Why I Wrote to the Senate: Strengthening ECC Governance and Enforcing RA 10587

The recent events surrounding the Monterrazas de Cebu development—and the Senate investigation that followed—have brought national attention. These events have highlighted long-standing weaknesses in our environmental regulatory system. The incident goes beyond the tragic flooding and slope failures. It exposes deeper structural issues in the way Environmental Compliance Certificates (ECCs) are evaluated and approved. This is especially concerning in areas that the law classifies as Environmentally Critical Areas (ECAs).

I work as an Environmental Planner, Real Estate Consultant, and researcher. My fields intersect law, economics, and natural capital. I felt compelled to articulate these systemic concerns. I did this through a formal letter addressed to Senator Risa Hontiveros and the members of the Senate.

My letter emphasizes three core points:

First, Proclamation No. 2146 and Presidential Decree No. 1586 clearly designate steep slopes, geohazard zones, and watershed recharge areas as Environmentally Critical Areas. These areas require the highest level of scientific scrutiny. This must happen before any development is allowed. Despite this, ECCs continue to be issued in areas of high ecological and hazard sensitivity.

Second, the Environmental Planning Act of 2013 (RA 10587) contains mandates. It requires that licensed Environmental Planners prepare and sign environmental planning work. This work includes EIAs, hazard studies, hydrologic analyses, and land-use planning. In the case of Monterrazas, this requirement was not met. Non-enforcement of this law compromises the scientific integrity of ECC submissions.

Third, the Monterrazas incident is not an isolated oversight but a symptom of a broader institutional problem. ECCs are too often granted despite incomplete or inadequate assessments. Clear statutory obligations are in place to safeguard communities and ecological systems, yet they are ignored.

My letter respectfully calls on the Senate to strengthen environmental governance. This can be done by ensuring that legal requirements, particularly RA 10587, are fully enforced. ECCs issued in Environmentally Critical Areas should be thoroughly reviewed. Additionally, DENR’s evaluation systems need strengthening and increased transparency.

This moment provides a crucial opportunity to elevate environmental planning. It also helps restore public confidence in regulatory mechanisms. Additionally, it offers better protection for vulnerable landscapes and communities. I hope this contribution is useful to the Senate’s ongoing inquiry. It is also meant to aid our collective effort to build a more climate-resilient and accountable governance system.

The Political Economy of Flooding in Cebu

Every flood follows the laws of physics—but the damage it brings follows the laws of politics and economics. To understand Cebu’s recurring floods, we must examine not just rivers and drains, but land markets, incentives, and power structures.

A civic group recently released a petition calling for accountability. They demand institutional reforms and immediate interventions after the November 4, 2025 flooding. There is a deeper structural truth behind these recurrent failures—one that cannot be resolved through flood-control works alone. Flooding in Cebu is not simply a hydraulic engineering problem. It is a political economy problem. It is shaped by land markets and governance incentives. It also involves institutional weaknesses and the complex interactions between urban development and ecological systems.

The physical manifestations of Cebu’s flooding are evident. They include overflowing rivers, silted channels, blocked waterways, undersized drainage lines, and deteriorated uplands. These issues are symptoms of underlying drivers embedded in the way land is valued, used, occupied, and regulated. These systemic forces determine where people settle and where capital flows. They dictate how infrastructure is prioritized. They also influence which environmental limits are observed or ignored. Understanding the city’s flood crisis requires a new perspective. We must shift from short-term engineering responses. We should focus on a long-term examination of Cebu’s land governance and socio-economic structures.

The Limits of Engineering-Centered Solutions

For decades, Cebu’s response to flooding has relied on traditional engineering. This includes the expansion of drainage networks. It also involves the construction of embankments and the deepening of rivers. Additionally, there is the installation of floodwalls and diversion channels. These are necessary interventions and form part of any modern urban infrastructure system.

However, the severe flooding of November 4 demonstrated an important fact. Structural measures cannot compensate for degraded watersheds. They cannot make up for constricted waterways either. Additionally, land-use choices that contradict hydrological realities are not offset by these measures.

