NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
s. No. 529
r 
of t!)f g i. U tM .UT
'22 JUL 13 P3 *04
Introduced by SENATOR CYNTHIA A. VILLAR
AN ACT
TO PROMOTE REFORESTATION AND TO INCREASE WOOD PRODUCTION 
THROUGH THE ESTABLISHMENT OF TREE GROWING
EXPLANATORY NOTE
The Philippine forestry sector is in a dire situation. Forest cover is only at 7 
million (m) hectares (ha) or 23% of the country's total land area. From 2013-2020, 
73% of tree cover loss, at 64,445 ha annual average, is found in natural forests.1 
This is equivalent to 276 metric tons of COze emissions. To worsen things, the 
country is one of the most vulnerable areas to adverse effects of climate change 
with an average of 20 typhoons annually, five of which are destructive. In terms of 
wood supply, the country is unable to meet its national wood requirements since 
2006. From 2006-2020, there is ah average deficit of 1.77m cubic meters of wood.2 
This increased to 2m cubic meters of wood in 2010-2019. Of the available wood 
supply, 83% are imported.3 The sector's contribution to the economy is minimal at 
an average of Php 2 billion or 0.04% from 2000-2021.4 Past and existing 
government reforestation and tree plantation programs are insufficient to provide for 
the growing wood demands of the country. Although the government has been 
encouraging the establishment of tree plantations, private sector is hesitant to go
1 Global Forest Watch. "Tree cover loss in Philippines". Accessed on 12/12/ 2021 from www.globalforestwatch.org.
2 Forest Management Bureau, "Plans and Programs for the Philippine Wood Industry." Lecture, Philippine Wood Expo 2019, 
Softel Hotel, Pasay City, October 21, 2019.
3 Department of Natural Resources, "Situationer of Forestry Investment in the Philippines", Facet ook, November 17, 2021, 
https;//www.facebook .com/DENROfficial/videos/1154495488408727.
4 At constant 2018 prices. Philippine Statistics Authority (2021). National Accounts of the Philippines. Quezon City: Phiiippines 
Statistics Authority.


into tree farm and plantation development. A major culprit is the insecure property 
rights in forest lands (State-owned lands).
A solution is to guarantee the security of property rights in forest lands by: 
1) establishing a Tree Growing Agreement (TGA) where the right to plant and 
harvest trees is respected; 2) treating planted trees as personal property where they 
can be personally owned at the moment they are planted; 3) establishing a Tree 
Plantation Promotion and Policy Board to develop and implement policies that would 
promote tree farm and plantations; 4) appropriating royalties and government share 
based on stumpage value to relevant stakeholders such as the national government, 
local government units, the tenure holders, the indigenous peoples, and the 
Department of Environment and Natural Resources; and 5) providing incentives to 
TGA holders. This bill seeks to encourage tree planting more especially in the 
countryside.
The proposed measure is expected to contribute to increasing the country's 
forest cover and mitigating the ill-effects of climate change by preventing severe 
flooding, landslides, and soil erosion, and enhancing carbon absorption. It would 
also protect the conservation areas and biodiversity, prevent the emergence of 
zootonic diseases such as COVID-19, support energy production & food security, and 
provide spaces for health, wellness, and recreation. Moreover, the untenured 5.5m 
ha of production forest lands5 will be utilized in part or whole for tree 
farm/plantation development thereby increasing wood production. This is relevant 
in meeting the country's wood demand, generating employment especially in the 
uplands where insurgency is rampant, supporting government infrastructure 
programs, and developing agroforestry and downstream wood industries such as 
furniture and housing construction.
With the country's natural endcwm.ents, a tropical climate with rainfall 
distributed evenly, and with rich soil condition favorable for forests to flourish, and a 
young population, with majority or 70.62m people belonging to the working ages of
Philippine Forestry Statistics 2020,” Forest Management Bureau, https://drive.google.eom/flle/d/lz01M24aUeBNV-ciH8XNpo lqiNt8g7NZ19/view.


15 to 646, that could serve as labor pool for tree planting maintenance, the 
Philippines possesses the capacity to becomie a booming forest superpower as it 
used to be in the 1950s-60s. The State recognizes the crucial role of the private 
sector as its partner in revitalizing the forestry sector following sustainable forest 
management principles.
Hence, I urge the approval of this bill.
cyn™ia a. villar
Ben 0. cle Vera, "World Bank: Young population to boost PH economic development" Philippine Daily Inquirer, May 21 2021. 
https://business.inc]uirer.net/323229/world-banl<-youir:.)-population-to-boost-ph-economic-
development#;~:toxt=%E2%80%9CThc%20Pbilippines%20rcpresents%20n%20young,miIlion%20age d%2065%20and%20above.


NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
s. No. 529
S, ,A
iii- .ft. 
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L
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P
72 JUL13 P3 *04
RliCElVEDBr/.
Introduced by SENATOR CYNTHIA A. VILLAR
AN ACT
TO PROMOTE REFORESTATION AND TO INCREASE WOOD PRODUCTION 
THROUGH THE ESTABLISHMENT OF TREE GROWING
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 "Tree Growing
2 
Agreement Act".
3 
Sec. 2. Declaration of Policy. - It is the policy of the State to promote tree
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farm and tree plantation development to restore denuded forests of the public
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domain, mitigate the effects of climate change, increase wood supply, encourage
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green investments to increase livelihood opportunities in the countryside, and
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contribute to the overall socio-economic development and growth of the national
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economy.
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Sec. 3. Definition of Terms. -
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a) 
Crop - is a plant or plant product that can be grown and harvested for
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profit subsistence.
•r, 1' ;■
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b) 
Forest Flock - is an area of contiguous forest land measuring fifteen
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(15) Seconds of latitude and fifteen (15) seconds of longitude at
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appro>amately 20.7 hectares per block.
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c) 
Forest land - includes the public forest, the permanent forest or forest
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reserves, forest reservations, and all other lands not classified as
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agricultural lands, mineral lands, and national parks.
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d) 
Planted Tree - a tree planted and raised by man.
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e) 
Tree Farm - refers to any small forest land or tract of land purposely
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planted to tree crops.
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f) 
Tree Growing Agreement- refers to an agreement entered into by and
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between a natural or juridical person and the DENR wherein the latter
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grants to the former the right to plant and harvest trees in a tract of
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forest land.
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g) 
Tree Plantation - any tract of forest land purposely and extensively
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planted to timber crops primarily to supply the raw material
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requirements of existing or proposed processing plants and related
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industries.
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Sec. 4. Establishment of Tree Farms and Tree Plantations. - The Department
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of Environment and Natural Resources (DENR) shall identify survey and map areas
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suitable for the establishment of tree farms and tree plantations in forest lands. Such
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areas shall be called Tree Growing Agreement Areas or TGA areas. TGA areas for
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establishment shall be denuded and/or underutilized areas within forestlands,
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whether tenured or not, including ancestral lands/domains, identified as suitable for
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tree farming, tree plantation development, agroforestry, and other forestry and
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agroforestry-related economic activities. TGA establishment may be initiated by the
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DENR or through a request of interested parties.
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Sec. 5. Criteria for the Determination of Tree Growing Agreement Areas. -
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The minimum requirements for suitability of the area for the TGA are:
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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 1000m above sea level (asl);


