By Angela Arnante

THE PHILIPPINES sits on a goldmine of forest and carbon wealth. But an unclear and short-sighted property rights regime is choking its potential; existing rules are partially to be blamed.

Forest lands, which are State-owned lands, span 15.8 million hectares or half of the country’s total land area. The 1987 Constitution states that all lands of the public domain, forest lands included, belong to the State. It can either manage them directly or partner with private entities, as long as Filipino citizens own at least 60% of the company involved and these agreements last 25 years, renewable for another 25. This legal framework along with existing policies, designed to regulate the exploitation of natural resources like mining and logging, now constrains investment in regenerative and non-extractive activities such as reforestation and carbon sequestration.

SHORT-TERM TENURE STIFLES LONG-TERM INVESTMENTS
The current tenure framework on forest lands does not match the biological and economic realities of forest and carbon development. While fast-growing trees like falcatta can be harvested in six to 15 years, high-value hardwoods such as narra, mahogany, and teak, and famous dipterocarp species like yakal and lauan take 20 to 25 years to mature just for a single-growth cycle. On top of this, renewing agreements can take anywhere from a year to even over a decade, leaving some existing investors in limbo and potential ones at bay.

A similar challenge exists for green and blue carbon projects — those that protect or restore ecosystems while capturing and storing carbon dioxide to help fight climate change and generate income through carbon credits. Whether involving tree plantations or mangrove ecosystems, these initiatives typically require project lifespans of 25 to 100 years to generate credible climate benefits and financial returns. However, legal agreements on forest lands remain capped at 25 years, renewable for another 25 years. This mismatch undermines investor confidence and reduces the bankability of carbon projects in the country.

UNCLEAR OWNERSHIP OF TREES AND CARBON
Moreover, a fundamental question remains unresolved: who owns the trees, and the carbon sequestered in forest lands? On private land, ownership is clear. On forest lands, however, it is less so.

Under the Revised Civil Code, ownership of land extends to what is attached to it. But can an exception be made for planted trees and sequestered carbon in forest lands? Can legal ownership of renewable resources be separated from land ownership?

Current forest tenure agreements generally recognize that tenure holders own the trees they plant, but this recognition is not backed by a stable legal framework. Such uncertainty dampens project sustainability. A more explicit legal separation between land, tree, and carbon rights, therefore, is needed to assure tenure holders, local communities, and investors.

Other countries offer more progressive models. In Australia and New Zealand, ownership of land, planted trees, and carbon credits can be distinct and transferable. This legal clarity enables dynamic investment flows and long-term planning — conditions that are lacking in the Philippine context.

POLICY INSTABILITY UNDERMINES SECTOR CONFIDENCE
The Philippine government has a history of implementing blanket bans as band-aid solutions to a systemic problem. Since the 1970s, the Philippine government has issued 44 different logging bans. The most far-reaching is Executive Order No. 23 (2011), which prohibits the harvesting and transport of timber from natural and residual forests. While intended to curb illegal logging and promote forest recovery, the policy inadvertently harmed legitimate tree farmers and wood processors, many of whom have ceased operations due to supply constraints. Regrettably, illegal logging persists — often at a larger scale than what regulated tenure holders could produce. A blanket, reactive approach to forest governance penalizes compliant stakeholders while failing to address systemic enforcement.

TIME FOR A PARADIGM SHIFT
A shift in perspective is essential: tree planting and carbon farming are renewable, nature-based practices and should not be regulated under the same legal framework as non-renewable resource extraction, such as mining or fossil fuel development. As environmental priorities, methodologies, and technologies evolve, so too must the legal tools used to manage natural resources.

The most direct solution would be to amend or repeal constitutional restrictions that limit the duration of tenure on forest lands. But for now, below are low-hanging policy proposals that offer promising solutions:

• Legally define carbon rights as separate from land rights, establishing who owns carbon credits and under what conditions they may be traded (Carbon Rights bill).

• Legally classify planted trees as personal property, distinct from land ownership (Tree Growing Agreement bill).

• Extend the maximum lease period of private lands for foreigners from 75 years to 99 years (amendments to the Investor’s Lease Act). This measure has already been ratified by both the House and Senate and is just awaiting the President›s signature. This bill includes agroforestry and ecological preservation as part of the activities that can be undertaken.

• Make comprehensive data on forest lands publicly accessible (Integration of forest lands in the national cadastre system).

Together, these reforms would lay the foundation for a more modern, climate-aligned system of resource governance.

Finally, there is a need to strengthen the property rights of the indigenous peoples (IPs) as private landowners who can directly enter business with either local or foreign investors. The IPs own vast hectares of land, most of them in the uplands, making them suitable for forestry and carbon-related projects. Their lands are private in nature and therefore they should not be asking for permits or clearances from the State when it comes to the utilization of natural resources in their domains. Moreover, as long-standing stewards of the land, they have safeguarded our forests for centuries, making them natural leaders in forest conservation and management.

SECURE PROPERTY RIGHTS DRIVE SUSTAINABILITY
Ultimately, tree plantation activities or carbon farming depend on a strong property rights regime. Investors, local communities, and indigenous groups need clear legal assurances that the trees they plant and the carbon they sequester can be owned, traded, and passed on.

The Philippines stands at a crossroads. It can remain bound by outdated frameworks and miss out on the opportunities of the green and blue economies — or it can enact forward-looking reforms that align the governance of resources with the demands of climate action and sustainable development.

Who owns the trees and the carbon? The answer should be just as simple: The person or community who planted and cared for them. The State’s role should be to ensure a clear and stable property rights system that supports responsible stewardship — not to impose and promulgate outdated rules designed for extractive industries on regenerative, sustainable activities.

Angela Arnante is a public policy advocate and is the assistant director of Policy and External Relations at the Foundation for Economic Freedom.