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NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
SENATE
S. No. 1914
of tljf
23 FEB 21 P6 :28
RtCEiVED BV;
Introduced by SENATOR RAMON BONG REVILLA, JR.
AN ACT
INSTITUTIONALIZING THE PHILIPPINE ECOSYSTEM AND NATURAL 
CAPITAL ACCOUNTING SYSTEM (PENCAS), APPROPRIATING FUNDS 
THEREFOR AND FOR OTHER PURPOSES
EXPLANATORY NOTE
The national income accounts (NIA) are important indicators that determine 
the country's development. Traditionally, NIA systems measure economic 
performance by determining the aggregate value of goods and services produced in a 
country to come up with indicators of economic development such as the Gross 
Domestic Product (GDP). However, this is an incomplete picture of a development 
without considering the natural capital.
The natural capital is a crucial component of our country's wealth. In addition 
to economic and social capital, natural capital accounts (NCA) for the stock of 
renewable and non-renewable resources which provide a flow of benefits to people. 
It includes the ecosystem services that are often "invisible" to most people such as, 
flood protection, carbon sequestration and habitats for wildlife, among others.
The efforts to institutionalize the Ecosystem and Natural Capital Accounting 
System started in the 1990s. Indicators and standards generated by the NIA system 
are considered vital to economic management and policy-making. They serve as the 
basis for socio-economic planning, formulation of development programs, and policy


analysis in aid of legislation, among others. Thus, it is important that the national 
income accounts reflect a more accurate state of development and economic 
performance of the country. It should incorporate both environmental and non- 
environmental economic inputs and outputs for policymakers to make responsive, 
relevant and effective laws, plans and programs necessary for national development.
This bill seeks to institutionalize a Philippine Ecosystem and Natural Capital 
Accounting System (PENCAS) to reflect environmental inputs and outputs in the 
determination of national income accounts. It aims to develop ecosystem accounts 
and creation of NCA units within government agencies.
In view of the holistic appreciation of the country's development, the passage 
of this measure is highly recommended.
RAMON ^NG REVILUV, JR.


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
SENATE 
s. No. 1914
^ClUUe
of til" “i-fi'i’t.'n
23 FEB 21 P6:28
RliCEIVEO BY.
\J
/I
Introduced by SENATOR RAMON BONG REVILLA, JR.
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:
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Section 1. Short Title. - This Act shall be known as the "Philippine Ecosystem
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and Natural Capital Accounting System (PENCAS) Law of2023'.
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Sec. 2. Declaration of Policy. — It is hereby declared the policy of the State to:
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a. Promote the common good, conserve and develop our patrimony, as provided
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in the Preamble of the Constitution, natural capital being the bedrock of the
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national patrimony;
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b. Develop a comprehensive information system and accounting framework that
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will take into consideration the role of our natural capital, consisting of both
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environmental and natural resources, and its impact on the country's economy;
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c. Include and institutionalize natural capital accounting as part of the national
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income accounting system, strengthening and building on Republic Act No.
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10625, otherwise known as the "Philippine Statistical Act of 2013', on
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environmental accounts and statistics;
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d. Provide indicators that will facilitate the integration of environmental and
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natural resource concerns in national development planning and policy making.


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in allocation of budgets, and in designating statistics that will be produced 
regularly for an identified period of analysis;
e. Establish and improve inter-agency coordination for the purpose of linking 
economic with environmental and natural resource information and efficient 
data management among concerned government agencies and their partner 
institutions, and to 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 in 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. "Ecosysterrf is a complex community of living organisms, their physical 
environment, and all their interrelationships in a particular unit of space, and 
these biotic and abiotic components are linked together through nutrient cycles 
and energy flows;
b. x'Capital"\s a stock concept, which yields a periodic income, which is a flow 
concept;
c. "Natural capita!" \s the concept of nature as a stock that provides a flow of 
benefits to people and the economy. Natural capital consists of 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, water, energy or climate regulations, 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; and


