With interest in plans to federalize the Philippine government system gaining steam because of renewed confidence in the applications and benefits of decentralization, it is important to look at the impact of such a change on regional politics, community development, and the management of natural resources in the country. Issues involving property rights, boundary-setting, and the degradation of the once rich set of natural resources in the country are further complicated by the vague and overlapping functions of national and local governments in addressing environmental issues; with greater, more localized knowledge of the characteristics of these common-pool resources and of the people using them, the decentralization of natural resource management through the devolution of responsibilities to local government units is seen as ideal. Proposals that a federal system of governance is the most effective way of achieving development goals and environmental objectives when the current 1991 Local Government Code of the Philippines already does what they say federalism seeks to do soft-pedal consequences that come with a massive overhaul of the system, such as issues regarding technical capacity, jurisdiction, and the lack of political will. Unless these issues of government inefficiency, the ambiguity of environmental policies, and the unclear roles of the different levels of government in resource management are solved, a move toward a federal regime will result in more of the same: the continuing decline of the state of the Philippine environment and its natural resources.