Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ____
Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.,  
HON. MIGUEL LUIS R. VILLAFUERTE, HON. TSUYOSHI ANTHONY “HORI” G. 
HORIBATA AND HON. BRIAN RAYMUND S. YAMSUAN 
EXPLANATORY NOTE 
This bill seeks to establish the Philippine Ecosystem and Natural Capital Accounting 
System (PENCAS) to reflect environmental inputs and outputs in the determination of 
national income accounts.  
It seeks to address the shortcomings of conventional national income accounting 
systems by which we come up with indicators of economic development such as the 
Gross National Product (GNP) and Gross Domestic Product (GDP). These systems 
tend to disregard the natural environment which generates goods and services that 
are utilized but are not valuated in the process of producing goods and services.  
Indicators and standards generated by the national income accounting system are 
considered vital information for economic management and policy-making. It is 
therefore important that the national income accounts reflect a more accurate state of 
development and economy by incorporating both environmental and non-
environmental economic inputs and outputs. 
In view of the foregoing, the passage of this bill is earnestly sought. 
LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR. 
MIGUEL LUIS R. VILLAFUERTE 
TSUYOSHI ANTHONY “HORI” G. HORIBATA 
BRIAN RAYMUND S. YAMSUAN 
May 11, 2023
2:36 pm
8075


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ____
Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.,  
HON. MIGUEL LUIS R. VILLAFUERTE, HON. TSUYOSHI ANTHONY “HORI” G. 
HORIBATA AND HON. BRIAN RAYMUND S. YAMSUAN 
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 the 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".  
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 Republic Act No.
10625, otherwise known as the "Philippine Statistical Act of 2013", on
environmental accounts and statistics;
(d)
Provide indicators that will facilitate the integration of environmental and natural
resource concerns in national development planning and policy making, in
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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 15 
hereby defined as follows:  
(a)  
An ecosystem 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)  
Capital is a stock concept, which yields a periodic income, which is a flow 
concept; 
(c)  
Natural capital is 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 are 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) is 
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 and blue 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:  
(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 government 
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 the 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. 
 
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 Sciences Administration 
(PAGASA); and, 
(j)   
Philippine Institute of Volcanology and Seismology (PHILVOLCS) 
 
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 
at 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. 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 
DHSUD 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, environmental 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, environmental and 
indigenous biodiversity considerations, are integrated in 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 
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. 10. 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 the lack of qualified employees who have the skills 
and capabilities required of the functions of the Units, the concerned agency shall be 
allowed to include new plantilla items in accordance with the prescribed procedures 
therefor. 
 
Sec. 11. 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 government, 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 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; 
(g)   
Enhance the water accounts to include both water resources (quantity), water 
quality for surface water and groundwater (water asset account), and water 
supply and use account, including water supply in relation to climate trends of 
extreme climatic events in coordination with DENR and its Environmental 
Management Bureau and National Water Resources Board, and DPWH and its 
Bureau of Research and Standards; 
(h)   
Update the Input-Output table 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. 12. Functions of the National Economic Development Authority and the 
NEDA Board. – The National Capital Unit at the NEDA shall: 
(a)   
Coordinate the conduct of consultation, orientations and training 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 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 of non-renewable 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 functioning of the data-gathering 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. 13. Role of the Local Government Units. – In the 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. 14. 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: 
1)   
The President, or his appointee to the Commission, as Chair; 
2)   
An economic statistician; 
3)   
An environment and natural resources economist; 
4)   
A terrestrial ecologist who shall also cover freshwater ecosystems; 


 
5)   
A marine ecologist who shall cover coastal and marine ecosystems;  
6)   
An environmental lawyer. 
All commissioners shall be appointed by the President from nominations by the 
agencies or civil society conglomerations. 
 
Sec. 15. 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 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 the other instrumentalities of the government 
have access to PENCAS data and endeavor to ensure that such data are used in 
policy and decision-making, taking care, however that security measures to prevent 
poaching or foreign intrusion that could impact on our utilization and enjoyment of our 
natural resources. 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, DHSUD, NEDA and PSA in all technical 
working groups consisted 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 
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 DA'S Ocean accounts, data 
submitted by license, permit and certification applicants, and the like.  
 
Sec. 16. 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 so as to prevent government spending that would 
unduly compromise PENCAS accounts and ecosystem services or the deterioration 
of the national patrimony.  


 
 
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.  
 
Sec. 18. PENCAS in the Educational System. – The Department of Education 
(DepEd) shall cause the crafting of modules both in all levels of the formal as well as 
the 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 Commission on 
Higher Education (CHED) shall include PENCAS in all curricula and 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. 19. 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 the 
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 GNP, 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, income, and employment. 
 
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 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.  
 
Sec. 21. Funding. – ‘The creation and initial funding of the Commission shall be Two 
hundred million pesos (Php200,000,000.00) to be sourced from excesses in funds, 
such as, the funds under Republic Act No. 9147 otherwise known as the "Wildlife 
Resources Conservation and Protection Act", Republic Act No. 8749 otherwise known 
as the "Philippine Clear Air Act", and similar special accounts, especially the ones that 
have remained dormant. Two billion pesos (Php2,000,000,000.00) shall be 
apportioned by the DBM 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 (Php800,000,000.00) 
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. 22. Implementing Rules and Regulations. – The Commission shall constitute 
an inter-agency working group to craft the Implementing Rules and Regulations (IRR) 


 
of this Act, and is hereby given the authority to adopt such IRR which shall constitute 
its inclusion as part of the administrative rules and regulations of all members of the 
Committee. 
 
Sec. 23. Separability Clause. – If any provision or part hereof is held invalid or 
unconstitutional, the remainder of the law or the provision or part not otherwise 
affected shall remain valid and subsisting.  
 
Sec. 24. Repealing Clause. – Any law, presidential decree or issuance, executive 
order, letter of instruction, administrative order, rule, or regulation contrary to or 
inconsistent with the provisions of this Act are hereby repealed, modified, or amended 
accordingly.  
 
Sec. 25. Effectivity. – This Act shall take effect fifteen (15) days after its publication 
in the Official Gazette or in a newspaper of general circulation. 
 
Approved,