Environmental decision-making in the Philippines has long relied on the Environmental Compliance Certificate (ECC). It serves as the ultimate regulatory gatekeeper for development. Yet in a province like Cebu, upland forests stabilize water, climate, and communities. The ECC has exposed its deepest limitation. It measures environmental compliance, not environmental value..
This distinction came into sharp public view in Cebu City’s upland development debates. This was most notable in the case of Monterazzas de Cebu. It is a large mixed-use project built within the ecologically significant ridges of Barangays Guadalupe and Buhisan. It is near the headwaters of the Central Cebu Protected Landscape (CCPL) and the Budlaan–Buhisan watershed system.
A Watershed Is More Than a Development Site
Cebu’s uplands function as critical ecological infrastructure. They supply benefits that are foundational, systemic, and often invisible until lost:
- Groundwater replenishment for Metro Cebu’s aquifers
- Flood control and runoff regulation protecting low-lying urban districts
- Carbon storage and microclimate regulation mitigating urban heat impacts
- Soil retention that prevents landslides and downstream siltation
- Habitat for endemic species and biodiversity reservoirs
- Landscape identity and cultural value for Cebuanos
These benefits fall under what environmental economics calls Total Economic Value (TEV)—a framework that includes not only direct use (e.g., water supply), but also indirect use (flood control, climate regulation), option value (future medicine, ecotourism), bequest value (inheritance for future generations), and existence value (nature’s value simply for being there).
The ECC process, however, recognizes none of these as economic assets requiring valuation. It focuses instead on mitigation plans, engineering controls, and compliance commitments, answering only the question:
“Can environmental impacts be managed within acceptable regulatory limits?”
It does not ask the larger, economically decisive question:
“What is the value of what will be lost, even if mitigation is implemented?”
The ECC is a compliance mechanism. It checks if an Environmental Management Plan (EMP) exists. It also checks if mitigation measures are proposed. Finally, it ensures that pollution thresholds fall within permissible standards. But compliance is not valuation, and mitigation is not the same as replacing lost natural capital. This structural limitation represents a market failure. It converts ecological services into unpriced subsidies for development. This shifts costs to communities, households, local governments, and future generations.
The Monterazzas Case: Legally Compliant, Economically Incomplete
Monterazzas secured an ECC because it fulfilled its regulatory obligations. These obligations included drainage systems, slope protection, detention ponds, tree replacement, and environmental monitoring plans. From a compliance standpoint, the approval was defensible.
Yet public backlash surged after severe rain events in 2019 and 2021 intensified flooding in downstream Cebu communities. Flooding cannot be attributed to a single development alone. However, the case crystallized a broader reality. The cumulative cost of upland land conversion was never evaluated in economic terms.
No valuation was conducted for:
- Reduced aquifer recharge from increased impervious surfaces
- Lost flood buffering previously performed by forested slopes
- Carbon stock reduction from land clearing
- Increased sediment load affecting rivers and drainage systems
- Public loss of ecological security and landscape heritage
These are not engineering failures. They are valuation failures—costs borne by communities and future generations, not by project balance sheets.
Mitigation Is Not Valuation
A detention pond cannot replace a mountain’s hydrological function.
Tree replanting cannot immediately restore decades of carbon storage.
Slope stabilization cannot substitute the slow work of root-bound soil ecology.
The ECC system can reduce harm, but it cannot measure the economic magnitude of what is permanently altered or foregone. As a result, developments may be:
✔ legally compliant
✖ economically suboptimal
✖ socially contested
✖ ecologically irreversible
Non-Use Values Matter to the Public—Even If the ECC Cannot See Them
What made the debate over Cebu’s uplands emotionally charged was not only flooding—it was the perception of losing something irreplaceable:
- Cebu’s last remaining green ridgelines
- Intergenerational access to functioning watersheds
- The comfort of knowing nature still exists at scale
- A shared ecological identity built into the Cebuano sense of place
These are non-use values—intangible yet real, and entirely absent in ECC assessment.
Toward a New Standard: Valuing Nature, Not Just Regulating It
If Cebu is to balance growth with survival, environmental governance must change significantly. It must evolve beyond impact mitigation. It should also move toward natural capital valuation.
Future upland development decisions should integrate:
- Total Economic Valuation (TEV)
- Hydrological and carbon loss accounting
- Cumulative impact costing
- Natural Capital Accounting (aligned with PENCAS)
- LGU-level ecosystem service valuation in land use planning
- Public trust and intergenerational equity as development thresholds
Because while the ECC may authorize a project, only economics can reveal its true costs—and only ecology pays them back.
The central lesson from Cebu is clear:
Development must not only comply with environmental rules.
It must account for environmental worth.
Otherwise, what is permitted is not always what is sustainable.
What Is Legal Is Not Always Economic
The ECC ensures projects meet environmental regulations. It does not ensure that development decisions make economic sense when nature’s services are fully priced. In rapidly urbanizing regions like Cebu, ignoring this distinction leads to developments that seem profitable in private ledgers. However, they impose hidden public costs that increase over time.
Cebu’s uplands are not free. Their services are not infinite. And their depreciation is not costless.
Nature’s contributions need to be priced, recorded, and defended like any other form of capital. Without these measures, the province will continue approving projects that are technically compliant. However, these projects will remain economically incomplete.
The ECC prevents illegal environmental harm.
Valuation prevents unaffordable environmental loss.
Cebu urgently needs both.
Real LexEcon 