NINETEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
S.B. No. 412
tirj/'iariKP of Uu' -r ; n.:n>
•22 JUL 12 P4 S2
Rl-CESVtO B:
Introduced by SENATOR IMEE R. MARCOS
AN ACT
TO PROMOTE REFORESTATION AND TO INCREASE WOOD PRODUCTION
THROUGH THE ESTABLISHMENT OF TREE GROWING AGREEMENT
EXPLANATORY NOTE
Section 16, Article II of the 1987 Constitution provides that, The State shall 
protect and advance the right of the people to a balanced and healthful ecology in 
accord with the rhythm and harmony of nature."
According to the Forest Management Bureau of the Department of Environment 
and Natural Resources, the Philippines have an annual domestic demand of six million 
cubic meters of wood (6,000,000 cu. m.), compared to an annual production of one 
million cubic meters (1,000,000 cu. m.). As such, the Philippines import 80% of its 
domestic demand. The Philippines currently has eight (8) million hectares (ha) of land 
for timber. As a tropical country, studies show that it has the capacity to produce at 
least 100 cubic meters per hectare of wood annually with a reasonable return on 
Investment.
With the logging moratorium that banned the harvest and transport of trees from 
natural and residual forests for protection and preservation purposes, there is a need 
to promote tree plantations as a dominant source of local timber. However, existing 
regulations premised on the protection of natural and residual forests has the 
unintended outcome of discouraging investments in tree plantations and wood 
processing.


Promoting tree plantations can help meet the country's local wood demand to 
support the government's infrastructure projects and develop downstream wood 
industries such as furniture and housing construction. It can also decrease the 
country's reliance on imports and increase the contribution of the forestry sector to 
GDP. Jobs can be generated especially in the uplands where around 25 million Filipinos
reside in poverty.
In order to address the concerns raised above, this bill aims to promote the 
development of tree farms nationwide by providing clear, simple, and investment- 
conducive policies and guidelines to the industry.
In view of the foregoing, the approval of this bill is earnestly sought.
IMEE R./MARCOS


NINETEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
S.B. No. 412
ol tt!C
72 JLIL 12 P4S2
ftECElVcOE
Introduced by SENATOR IMEE R. MARCOS
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AN ACT
TO PROMOTE REFORESTATION AND TO INCREASE WOOD PRODUCTION 
THROUGH THE ESTABLISHMENT OF TREE GROWING AGREEMENT
Be it enacted by the Senate and House of Representatives of the Phiiippines in 
Congress assembied:
SECTION 1. Short Titie. - This Act shall be known as the "Tree Growing 
Agreement Act"
SEC. 2. Deciaration ofPoiicy. - It is the policy of the State to promote tree 
farm and tree plantation development to restore denuded forests of the public domain, 
mitigate the effects of climate change, increase wood supply, encourage green 
investments to increase livelihood opportunities in the countryside, and contribute to 
the overall socio-economic development and growth of the national economy.
SEC. 3. Estabiishment of Tree Farms and Tree Piantations. — The Department 
of Environment and Natural Resources (DENR) shall identify, survey, and map areas 
suitable for the establishment of tree farms and tree plantations in forest lands. Such 
areas shall be called Tree Growing Agreement (TGA) Areas or TGA areas. TGA areas 
for establishment shall be denuded and/or underutilized areas within forestlands 
whether tenured or not, including ancestral lands/domains, ioentified as suitable for 
tree farming, tree plantation development, agroforestry, and other forestry and 
agroforestry-related economic activities. TGA establishment may be initiated by the 
DENR or through a request of interested parties.
SEC. 4. Criteria for the Determination of Tree Growing Agreement Areas. -The 
minimum requirements for suitability of the area for the TGA are.
a. Soil quality should be suitable for tree plantation/tree farming, and
agroforestry farming;
b. Slope gradient should be below 50 percent, and elevation should be below


