure of national income is Gross Domestic Product 
(GDP). However, this is an incomplete assessment of a country’s 
economic wellbeing as GDP only looks at one part of economic 
performance, i.e., output, and does not take into account the wealth 
underpinning this output, including a country’s natural capital. 
Natural capital includes resources such as minerals, energy, timber, 
agricultural land, fisheries, and water. It also includes ecosystem services, 
whose values are not readily captured in markets, such as air and water 
filtration, flood protection, carbon storage, and habitats for wildlife. Natural 
capital is particularly important to many developing countries as it makes 
up a large share of their total wealth and the livelihoods of several 
May 15, 2023
3:55 pm
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communities depend directly on healthy ecosystems. 1  Incorporating 
natural capital into national accounts will provide a broader picture of 
development progress than traditional measures of GDP. It will reveal how 
natural resources contribute to the economy and how the economy affects 
natural resources. 
According to the Philippine Statistics Authority (PSA), our natural 
resources composed of mineral, cropland, timber, and coastal and marine 
resources make up an estimated 19% of the nation’s wealth, contributing 
largely to our economic development. However, rapid growth and climate 
change are adding pressure to our already strained natural resources.2  
Thus, this bill seeks to develop a comprehensive information system 
and accounting framework that will take into consideration our natural 
capital and its impact on the country’s economy, institutionalizing the 
Philippine Ecosystem and Natural Capital Accounting System (PENCAS). 
The PENCAS shall follow the international standard approved by the 
United 
Nations 
Statistical 
Commission 
called 
the 
System 
of 
Environmental-Economic Accounting (SEEA). This measure also aims to 
provide indicators that will facilitate the integration of environmental and 
natural resource concerns in national development planning and policy 
making. 
In view of the foregoing, the passage of this bill is earnestly sought. 
EDUARDO “BRO. EDDIE” C. VILLANUEVA 
1 Wealth Accounting and Valuation of Ecosystem Services (WAVES). FAQs on Natural Capital Accounting. 
Available at https://www.wavespartnership.org/en/frequently-asked-questions-natural-capital-accounting-
nca. Accessed on 17 March 2023. 
2 Philippine Statistics Authority. Phil-WAVES. Available at https://psa.gov.ph/phil-waves. Accessed on 22 
March 2023. 


3
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ____ 
Introduced by CIBAC Party-List Representative 
HON. EDUARDO “BRO. EDDIE” C. VILLANUEVA 
AN ACT  
INSTITUTIONALIZING THE PHILIPPINE ECOSYSTEM AND 
NATURAL CAPITAL ACCOUNTING SYSTEM (PENCAS), 
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 
1 
Ecosystem and Natural Capital Accounting System (PENCAS) Act.” 
2 
3 
SEC. 2. Declaration of Policy. – It is hereby declared the policy of 
4 
the State to: 
5 
6 
a)
Promote the common good, conserve and develop our patrimony, as
7 
provided in the Preamble of the Constitution, natural capital being the
8 
bedrock of the national patrimony;
9 
10 
b)
Develop a comprehensive information system and accounting
11 
framework that will take into consideration the role of our natural
12 
capital, consisting of both environmental and natural resources, and
13 
its impact on the country’s economy;
14 
15 
c)
Include and institutionalize natural capital accounting as part of the
16 
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national income accounting system, strengthening and building on 
1 
Republic Act No. 10625, otherwise known as the “Philippine 
2 
Statistical Act of 2013,” on environmental accounts and statistics; 
3 
4 
d)
Provide indicators that will facilitate the integration of environmental
5 
and natural resource concerns in national development planning and
6 
policy making, in allocation of budgets, and in designating statistics
7 
that will be produced regularly for an identified period of analysis;
8 
9 
e)
Establish and improve inter-agency coordination for the purpose of
10 
linking economic with environmental and natural resource information
11 
and efficient data management among concerned government
12 
agencies and their partner institutions, and to establish an office to
13 
guide such coordination; and
14 
15 
f)
Include nature’s pricelessness, its intrinsic value, and its
16 
interdependencies in the implementation of the foregoing policies to
17 
consider that nature and ecosystems have intrinsic rights to exist,
18 
with an end in view of recognizing legal rights that serve to protect
19 
endangered ecosystems and applying the precautionary principle,
20 
especially when economic values cannot be estimated.
21 
22 
SEC. 3. Definition of Terms. – For purposes of this Act, the following 
23 
terms are hereby defined as follows: 
24 
25 
a)
Ecosystem refers to a complex community of living organisms, their
26 
physical environment, and all their interrelationships in a particular
27 
unit of space, the biotic and abiotic components of which are linked
28 
together through nutrient cycles and energy flows;
29 
30 
b)
Capital refers to a stock concept, which yields a periodic income,
31 
which is a flow concept;
32 
33 
c)
Natural Capital refers to the concept of nature as a stock that provides
34 
a flow of benefits to people and the economy, and consists of stocks
35 
of natural assets,  both biotic and abiotic. It includes air, water, soil,
36 
minerals, forests, coral reefs, seagrass beds, and all living things, and
37 
from which humans derive a wide range of goods and services, which
38 
make human life possible;
39 
40 
d)
Ecosystem Services refer to goods and services that natural capital
41 
provides, such as food, water, energy or climate regulations;
42 
43 


