The Philippines is emerging as a promising destination for nature-based carbon projects, but successfully navigating its investment landscape requires a thorough understanding of regulatory frameworks, market trends, and financing mechanisms. At AtmosTalk Philippines, industry experts from the Forest Management Bureau of the Department of Environment and Natural Resources (DENR), Boston Consulting Group (BCG), and Fairatmos shared critical insights into the opportunities and challenges shaping the country’s carbon market.

Navigating Investment Regulations

Thomas Kabigting, Assistant Director of the Forest Management Bureau (DENR), delved into the regulatory landscape governing forest carbon investments in the Philippines. He highlighted that the investment horizon is capped at 50 years, split into an initial 25-year term with a potential 25-year renewal. Foreign direct investment (FDI) regulations further shape the market, limiting foreign investors to a maximum of 40% equity ownership, requiring at least 60% Filipino ownership in forest carbon projects. While the Free Trade Agreement (FTA) allows 100% foreign ownership, it applies exclusively to the mineral sector, excluding forestry and nature-based investments.

To navigate these restrictions, investors can explore alternative strategies, such as forming special-purpose vehicles (SPVs) joint ventures with fully Filipino-owned corporations, engaging in multi-party agreements with the government, or partnering with local tenured communities. These approaches provide pathways for foreign investors to participate in the Philippine carbon market while adhering to legal frameworks.

Developing the Voluntary Carbon Market (VCM)

Thomas also discussed the ongoing efforts to establish a structured market framework for the Voluntary Carbon Market (VCM) in the Philippines. While no institutional requirements currently exist, clear guidelines are expected by mid-2025, ahead of COP 30 in Brazil, with full implementation targeted for February 2026. Policy enhancements under consideration include revenue collection reforms, streamlined tenure application processes, improved identification of investment areas, and greater transparency in site and project feasibility. These measures aim to create a more investor-friendly environment while fostering growth in the carbon market.

The Role of Major Buyers and Market Trends

Jamie Bawalan, Principal at Boston Consulting Group in the Philippines, highlighted the impact of major corporations in shaping the voluntary carbon market. Companies such as Amazon, Microsoft, BCG, Bayer, and H&M are leading buyers of high-quality carbon credits, with prices ranging from $35 to $50 per ton, while top-tier nature-based credits have reached as high as $80 per ton. Their participation provides crucial long-term commitments and price stability, facilitating project financing and bank lending through advance purchase agreements.

In addition, she emphasized the growing importance of robust Monitoring, Reporting, and Verification (MRV) systems. A recent BCG survey found that buyers prioritize projects with strong MRV frameworks, as transparency and accuracy are key to ensuring credibility. The use of digital tools, satellite imagery, and historical deforestation data enhances the precision of carbon credit calculations, making them more reliable for investors and stakeholders.

The Road Ahead

With the voluntary carbon market gaining traction, the Philippines is well-positioned to become a leader in nature-based solutions. However, regulatory clarity, investment incentives, and strong MRV systems will be critical in unlocking its full potential.

Fairatmos remains dedicated to supporting project developers, investors, and policymakers in building a high-integrity, transparent, and scalable carbon market in the Philippines.

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