2026 Philippines Regulatory Momentum Across Renewable Energy Certificates, ESG Reporting, and Carbon Readiness

The Philippines entered 2026 with significant regulatory progress across renewable energy certificates (RECs), ESG reporting, and voluntary forest carbon markets. Recent policy developments reflect stronger alignment with global standards, improved market integrity, and increasing clarity in the country’s renewable energy and carbon market frameworks.

I-REC Philippines: Six-Month Expanded Issuance Trial

On 21 January 2026, the International Tracking Standard Foundation (I-TRACK Foundation) launched a six-month trial (21 January–24 July 2026) temporarily expanding eligibility for I-REC(E) issuance in the Philippines. During this period, additional renewable energy generation facilities may register and receive I-RECs, provided they are not participating in any other renewable energy certificate (REC) program. The initiative aims to introduce greater flexibility while maintaining strict safeguards against double-counting.

I-REC(E) issuance in the Philippines has historically been limited due to overlap risks with the country’s mandatory Renewable Portfolio Standard (RPS) and the domestic Renewable Energy Market (REM). Since 2021, I-TRACK restricted issuance for assets commissioned in or after 2009 to prevent conflicts with compliance RECs.

The trial follows engagement with the Department of Energy (DOE), which issued a 2024 advisory stating no objection to voluntary REC markets, provided voluntary systems ensure attributes are not used for RPS compliance. This development coincides with the REM reaching full commercial operations in late 2024 under the Independent Electricity Market Operator of the Philippines (IEMOP), supported by an Energy Regulatory Commission price cap.

Overall, the trial offers short-term supply opportunities and improved sourcing options, but long-term market confidence will depend on clear rules governing the coexistence of compliance and voluntary RECs.

ESG Reporting: Mandatory IFRS-Aligned Sustainability Disclosures

In early 2026, the Philippine Securities and Echange Commission (SEC) adopted the Philippine Financial Reporting Standards (PFRS) on Sustainability Disclosures, aligned with the International Sustainability Standards Board’s IFRS S1 and IFRS S2. This marks a transition toward mandatory, globally aligned sustainability reporting for Philippine companies.

Implementation will follow a phased approach. Large publicly listed firms (market capitalization above PHP 50 billion) must begin reporting in 2027 for the fiscal year 2026, followed by mid-cap listed companies in 2028. By 2029, all remaining listed firms and large non-listed entities (annual revenues above PHP 15 billion) will be required to comply. The framework significantly expands sustainability reporting obligations beyond publicly listed companies.

The standards introduce mandatory limited assurance for Scope 1 and Scope 2 emissions two years after reporting begins, while transitional measures, such as deferred Scope 3 disclosures and phased climate-risk reporting to help ease compliance.

This shift aligns the Philippines with global and ASEAN regulatory trends promoting transparency, comparability, and investor-focused ESG disclosures. For Philippine companies, particularly those integrated into global supply chains, the adoption strengthens credibility, supports continued market access, and enhances their ability to communicate sustainability-related risks and opportunities affecting enterprise value.

Voluntary Forest Carbon Market: DENR Roadmap to Readiness (2026-2030)

In February 2026, the Department of Environment and Natural Resources (DENR) issued a Department Administrative Order formally adopting the Philippines’ Roadmap to Readiness in the Voluntary Forest Carbon Market (2026–2030). The initiative aims to position the country as a credible supplier of high-integrity forest carbon credits while ensuring alignment with its Nationally Determined Contributions (NDCs) and promoting inclusive community development.

The DAO highlights adherence to high-integrity standards and assigns the DENR Climate Change Service to ensure consistency with national climate strategies. In coordination with the Department of Finance, DENR will explore sustainable financing options, including a potential Trust Fund to reinvest carbon revenues into forest protection and conservation.

Developed with technical support from the United Nations Development Programme (UNDP), the roadmap was shaped through multi-stakeholder consultations across government agencies, local governments, the private sector, and civil society. It will take effect fifteen days after official publication.

The roadmap prioritizes four areas: establishing a clear governance framework for carbon rights and trading; strengthening Measurement, Reporting, and Verification (MRV) systems and registries; clarifying institutional roles for terrestrial and blue-carbon oversight; and developing sustainable financing and benefit-sharing mechanisms for local communities and Indigenous Peoples.

The roadmap strengthens policy clarity and market integrity, supporting investor confidence and improving the credibility of Philippine forest carbon credits in voluntary markets.

Conclusion

Overall, these developments demonstrate the Philippines’ clear move toward a more transparent, structured, and internationally aligned sustainability and carbon market framework. The I-REC(E) trial, mandatory IFRS-based ESG reporting, and the Forest Carbon Market Roadmap collectively strengthen regulatory clarity, market integrity, and global credibility. For investors and corporate buyers, this signal improving policy stability and growing confidence in the Philippines as a competitive participant in renewable energy, ESG, and voluntary carbon markets.

For tailored advisory, procurement, and implementation support across renewable energy certificates, carbon markets, and ESG compliance, contact Mt. Stonegate to explore how we can support your decarbonization journey in the country.

References:

1. Expanding permission for I-REC issuance in the Philippines: Six-month trial to run 21 January to 24 July — Tracking Standard (i-TRACK Foundation): https://www.trackingstandard.org/expanding-permission-for-i-rece-issuance-in-the-philippines-six-month-trial-to-run-21-january-to-24-july/

2. SEC Memorandum Circular No. 16, Series of 2025 — Philippine Securities and Exchange Commission (adoption of IFRS S1 & S2-aligned sustainability reporting framework for Philippine entities)

3. DENR adopts roadmap to readiness for voluntary forest carbon market — BusinessMirror (9 Feb 2026): https://businessmirror.com.ph/2026/02/09/denr-adopts-roadmap-to-readiness-for-voluntary-forest-carbon-market/