By: Atty. Gregorio B. Austral, CPA
The Philippine Ecosystem and Natural Capital Accounting System Act
The economic value of the ecosystem and natural capital is vital to policymaking. In the controversial proposal to reclaim the Tagbilaran Bay, one nagging question that remained unanswered by the proponent and the local legislators is how much is the value of the marine ecosystem to be dumped and filled to accommodate the project. Does the economic benefit of the project far outweigh the cost or value of the marine ecosystem?
The answer to the foregoing question seems to be elusive since the Philippines does not have the accounting standards to measure or value the ecosystem or any natural capital the country has. In one training sessions on the Philippine Environmental Impact Statement System (PEISS), the DENR admits that there is no such accounting standard yet which explains why no quantitative cost-benefit analysis can be objectively done in the Environmental Impact Assessment (EIA) reports. If ever there is one, the standard and the method used will depend on the choice of the expert hired to do the EIA.
Now, the Philippines will soon have meaningful information that can guide policymakers in their decision pertaining to projects that affect the environment with the passage of Republic Act No. 11995, otherwise known as the “Philippine Ecosystem and Natural Capital Accounting System (PENCAS) Act.”
Under the PENCAS Act, it is hereby declared the policy of the State to: (a) Recognize natural ecosystems as an integral part of our patrimony and heritage; (b) Protect and promote ecological balance and resilience, and advance the right of the people to live in harmony with nature; (c) Adhere to internationally accepted System of Environmental-Economic Accounting that measures and monitors the dynamic interaction and intersections of the environment, economy and society; (d) 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 including ecosystem services, and its impact on the economy; (e) Compile and progressively integrate natural capital accounts in macroeconomic indicators, strengthening and building on Republic Act No. 10625, otherwise known as the “Philippine Statistical Act of 2013,” which mandates the compilation of national accounts, including environmental accounts, statistics, and indicators; (f) Provide indicators that will facilitate the integration of environmental and natural resource concerns in planning and policymaking at the national and subnational levels, in allocating budgets, and in designating statistics that will be produced regularly for an identified period of analysis; (g) Establish and improve interagency coordination for the purpose of linking natural capital information as well as efficient data management among concerned agencies and their partner institutions, and establish an office to guide such coordination; and (h) Understand nature’s pricelessness, its heritage and intrinsic value, and its interdependencies in the implementation of the foregoing policies to consider that nature and ecosystems have inherent rights to exist, with an end view of recognizing legal rights that serve to protect endangered ecosystems and applying the precautionary principle, especially when economic values cannot be estimated.
The PENCAS shall have the following major objectives: (a) Support economic, environmental, and health policy development and decision-making; (b) Provide a system for the collection, compilation, and development of physical and natural capital accounts in the government as a tool for physical and development planning and programming, policy analysis, and decision-making; (c) Serve as a comprehensive data framework in the generation of natural capital statistics and accounts towards their progressive integration in macroeconomic indicators; (d) Provide tools and measures that contribute to the protection, conservation, and restoration of ecosystems; and (e) Provide valuation of ecosystem services such as provisioning, regulating and maintenance, and cultural services.
The Philippine Statistics Authority (PSA) Board shall oversee the implementation of PENCAS.||| (Philippine Ecosystem and Natural Capital Accounting System (PENCAS) Act, Republic Act No. 11995, [May 22, 2024])