The core limitations are clear:

Upstream forests have thinned, reducing water absorption.
Urban surfaces have become more impermeable, rapidly increasing runoff.
Natural retention areas have been converted into residential and commercial zones.
Rivers have narrowed due to settlements, obstructions, and encroachments.
Drainage systems designed for past rainfall patterns are now overwhelmed by climate-intensified storms.

Engineering solutions, however well-designed, cannot fully absorb the consequences of decades of unsustainable land use and misaligned development patterns.

Land Market Pressures and Development in High-Risk Areas

Cebu’s flooding problem cannot be separated from the economics of land. As urban land becomes increasingly scarce and valuable, development pressures intensify toward hazard-prone areas:

river easements and riparian buffers,
wetlands and marshes,
floodplains and low-lying coastal areas,
steep upland slopes and watershed zones.

These areas historically served as natural drainage or water retention systems. Yet economic incentives—combined with regulatory concessions—have enabled their transformation into buildable parcels.

This trend reflects a market-driven logic: when prime land is limited, the pressure to develop environmentally sensitive areas becomes stronger. The result is a spatial configuration that maximizes short-term economic gains but increases long-term exposure to floods.

Thus, flooding is not merely caused by extreme rainfall. It is shaped by land scarcity and speculative development. Permissive regulatory environments also play a role in its formation. It is shaped by the interaction between land scarcity, speculative development, and permissive regulatory environments.

Political Incentives Favor Visible Infrastructure Over Preventive Governance

Flood-control infrastructures are politically compelling projects. They offer:

highly visible outputs,
significant budgets,
recurring maintenance contracts,
and narratives of action and responsiveness.

Because they are technically complex, such projects often escape broader public scrutiny. At the same time, some measures reduce long-term flood risk most effectively. These include watershed rehabilitation, strict easement enforcement, and climate-informed zoning. However, they are politically challenging. They require displacements, long-term planning consistency, and actions that may produce limited immediate political returns.

This imbalance in incentives explains why Cebu sees many flood-control structures. These structures do not always address the underlying drivers of vulnerability. Sometimes, they even worsen the situation.

Flooding persists not simply because engineering solutions are inadequate. It also occurs because political incentives prioritize short-term, highly visible outputs. These outputs are prioritized over structural preventive governance.

The issue is not a lack of technical knowledge among agencies. The problem continues because actions conflict with the interests of those who hold political and economic power.

This is the essence of the political economy argument.

River Degradation and Extractive Activities

Siltation, riverbed changes, and sediment buildup are major contributors to flood severity. These issues are exacerbated by:

sand and gravel extraction,
upland clearing for agriculture or development,
informal excavation,
and poor adherence to environmental safeguards.

These activities are sustained because they are economically profitable and often backed by political or economic influence. Despite their known impacts, they persist due to entrenched interests along the value chain—from local employment to construction demand.

Thus, river degradation is not merely a technical or enforcement issue. It is a governance challenge linked to resource extraction, revenue dependence, and regulatory gaps.

Enforcement Challenges Reflect Institutional Capture and Regulatory Asymmetry

Calls for strict enforcement frequently assume that institutions lack capacity or technical competence. In reality, enforcement failures are often tied to:

local political alliances,
informal settlements that represent vote-rich constituencies,
economic actors with significant influence over land use decisions,
fragmented authority across agencies,
inconsistent application of zoning and environmental rules.

Hazard-prone areas become zones of negotiation rather than regulation. This institutional dynamic contributes to weak compliance, reinforcing land-use patterns that increase flood exposure.

Flooding, therefore, arises not only from natural or physical factors but also from institutional capture and uneven regulatory power.

From Flood Control to Flood Governance

The arguments focusing on removing obstructions, correcting flawed structures, or improving inter-agency coordination are important. Yet they must be integrated into a broader, structural framework of flood governance, one that recognizes the interconnectedness of:

land markets,
watershed systems,
ecological integrity,
urban density,
climate projections,
institutional frameworks,
and political incentives.

