The issuance of Executive Order (EO) No. 127, series of 2026, marks an important development in the regulation of carbon markets in the Philippines. Signed on October 13, 2026, the Executive Order directs the formulation of a national policy framework governing the country’s participation in domestic and international carbon markets. It also designates the Department of Environment and Natural Resources (DENR) as the National Authority for Carbon Markets and establishes an inter-agency mechanism to coordinate the implementation of the government’s carbon market policies.

A National Framework for Carbon Market Participation

EO No. 127 seeks to establish a coordinated approach to carbon market activities, covering both voluntary carbon markets and international transactions under Article 6 of the Paris Agreement. The proposed Philippine Carbon Market Policy Framework is intended to provide the rules governing eligible carbon projects, carbon credit registration, issuance, transfer, authorization, and reporting.

The Framework will also address recognized carbon crediting standards and methodologies, environmental and social safeguards, benefit-sharing arrangements, and the requirements for international transfers of emission reduction outcomes. These measures are intended to ensure that carbon market activities are consistent with the country’s climate commitments and applicable national policies.

DENR as the National Authority for Carbon Markets

One of the principal features of the Executive Order is the designation of the DENR as the country’s National Authority for Carbon Markets. In this capacity, the DENR will oversee and authorize the registration and implementation of carbon mitigation projects and establish, manage, and maintain the Philippine National Carbon Registry.

The Registry will serve as the central system for recording and tracking carbon credits and internationally transferred mitigation outcomes, including their issuance, authorization, transfer, cancellation, and retirement. This is particularly relevant to organizations developing carbon projects or participating in carbon credit transactions, as the registration and tracking of credits will form part of the government’s regulatory oversight.

Creation of the Inter-Agency Committee on Carbon Markets

EO No. 127 also establishes the Inter-Agency Committee on Carbon Markets (IACCM), chaired by the Climate Change Commission, with the Department of Finance as Vice-Chair. Its members include the DENR, Department of Energy, Department of Agriculture, Department of Transportation, Department of Trade and Industry, and Securities and Exchange Commission.

The Committee is tasked with providing policy direction, coordinating government agencies, reviewing the implementation of the Framework, and approving reasonable processing fees for carbon market applications and certifications. The participation of these agencies recognizes that carbon market activities may involve several sectors and regulatory jurisdictions.

Implications for Businesses and Project Developers

For businesses, investors, and organizations undertaking carbon-related activities, the Executive Order signals a more coordinated regulatory environment. Organizations involved in forestry, renewable energy, agriculture, transportation, waste management, and other eligible activities should take note of the forthcoming requirements governing project registration, carbon credit authorization, monitoring, reporting, and benefit-sharing.

Existing carbon credit projects will also be covered by the transition to the Philippine National Carbon Registry once it becomes operational. Government agencies maintaining records of carbon crediting projects are required to share or transfer relevant information to the DENR within three months from the effectivity of the Executive Order.

Implementation and Compliance Considerations

The DENR is directed to prepare and submit the proposed Philippine Carbon Market Policy Framework to the IACCM within 30 days from the effectivity of the Executive Order. The Committee, in turn, is required to approve the Framework within 30 days from receipt.

Organizations should therefore monitor the issuance of implementing guidelines, particularly those concerning eligibility requirements, registration procedures, recognized carbon standards, government authorizations, applicable fees, and the transfer of carbon credits. The Executive Order also provides that policies involving fiscal matters, revenue generation, carbon pricing, or the possible transition to a compliance carbon market are subject to the concurrence of the Department of Finance.

The Road Ahead

EO No. 127 establishes an important foundation for the development and regulation of carbon markets in the Philippines. While the detailed requirements will depend on the national policy framework and subsequent implementing issuances, organizations involved in carbon-related projects and transactions should begin assessing the implications of the new regulatory structure on their existing and proposed activities. Understanding the applicable requirements at an early stage will be essential in managing compliance obligations, protecting contractual and commercial interests, and preparing for the country’s expanding participation in carbon markets.