The Department of Environment and Natural Resources (DENR) took a major step toward making the Philippines a hub for forest carbon investments, signing a Department Administrative Order (DAO) this Sunday.

Secretary Raphael P.M. Lotilla signed the order, which calls for technical support from the United Nations Development Programme (UNDP) to build a sustainable carbon infrastructure aligned with the country’s climate goals.

UNDP has long championed forest conservation through its UN-REDD (Reducing Emissions from Deforestation and Forest Degradation) initiative, launched in 2008 to help partner countries protect their forests while reducing carbon emissions.

Under the new DAO, the DENR has laid out four priority areas to establish a Voluntary Forest Carbon Market (VFCM) in the Philippines, with a roadmap spanning 2026 to 2030.

Carbon markets allow governments, companies, and individuals to offset emissions by investing in climate-positive activities, using carbon credits to track and trade reductions, according to a UNDP release from August 2025.

The DENR’s plan includes clear guidelines for carbon rights and trading, a digital infrastructure via a National Forest Monitoring System and a Forest Carbon Credit Database, and defined roles for key agencies. The Forest Management Bureau and the Biodiversity Management Bureau will focus on their respective mandates to ensure proper management.

The agency also emphasized inclusivity, aiming to involve local communities and Indigenous Peoples in the new market, with support from the Department of Finance.

The DAO will take effect 15 days after its publication, marking a key milestone for the country’s climate and forest conservation efforts.