This paper assessed the biophysical and economic consequences of land-use change from Imperata grasslands to continuous maize cropping and tree-based farming systems in Claveria, Northern Mindanao, Philippines. The long-term productivity and sustainability of upland farms under the three land-uses (Imperata, maize and Gmelina) were determined through a bioeconomic modeling approach using Soil Changes Under Agroforestry (SCUAF) model linked to a cost-benefit spreadsheet. Changes in soil carbon and soil erosion as well as carbon sequestration potential were examined. Simulation results have shown that the Gmelina system appears to be superior compared with the other systems studied since it had the least cumulative soil loss and highest organic C retained in the soil-plant system. The Gmelina plantation system obtained a higher level of farm productivity, highest private financial profitability and social benefits from carbon sequestration. The social benefits of carbon sequestration for Gmelina system can strongly justify for government intervention that would encourage farmers to transform marginal Imperata areas into a productive and sustainable Gmelina plantation system.