NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
SENATE 
S.B. No. '
23 tW 22 P5«5
received BV:
Introduced by SENATOR JOEL VILLANUEVA
AN ACT
INSTITUTIONALIZING THE PHILIPPINE ECOSYSTEM AND NATURAL 
CAPITAL ACCOUNTING SYSTEM (PENCAS), APPROPRIATING 
FUNDS THEREFOR AND FOR OTHER PURPOSES
EXPLANATORY NOTE
National income accounts measure a country’s economic activity and economic 
wellbeing, including the flows from production to consumption, foreign trade, and asset 
accumulation, which are useful in economic analysis, decision-making, and policy 
formulation. The broadest and most widely used measure of national income is Gross 
Domestic Product (GDP). However, this is an incomplete assessment of a country’s 
economic wellbeing as GDP only looks at one part of economic performance, i.e., 
output, and does not take into account the wealth underpinning this output, including 
a country’s natural capital.
Natural capital includes resources such as minerals, energy, timber, agricultural 
land, fisheries, and water. It also includes ecosystem services, whose values are not 
readily captured in markets, such as air and water filtration, flood protection, carbon 
storage, and habitats for wildlife. Natural capital is particularly important to many 
developing countries as it makes up a large share of their total wealth and the 
livelihoods of several communities depend directly on healthy ecosystems.1 
Incorporating natural capital into national accounts will provide a broader picture of 
development progress than traditional measures of GDP. It will reveal how natural 
resources contribute to the economy and how the economy affects natural resources.
According to the Philippine Statistics Authority (PSA), our natural resources 
composed of mineral, cropland, timber, and coastal and marine resources make up 
an estimated 19% of the nation’s wealth, contributing largely to our economic
1 Wealth Accounting and Valuation of Ecosystem Services (WAVES). FAQs on Natural Capital Accounting. 
Available at https://www.wavespartnership.orq/en/frequentlv-asked-questions-natural-capital-accounting-
nca. Accessed on 17 March 2023.


development. However, rapid growth and climate change are adding pressure to our 
already strained natural resources.2
Thus, this bill seeks to develop a comprehensive information system and 
accounting framework that will take into consideration our natural capital and its impact 
on the country’s economy, institutionalizing the Philippine Ecosystem and Natural 
Capital Accounting System (PENCAS). The PENCAS shall follow the international 
standard approved by the United Nations Statistical Commission called the System of 
Environmental-Economic Accounting (SEEA). This measure also aims to provide 
indicators that will facilitate the integration of environmental and natural resource 
concerns in national development planning and policy making.
In view of the foregoing, the passage of this bill is earnestly sought.
JOBl/VILLANUEVA
2 Philippine Statistics Authority. Phil-WAVES. Available at https://psa.gov.ph/phil-waves. Accessed on 22 
March 2023.


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NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
SENATE 
S.B. No. 1
Introduced by SENATOR JOEL VILLANUEVA
AN ACT
INSTITUTIONALIZING THE PHILIPPINE ECOSYSTEM AND NATURAL 
CAPITAL ACCOUNTING SYSTEM (PENCAS), APPROPRIATING 
FUNDS THEREFOR AND FOR OTHER PURPOSES
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Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled:
SECTION 1. Short T/f/e. - This Act shall be known as the “Philippine Ecosystem 
and Natural Capital Accounting System (PENCAS) Act.”
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 
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


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management among concerned government agencies and their partner 
institutions, and to establish an office to guide such coordination; and
f) Include nature’s pricelessness, its intrinsic value, and its interdependencies in 
the implementation of the foregoing policies to consider that nature and 
ecosystems have intrinsic rights to exist, with an end in view of recognizing legal 
rights that serve to protect endangered ecosystems and applying the 
precautionary principle, especially when economic values cannot be estimated.
SEC. 3. Definition of Terms. - For purposes of this Act, the following terms are 
hereby defined as follows:
a) 
Ecosystem refers to a complex community of living organisms, their physical 
environment, and all their interrelationships in a particular unit of space, the biotic 
and abiotic components of which are linked together through nutrient cycles and 
energy flows;
b) 
Capital refers to a stock concept, which yields a periodic income, which is a flow 
concept;
c) 
Natural Capital refers to the concept of nature as a stock that provides a flow of 
benefits to people and the economy, and 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, and from which humans derive a wide range 
of goods and services, which make human life possible;
d) 
Ecosystem Services refer to goods and services that natural capital provides, 
such as food, water, energy or climate regulations;
e) 
United Nations System of Environmental-Economic Accounting (SEEA) refers to 
the 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 
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


