Philippines orders carbon market framework to attract green investment

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Philippines carbon market framework

Highlights

Executive Order No. 127, signed Oct. 13, mandates the Department of Environment and Natural Resources to draft a national carbon market policy within 30 days.
The framework will establish standards for carbon trading, satisfy Philippines’ Paris Agreement commitments, and attract investment for climate programs without imposing a carbon tax.
A new inter-agency committee, chaired by the Climate Change Commission, will review and approve the framework to enable climate finance for reforestation, renewables, agriculture, and waste management.

Framework rollout and approval timeline

As reported by BusinessWorld Online, Executive Order No. 127, signed on Oct. 13, directs the Department of Environment and Natural Resources to prepare a national carbon market policy framework covering both Article 6 of the Paris Agreement and voluntary carbon markets.

Palace Press Officer Clarissa A. Castro said at a news briefing that the framework is intended to set national standards for carbon credit trading, support the country’s Paris Agreement commitments, and draw funding and investment for climate-related programs. She also said the executive order establishes a carbon market framework and does not impose a new carbon tax.

Under the order, the DENR has 30 days to draft operational guidelines. Once completed, the department will submit the framework to a newly created inter-agency committee, which will have another 30 days to review and approve the guidelines.

Climate finance and sector implications

The executive order creates an inter-agency committee on carbon markets, with the Climate Change Commission as chair and the Department of Finance as vice-chair. The measure is designed to put in place transparent rules for carbon credit issuance, registry tracking, and benefit-sharing across carbon crediting activities.

According to the directive, clearer rules could help environmental projects generate climate finance in areas including reforestation, renewable energy, sustainable agriculture, and waste management. The order takes effect immediately upon publication in the Official Gazette or in a newspaper of general circulation.

In our earlier article on Malaysia’s push to strengthen its fiscal buffers, we noted warnings that recurring shocks — including climate events — are becoming a standard factor in government planning. We also outlined how rising spending commitments and a prolonged period of high interest rates could tighten fiscal space, increasing the importance of reforms that improve revenue collection and preserve flexibility.

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