Ifugao province of the Philippines has a traditional muyong forest system that supplies water and prevents soil erosion of the world-famous Ifugao rice terraces. The socio-political structure of Ifugao has been the key to the maintenance and communal use of land, as well as the muyong forest, without causing excessive damage to the land. Recently, the Ifugao is facing various challenges viz. deforestation, slash-and-burn, introduction of commercial rice, and climate change. The aim of the study is to qualitatively assess the forest management practices in the muyong forest and the way forward to implement the United Nations—Reducing Emissions from Deforestation and Forest Degradation (REDD+) mechanism. Community forestry can be an interesting option to reduce CO2 emissions from deforestation in Ifugao. This study qualitatively explores the societal problems in the area using focus group discussion (FGD) and key informant interviews (KII). The results show that the terracing lifestyle is at risk, due to mounting economic pressures from the domestic economy. Societal changes are altering the perceptions of the youth in terms of muyong sustainable management. They are threatening the sustainability of the terraces in the long-term because of outward migration and less value given to traditional practices. Furthermore, integration of commercial rice is changing the traditional agricultural system and placing less focus on forest maintenance. This study also discusses potential challenges and opportunities of REDD+ intervention and the role of REDD+ to foster sustainable muyong forest management as well as to find new innovative ways to maintain the Ifugao traditional system while coping with the modernization of the Ifugao economy.