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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. National Economic and Development Authority (NEDA) as the Lead 
Agency. - The NEDA shall be the lead agency in fulfilling the objectives of this Act. It 
shall coordinate the performance of the functions of the involved agencies enumerated 
herein.
SEC. 7. Involvement of Government Agencies. - The following government 
agencies and the concerned offices and bureaus under or attached to them shall be 
involved in the establishment and institutionalization of the PENCAS:
a) 
National Economic and Development Authority (NEDA) as the Lead Agency;
b) 
Philippine Statistics Authority (PSA);
c) 
Department of Environment and Natural Resources (DENR);
d) 
Department of Agriculture (DA);
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 Trade and Industry (DTI)
j) 
Department of Health (DOH);
k) 
Department of the Interior and Local Government (DILG);
l) 
Department of Science and Technology (DOST);
m) 
Department of Human Settlements and Urban Development (DHSUD); and
n) 
Other agencies as necessary.
SEC. 8. Creation of the Natural Capital Units. - Natural Capital Units shall be 
created within the organizational structure of the NEDA, PSA, DENR, DA, 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 shall 
be a Division Chief or higher. The head of the agency shall designate existing 
personnel within the agency or hire new ones within its budget to operate its Natural


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Capital Unit.
SEC. 9. Natural Capital Units at National Agencies. - The Natural Capital 
Units at the NEDA, PSA, DENR, DA, 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 (LGUs), 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; and
e) 
Institutionalize open data for the studies and research in support of policy 
development related to PENCAS.
The DILG shall assist the LGUs 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 far 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, subject to the approval of the Department of 
Budget and Management (DBM) and in accordance with the rules and regulations of 
the Civil Service Commission (CSC).
SEC. 11. Functions of the NEDA.- The Natural Capital Unit at the NEDA shall:
a) Coordinate the conduct of consultations, orientations, and training seminars on 
the PENCAS and its implementation for the national government agencies, 
LGUs, and other concerned institutions, as well as the private sector and civil


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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; and
e) 
Provide technical services to the (i) 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; (ii) NEDA Investments Coordinating Committee 
(ICC) 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 (Hi) any Task 
Force/s or entities which may be created for the coordinated functioning of the 
data-gathering agencies and quality decision-making.
SEC. 12. Functions of the PSA. - The Natural Capital Unit at the PSA shall:
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 governments, 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, and Community Based 
Monitoring System;


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e) 
Collect data up to the fourth-digit level of the Philippine Standard for Industrial 
Classification particularly for data needed in the ocean accounts;
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 (EMB) and National Water Resources Board (NWRB), and 
DPWH and its Bureau of Research and Standards;
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Update the Input-Output table regularly, incorporating the PENCAS accounts; 
and
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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. 13. Role of Local Government Units. - In the planning and local 
legislation duties, the LGUs 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. Data and Research Support. - The PSA shall, in coordination with 
the involved agencies, designate the required environment and economic statistics in 
the agencies and bureaus that shall be responsible for generating such data. The DBM 
shall ensure that such research and data management are supported to prevent 
government spending that would unduly compromise PENCAS accounts and 
ecosystem services.
SEC. 15. 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 NEDA and the DENR 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 Environmental Impact 
Statement (EIS) System.
SEC. 16. PENCAS in the Educational System. - The Department of Education 
(DepEd), Commission on Higher Education (CHED), and Professional Regulation


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Commission (PRC) shall lead in mainstreaming PENCAS in all relevant modules, 
courses, curriculum, training, and licensure examination. They may establish 
partnerships with different educational institutions and private entities for learning and 
development in forms of resource sharing, module and training development, 
standards development, and other similar forms.
SEC. 17. 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 Filipino citizen shall have:
a) 
the right to information on any accounts generated under this Act;
b) 
the standing to compel the performance of any of the mandates under this Act;
and
c) 
the right to 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 similar indicators of economic condition, and 
highlight the contribution of resources and ecosystems to the economy, income, and 
employment.
SEC. 18. 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 NEDA 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 NEDA 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. 19. Appropriations. - The amount necessary to implement this Act shall 
be sourced from the 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 Clean Air Act,” and similar 
special accounts, especially the ones that have remained dormant.
The allocations shall be based on the plan and priorities decided by the NEDA, 
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. 20. Implementing Rules and Regulations (IRR). - Within ninety (90)


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days from the effectivity of this Act, the NEDA shall, in consultation and coordination 
with appropriate national government agencies, civil society organizations, private 
sector, and other stakeholders, promulgate the IRR for the effective implementation of 
this Act.
SEC. 21. Separability Clause. - Should any provision of this Act or part hereof 
be declared unconstitutional, the other provisions or parts not affected thereby shall 
remain valid and effective.
SEC. 22. Repealing Clause. - All laws, decrees, orders, and issuances, or 
portions thereof, which are inconsistent with the provisions of this Act, are hereby 
repealed, amended, or modified accordingly.
SEC. 23. Effectivity. - This Act shall take effect fifteen (15) days after its 
complete publication in the Official Gazette or in a newspaper of general circulation.
Approved,