The objectives of this CountryEnvironmental Analysis (CEA) were to assess theenvironmental quality in the Philippines with a focus on howthis affects human welfare and sustainability, measure andanalyze the biophysical significance and monetary cost ofenvironmental degradation and derive priority areas ofaction, assess the Philippines government's capacity tomanage the environmental challenges identified, and identifyopportunities for reform and interventions. The Philippineshas sound and comprehensive environmental laws and policies.However, it suffers from weak implementation because ofinadequate capacity and financial constraints both at thenational and local levels. A shift in strategy toward moredevolution to local levels of government, enhanced resourcemobilization for environmental management, betterprioritization, and retooling of human resources areurgently needed to accommodate new priorities. The CEA alsorecommends improvements in environmental information systemsand public access to such information.