Executive Order No. 127 (“EO No. 127”), issued on 13 October 2026, directs the Department of Environment and Natural Resources (“DENR”) to formulate the Philippine Carbon Market Policy Framework (“Framework”), creates the Inter-Agency Committee on Carbon Markets (“IACCM”), and designates the DENR as the Designated National Authority (“DNA”) for carbon markets in the Philippines. Under Section 1, the Framework is to serve as the primary national policy framework for the Philippines’ participation in carbon markets, including cooperative approaches under Article 6 of the Paris Agreement and voluntary carbon markets (“VCM”).

Key provisions

  • Contents of the Framework. At a minimum, the Framework must cover participation under Article 6 of the Paris Agreement (integrity principles, eligibility requirements and authorization criteria, the mitigation activity development cycle including the issuance of a no-objection letter, conditions for corresponding adjustments by the Philippines, benefit-sharing mechanisms and guidelines, and the operation of the Philippine National Carbon Registry (“Registry”)); participation in the VCM (eligibility requirements and safeguards, recognized carbon crediting standards and methodologies, benefit-sharing mechanisms and guidelines, and oversight and reporting requirements); fees and cost-recovery principles; institutional arrangements and roles of the DNA, line agencies, and other relevant government entities; and guidance on other carbon credits, including transition credits (Section 1).
  • DOF concurrence. Any policy relating to fiscal and revenue generation, carbon pricing, or the possible transition of the VCM to a compliance carbon market is subject to the concurrence of the Department of Finance (“DOF”) (Section 1(e)).
  • Creation of the IACCM. The IACCM was created to ensure a whole-of-government approach and coherent policy direction in the implementation of EO No. 127 (Section 2).
  • IACCM composition. The IACCM is chaired by the head of the Climate Change Commission (“CCC”), with the head of the DOF as Vice-Chair, and the heads of the following agencies as members: DENR, Department of Energy (“DOE”), Department of Agriculture (“DA”), Department of Transportation (“DOTr”), Department of Trade and Industry, and Securities and Exchange Commission. The CCC serves as Secretariat (Section 2).
  • Role of the IACCM. The IACCM exercises strategic policy oversight and inter-agency coordination, issues policy guidelines, periodically assesses the implementation and effectiveness of the Framework, serves as the principal forum for inter-agency consultation, determines and approves reasonable processing fees for applications or certifications related to carbon markets, and, as necessary, creates technical working groups (Section 3).
  • Role of the DNA. The DENR, as the DNA, authorizes or approves the registration and implementation of carbon mitigation projects; establishes, manages and maintains the Registry for the tracking, recording, issuance, authorization, transfer, cancellation and retirement of carbon credits and internationally transferred mitigation outcomes; and authorizes the imposition of fees and charges allowed under prevailing laws and policies (Sections 4 and 5).
  • Role of line agencies. The concerned government agencies, offices, and instrumentalities participate in the operationalization and implementation of the Framework by providing technical, policy, regulatory, and sector-specific inputs consistent with their respective mandates, including the following: the DENR for nature-based solutions, forestry and the waste sector; the DOE for the energy sector; the DA and the Philippine Statistics Authority for the agricultural sector; the DOTr for transport-related carbon credit projects; and the DOF for fiscal policy, investment promotion, climate finance and the fiscal implications of carbon market transactions (Section 6).
  • Funding. Initial implementation is charged against the current appropriations of the DENR and other concerned agencies; later funding is included in their budget proposals (Section 9).

Timelines and transition

  • Issuance of the Framework. Within thirty (30) days from the effectivity of EO No. 127, the DENR must draft and submit the Framework to the IACCM for review and approval, and the IACCM must approve it within thirty (30) days from receipt (Section 7).
  • Transition to the Registry. Existing carbon crediting projects across all sectors transition to the Registry once the latter becomes operational. National government agencies holding records on carbon crediting projects, including Clean Development Mechanism records, must share or transfer the data to the DNA within three (3) months from the effectivity of EO No. 127 (Section 8).

Effectivity

Under Section 12, EO No. 127 takes effect immediately upon its publication in the Official Gazette or in a newspaper of general circulation. Inconsistent issuances are repealed or modified accordingly (Section 11).

Source: Executive Order No. 127, s. 2026, “Directing the Formulation of the Philippine Carbon Market Policy Framework, Creating the Inter-Agency Committee on Carbon Markets, and Designating the Department of Environment and Natural Resources as the National Authority for Carbon Markets in the Philippines,” 13 October 2026.

This alert was prepared by OS Law. This alert is for general information only and is not legal advice. Please consult counsel on how these rules apply to your specific circumstances.