A governance-centered approach requires:

climate-sensitive and risk-informed land use planning,
protection and restoration of watershed and riparian systems,
strict implementation of easements and hazard-zone regulations,
upstream retention strategies and nature-based solutions,
green infrastructure that enhances urban permeability,
basin-wide management across LGU boundaries,
resilient zoning and development controls,
and institutional reforms that shield planning from political and economic capture.

Cebu’s long-term resilience depends on integrating these elements into a coherent governance structure.

Conclusion

The November 4, 2025 flood event underscored the limitations of relying primarily on engineering-centric flood control. While structural interventions remain essential, they are insufficient against systemic land-use pressures. Institutional weaknesses and economic incentives drive risky development.

Flooding in Cebu is a political economy issue—rooted in how land is valued, governed, and contested. Meaningful solutions require a transition from reactive flood-control efforts. These solutions must embrace a comprehensive approach rooted in land governance, ecological integrity, institutional accountability, and long-term urban planning.

Cebu can only move toward true resilience through this shift. It will reduce its vulnerability to the increasingly severe impacts of climate and development pressures.

Beyond Compliance: Why the ECC Fails to Capture the True Value of Cebu’s Uplands

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.

Flood-Control Projects Alone Will Not Save Cebu—Land Use Will

The declaration by experts confirms that infrastructure alone cannot solve Cebu’s flooding crisis. Planners, scientists, and community advocates have long warned this truth. Drainage projects may manage water. However, land use decisions determine where the water goes.

No flood control masterplan, regardless of engineering quality, will succeed while:

Upland forests and recharge zones shrink faster than detention basins are built
Commercial land zones double, increasing impervious surface cover
Core city residential areas are compressed, pushing communities into hazard-prone uplands
Agricultural and green buffer landscapes decline at scale
Critical slope, soil, and watershed protections remain advisory—not mandatory

The problem is not simply inadequate pipes and culverts.
The problem is unregulated sprawl, declining absorption capacity, and the absence of enforceable ecological limits in land development.

The science is clear: Flooding is a land use failure before it is an engineering failure.

A city loses flood resilience when rainfall has nowhere to go. This happens when forests are fragmented. It also occurs when slopes are sealed and floodplains are built over. Additionally, housing is pushed uphill without geotechnical, drainage, or watershed safeguards.

The recently approved Cebu City CLUP and Zoning Ordinance thus arrives at a critical inflection point.
Commercial zones have expanded. Forests have been reduced. Affordable housing provision is minimal. The plan must now integrate mandatory disaster-responsive corrections in its implementation phase. This must happen before more irreversible exposure is built into the urban footprint.

We call on city decision-makers to embed the following as binding implementation requirements:

Slope-based and hazard-based development controls for uplands
Mandatory stormwater detention, permeable surface thresholds, and infiltration standards per project
Watershed and ridge-to-reef protection zones with enforceable buffers
Moratorium on approvals in high-risk upland settlements pending risk audit
Mid-rise affordable housing incentives within safe urban zones to prevent uphill displacement
Integration of Metro Cebu-wide watershed governance beyond city political boundaries
Creation of an independent CLUP implementation oversight body

Development is not the crisis. Ungoverned development is.

No amount of pumping stations, river walks, canal clearing, or floodgates can compensate for lost forests. They cannot compensate for paved watersheds. They cannot address displaced communities and weakened soil absorption systems. Lost forests, paved watersheds, displaced communities, and weakened soil absorption systems.

Cebu must move beyond treating floods as an aftermath problem.
Flood risk must be prevented at the point of land conversion, zoning approval, and building permit. It should not be addressed only by draining after the storm.

“What protects a city is not just how it builds its drainage…

but how it plans its land.”

We urge the City Government to ensure that CLUP implementation corrects the risk drivers of future disasters. National oversight agencies should also ensure corrective measures are taken. It should not institutionalize these risk drivers.

The aspiration should change. It should not be:
“Cebu that survives floods.” It should be:
“Cebu that no longer floods because it was planned correctly.”

Spaces of Growth, Zones of Risk: Cebu’s Land Use Paradox

The impacts of Typhoon Tino offered a stark reminder. Floods are not solely natural hazards. Instead, they are hydrological imprints of spatial decisions. Land allocation, slope conversion, river encroachment, and watershed disruption manifest their consequences most visibly during extreme weather events.

