Philippine President Ferdinand Marcos, Jr has ordered the creation of a national carbon market policy framework to attract climate investments and support domestic emissions cuts, the Presidential Communications Office announced on 17 October.
The executive order, signed on 13 October, directs the Department of Environment and Natural Resources (DENR) to develop rules governing participation in domestic and international carbon markets, which enable trading in credits generated by projects that reduce or remove greenhouse gas emissions.
The framework will cover voluntary carbon credits, bought by choice rather than legal obligation, as well as credits under Article 6 of the Paris Agreement, which sets government approval and accounting rules for international carbon trading. The categories can overlap, but voluntary credits do not automatically meet Article 6 requirements.
Under the order, the DENR will provide technical, policy and regulatory inputs for nature-based solutions, forestry and waste, while the Department of Energy will cover the energy sector.
The Department of Agriculture and Philippine Statistics Authority will handle agriculture-related inputs, and the Department of Transportation will cover transport-related carbon credit projects. The Department of Finance will address fiscal policy, investment promotion, climate finance and the fiscal implications of carbon market transactions.
“There is a need to formulate a national carbon market framework aligned with international standards, through a whole-of-government approach, to support the achievement of the country’s NDCs,” the order stated, referring to the Nationally Determined Contribution, a country’s climate action plan under the Paris Agreement.
The Philippines submitted its updated pledge in September, seeking to strengthen its net sink status but without committing to a fossil fuel phase-out or net zero.
John Leo Algo, national coordinator of the 40-member civil society network Aksyon Klima Pilipinas, said the order signals that the framework could be completed by COP31 or early 2027, potentially attracting investors awaiting clearer rules.
But its contribution to stronger climate ambition remains uncertain, he told Eco-Business.
“While the 2026 NDC has been finalised, it is missing a 1.5°C-aligned decarbonisation pathway and, subsequently, how much of its conditional target is planned to be achieved through carbon markets.”
Algo urged meaningful consultations in the coming weeks, including with communities whose lands are being considered for carbon projects, rather than only prospective market participants.
Jonathan Joson, Philippine operations head at Singapore-based carbon solutions firm Kennemer Eco Solutions, welcomed the order’s multi-agency approach.
“I am more confident that this executive order resolves the fragmentation. There is higher regulatory certainty leading to investor confidence,” he told Eco-Business.
Joson previously warned that carbon credit rules released last year, covering only clean energy projects, could divert investment from nature-based solutions, agriculture and blue carbon without an overarching framework.
The order follows a Philippine-Singapore Article 6 agreement signed in May, establishing a legal framework for transferring emissions reductions between the countries. Observers cautioned that credible benefits would depend on robust rules for measuring and approving those reductions.
Other Southeast Asian countries have also pursued such agreements before establishing comprehensive domestic carbon markets.
Vietnam, which plans to make its carbon market fully operational around 2028, signed an agreement with Singapore last year allowing credits generated by Vietnamese projects to be transferred to the city-state.
Thailand also signed an Article 6 agreement with Singapore last year. It operates voluntary crediting schemes and is exploring an emissions trading system, but has yet to introduce a nationwide compliance carbon market.
