Aims: This paper described the availability of students’ learning environment in physical education under modular instruction in terms of exercise and dance in a public school in Negros Occidental, Philippines during the school year 2021-2022 when they were taken as a whole and grouped according to sex, parents' highest educational attainment, and family income. Likewise, it described their learning motivation both intrinsic and extrinsic. Lastly, it described their challenges in environment, content, teacher, learner, and technology. Study Design: The study utilized the quantitative design particularly the descriptive approach. Place and Duration of Study: The study was conducted among the students of a public school in Negros Occidental, Philippines during the school year 2021-2022. Methodology: Using the validated and reliability tested questionnaires, the study was responded by 264 grade 10 students determined through stratified random sampling. The instrument was assessed using the scale: 1-strongly disagree, 2-disagree, 3-neutral, 4-agree, and 5-strongly agree. In terms of data analysis, mean and standard deviation were utilized to describe the three constructs. Results: The students’ availability of learning environment facilities in physical education under modular instruction in terms of exercise (M=3.93; SD=0.52) is rated with agreeable result. In the availability of learning environment facilities relative to dance        (M=3.88; SD=0.63), it was rated with agreeable result. Finally, the overall availability of learning environment facilities (M=3.91; SD=0.53) in physical education under modular instruction is rated with agreeable result. Meanwhile, the students’ intrinsic motivation (M=4.30; SD=0.60) is rated strongly agree. Their extrinsic motivation (M=4.09; SD=0.67) in physical education is rated agree. Finally, the overall students’ learning motivation (M=4.19; SD=0.60) in physical education is rated with agreeable result. The students’ challenges in learning physical education (M=3.31; SD=0.84) is rated neutral. The top challenge is the students’ difficulty in understanding the lessons in dance (M=3.69; SD=0.96) with agreeable result. The least challenge is on the students’ existing health conditions and diseases (M=2.29; SD=1.27) with disagreeable result. Conclusion: The success of physical education modular instruction highly depends on the availability of environment facilities as manifested by the favorable space and adequate learning resources. Also, when the students’ intrinsic and extrinsic motivations are in place, quality physical education instruction is guaranteed.