Abstract

Globally, natural capital plays a crucial role in driving economic growth and is an essential component of an economy. Natural capital refers to the stock of resources, both renewable and non-renewable, that provide benefits to people. This includes ecosystem services that are not easily captured in the market. Natural capital accounting (NCA) provides accounting frameworks that aim to integrate environmental data with conventional income accounts. By doing so, it helps to provide a more complete picture of the value of natural resources, including ecosystem services, and their contribution to economic growth.

The Philippines has been a pioneer of environmental accounting in Southeast Asia, with NCA being in its early stages since the 1990s. In 2022, the Roadmap to Institutionalize Natural Capital Accounting in the Philippines was launched. It provides strategic guidance on the national implementation of the NCA from 2022 to 2040.

Currently, the Philippine Statistics Authority (PSA) is working on improving and developing environmental-economic accounting in the country. This includes the regular compilation of environmental-economic accounts both at the national and sub-national levels as well as ongoing research and development of new accounts. These efforts align with the System of Environmental-Economic Accounting (SEEA) Central Framework and Ecosystem Accounting.

With the aim of progressively incorporating NCA to conventional economic measures, the Republic Act No. 11995 or the Philippine Ecosystem and Natural Capital Accounting System (PENCAS) Act was signed into law in May 2024 to institutionalize NCA in the country and mandate its use in policy and decision-making. This paper aims to discuss the mandates of the PSA and other relevant partner agencies in the context of NCA, the current outputs and ongoing research and developmental activities on environmental-economic accounts, the institutional arrangements, and the ways forward.