 
 
3
e) 
United Nations System of Environmental-Economic Accounting 
1 
(SEEA) refers to the framework that integrates both economic and 
2 
environmental data to provide a more comprehensive and 
3 
multipurpose view of the interrelationships between the economy, the 
4 
environment, and ecosystems, and the stocks and changes in stocks 
5 
of natural assets, as they bring benefits to humanity. 
6 
 
7 
SEC. 
4. 
Philippine 
Environmental 
and 
Natural 
Capital 
8 
Accounting System (PENCAS). – A system of Environmental-Economic 
9 
Accounting is hereby institutionalized within the government bureaucracy. 
10 
The Philippine Environmental and Natural Capital Accounting System 
11 
(PENCAS) shall be based on the existing environmental accounting 
12 
frameworks that are covered by the UN SEEA and are theoretically correct 
13 
and accepted as evaluated based on international standards. Among 
14 
others, the PENCAS framework shall include a list of the officially 
15 
designated statistics on the depreciation of natural capital, environmental 
16 
protection expenditures, pollution and quality of land, air and sea, 
17 
environmental damages, and genuine savings. It shall conform to, and 
18 
expound, expand and localize the UN SEEA. A roadmap and manual for 
19 
further development of these indicators for each of the terrestrial (land and 
20 
freshwater) and blue (marine) economies shall be formulated. The 
21 
roadmap and international manuals shall be customized to the 
22 
ecosystems in the Philippine archipelago that support the terrestrial and 
23 
blue economies. All these data shall constitute the Philippines' natural 
24 
capital, the conservation of which shall be paramount.  
25 
 
26 
SEC. 5. Objectives of the PENCAS. – The PENCAS shall 
27 
supplement the current System of National Accounts and shall have the 
28 
following major functions: 
29 
 
30 
a) 
To support economic-environmental policy development and 
31 
decision-making; 
32 
 
33 
b) 
To generate the Philippine version of the UN SEEA satellite accounts 
34 
covering both the Central Framework and the Ecosystem Accounts; 
35 
 
36 
c) 
To serve as a comprehensive data framework in the generation of 
37 
PENCAS statistics; and 
38 
 
39 
d) 
To ensure that ecosystems and habitats, especially the ones in 
40 
critical danger of irreparable damage, are conserved and restored, in 
41 
line with the objectives and timelines of key Multilateral 
42 
Environmental Agreements, including the United Nations Decade of 
43 


 
 
4
Ecological Restoration and the 2030 Agenda for Sustainable 
1 
Development. 
2 
SEC. 6. National Economic and Development Authority (NEDA) 
3 
as the Lead Agency. – The NEDA shall be the lead agency in fulfilling 
4 
the objectives of this Act. It shall coordinate the performance of the 
5 
functions of the involved agencies enumerated herein. 
6 
 
7 
SEC. 7. Involvement of Government Agencies. – The following 
8 
government agencies and the concerned offices and bureaus under or 
9 
attached to them shall be involved in the establishment and 
10 
institutionalization of the PENCAS: 
11 
 
12 
a) 
National Economic and Development Authority (NEDA) as the Lead 
13 
Agency; 
14 
b) 
Philippine Statistics Authority (PSA); 
15 
c) 
Department of Environment and Natural Resources (DENR); 
16 
d) 
Department of Agriculture (DA); 
17 
e) 
Department of Energy (DOE); 
18 
f) 
Department of Tourism (DOT); 
19 
g) 
Department of Transportation (DOTr);  
20 
h) 
Department of Public Works and Highways (DPWH); 
21 
i) 
Department of Trade and Industry (DTI) 
22 
j) 
Department of Health (DOH); 
23 
k) 
Department of the Interior and Local Government (DILG); 
24 
l) 
Department of Science and Technology (DOST); 
25 
m) Department of Human Settlements and Urban Development 
26 
(DHSUD); and 
27 
n) 
Other agencies as necessary.  
28 
 
