Assessment of status and trends of forestry investments in the Philippines

The demand for forest-based goods and services has shifted in the past decades from mainly timber-based harvesting to the provision of ecosystem-based goods and services. Ecosystem provisioning goods and services include food, timber, fuelwood, non-timber forest products, medicine, resin, and latex, among other things. Among the regulating services are carbon sequestration, soil and water conservation, clean air, watershed services, and biodiversity conservation. Cultural services provide ecotourism, aesthetic value, and education. There is heightened appreciation and demand for these ecosystem goods and services due to globalization of technology and information. Investments in the forestry sector have been declining over the years due to major policy changes such as the 1987 Philippine Constitution where the timber license agreements (TLAs) were replaced by co-production, production sharing, and joint production agreements. The timber harvesting ban in primary forests in the 1990s and the recent logging moratorium in residual natural forests in 2011 significantly shifted wood production from naturally grown timber to plantation wood. These have led to increasing imports for wood to supply the wood processing industry. However, there remain opportunities for investments in the forest-based industry such as the availability of forestlands (about 4M has open access areas) where ecosystem goods and services can be developed and sustainably managed to address the continuously growing demand for such. The areas planted with tree species and high value crops such as rubber, coffee, cacao and rattan under the National Greening Program (NGP) also serve as investment opportunities for development of processing industries. This study discusses the issues and concerns that need to be addressed so that the forestry investments can become attractive and viable to interested entities. Among the recommendations are an investor-friendly policy environment and a forestry investments road map.