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e. " The United Nations System of Environmentai-Economic Accounting (SEEA)"\s
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a framework that integrates both economic and environmental data to provide
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a more comprehensive and multipurpose view of the interrelationships between
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the economy, the environment and ecosystems, and the stocks and changes in
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stocks of natural assets, as they bring benefits to humanity.
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Sec. 4. Phiiippine Environmentai and Naturai Capitai Accounting System
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(PENCAS). — A system of Environmental-Economic Accounting is hereby
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institutionalized within the government bureaucracy. The Philippine Environmentai
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and Natural Capital Accounting System (PENCAS) shall be based on the existing
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environmental accounting frameworks that are covered by the UN SEEA and are
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theoretically correct and accepted as evaluated based on international standards.
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Among others, the PENCAS framework shall include a list of the officially designated
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statistics on the depreciation of natural capital, environmental protection expenditures,
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pollution and quality of land, air and sea, environmental damages, and genuine
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savings. It shall conform to and expound, expand and localize the UN SEEA. A
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roadmap and manual for further development of these indicators for each of the
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terrestrial (land and freshwater) and blue (marine) economies shall be formulated.
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The draft roadmap and international manuals shall be customized to the ecosystems
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in the Philippine archipelago that support the terrestrial and blue economies. All these
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data shall constitute the Philippines' natural capital, the conservation of which shall be
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paramount.
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Sec. 5. Objectives of the PENCAS. — The PENCAS shall supplement the current
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System of National Accounts and shall have the following major functions:
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a. To support economic-environmental policy development and decision-making;
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b. To generate the Philippine version of the UN SEEA satellite accounts covering
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both the Central Framework and the Ecosystem Accounts;
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c. To serve as a comprehensive data framework in the generation of PENCAS
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statistics; and
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d. To ensure that ecosystems and habitats, especially the ones in critical danger
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of irreparable damage, are conserved and restored, in line with the objectives
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and timelines of key Multilateral Environmental Agreements, including the


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United Nations Decade of Ecological Restoration and the 2030 Agenda for
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Sustainable Development.
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Sec. 6. National Economic and Development Authority (NEDA) as the Lead
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Agency. - NEDA shall be the lead agency in fulfilling the objectives of this Act.
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The NEDA and its instrumentalities shall ensure that PENCAS is considered in
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all its policy decisions and project evaluation systems. In order to ensure this, the
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composition of the NEDA Board shall always include the departments that generate
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the most crucial data on PENCAS accounts, such as the DENR and DA.
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Sec. 7. Involvement of Government Agencies. - The following government
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agencies and the concerned offices and bureaus under or attached to them shall be
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involved in the establishment and institutionalization of the PENCAS:
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a. National Economic and Development Authority (NEDA) as the Lead Agency;
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b. Philippine Statistics Authority (PSA);
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c. Department of Environment and Natural Resources (DENR);
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d. Department of Agriculture (DA);
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e. Department of the Interior and Local Government (DILG);
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f. Department of Science and Technology (DOST);
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g. Department of Energy (DOE);
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h. Department of Tourism (DOT);
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i. Department of Transportation (DOTr);
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j. Department of Public Works and Highways (DPWH);
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k. Department of Health (DOH);
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I. Department of Human Settlements and Urban Development (DHSUD); and,
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m. Other agencies as necessary.
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Sec. 8. Creation of the Natural Capital Units. - Natural Capital units shall be
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created within the organizational structure of the NEDA, PSA, DENR, DA, DOE, DOT,
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DOTr, DPWH, DTI, DOH, DILG, DOST, DHSUD, and other agencies as necessary.
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The head of the Natural Capital Units in the foregoing government agencies
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should be at a Division Chief or higher level. The Department Head shall designate
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existing personnel within the Department or hire new ones within its budget to operate
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its Natural Capital Unit.


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Sec. 9. Natural Capital Units at National Agencies. — The Natural Capital Units
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at the NEDA, PSA, DENR, DA, DOE, DOT, DOTr, DPWH, DTI, DOH, DILG, DOST,
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DHSUD shall:
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a. Develop and apply, with its various offices, attached agencies, GOCCs and
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beneficiaries, the data collection, development and compilation of resource or
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natural asset and ecosystem service accounts, environmental and emission
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accounts and ocean accounts, relevant to each agency's mandates, and
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formulate viable data development approaches and methodologies in
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coordination with PSA;
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b. Collaborate with the science community in conducting studies and research in
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support of policy development related to PENCAS;
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c. Ensure that sustainable development principles, especially regenerative
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resource use, resource conservation and climate, environmental and indigenous
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biodiversity considerations, are integrated in all its bureaus and offices and in
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their policy, national and project planning and implementation based on
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PENCAS results; and strengthen its statistical capabilities, especially regulatory
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monitoring to provide environmental and natural resources data and accounts
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to other national government agencies, local government units, private sector,
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civii society, and other data users;
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d. Prioritize the data generation for the PENCAS accounts for the blue economy,
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particularly for areas of national patrimony most in danger of exploitation and
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appropriation, such as the West Philippine Sea and the Philippine Rise;
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e. Institutionalize open data for the studies and research in support of policy
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development related to PENCAS;
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The DILG shall assist the local governments in building capacity and performing
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the above functions as far as they are able in order to build their own PENCAS
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accounts. It shall also consolidate local government data and statistics and compare
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these with the national accounts as generated by the other agencies.
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Sec. 10. Staffing Pattern for Natural Capital Units. - The agencies concerned
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shall, as much as practicable, utilize existing qualified employees for staffing the
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Natural Capital Units. In case, however, of the lack of qualified employees who have
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the skills and capabilities required of the functions of the Units, the concerned agency