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1000m above sea level (asl);
c. Should not be prone to landslides or severe soil erosion; and
d. Should not be identified as protected area.
SEC. 5. Identification and Deiineation of Tree Growing Agreement Areas. - 
For purposes of identification and delineation of area for TGA, the DENR shall identify 
denuded, idle, and/or underutilized public forest that are either tenured or untenured. 
These identified areas of public forest shall be divided into meridional forest blocks of 
fifteen (15) seconds of latitude and fifteen (15) seconds of longitude at approximately 
20.7 hectares per block. Such forest blocks shall be indicated in the maps publicly 
available in the Tree Growing Agreement Registry
SEC. 6. Tenured Lands. - Forest lands covered by existing tenurial instruments 
may be covered by the Tree Growing Agreement. Existing tenurial instruments shall 
be automatically amended after a TGA has been executed between the DENR and the 
Agreement holder.
Tenure holders who are no longer interested in their tenure may surrender their 
tenure to the DENR. They may also transfer such tenurial Instrument to an interested 
party for conversion to TGA. Tenure holders who refuse to utilize or abandon their 
tenurial area may be subjected to compulsory inclusion after being notified.
A Notice of Inclusion under the TGA shall be issued by DENR to inform tenure 
holders of compulsory coverage of the whole or portion of their unutilized or 
abandoned tenured areas.
SEC. 7. Tree Growing Agreement Registry. - Forest lands that had been 
established by the DENR as TGA area shall be recorded and made available in a public 
registry to be maintained at the Provincial Environment and Natural Resources Office 
(PENRO) and supervised by the Forest Management Bureau (FMB). Such registry shall 
be accessible to the public through the internet and shall contain maps showing the 
location of all forest lands under TGA and shall also indicate forest lands that are 
already under an agreement as well as those still available for application of investors.
SEC. 8. Aiiowable Activities for the Tree Growing Agreement. 
activities within the Tree Growing Agreement area shall be limited to:
a. Tree Plantation/Farming
b. Wood Processing/Establishment of Wood Processing Plants
c. Agroforestry
d. Forestry/Agroforestry-Based Ecotourism
Allowable


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SEC. 9. Tree Growing Agreement - Interested parties whether natural or 
juridical, may enter into a Tree Growing Agreement for the development, sustainable 
utilization, and management of TGA areas and forest resources within the allotted 
TGA area.
The Agreement shall be for a minimum of two production cycles depending on 
the project as proposed in the development plan to be submitted to the DENR upon 
application for a TGA. The duration of the production cycle shall depend on the species 
intended to be planted as a main crop.
The Agreement may be renewed automatically at the option of the TGA holder 
for another minimum of two production cycles if the TGA holder has complied with 
the terms and conditions of the Agreement and with existing laws.
The TGA is transferrable to qualified transferees for value. The agreement may 
not be cancelled except for cause and with due process by the DENR. The Agreement 
holder shall develop at least 30% of the area applied for in the first three (3) years 
and utilize seventy-five (75%) of the area within five (5) years upon issuance of the 
TGA. Eighty percent (80%) of the TGA area must be devoted to the primary timber
crop.
Changes in tenure arrangements on the forest land shall not affect the status 
of the TGA unless the consent of the TGA holder is granted.
Processing of applications and awarding and issuance of TGA shall be 
accomplished at the Provincial Environment and Natural Resources Office (PENRO) of 
the DENR and completed within 120 days from the time the complete application Is
submitted.
Tree Growing Agreements shall be limited to a maximum of 25 forest blocks 
for Individuals/families, 50 forest blocks, for partnerships and cooperatives, and 250 
forest blocks for private and public corporations Including local government units 
(LGUs) and government owned and controlled corporations (GOCCs).
SEC. 10. Qualifications of Applicants. -Any natural or juridical person may 
apply for a Tree Growing Agreement. LGUs and GOCCs may also apply for the said 
Agreement. Likewise, Agreement shall be awarded transparently and equitably to both 
foreign and domestic investors.
SEC. 11. Certifications/ Permits and Licenses. - Within sixty (60) days after the 
award of the Tree Growing Agreement, the DENR PENRO shall also coordinate with 
the Environmental Management Bureau (EMB), LGUs, and the National Commission


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on Indigenous Peoples (NCIP) for assistance in the expedited issuance of 
environmental permits, local permits, and the Certification Precondition (CP).
SEC. 12. Property Rights of TGA Holders. - All timber, trees, and other forestry 
and agroforestry products produced within TGA area shall be considered as personal 
property even if they are still attached to the soil. They shall also be considered as 
personal property of the holder within the purview of Republic Act No. 11057, 
otherwise known as the Personal Property Security Act, and thus maybe traded or 
may be a subject to commodity contract, mortgage contract, and other security
arrangement.
SEC. 13. Relaxation of Restrictions and Regulations. - In order to promote 
investments and generate interest in forest related activities within the TGA areas, 
existing laws, executive issuances, local ordinances, rules and regulations are hereby 
repealed, amended, and modified accordingly for holders in order to:
a. 
Allow only a one-time inspection by the DENR PENRO prior to harvest of 
trees leading to a single clearance for harvest, processing, transport and 
sale both local and international;
b. 
Exempt from any clearance, the cutting, harvesting, gathering, collection 
and transport of non-timber forest products from the TGA area;
c. 
Exempt established tree farms and plantations from logging bans for the 
duration of the agreement;
d. 
Allow logs, lumber and other finished wood products from TGA area to 
be exported without restrictions in volume;
e. 
Allow the acceptance of planted trees in TGA areas as collateral for 
loans in all banks and non-bank financial institutions;
Allow insurance coverage of planted trees in TGA areas;
Allow the issuance of an Environmental Compliance Certificate by the 
DENR for the entire TGA area even prior to the issuance of the TGA;
h. Allow the Issuance of the Certification Precondition by the NCIP for the 
entire TGA area even prior to the issuance of the TGA;
I. Allow exemption from payment of Advanced Value Added Tax (VAT). 
The VAT shall be paid only after logs have been delivered and payment 
received by plantation owners;
j. 
Include tree farming and plantation development as pioneer areas of 
Investment under the Strategic Investments Priority Plan of the 
government;
k. 
Include tree farming and plantation development in tax incentives as 
may be provided by existing rules and regulations of different 
government agencies including but not limited the Department of 
Finance and Department of Trade and Industry; and
f.
g-


