The Philippine government has moved to develop a system to account for the use of environment and natural resources to ensure that development will be sustainable, according to the National Economic and Development Authority (NEDA).

NEDA Deputy Director-General Emmanuel F. Esguerra said that such a system, called natural capital accounting (NCA), is important because the Philippines has not been able to maximize the benefits of its natural resources, as evidenced by the pervasiveness of poverty in sectors that are dependent on them. Natural capital accounting or NCA refers to how a country recognizes and measures the use of its environment and natural resources to be able to determine how much these resources contribute to the economy and livelihoods.

“Despite the challenges faced in the past, current conditions in the country already make it possible to have natural capital accounting included in the country’s programming and policy formulation process,” said Esguerra in a session during the World Bank’s 4th Wealth Accounting and the Valuation of Ecosystem Services (WAVES) Partnership Meeting in Washington, D.C. on May 14, 2014. “There is now a methodology in place that is generally acceptable,” said Esguerra.

He added that a greater demand for NCA has been noted as governments, civil society, and the private sector are increasingly being challenged to incorporate environmental and natural resource concerns in development planning and policy.

“The implementation of natural capital accounting could not therefore have come at a more opportune time. The NCA results will serve as bases for analysis and as indicators in preparing national and regional development plans,” said Esguerra.

He also explained that the NCA provides a metric to inform policy and planning with respect to the socio-economic and environmental trade-offs associated with alternative resource uses, as well as their implications for equity and sustainable development.

“In particular, the results of NCA are useful in informing the development of economic instruments like fiscal rules for mineral resources and water pricing,” he said.

Moreover, Esguerra underscored that NCA could address policy challenges concerning water pollution and siltation, land use conflicts, revenue and benefit sharing from mineral resources, and coastal zone protection and disaster-risk reduction.

“The updated Philippine Development Plan 2011-2016, which aims for inclusive growth, mentions resource valuation as a priority. This is central to a transparent, science- and evidence-based approach to decision making, particularly where it concerns natural resources and the environment,” he concluded.

Esguerra noted that developing the NCA system could take time and may have to be done in phases.

The session titled “Going #BeyondGDP: Making Natural Capital Count for Development” looks into how countries value their natural resources in making informed decisions that concern their development. Esguerra represented the Philippines during the panel session as the Philippine government is already currently working with the Global Partnership on WAVES to build natural capital accounts.