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c) 
Should not be prone to landslides or severe soil erosion; and
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d) 
Should not be identified as protected area.
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Sec. 6. Identification and Deiineation of Tree Growing Agreement Areas. -
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For purposes of identification and delineation of area for TGA, the DENR shall
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identify denuded, idle, and/or underutilized public forest that are either tenured or
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untenured. These identified areas of public forest shall be divided into meridional
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forest blocks of fifteen (15) seconds of latitude and fifteen (15) seconds of longitude
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at approximately 20.7 hectares per block. Such forest blocks shall be indicated in the
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maps publicly available in the Tree Growing Agreement Registry.
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Sec. 7. Tree Growing Agreement Registry. - Forest lands that had been
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established by the DENR as TGA area shall be recorded and made available in a
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public registry to be maintained at the Provincial Environment and Natural Resources
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Office (PENRO) and supervised by the Forest Management Bureau (FMB). Such
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registry shall be accessible to the public through the internet and shall contain maps
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showing the location of all forest lands under TGA and shall also indicate forest lands
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that are already under an agreement as well as those still available for application of
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investors.
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Sec. 8. Allowable Activities for the Tree Growing Agreement - Allowable
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activities within the Tree Growing Agreement area shall be limited to:
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a) 
Tree Plantation/Farming
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b) 
Wood Processing/Establishment of Wood Processing Plants
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c) 
Agroforestry
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d) 
Forestry/Agroforestry-Based Ecotourism
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Sec. 9. Tree Growing Agreement - Interested parties whether natural or
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juridical, may enter into a Tree Growing Agreement for the development, sustainable
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utilization, and management of TGA areas and forest resources within the allotted
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TGA area.
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The Agreement shall be for a minimum of two production cycles depending
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on the project as proposed in the development plan to be submitted to the DENR
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upon application for a TGA. The duration of the production cycle shall depend on the
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species intended to be planted as a main crop. Each cycle shall not exceed twenty-
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five years.
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The Agreement may be renewed automatically at the option of the TGA
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holder for another minimum of two production cycles if the TGA holder has complied
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with the terms and conditions of the Agreement and with existing laws.
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The TGA is transferrable to qualified transferees for value. The Agreement
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may not be cancelled except for cause and with due process by the DENR. The
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Agreement holder shall develop at least 30% of the area applied for in the first three
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(3) years and utilize seventy-five (75%) of the area within five (5) years upon
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issuance of the TGA. Ninety percent (90%) of the TGA area must be devoted to the
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primary timber or tree crop compatible to the ecological and biophysical
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characteristics of the area.
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Processing of applications and awarding and issuance of TGA shall be
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accomplished at the Provincial Environment and Natural Resources Office (PENRO)
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of the DENR and completed within 120 days from the time the complete application
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is submitted.
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Tree Growing Agreements shall be limited to a maximum of 25 forest blocks
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for individuals/families, 50 forest blocks, for partnerships and cooperatives, and 250
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forest blocks for private and public corporations including local government units
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(LGUs) and government owned and controlled corporations (GOCCs).
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Sec. 10. Tenured Lands- Forest lands covered by existing tenurial
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instruments may be amended to be covered by the Tree Growing Agreement. Such
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amendment shall be applied for at the DENR.
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Tenure holders who are no longer interested in their tenure may surrender
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their tenure to the DENR. They may also transfer such tenurial instrument to an
27 
interested party for conversion to TGA. Tenure holders who refuse to utilize or
28 
abandon their tenurial area may be subjected to compulsory inclusion after being
29 
notified.


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A Notice of Inclusion under the TGA shall be issued by DENR to inform tenure
2 
holders of compulsory coverage of the whole or portion of their unutilized or
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abandoned tenured areas.
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Sec. 11. Qualifications of Applicants - Nc\y natural or juridical person may
5 
apply for a Tree Growing Agreement. LGUs and GOCCs may also apply for the said
6 
Agreement. Likewise, Agreement shall be awarded transparently and equitably to
7 
both foreign and domestic investors.
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Sec. 12. Certifications, Permits and Licenses - The DENR PENRO shall also
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coordinate with the Environmental Management Bureau (EMB), National Commission
10 
on Indigenous Peoples (NCIP), LGUs, and other government agencies for assistance
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in the expedited issuance of anvironmental permits, local permits. Certification
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Precondition (CP), and other permits.
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Sec. 13. Property Rights of TGA Holders. - All planted trees, and other non-
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timber forestry and agroforestry products produced within TGA areas shall be
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considered as personal property even if they are still attached to the soil. They shall
16 
also be considered as personal property of the holder within the purview of Republic
17 
Act No. 11057, otherwise known as the Personal Property Security Act, and thus
18 
may be traded or may be a subject to commodity contract, mortgage contract, and
19 
other security arrangement.
20 
All planted trees and other non-timber forestry and agroforestry products
21 
produced within the TGA areas shall be considered as crops.
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Sec. 14. Relaxation of Restrictions and Regulations. - In order to promote
23 
investments and generate interest in forest related activities within the TGA areas,
24 
existing laws, executive issuances, local ordinances, rules and regulations are hereby
25 
repealed, amended, and modified accordingly for holders in order to:
26 
a) Exempt from the payment of forest charges and other fees for taxes
27 
that local government units may impose;


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b) 
Provide access to development loans from public financial institutions 
for farm and plantation developers;
c) 
Provide insurance coverage of plantations and plantation development 
equipment by the Philippine Crop Insurance Corpoi ation (PCIC);
d) 
Provide tax free importation of plantation development equipment, 
including tree nursery facilities, pursuant to Republic Act No. 10863, 
otherwise known as the Customs Modernization and Tariff Act (CMTA);
e) 
Allow the expenses incurred for plantation operations to be as 
deductible expenses for income tax purposes, subject to the provisions 
of the National Internal Revenue Code of 1997, as amended: Provided, 
that the deduction shall only apply to the Taxable Period when the 
expenses were incurred;
f) 
Allow the expenses incurred in the development and operation of a 
tree plantation prior to the commercial harvest to be regarded as 
ordinary and necessary expenses or as capital expenditure;
g) 
Prioritize access for tree farm and plantation developers to credit 
assistance from government owned, controlled and/or supported 
financial institutions;
h) 
No inspection of harvested trees and other crops from TGA areas at 
check points;
i) 
Allow acceptance of planted trees and crops as collateral for loans in 
government owned or controlled banks and other financial institutions;
j) 
Allow only a one-time inspection by the DENR PENRO prior to harvest 
of planted trees leading to a single clearance for harvest, processing, 
transport and sale both local and international;
k) 
Exempt established tree farms and plantations from logging bans for 
the duration of the Agreement;
l) 
Allow logs, lumber and other finished wood products from TGA area to 
be exported without restrictions in volume;