29 
SEC. 8. Creation of the Natural Capital Units. – Natural Capital 
30 
Units shall be created within the organizational structure of the NEDA, 
31 
PSA, DENR, DA, DOE, DOT, DOTr, DPWH, DTI, DOH, DILG, DOST, 
32 
DHSUD, and other agencies as necessary. 
33 
 
34 
The head of the Natural Capital Units in the foregoing government 
35 
agencies shall be a Division Chief or higher. The head of the agency shall 
36 
designate existing personnel within the agency or hire new ones within its 
37 
budget to operate its Natural Capital Unit. 
38 
 
39 
SEC. 9. Natural Capital Units at National Agencies. – The Natural 
40 
Capital Units at the NEDA, PSA, DENR, DA, DOE, DOT, DOTr, DPWH, 
41 
DTI, DOH, DILG, DOST, and DHSUD shall: 
42 
 
43 


 
 
5
a) 
Develop and apply, with its various offices, attached agencies, 
1 
GOCCs and beneficiaries, the data collection, development and 
2 
compilation of resource or natural asset and ecosystem service 
3 
accounts, environmental and emission accounts, and ocean 
4 
accounts, relevant to each agency's mandates, and formulate viable 
5 
data development approaches and methodologies in coordination 
6 
with PSA;  
7 
 
8 
b) 
Collaborate with the science community in conducting studies and 
9 
research in support of policy development related to PENCAS;  
10 
 
11 
c) 
Ensure 
that 
sustainable 
development 
principles, 
especially 
12 
regenerative resource use, resource conservation and climate, 
13 
environmental and indigenous biodiversity considerations, are 
14 
integrated in all its bureaus and offices and in their policy, national 
15 
and project planning and implementation based on PENCAS results; 
16 
and strengthen its statistical capabilities, especially regulatory 
17 
monitoring to provide environmental and natural resources data and 
18 
accounts to other national government agencies, local government 
19 
units (LGUs), private sector, civil society, and other data users;  
20 
 
21 
d) 
Prioritize the data generation for the PENCAS accounts for the blue 
22 
economy, particularly for areas of national patrimony most in danger 
23 
of exploitation and appropriation, such as the West Philippine Sea 
24 
and the Philippine Rise; and 
25 
 
26 
e) 
Institutionalize open data for the studies and research in support of 
27 
policy development related to PENCAS. 
28 
 
29 
 
The DILG shall assist the LGUs in building capacity and performing 
30 
the above functions as far as they are able in order to build their own 
31 
PENCAS accounts. It shall also consolidate local government data and 
32 
statistics and compare these with the national accounts as generated by 
33 
the other agencies.  
34 
 
35 
SEC. 10. Staffing Pattern for Natural Capital Units. – The agencies 
36 
concerned shall, as far as practicable, utilize existing qualified employees 
37 
for staffing the Natural Capital Units. In case, however, of the lack of 
38 
qualified employees who have the skills and capabilities required of the 
39 
functions of the Units, the concerned agency shall be allowed to include 
40 
new plantilla items, subject to the approval of the Department of Budget 
41 
and Management (DBM) and in accordance with the rules and regulations 
42 
of the Civil Service Commission (CSC). 
43 


 
 
6
 
1 
SEC. 11. Functions of the NEDA. – The Natural Capital Unit at the 
2 
NEDA shall: 
3 
 
4 
a) 
Coordinate the conduct of consultations, orientations, and training 
5 
seminars on the PENCAS and its implementation for the national 
6 
government agencies, LGUs, and other concerned institutions, as 
7 
well as the private sector and civil society organizations, upon their 
8 
request;  
9 
 
10 
b) 
Coordinate the conduct of studies and research in support of policy 
11 
development related to PENCAS and provide training for non-
12 
governmental entities on generating natural capital data and 
13 
statistics;  
14 
 
15 
c) 
Establish a mechanism for integration of environmental and 
16 
regenerative resource conservation considerations in national, 
17 
regional, local and sectoral planning, policy, project development and 
18 
implementation based on PENCAS results, particularly assuring that 
19 
legally extracted resources and energy are sufficient for the plans for 
20 
their sustainable use;  
21 
 
22 
d) 
Formulate and update indicators on the economy-environment 
23 
interactions and regenerative and sustainable development indices; 
24 
and 
25 
 