The approval of Cebu City’s Comprehensive Land Use Plan (CLUP) 2023–2032 redirects the public agenda. It moves from legislative formality to the more consequential arena of implementation. The legitimacy of a land use plan is not proven by its passage. Instead, it is validated by the development outcomes it produces. This is especially true when these outcomes are tested by climate, geography, and population pressure.

The new CLUP reveals major spatial shifts that carry long-term implications. Commercial land allocation more than doubled, while agricultural lands declined dramatically, and forest areas registered significant reduction. Meanwhile, socialized housing allocation remains strikingly minimal. The pattern points to a clear directional tilt. Commercial land expansion is accelerating faster than ecological buffering. It is also outpacing safe residential capacity.

As land values intensify within the urban core, households priced out of the city do not vanish. They relocate to the margins where land is cheaper and regulations are thinner. In Cebu, this relocation increasingly occurs toward upland barangays, steeper slopes, informal drainage basins, and unengineered terrain. The result is not accidental sprawl but policy-induced spatial displacement, where affordability gradients align dangerously with hazard gradients.

A persistent public misconception aggravates this risk calculus. Many people think that uplands newly classified under NIPAS (National Integrated Protected Areas System) are automatically protected. They believe these areas are free from settlement and land conversion. The law says otherwise. Under DENR Administrative Order 2008-26, Section 10(e), carried into the IRR of RA 11038, NIPAS areas may contain Multiple-Use Zones. In these zones, settlement, agriculture, agroforestry, extraction, and livelihood activities may be permitted. Even land tenure rights can be allowed, subject to the Protected Area Management Plan. In other words, NIPAS is a regulatory designation, not an automatic forest preservation guarantee. Hydrology responds to slope, soil porosity, and tree cover — not legal cartography.

Commerce expands more quickly than contour lines can withstand. Three outcomes converge. Land values rise without a parallel safe housing supply. Ecological buffers shrink faster than drainage systems are upgraded. Disaster risk is redistributed rather than reduced. The city becomes economically attractive yet environmentally fragile — bankable in dry months, breakable in wet ones.

The core policy question is therefore not “Should Cebu grow?” but rather, “Should Cebu grow without slope limits, drainage safeguards, housing balance, and hydrological discipline?” A land use plan that expands markets can be beneficial. However, if it creates flood risks for vulnerable communities, it does not represent a development strategy. It is a liability transfer encoded in zoning policy.

Urban planning must retire the outdated metric of success defined by hectares converted. It should adopt a new standard measured in households protected, watersheds stabilized, and risks prevented. Cities do not fail when the economy slows. They fail when slopes collapse and rivers overflow. Institutions run out of answers during the rainfall test they were meant to anticipate.

Cebu City now stands at a pivotal governance moment. The challenge ahead is not to stop development, but to civilize its direction. We need to build where water can be managed. Settling families in areas where slopes are stable is crucial. We must treat forests as infrastructure. Defending watersheds as life-support systems, not land reserves awaiting extraction, is vital.

The legacy of the CLUP will ultimately be judged by evacuation numbers. It will also be judged by flood marks and the geography of survival when the next typhoon arrives. Investment portfolios or skylines will not determine this legacy.

Progress is not proven by buildings standing in fair weather,
but by communities still standing after the storm.

Why the URC Bais Molasses Spill Demands an Official Economic Valuation

On October 26, 2025, the tailing pond of the URC Bais Distillery collapsed. As a result, thousands of cubic meters of molasses wastewater spilled into the Tañon Strait. This spill polluted over 3,000 hectares of marine waters between Negros Oriental and Cebu. The spill killed fish and discolored the water. It forced tourism operators in Bais and Manjuyod to suspend dolphin-watching and sandbar activities. What unfolded was more than an ecological crisis. It was an economic crisis as well. This crisis rippled through coastal communities. Their livelihoods depend on clean water, healthy fish stocks, and tourism income. Yet, despite the extent of the damage, there has been no official economic valuation. Without valuation, harm remains visible to the eye but invisible to the law.

