President Ferdinand Marcos Jr. has issued Executive Order No. 127, establishing a comprehensive national policy framework for carbon markets, creating an inter-agency governing body, and designating the Department of Environment and Natural Resources (DENR) as the primary authority for national carbon market regulation.
Signed on September 13 and published in the Official Gazette on Thursday, October 15, EO 127 aligns the country’s climate policies with international commitments under the United Nations Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol and the Paris Agreement.
The directive adopts a whole-of-government approach to help the Philippines achieve its Nationally Determined Contributions (NDCs), streamline carbon-crediting projects, and unlock access to global climate finance, clean technology and green investments.
The order establishes the Inter-Agency Committee on Carbon Markets (IACCM) to govern the Philippines’ participation in both international cooperative mechanisms under Article 6 of the Paris Agreement and voluntary carbon markets. The Climate Change Commission (CCC) serves as chairperson, with the Department of Finance (DOF) as vice-chairperson and the DENR joining alongside other relevant national agencies.
The IACCM is tasked with leading policy coordination, issuing implementation guidelines, evaluating the framework’s effectiveness, setting processing fees for applications and certifications and serving as the primary forum for inter-agency consultations on carbon trading rules.
As the designated National Authority for Carbon Markets, the DENR is mandated to approve and register carbon mitigation projects and manage the Philippine National Carbon Registry, a centralized digital database designed to track, record, issue, transfer, cancel and retire carbon credits and Internationally Transferred Mitigation Outcomes (ITMOs). The DENR will also establish eligibility standards, recognized crediting benchmarks and reporting rules for voluntary market players.
Meanwhile, the DOF must give formal concurrence on any policies involving fiscal measures, revenue generation, carbon pricing or any future transition from voluntary to compliance-based carbon markets.
The DENR has been given 30 days from the order’s effectivity to submit the proposed national policy framework to the IACCM for review and adoption. Funding for the initial implementation will be sourced from current agency budgets, with future operational costs integrated into the annual General Appropriations Act.