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I. Include tree farming and plantation development In other investment 
incentive packages available for agriculture and agroforestry-related 
Industries.
Provided that, relevant incentives shall also apply to private tree plantations
registered with the DENR.
SEC. 14. Royalties and Government Share. - Royalties and government share 
shall be based on the stumpage value of planted trees. Stumpage value shall be 
computed by the DENR using a formula developed with the approval of the Tree 
Plantation Promotion and Policy Board.
Royalties and government share shall be based on the 70% of gross revenues 
of the Agreement holder. The national government shall get five percent (5%) royalty, 
the tenure holder for tenured lands shall get one percent (1%), the concerned LGU 
where the TGA area is located shall get five percent (5%), if there are indigenous 
peoples in the area, two percent (2%) shall be allotted to them, and the remaining 
two percent (2%) shall go to DENR's tree plantation development programs and 
projects and carbon trading activities. Provided that, in the absence of IPs or tenure 
holders, the share allotted for them shall accrue to the DENR's account.
SEC. 15. Dispute Resolution Mechanism. - Disputes arising from conflicting 
claims and other controversies related to the issuance and the implementation of the 
TGA shall be resolved administratively in the first instance at the DENR.
Any and all disputes arising from the Implementation of TGA may be submitted 
to arbitration in the Philippines, in accordance with the relevant laws and policies. The 
process of arbitration shall be incorporated as a provision in the TGA that will be 
executed pursuant to the provisions of this Act. Provided that, upon consent of both 
parties, alternative modes of dispute resolution may be agreed upon.
SEC. 16. Premature termination of the agreement. - Upon the premature 
termination of the agreement, at no fault of the holder, all depreciable permanent and 
semi-permanent improvements such as roads, buildings, and nurseries including the 
planted and standing trees and other forest crops, introduced and to be retained In 
the area, shall be properly evaluated and the holder shall be entitled to a fair 
compensation thereof, the amount of which shall be mutually agreed upon by both 
the DENR and the agreement holder, and in case of disagreement between them, by 
arbitration through a mutually acceptable and impartial third-party adjudicator.
SEC. 17. Tree Plantation Promotion and Policy Board. - The Tree Planation 
Promotion and Policy Board, referred to as the Board, is hereby created which shall


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be the overall policy-development body for all forest lands identified for TGA. It shall 
be responsible for setting the strategic direction of programs and projects and in 
creating an enabling policy and institutional environment TGA areas.
The Board shall be composed of the following:
1. Secretary of Environment and Natural Resources as Chairperson;
2. Secretary of Trade and Industry as Co-Chairperson;
3. One representative from the wood producers;
4. One representative from the tree farmers;
5. One representative from the wood processors;
6. One representative from the furniture industry;
7. One representative from the construction industry; and
8. One representative from the professional organization of foresters.
The principal members of the Board may designate their respective alternates, 
who shall be the officials next-ln-rank to them, and whose acts shall be considered 
the acts of their principals.
The presence of the Chairperson with four (4) other members of the Board 
shall constitute a quorum and a majority vote of the members present shall be 
necessary for the adoption of any issuance, order, resolution, decision or other act of 
the Board In the exercise of its functions. The Board shall act as a collegial body. In 
the conduct of meetings, the Chairperson shall not vote except to break a tie.
The Board shall act on any matter for its consideration not later than thirty 
(30) days from the date of submission thereof.
The members of the Board shall be entitled to honoraria based on existing 
government accounting and auditing rules and regulations. The DENR shall act as 
Secretariat to the Board.
SEC. 18. Appropridtion. — The amount needed for the implementation of this 
Act shall be included in the General Appropriations Act (GAA).
SEC. 19. Implementing Rules and Regulations. - The FMB of DENR shall 
promulgate the necessary rules and regulations to carry out the provisions of this Act 
within 120 days from approval hereof.
SEC. 20. Repealing Clause. - All laws, decrees, executive order, executive 
issuances or letters of Instruction, rules and regulations or any part thereof


inconsistent with or contrary to the provisions of this Act are hereby deemed repealed, 
amended or modified accordingly.
SEC. 21. Separability Clause. - If, for any reason or reasons, any part or parts 
of this Act shall be declared unconstitutional or invalid by any competent court, other 
parts of this Act not so declared shall continue to be in full force and effect.
SEC. 22. Effectivity. - This Act shall take effect fifteen days (15) after its 
publication in two (2) newspapers of general education.
Approved,