Economic valuation is not about assigning a price to nature. It is about recognizing the real value of ecosystem services that sustain livelihoods and well-being. It transforms abstract losses into measurable, actionable data that policymakers and courts can use to demand accountability and rehabilitation. In the absence of valuation, justice often fails to materialize. The Clean Water Act requires the government to quantify and integrate environmental costs into planning and policy. The Philippine Ecosystem and Natural Capital Accounting System (PENCAS) Act also imposes this duty. However, in many cases these studies are never conducted. As a result, environmental disasters become administrative events instead of economic wrongs.

This failure is not theoretical. In the case of Ang Aroroy ay Alagaan, Inc. v. Filminera Resources Corp., environmental advocates in Masbate filed a petition. They aimed to stop gold mining operations. These operations were alleged to have caused water pollution and marine degradation. The case was dismissed. The petitioners did not provide scientific evidence linking the mining activity to the harm. They also failed to provide valuation evidence. The courts held that while the right to a balanced and healthful ecology is self-executory, it cannot rest on speculation. Without measurable data, there was no causal proof, and therefore no justice. This shows that when environmental damage is not quantified, the legal system has nothing to compensate. It has no foundation to impose liability. There is also no guide to direct restoration.

The law, however, provides a way to act amid scientific uncertainty through the precautionary principle. This principle is enshrined in Rule 20, Section 1 of the Rules of Procedure for Environmental Cases. It allows courts to act even when causation is not fully proven. It shifts the burden of proof to the polluter once a prima facie case of environmental risk is shown. In the landmark case Resident Marine Mammals of the Tañon Strait v. Reyes, the Supreme Court ruled that complete scientific certainty is unnecessary. Action should not be postponed if it can prevent environmental harm. In practice, however, the Filminera case demonstrates that courts hesitate to apply this principle. This happens when there is no baseline data or valuation study to demonstrate measurable harm. The absence of valuation deprives the precautionary principle of its factual footing.

In the URC Bais Distillery spill, the Environmental Management Bureau itself confirmed the contamination of thousands of hectares. They also confirmed the presence of fish kills and the closure of tourism activities. These are not speculative claims—they are facts. The prima facie case for environmental harm already exists. Therefore, failing to conduct an economic valuation at this stage runs counter to the very spirit of the precautionary principle. The principle demands preventive and remedial action even amid uncertainty, and valuation is the mechanism that gives it economic expression. Quantifying losses in fisheries, tourism, and household costs is necessary not just to demand accountability. Estimating non-market ecosystem values is also essential to guide rehabilitation and compensation.

When valuation is absent, the government cannot compute what justice demands. Victims receive no restitution, ecosystems receive no quantified restoration, and polluters face no cost proportional to the damage they cause. Without numbers, there are no remedies. Without valuation, there is no justice. And without accountability, pollution becomes merely another cost of doing business. The precautionary principle tells us to act before harm becomes irreversible. For that action to have meaning, it must be backed by measurement.

The Tañon Strait is not just a channel between two islands. It is a living system that feeds communities. It attracts tourism and anchors the regional economy. Its value is not speculative but measurable. Government agencies such as DENR, NEDA, BFAR, and local governments have a duty. They must translate this value into policy through formal economic valuation. Only then can we ensure that environmental protection is not symbolic but substantial. The spill in Bais should be a turning point. It should teach us that when damage has no price, accountability disappears. To value nature is to defend it. To measure loss is to make justice possible.

To value nature is not to commercialize it but to defend it. Measurement gives law and policy their moral weight. When damage has no price, accountability disappears. But when we count every lost fish, canceled tour, and poisoned tide, we remind the nation that ecology is economy. Justice begins with knowing what we have truly lost.

The Philippines’ New Forest Policy: A Green Revolution or a Risky Gamble?

The Philippines is a nation blessed with incredible biodiversity. However, it is plagued by deforestation. The country is embarking on a new chapter in forest management. Environment Secretary Raphael P.M. Lotilla recently launched the Sustainable Forest Land Management Agreement (SFLMA). He hailed it as a “major shift.” It promises to revolutionize how the country’s 15.8 million hectares of forest land are managed.

