The paper “Carbon Pricing in the Philippines” published by the International Institute for Sustainable Development (IISD) reviews the experiences of other governments and applies its own analysis of proposed carbon pricing and carbon market legislation filed in the Philippine House of Representatives under the 20th Congress. Specifically, this paper examines the texts of House Bills (HBs) 1817, 2055, 2481, 3685, 3820, 6407, and 6890, drawing on IISD’s technical submissions to the House Committee on Climate Change and a broader review of related bills filed before the House adjourned on 3 June 2026. The analysis considers factors that typically shape whether carbon pricing and carbon market frameworks work well in practice: whether they reduce emissions, encourage cost-effective decarbonization, remain administratively feasible, maintain support from businesses and the wider public, protect market integrity, and contribute to a just transition. 

The paper identifies several areas where legislative refinement could strengthen the design and implementation of the proposed schemes: 

  • HBs 2055, 3685, and 3820 offer an innovative and flexible mix of compliance options, but international experience suggests that focusing initially on a smaller set of sectors, clarifying the role of decarbonization plans in allowance allocation, and carefully designing the CCC-determined carbon price so that it supports an effective domestic compliance market could strengthen implementation
  • HBs 6407 and 6890 present key refinements to the preceding bills by clarifying connections with international carbon markets, aligning emissions caps with the collective temperature goal under the Paris Agreement, explicitly including financial institutions as covered enterprises, and introducing additional tax incentives. Further refinement could focus on protecting domestic NDC achievement, clarifying interim cap adjustments, safeguarding market integrity where financial institutions participate, and assessing whether tax exemptions should be more targeted. 
  • HB 2481 provides a clear pathway toward auctioning and revenue recycling through the Climate Reinvestment Fund. However, its relatively rapid auction schedule might benefit from a more gradual phase-in. Moreover, while prioritizing community-led just transition programs is commendable, broadening the uses of revenues to include infrastructure and industrial transition investments could accelerate the economy’s adaptation to carbon pricing and deliver wider social and economic benefits. 
  • HB 1817 complements the proposed carbon pricing bills by clarifying the legal status, ownership, transfer, and benefit sharing of carbon credits. This could help reduce the legal uncertainty for carbon project developers, communities, Indigenous Peoples, and potential buyers. Further refinement could focus on ensuring consistency with NDC accounting, strengthening safeguards against double counting and false claims, clarifying how credits may be used in any future domestic compliance scheme, and assessing whether the proposed tax exemptions should be more targeted. 

Access the paper here