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shall be allowed to include new plantilla items in accordance with the prescribed
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procedures therefore.
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Sec. 11. Functions of the National Economic Development Authority and the
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NEDA Board. - The National Capital Unit at the NEDA shall:
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a. Coordinate the conduct of consultations, orientations and training seminars on
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the PENCAS and its implementation for the national government agencies, local
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government units and other concerned institutions as well as on request by the
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private sectors and civil society organizations, upon their request;
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b. Coordinate the conduct of studies and research in support of policy
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development related to PENCAS and provide training for non-governmental
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entities on generating natural capital data and statistics;
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c. Establish a mechanism for integration of environmental and regenerative
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resource conservation considerations in national, regional, local and sectoral
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planning, policy, project development and implementation based on PENCAS
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results, particularly assuring that legally extracted resources and energy are
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sufficient for the plans for their sustainable use;
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d. Formulate and update indicators on the economy-environment interactions and
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regenerative and sustainable development indices;
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e. Provide technical services to the
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i. Development Budget Coordination Committee (DBCC) for the integration
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of environment, ecosystems, natural capital, and climate change in
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macroeconomic planning and allocation of expenditures and capital
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outlays;
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ii. Investments Coordinating Committee that would review completeness
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of project-evaluation and ensure that it is inclusive of economic benefits
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and costs, sources of proposed natural resources, risks and uncertainty
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due to climate change, natural capital, environmental, biodiversity and
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social safeguards, justification of use of non-renewable resource, and
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matching of natural capital supply and demand; and,
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Hi. any Task Forces or deputized or contracted entities, which may create
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or partner with for the coordinated functioning of the data-gathering
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agencies and quality decision-making


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Sec. 12. Functions of the Philippine Statistics Authority (PSA). — The Natural
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Capital Unit at the PSA shall have a pivotal role in the implementation of the PENCAS:
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a. Compile and collate PENCAS Accounts, and study and formulate viable
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approaches and methodologies for the PENCAS;
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b. Formulate templates, guidelines and digital aids to ensure that all units,
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especially local government, generating PENCAS data do so in a manner that
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can be efficiently consolidated, compared and analyzed, and ensure public
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accessibility for these tools;
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c. Explore ways and means to modify and improve current environmental and
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economic statistics, in coordination with the concerned data producers and
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users, including those in the academe, private sector, and non-governmental
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organizations;
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d. Include natural resource and environment-related questions in the PSA's census
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and surveys, such as, but not limited to. Census of Establishments, Annual
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Survey of Philippine Business and Industry, Family Income and Expenditure
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Survey, Labor Force Survey, Survey on Tourism Establishments, Surveys of
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Household and Establishment Energy Consumption, Fisheries and Aquaculture
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Surveys, Agriculture, Livestock and Poultry surveys. Community Based
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Monitoring System, and any surveys these may change into or added to them;
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e. Collect data up to the fourth-digit level of the Philippine Standard for Industrial
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Classification particularly for data needed in the ocean accounts, and update
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the Input-Output and Supply and Use tables regularly;
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f. Develop a satellite account for the oceans, including ocean-based and ocean-
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related economic activities or sectors, coastal and marine ecosystems (e.g.,
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mangroves, seagrass, coral reefs, tidal flats, etc.), and marine water quality;
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g. Enhance the water accounts to include both water resources (quantity), water
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quality for surface water and groundwater (water asset account), and water
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supply and use account, including water supply in relation to climate trends of
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extreme climatic events in coordination with DENR and its Environmental
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Management Bureau and National Water Resources Board, and DPWH and its
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Bureau of Research and Standards;