On the surface, SFLMA sounds like a win-win. It streamlines seven fragmented forest tenure instruments into a single, renewable 25-year contract. It also encourages diverse uses like agroforestry, tourism, and conservation. The goal? Foster job creation, cut red tape, and promote inclusive economic growth. The DENR even rolled out complementary initiatives: “Forest for Life: 5 Million Trees by 2028” and mapping over 1.18 million hectares as “Potential Investment Areas (PIAs)” ready for private-sector cash.

Officials are calling it a “new era where conservation and commerce go hand-in-hand.” But is it truly a green revolution? Or does it hold hidden risks for the environment? What about the very communities dependent on these forests?

Legal and Economic Foundations: Operationalizing PNEACAS

The SFLMA is not merely a land-use policy; it is the operational execution of the Philippine National Ecosystem and Climate Accounting System (PENCAS) Law (Republic Act No. 11995). PENCAS legally mandates the integration of the environment’s economic value into national policy. It provides the foundational framework for the SFLMA’s valuation requirement. The agreement requires the calculation of the Total Economic Value (TEV) of the forest. It moves beyond traditional resource extraction models. This TEV approach is guided by the United Nations System of Environmental-Economic Accounting (SEEA) standards mandated by PNEACAS. It ensures that forest stewardship is financially incentivized.

The TEV calculation is divided into two distinct components, which define the roles of financial experts and environmental economists. The first, Valuation of Tangible Assets (Market Value), uses financial methods to evaluate profitability. These methods include Discounted Cash Flow (DCF) and Real Options Analysis (ROA). They determine commercial profitability from timber, non-timber products, and fixed user fees. This component is essential for attracting investment and securing financing.

The second and more innovative component is the Valuation of Intangible Services (Non-Market Value). This component monetizes public environmental goods, directly supporting the goals of PNEACAS. By converting ecological preservation into a quantifiable revenue stream, the SFLMA attempts to align conservation with long-term financial interest.

The Critical Role of the Economist

The economist’s function is to serve as the translator between ecological sustainability and financial viability. They achieve this by monetizing non-market benefits. This process directly addresses the core mandates of the PENCAS Law. They generate the data required for policy alignment and incentive design. Specifically, the economist calculates the value of carbon sequestration by applying the Social Cost of Carbon (SCC). This application turns stored carbon into tradable financial assets, known as carbon credits. This conversion establishes a critical revenue stream for reforestation. They apply the Replacement Cost Method to value watershed services. This method involves estimating the expense of building man-made infrastructure to replace the forest’s natural function. Furthermore, they use the Contingent Valuation Method (CVM) in surveys. These surveys quantify the public’s Willingness To Pay (WTP) for biodiversity. They also assess ecotourism. Through these processes, the economist ensures the SFLMA valuation is consistent with the SEEA framework. They guarantee the environmental statistics are credible and can be integrated into the national economic accounts. This demonstrates that the forest is worth more when preserved than when depleted.

Structural Incentives and Regulatory Risks

The SFLMA’s structural benefits include bureaucratic simplification. This reduces red tape. The 25-year long-term tenure provides the necessary security for substantial, sustainable investment. It mandates an integrated management plan, theoretically ensuring holistic management across production and protection uses.

However, critics cite significant policy risks. A primary concern is the potential for elite capture. This concern is driven by unequal land caps. These caps allow corporations to secure up to 40,000 hectares while capping People’s Organizations (POs) at 1,000 hectares. The technical complexity of TEV calculation adds an additional barrier. It requires sophisticated financial modeling such as DCF, ROA, and CVM. This complexity effectively excludes marginalized Indigenous Cultural Communities (ICCs) and POs that lack extensive external technical and financial support.

Furthermore, the policy faces criticism regarding its environmental oversight. The provision allows proponents to secure an Environmental Compliance Certificate (ECC) after the SFLMA is awarded. This reverses standard environmental procedure. It creates a potential loophole for environmentally damaging activities. The broad allowance for “special uses,” including industrial facilities, raises fears. There is concern about the industrial conversion of biodiverse areas into monoculture plantations or logistical hubs. This could potentially undermine the conservation goals inherent in the PNEACAS framework. The unresolved ambiguity surrounding the ownership of benefits from carbon credits also poses a risk. There may be disputes and unfair distribution of benefits among the state, investors, and local communities.