26 
e) 
Provide technical services to the (i) Development Budget 
27 
Coordination Committee (DBCC) for the integration of environment, 
28 
ecosystems, natural capital, and climate change in macroeconomic 
29 
planning and allocation of expenditures and capital outlays; (ii) NEDA 
30 
Investments Coordinating Committee (ICC) that would review 
31 
completeness of project evaluation and ensure that it is inclusive of 
32 
economic benefits and costs, sources of proposed natural resources, 
33 
risks and uncertainty due to climate change, natural capital, 
34 
environmental, biodiversity and social safeguards, justification of use 
35 
of non-renewable resource, and matching of natural capital supply 
36 
and demand; and (iii) any Task Force/s or entities which may be 
37 
created for the coordinated functioning of the data-gathering 
38 
agencies and quality decision-making. 
39 
 
40 
SEC. 12. Functions of the PSA. – The Natural Capital Unit at the 
41 
PSA shall: 
42 
 
43 


 
 
7
a) 
Compile and collate PENCAS accounts, and study and formulate 
1 
viable approaches and methodologies for the PENCAS; 
2 
b) 
Formulate templates, guidelines and digital aids to ensure that all 
3 
units, especially local governments, generating PENCAS data do so 
4 
in a manner that can be efficiently consolidated, compared and 
5 
analyzed, and ensure public accessibility for these tools;  
6 
 
7 
c) 
Explore ways and means to modify and improve current 
8 
environmental and economic statistics, in coordination with the 
9 
concerned data producers and users, including those in the 
10 
academe, private sector, and non-governmental organizations;  
11 
 
12 
d) 
Include natural resource and environment-related questions in the 
13 
PSA's census and surveys, such as, but not limited to, Census of 
14 
Establishments, Annual Survey of Philippine Business and Industry, 
15 
Family Income and Expenditure Survey, Labor Force Survey, Survey 
16 
on 
Tourism 
Establishments, 
Surveys 
of 
Household 
and 
17 
Establishment Energy Consumption, Fisheries and Aquaculture 
18 
Surveys, Agriculture, Livestock and Poultry Surveys, and Community 
19 
Based Monitoring System; 
20 
 
21 
e) 
Collect data up to the fourth-digit level of the Philippine Standard for 
22 
Industrial Classification particularly for data needed in the ocean 
23 
accounts; 
24 
 
25 
f) 
Develop a satellite account for the oceans, including ocean-based 
26 
and ocean- related economic activities or sectors, coastal and marine 
27 
ecosystems (e.g., mangroves, seagrass, coral reefs, tidal flats, etc.), 
28 
and marine water quality;  
29 
 
30 
g) 
Enhance the water accounts to include both water resources 
31 
(quantity), water quality for surface water and groundwater (water 
32 
asset account), and water supply and use account, including water 
33 
supply in relation to climate trends of extreme climatic events in 
34 
coordination with DENR and its Environmental Management Bureau 
35 
(EMB) and National Water Resources Board (NWRB), and DPWH 
36 
and its Bureau of Research and Standards;  
37 
 
38 
h) 
Update the Input-Output table regularly, incorporating the PENCAS 
39 
accounts; and 
40 
 
41 
i) 
Serve as a repository of all PENCAS-related data and materials 
42 
through the National Statistical Information Center and make the 
43 


 
 
8
PENCAS data available on the PSA website. 
1 
 
2 
SEC. 13. Role of Local Government Units. – In the planning and 
3 
local legislation duties, the LGUs shall endeavor to create and populate 
4 
PENCAS accounts, in compliance with templates and guidelines from the 
5 
PSA and DILG, and in addition, employ other innovative measures and 
6 
methods of resource valuation, damage estimation, ecosystem services 
7 
and natural capital accounting to highlight their ecological competitive 
8 
edge. 
9 
 
10 
SEC. 14. Data and Research Support. – The PSA shall, in 
11 
coordination with the involved agencies, designate the required 
12 
environment and economic statistics in the agencies and bureaus that 
13 
shall be responsible for generating such data. The DBM shall ensure that 
14 
such research and data management are supported to prevent 
15 
government spending that would unduly compromise PENCAS accounts 
16 
and ecosystem services. 
17 
 
18 
SEC. 
15. 
Government 
Planning 
Mechanisms 
and 
the 
19 
Environmental Impact Assessment System. – In all government 
20 
planning, considerations of PENCAS shall be included. In the 
21 
Environmental Impact Assessment System, the DENR shall ensure that 
22 
the natural environment, ecosystem services, and natural capital are 
23 
framed as opportunities, benefits, or assets as opposed to being merely a 
24 
constraint or backdrop to absorb impacts. The NEDA and the DENR shall 
25 
ensure a wide availability of tools, methods, and skills that can support the 
26 
consideration of ecosystem services as part of the Environmental Impact 
27 
Assessment and ensure the inclusion of such in the development of the 
28 
Implementing Rules and Regulations (IRR), further including in such rules 
29 
accounting for activities that may degrade the natural capital considerably 
30 
despite not being under the coverage of the Philippine Environmental 
31 
Impact Statement (EIS) System. 
32 
 