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h. Update the Input-Output table regularly, incorporating the PENCAS accounts;
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and,
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i. Serve as a repository of all PENCAS-related data and materials through the
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National Statistical Information Center and make the PENCAS data available on
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the PSA website.
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Sec. 13. Role of the Local Government Units. - In the planning and local
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legislation duties, local governments shall endeavor to create and populate PENCAS
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accounts, in compliance with templates and guidelines from the PSA and DILG, and in
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addition, employ other innovative measures and methods of resource valuation,
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damage estimation, ecosystem services and natural capital accounting to highlight
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their ecological competitive edge.
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Sec. 14. Data and Research Support. - The PSA, in coordination with the
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involved agencies, shall designate the required environment and economic statistics
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in the agencies and bureaus that shall be responsible for generating such data. The
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Department of Budget and Management (DBM) shall ensure that such research and
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data management are supported so as to prevent government spending that would
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unduly compromise PENCAS accounts and ecosystem services or the deterioration of
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the national patrimony.
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Sec. 15. Government Planning Mechanisms and the Environmental Impact
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Assessment System. - In all government planning, considerations of PENCAS shall be
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included. In the Environmental Impact Assessment System, the DENR shall ensure
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that the natural environment, ecosystem services and natural capital are framed as
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opportunities, benefits or assets as opposed to being merely a constraint or backdrop
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to absorb impacts. The Commission shall ensure a wide availability of tools, methods
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and skills that can support the consideration of ecosystem services as part of the
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Environmental Impact Assessment and ensure the inclusion of such in the
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development of the Implementing Rules and Regulations (IRR), further including in
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such rules accounting for activities that may degrade the natural capital considerably
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despite not being under the coverage of the Philippine EIS System.
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Sec. 16. PENCAS in the Educational System. - The Department of Education
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(DepEd), Commission on Higher Education (CHED) and Professional Regulation
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Commission (PRC) shall lead in mainstreaming PENCAS in all relevant modules.


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courses, curriculum, training and licensure examination. They may establish
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partnerships with different educational institutions and private entities for learning and
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development in forms of resource sharing, module and training development,
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standards development, and other similar forms.
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Sec. 17. Participatory Mechanisms and Citizen Remedies. - Each Natural Capital
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Unit shall institute consultative mechanisms, mass collaboration measures and digital
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comment and recommendation solicitations to effectively popularize PENCAS and
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ensure wide comprehensibility and usage of the accounts. Any citizen shall have the
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right to information on any accounts generated under this Act, have the standing to
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compel the performance of any of the mandates under this Act, and seek justification
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from any government agency who may have ignored or neglected PENCAS data in
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their policy or decision-making. Major PENCAS accounts, results on nature's wealth
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and the economic value of ecosystem services shall be released along with all releases
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of national economic data, such as GNP, GDP and other often-released measures of
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the state of the country's economic health, and highlight the contribution of resources
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and ecosystems to the economy, income, and employment.
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Sec. 18. Rights of Nature. - Nothing in this Act shall be construed to mean that
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nature has no intrinsic value separate and distinct from its economic value, or that it
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loses interdependencies and pricelessness by such valuation. Whenever data or
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accounts tend to show that valuation of ecosystems or discrete and identified life-
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support mechanisms will commodify and/or degrade them, any citizen is authorized
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to submit a registration to the Commission for the latter's recognition of such intrinsic
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value and the right of such ecosystem or mechanism to exist and maintain its integrity,
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which registration the Commission is required to accept. The generated data and
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accounts can still be used but only for the purpose of the recognition of such rights
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rather than for commodification or ecologically unacceptable trade-offs.
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Sec. 19. Appropriations. - The amount necessary to implement this Act shall
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be sourced from the excesses in funds, such as the funds under Republic Act 9147,
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otherwise known as the " Wiidiife Resources Conservation and Protection Act',
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Republic Act 8749, otherwise known as the "Philippine dean Air Act', and similar
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special accounts, especially the ones that have remained dormant.


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The allocations shall be based on the plan and priorities decided by the NEDA,
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in coordination with the agencies performing the functions. These shall be included
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in the budget preparation of each agency to be incorporated in the annual General
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Appropriations Act under separate fund items.
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Sec. 20. Implementing Rules and Regulations (IRR) - The NEDA, in
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consultation and coordination with appropriate national government agencies, civil
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society organizations, private sector and other stakeholders, shall promulgate the IRR
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for the effective implementation of this Act no later than one hundred eighty (180)
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days upon the effectivity of this Act.
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Sec. 21. Separability Clause. - If any part or provision of this Act is declared
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invalid or unconstitutional, the other parts hereof not affected thereby shall remain in
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full force and effect.
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Sec. 22. Repealing Clause. - Any law, presidential decree or issuance,
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executive order, letter of instruction, administrative order, rule, or regulation contrary
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to or inconsistent with the provisions of this Act are hereby repealed, modified, or
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amended accordingly.
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Sec. 23. Effectivity. - This Act shall take effect fifteen (15) days after its
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publication either in the Official Gazette or in two (2) newspapers of general circulation
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in the Philippines.
Approved,
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