The Department of Environment and Natural Resources (DENR) has signed a Department Administrative Order (DAO) laying the groundwork for the Philippines to become an investment hub for forest carbon, according to the agency’s latest report.

The order was signed Sunday by Environment Secretary Raphael P.M. Lotilla and seeks technical support from the United Nations Development Programme (UNDP) to help develop a sustainable carbon market infrastructure aligned with the country’s climate goals.

The UNDP established the United Nations’ Reducing Emissions from Deforestation and Forest Degradation initiative, known as UN-REDD, in 2008 to support forest conservation efforts among partner countries.

Under the partnership, the DENR crafted the DAO with four priority areas and a target implementation period from 2026 to 2030 to establish a Voluntary Forest Carbon Market (VFCM) in the Philippines.

According to a UNDP release issued in August 2025, carbon markets use carbon credits to allow governments, private companies and individuals to offset emissions by investing in projects that mitigate climate change.

The DAO outlines specific guidelines on carbon rights and trading and calls for the development of digital infrastructure, including a National Forest Monitoring System and a Forest Carbon Credit Database.

It also defines the roles of key DENR offices, mandating the Forest Management Bureau and the Biodiversity Management Bureau to focus on their respective areas of responsibility.

The DENR said the order also aims to ensure an inclusive and sustainable carbon market that considers the welfare of local communities and Indigenous Peoples, with support from the Department of Finance.

The DAO is set to take effect 15 days after its publication, the DENR said.