Safeguards and the Critical Path Forward

The DENR has attempted to mitigate these risks by articulating key safeguards. Key safeguards include the strict requirement for Free, Prior, and Informed Consent (FPIC) in ancestral domains. They also involve using Performance-Based Renewal. In this system, the 25-year contract renewal depends on stringent performance against specific Environmental, Social, and Governance (ESG) metrics. SFLMA holders are also mandated to include social development programs to ensure local employment and fair wages.

The success of the SFLMA hinges entirely on the rigorous enforcement of these social and environmental safeguards. For the policy to truly be a green revolution, it must overcome significant institutional challenges. It must ensure that the benefits quantified through the PNEACAS-mandated valuation framework are equitably shared. Community groups must be empowered to participate effectively. They should not be marginalized by the very system designed to value the resources they steward. Without this transparency, the SFLMA cannot succeed. Equitable implementation is essential. Despite its sophisticated economic design, it risks becoming a vehicle for resource consolidation and further environmental degradation.

Reference:

The Impact of the WorldRisk Report on Philippine Real Estate

The Philippines, a nation of islands situated in the typhoon belt, remains one of the world’s most disaster-prone countries. The WorldRisk Report 2025 is a publication of Bündnis Entwicklung Hilft. It is also published by the Institute for International Law of Peace and Armed Conflict (IFHV) of Ruhr-University Bochum. It places the country among those with the highest global risk exposure. This conclusion is once again highlighted. The report has a special focus on floods. Floods are the most frequent and destructive natural hazard worldwide. Between 2000 and 2009, floods accounted for 44 percent of all global catastrophes, affecting more than 1.6 billion people and causing losses exceeding USD 650 billion. In the Philippines, flood vulnerability continues to rise because of climate-related rainfall intensification. Unregulated urbanization contributes to the risk. The degradation of natural buffers such as wetlands and mangroves exacerbates the situation.

These recurring flood events are no longer isolated environmental phenomena. They are now central to understanding how real estate functions. They are also central to understanding how real estate is valued. Climate risk directly influences property demand, development feasibility, and investment decisions. What once defined value purely in economic terms—location, accessibility, and market trends—now includes resilience, adaptability, and sustainability. Floods not only damage structures and displace communities but also recalibrate the long-term performance and desirability of land.

The Real Property Valuation and Assessment Reform Act (RA 12001), enacted in 2024, reflects this changing reality. It establishes a uniform national valuation framework, standardizes market-based approaches, and introduces mechanisms for adaptive reassessment. Among its provisions, Section 18 explicitly recognizes that disasters and calamities can alter property market values. It authorizes local government units to revise their Schedules of Market Values. This occurs whenever “significant changes” happen due to calamities or disasters. These changes can be man-made or natural. This provision marks a significant legal milestone. It integrates disaster risk into valuation governance. It acknowledges that climate events are legitimate economic variables. These variables can affect land and building worth.

This legal recognition aligns with the 2025 WorldRisk Report findings. The report calls for an integrated response. It combines four key perspectives: political, technological, social, and ecological. Political measures emphasize decentralized governance and the inclusion of risk management in land-use planning. Technological innovation encourages the use of satellite data, LiDAR mapping, and AI-based flood forecasting to inform planning and decision-making. Social resilience underscores community preparedness and traditional knowledge systems that reduce vulnerability. Ecological solutions advocate for mangrove reforestation, wetland restoration, and nature-based flood control, which simultaneously protect biodiversity and buffer human settlements.

In real estate valuation, these four dimensions translate into practical implications. Under the cost approach, flood exposure accelerates physical deterioration. It shortens the remaining economic life of improvements. Appraisers must apply higher depreciation rates. They also need to use more conservative estimates of useful life. The income approach must consider flood-induced operating expenses. It should also factor in reduced rentability and risk-based capitalization rates. These considerations help to account for uncertainty in income streams. Meanwhile, the market approach must segregate comparable sales based on hazard exposure. This is important since properties within flood-prone zones typically transact at discounted prices. These properties also exhibit longer marketing periods.