33 
SEC. 16. PENCAS in the Educational System. – The Department 
34 
of Education (DepEd), Commission on Higher Education (CHED), and 
35 
Professional Regulation Commission (PRC) shall lead in mainstreaming 
36 
PENCAS in all relevant modules, courses, curriculum, training, and 
37 
licensure examination. They may establish partnerships with different 
38 
educational institutions and private entities for learning and development 
39 
in forms of resource sharing, module and training development, standards 
40 
development, and other similar forms. 
41 
 
42 
SEC. 17. Participatory Mechanisms and Citizen Remedies. – 
43 


 
 
9
Each Natural Capital Unit shall institute consultative mechanisms, mass 
1 
collaboration measures and digital comment and recommendation 
2 
solicitations to effectively popularize PENCAS and ensure wide 
3 
comprehensibility and usage of the accounts.  
4 
 
5 
Any Filipino citizen shall have:  
6 
 
7 
a) 
the right to information on any accounts generated under this Act;  
8 
 
9 
b) 
the standing to compel the performance of any of the mandates under 
10 
this Act; and  
11 
 
12 
c) 
the right to seek justification from any government agency who may 
13 
have ignored or neglected PENCAS data in their policy or decision-
14 
making.  
15 
 
16 
 
Major PENCAS accounts, results on nature's wealth and the 
17 
economic value of ecosystem services shall be released along with all 
18 
releases of national economic data, such as GNP, GDP, and other similar 
19 
indicators of economic condition, and highlight the contribution of 
20 
resources and ecosystems to the economy, income, and employment. 
21 
 
22 
SEC. 18. Rights of Nature. – Nothing in this Act shall be construed 
23 
to mean that nature has no intrinsic value separate and distinct from its 
24 
economic value, or that it loses interdependencies and pricelessness by 
25 
such valuation. Whenever data or accounts tend to show that valuation of 
26 
ecosystems or discrete and identified life- support mechanisms will 
27 
commodify and/or degrade them, any citizen is authorized to submit a 
28 
registration to the NEDA for the latter's recognition of such intrinsic value 
29 
and the right of such ecosystem or mechanism to exist and maintain its 
30 
integrity, which registration the NEDA is required to accept. The generated 
31 
data and accounts can still be used but only for the purpose of the 
32 
recognition of such rights rather than for commodification or ecologically 
33 
unacceptable trade-offs. 
34 
 
35 
SEC. 19. Appropriations. – The amount necessary to implement 
36 
this Act shall be sourced from the excesses in funds, such as the funds 
37 
under Republic Act No. 9147, otherwise known as the “Wildlife Resources 
38 
Conservation and Protection Act,” Republic Act No. 8749, otherwise 
39 
known as the “Philippine Clean Air Act,” and similar special accounts, 
40 
especially the ones that have remained dormant.  
41 
 
42 
The allocations shall be based on the plan and priorities decided by 
43 


 
 
10 
the NEDA, in coordination with the agencies performing the functions. 
1 
These shall be included in the budget preparation of each agency to be 
2 
incorporated in the annual General Appropriations Act under separate 
3 
fund items. 
4 
 
5 
SEC. 20. Implementing Rules and Regulations (IRR). – Within 
6 
ninety (90) days from the effectivity of this Act, the NEDA shall, in 
7 
consultation and coordination with appropriate national government 
8 
agencies, civil society organizations, private sector, and other 
9 
stakeholders, promulgate the IRR for the effective implementation of this 
10 
Act. 
11 
 
12 
SEC. 21. Separability Clause. – Should any provision of this Act or 
13 
part hereof be declared unconstitutional, the other provisions or parts not 
14 
affected thereby shall remain valid and effective. 
15 
 
16 
SEC. 22. Repealing Clause. – All laws, decrees, orders, and 
17 
issuances, or portions thereof, which are inconsistent with the provisions 
18 
of this Act, are hereby repealed, amended, or modified accordingly. 
19 
 
20 
SEC. 23. Effectivity. – This Act shall take effect fifteen (15) days after 
21 
its complete publication in the Official Gazette or in a newspaper of 
22 
general circulation. 
23 
 
Approved,