The recent tax dispute between the Province of Cebu and Apo Land and Quarry Corporation (ALQC) has highlighted the legal limits of provincial taxation authority over quarry operations. The initial assessment of approximately Php1.218 billion was reduced to a proposed Php211 million compromise settlement, now under review by the Provincial Board. While the legal aspects of the dispute revolve around statutory limits on quarry taxation, the case also raises a broader question: how should the economic value of natural landscapes affected by quarry extraction be measured?
The Philippines has recently institutionalized ecosystem and natural capital accounting through Republic Act No. 11995, commonly referred to as PENCAS. This law recognizes ecosystems as economic assets whose value should be reflected in national and local policy decisions. When applied to quarry operations, natural capital accounting allows policymakers to estimate the economic value of ecosystem services that may be affected by extraction activities.
Under the PENCAS framework, the economic value of a natural resource landscape can be expressed as the Total Economic Value, which combines both market output and ecosystem services.
| Component | Description |
| Market value | Commercial value of extracted minerals |
| Natural capital value | Ecosystem services such as watershed protection, slope stabilization, and flood mitigation |
While traditional taxation captures only the market value of extraction, natural capital accounting attempts to quantify the value of ecosystem functions that support environmental stability and community resilience.
The Apo quarry operations cover an estimated 406 hectares under mining agreements. However, quarry sites typically disturb only a portion of the concession area at any given time. International mining and quarrying studies suggest that active disturbance commonly affects 30–40 percent of the concession area. Applying a mid-range estimate of 35 percent disturbance, the approximate area of affected landscape may be calculated as follows:
| Indicator | Value |
| Total concession area | 406 hectares |
| Estimated disturbance ratio | 35% |
| Estimated disturbed area | 142 hectares |
Global watershed valuation studies—including the The Economics of Ecosystems and Biodiversity (TEEB) Initiative and the widely cited work of Costanza et al. (2014) Changes in the Global Value of Ecosystem Services—estimate the bundled value of ecosystem services such as watershed protection, flood regulation, erosion control, and groundwater recharge at approximately US$3,000 to US$20,000 per hectare per year depending on ecosystem type.
Also, ecosystem service valuation studies conducted in watershed environments worldwide estimate the value of environmental services such as flood regulation, erosion control, and groundwater recharge at approximately US$10,000–US$20,000 per hectare annually. Converting this range into Philippine pesos results in an estimated Php500,000 to Php1,000,000 per hectare per year.
Using a conservative midpoint estimate of Php900,000 per hectare annually, the potential ecosystem service value associated with the affected landscape may be estimated as follows:
| Calculation | Value |
| Disturbed area | 142 hectares |
| Estimated ecosystem value per hectare | Php900,000/year |
| Estimated ecosystem service value | Php127.8 million per year |
This estimated ecological value offers a useful point of comparison with the proposed compromise settlement in the Apo tax case. If the Php211 million settlement is distributed across the approximate 16-year coverage period of the assessment, the provincial fiscal recovery corresponds to roughly Php13.2 million per year.
The comparison between fiscal recovery and estimated ecosystem value may be illustrated as follows:
| Indicator | Estimated Value |
| Ecosystem services value | Php127.8 million / year |
| Provincial fiscal recovery | Php13.2 million / year |
| Fiscal capture ratio | ≈10% of ecosystem value |
It is important to emphasize that this comparison does not imply a legal liability on the part of the quarry operator. Rather, it illustrates the difference between the fiscal instruments currently available to local governments and the broader environmental value associated with landscapes affected by extraction activities.
Mining agreements in the Philippines typically operate within a 25–30 year timeframe. If the estimated ecosystem service value were projected over a 30-year operational horizon, the cumulative value of ecosystem services associated with the affected landscape could be estimated as follows:
| Projection | Value |
| Annual ecosystem value | Php127.8 million |
| 30-year horizon Estimated ecosystem value | Php3.8 billion |
This simplified natural capital ledger helps place the Apo quarry case within a broader economic context.
| Component | Estimated Value |
| Limestone production value (Cebu quarry sector) | ~Php225 million/year |
| Ecosystem service value | ~Php128 million/year |
| Estimated 30-year ecosystem value | ~Php3.8 billion |
| + Carbon sequestration | +Php8 million |
| Proposed tax settlement | Php211 million |
From a policy perspective, the significance of this analysis lies not in assigning additional financial liability but in recognizing the economic importance of ecosystems within resource governance.Carbon sequestration offers a strong “alternative use” valuation for quarry-disturbed lands like Apo (upland Cebu forests), quantifying foregone climate benefits as an opportunity cost in your natural capital ledger.
The Apo case illustrates the structural characteristics of the Philippine mining governance framework. Mineral resources are owned by the State and administered by the national government, while environmental impacts and land-use implications are often experienced locally. As a result, local governments may face environmental management responsibilities while having limited taxation authority over extraction activities.
Natural capital accounting offers a complementary tool that allows policymakers to understand the broader economic landscape within which resource extraction occurs. Instead of relying solely on traditional taxation mechanisms, governments can use ecosystem accounting to guide policies such as watershed restoration programs, rehabilitation funds, and long-term land-use planning.
In this sense, the Apo quarry case highlights an important shift in public policy thinking. While taxation measures the financial revenue generated from extraction, natural capital accounting helps quantify the environmental assets that support economic activity and community resilience.
As Cebu continues to grow as an economic center in the Visayas, integrating natural capital accounting into resource governance may provide a more comprehensive framework for balancing development, environmental stewardship, and long-term sustainability.
The purpose of this estimation is to illustrate how ecosystem accounting can complement traditional fiscal metrics. While tax assessments measure the financial revenues associated with extraction activities, natural capital accounting helps quantify the environmental services that landscapes provide to surrounding communities.
In this sense, the Apo quarry case underscores the potential policy relevance of ecosystem accounting under Republic Act No. 11995, PENCAS. By recognizing ecosystems as economic assets, natural capital accounting allows policymakers to better understand how natural landscapes contribute to long-term environmental resilience and sustainable development.
The Apo Quarry tax dispute reveals a critical gap in Philippine resource governance: while provincial taxes capture only a fraction (~10%) of extraction’s market value, natural capital accounting under PENCAS quantifies the far broader ecological ledger—Php128 million/year in ecosystem services plus Php8 million/year in foregone carbon sequestration across 142 disturbed hectares.
Integrating these metrics exposes structural imbalances, where local governments bear environmental burdens from nationally administered mining without commensurate fiscal tools. This analysis demonstrates NCA’s power not as a liability hammer, but as a policy compass—guiding watershed restoration bonds, progressive rehab fees, and land-use plans that align development with Cebu’s natural assets.
Real LexEcon 