Beyond appraisal technique, the relationship between flood risk and property value also reflects broader behavioral and institutional adjustments. Developers now prioritize elevation, drainage systems, and green design. Lenders are requiring flood-risk assessments before approving mortgages. Insurers have introduced differentiated premiums based on hazard classification. These market adjustments demonstrate that resilience has become a form of economic capital—one that safeguards value and attracts investment.

Yet the transformation brought by the WorldRisk Report and RA 12001 extends far beyond valuation methodology. It is reshaping the Philippine real estate sector as a whole. Urban planning now integrates flood risk into Comprehensive Land Use Plans (CLUPs). Developers incorporate retention ponds and elevated designs as standard practice. Financial institutions are embedding environmental risk into credit assessments. The convergence of scientific data, legal frameworks, and market adaptation signals a new era in property governance. In this era, resilience is not peripheral but central to defining and protecting value.

In this evolving landscape, real estate valuation has likewise been methodologically reshaped. It is no longer a static appraisal of economic worth but a dynamic assessment of risk, sustainability, and adaptive capacity. Properties are now judged by their performance under pressure. This includes how they resist, how they recover, and how they remain useful during climate events. The very meaning of “value” has expanded: it now includes the ability to endure.

Ultimately, the 2025 WorldRisk Report and RA 12001 together redefine the fundamentals of real estate in the Philippines. The former provides the global scientific context for understanding hazard exposure. The latter establishes the national legal mechanism to respond to this exposure. Together, they transform how property is developed, managed, financed, and valued. In the age of climate uncertainty, the true measure of real estate is no longer limited to its square meters. It is also not defined by its location. Instead, it lies in its resilience per square meter.

In this century of rising tides and shifting ground, resilience is not just protection—it is value itself.

References

Bündnis Entwicklung Hilft & IFHV Ruhr-University Bochum. WorldRiskReport 2025. Available at: https://weltrisikobericht.de/worldriskreport/
Republic Act No. 12001. Real Property Valuation and Assessment Reform Act of 2024. Official Gazette of the Republic of the Philippines.
Department of Finance – Bureau of Local Government Finance. Philippine Valuation Standards (PVS 2023).

AB Agosto was named to the Environmental Impact Assessment Review Committee

In a significant development, Gus Agosto has been listed as a member of the newly established Environmental Impact Assessment (EIA) Review Committee in Region 7. The EIA process, aimed at foreseeing the environmental impact of a development, involves the preparation of an Environmental Impact Statement (EIS). This document, submitted by the project proponent or EIA consultant, serves as the application for an environmental compliance certificate (ECC).

“I am deeply honored and humbled by the appointment to serve in the EIA Review Committee. The importance of responsible and sustainable development cannot be overstated, and I am committed to contributing my expertise to ensure that development projects in our region align with environmental standards,” commented the Environmental Planner.

The ECC is granted based on a comprehensive study of a project’s significant impacts on the environment and the proposed environmental management plan. Agosto’s role in the committee involves contributing to the thorough analysis required during the review of EIS. This analysis includes evaluating data accuracy, the soundness of analysis, and the appropriateness of proposed mitigation measures.

According to DENR Administrative Order 2003-30, the Environmental Management Bureau (EMB) is entrusted with implementing the Philippine Environmental Impact Statement System (PEISS). The EMB can commission independent professionals, academic experts, and representatives from relevant government agencies as members of the EIA Review Committee (EIARC).

The EIARC, a body of independent technical experts and professionals of known probity from various fields, evaluates EIA reports and provides recommendations on the issuance or non-issuance of an ECC. It plays a crucial role in ensuring the environmental sustainability of development projects.

Project proponents are mandated to secure an ECC before commencing any development initiative. The issuance of this certificate is contingent upon a positive review of the EIS by the EIARC, highlighting the significance of this committee in upholding environmental standards in development projects.

“I believe that fostering a balance between development and environmental preservation is crucial for the well-being of our communities,” Mr. Agosto concluded.