1 
m) 
Allow exemption from payment of Advanced Value Added Tax (VAT).
2 
The VAT shall be paid only after logs have been delivered and payment
3 
received by plantation owners;
4 
n) 
Include tree farming and plantation development as pioneer areas of
5 
investment under the Strategic Investments Priority Plan of the
6 
government;
7 
o) 
Include tree farming and plantation development in tax incentives as
8 
may be provided by existing rules and regulations of different
9 
government agencies including but not limited the Department of
10 
Finance and Department of Trade and Industry; 
and
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p) 
Include tree farming and plantation development in other investment
12 
incentive packages available for agriculture and agroforestry-related
13 
industries.
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Provided that, relevant incentives shall also apply to private tree plantations
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registered with the DENR.
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Sec. 15. Royalties and Government Share. - Royalties and government share
17 
shall be based on the stumpage value of planted trees. Stumpage value shall be
18 
computed by the DENR using a formula developed with the approval of the Tree
19 
Plantation Promotion and Policy Board.
20 
Royalties and government share shall be based on the 70% of gross revenues
21 
of the Agreement holder. The government shall get five percent (5%) royalty, the
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tenure holder for tenured lands shall get one percent (1%), the concerned LGU
23 
where the TGA area is located shall get five percent (5%), if there are indigenous
24 
peoples in the area, two percent (2%) shall be allotted to them, and the remaining
25 
two percent (2%) shall go to DENR's tree farm and plantation development
26 
programs and projects and carbon trading activities.
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Sec. 16. Dispute Resolution Mechanism. - Disputes arising from conflicting
28 
claims and other controversies related to the issuance and the implementation of the
29 
TGA shall be resolved administratively in the first instance at the DENR.


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Any and ail 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 by mutual 
agreement, the parties may agree in writing to resort to alternative modes of dispute 
resolution.
Sec. 17. 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. 18. Tree Piantation Promotion and Policy Board. - The Tree Planation 
Promotion and Policy Board, referred to as the Board, is hereby created which shall 
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 foilowing:
a) 
Secretary of Environment and Natural Resources as Chairperson;
b) 
Secretary of Trade and Industry as Co-Chairperson;
c) 
One representative from the wood producers;
d) 
One representative from the tree farmers;
e) 
One representative from the wood processors;
f) 
One representative from the furniture industry;
g) 
One representative from the construction industry; and
h) 
One representative from the professional organization of foresters.


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The principal members of the Board may designate their respective
2 
alternates, who shall be the officials next-in-rank to them, and whose acts shall be
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considered the acts of their principals.
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The presence of the Chairperson with four (4) other members of the Board
5 
shall constitute a quorum and a majority vote of the members present shall be
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necessary for the adoption of any issuance, order, resolution, decision or other act of
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the Board in the exercise of its functions. The Board shall act as a collegial body. In
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the conduct of meetings, the Chairperson shall not vote except to break a tie.
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The Board shall act on any matter for its consideration not later than thirty
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(30) days from the date of submission thereof.
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The members of the Board shall be entitled to honoraria based on existing
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government accounting and auditing rules and regulations. The DENR shall act as
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Secretariat to the Board.
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Sec. 19. Implementing Rules and Regulations. - The FMB of DENR shall
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promulgate rules and regulations to carry out the provisions of this Act within 120
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days from approval hereof.
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Sec. 20. Repealing Clause. - All laws, decrees, executive order, executive
18 
issuances or letters of instruction, rules and regulations or any part thereof
19 
inconsistent with or contrary to the provisions of this Act are hereby deemed
20 
repealed, amended or modified accordingly.
21 
Sec. 21. Separability Clause. - If, for any reason or reasons, any part or parts
22 
of this Act shall be declared unconstitutional or invalid by any competent court, other
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parts of this Act not so declared shall continue to be in full force and effect.
24 
Sec. 22. Effectivity. - This Act shall take effect fifteen days (15) after its
25 
publication in two (2) newspapers of general education.
Approved,