Who really holds the rights to trees and carbon in the Philippines?

THE PHILIPPINES sits on a goldmine of forest and carbon wealth. But an unclear and short-sighted property rights regime is choking its potential; existing rules are partially to be blamed.

- By Angela Arnante

Forest lands, which are State-owned lands, span 15.8 million hectares or half of the country's total land area. The 1987 Constitution states that all lands of the public domain, forest lands included, belong to the State. It can either manage them directly or partner with private entities, as long as Filipino citizens own at least 60% of the company involved and these agreements last 25 years, renewable for another 25. This legal framework along with existing policies, designed to regulate the exploitation of natural resources like mining and logging, now constrains investment in regenerative and non-extractive activities such as reforestation and carbon sequestration.

SHORT-TERM TENURE STIFLES LONG-TERM INVESTMENTS

The current tenure framework on forest lands does not match the biological and economic realities of forest and carbon development. While fast-growing trees like falcatta can be harvested in six to 15 years, high-value hardwoods such as narra, mahogany, and teak, and famous dipterocarp species like yakal and lauan take 20 to 25 years to mature just for a single-growth cycle. On top of this, renewing agreements can take anywhere from a year to even over a decade, leaving some existing investors in limbo and potential ones at bay.

A similar challenge exists for green and blue carbon projects — those that protect or restore ecosystems while capturing and storing carbon dioxide to help fight climate change and generate income through carbon credits. Whether involving tree plantations or mangrove ecosystems, these initiatives typically require project lifespans of 25 to 100 years to generate credible climate benefits and financial returns. However, legal agreements on forest lands remain capped at 25 years, renewable for another 25 years. This mismatch undermines investor confidence and reduces the bankability of carbon projects in the country.

UNCLEAR OWNERSHIP OF TREES AND CARBON