Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
EIGHTEENTH CONGRESS 
Second Regular Session 
HOUSE BILL NO. ____ 
Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR. 
AN ACT 
INSTITUTIONALIZING THE PHILIPPINE ECOSYSTEM AND NATURAL CAPITAL 
ACCOUNTING SYSTEM (PENCAS), APPROPRIATING FUNDS THEREFOR AND 
FOR OTHER PURPOSES 
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 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. 
May 25, 2021
3:58 pm
9467


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
EIGHTEENTH CONGRESS 
Second Regular Session 
HOUSE BILL NO. ____ 
Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, 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 Representative 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".  
SECTION 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 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. 
9467


 
 
 
SECTION 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. 
 
 
SECTION 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.  
 
SECTION 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. 
 
 
SECTION 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. 
 
SECTION 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) 
 
SECTION 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.  
 
SECTION 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. 
 
SECTION 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. 
 
SECTION 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.  
 
SECTION 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.  
 
SECTION 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.  
 
SECTION 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. 
 
SECTION 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.  
 
SECTION 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.  
 
SECTION 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.  
 
SECTION 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.  
 
SECTION 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. 
 
SECTION 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.  
 
SECTION 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.  
 
SECTION 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. 
 
SECTION 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.  
 
SECTION 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.  
 
SECTION 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,