Land degradation in the Philippines is a serious environmental problem with long-term implications for the sustainability of agricultural production. Protection of the resource base has thus become a policy priority, whether in terms of improving crop management in the lowlands or more urgently, arresting soil erosion in the uplands. This review aims to compile and evaluate estimates of the costs of land degradation; then analyze the costs, benefits, and equity implications of priority measures to protect soil resources; and lastly, draw implications for policy. We find that the most important cause of land degradation in the Philippines is soil erosion. Despite wide variations in the figures, and considerable uncertainty about the degradation parameters, even the most conservative methods lead to large estimates of the cost of soil erosion, comparable at least to the annual investment in research and development of the public sector. Direct interventions such as promotion of soil-conserving farm technologies are worthwhile investments based on social benefit-cost analysis. Owing to liquidity and other constraints, however, farmers may forego these investments. Indirect interventions such as tenure reform have an ambiguous effect on soil erosion; however, removal of domestic protection of corn has a positive effect on soil conservation. Upland farmers, including the large population of subsistence corn growers, are among the poorest segments of the rural population. The review supports increasing and widening incentives for adoption of soil conservation and permanent tree crops through extension and improved tenurial measures, while ensuring that trade adjustment be accompanied by adequate social protection.