This presentation seeks to address whether building social capital through policy and other incentives can affect the state of the environment. "Social capital" is operationalized into measurements of level of trust, membership in associations/ organizations, reciprocity and collective action applied in a survey in Lantapan. Conclusions reached are: social capital and environmental degradation are found to be non-linear in nature; if there were good relations between the community and the village governance, people have high propensity to collectively participate in the management of natural resources; incentives to do sustainable resource (i.e. soil) management practices vary; social capital should be seen as giving policymakers useful insights into the importance of community, the social fabric and social relations at the individual, community and societal levels in natural resource management.