The Department
of Finance (DOF), under
the leadership of Secretary Benjamin E. Diokno,
has led intensified climate
action initiatives in 2023
amid escalating challenges of global warming.
In January, the
DOF and the Agence
Française de Développement (AFD) had a ceremonial exchange of loan
agreement following the
signing of the EUR 150
million (about PHP 9.11
billion) policy-based loan
for the Climate Change
Action Program, Subprogram 1 (CCAP1) to help
the Philippines heighten
its efforts to mitigate and
adapt to climate change.
The AFD and the
Asian Development Bank
(ADB) are supporting the
Philippines’ ambitions to
scale up its climate action with a combined policy-based loan amounting
to EUR 390 million (about
PHP 23.7 billion), include
ng the EUR 150 million
(about PHP 9.1 billion)
mobilized by AFD in addition to the US$ 250-million (about PHP 13.9 billion) loan extended by the
ADB for the CCAP1. The
program aims to support
the country in achieving
its Nationally Determined
Contribution (NDC) commitments and in its efforts
to assist vulnerable sectors in the transition to a
resilient, low-carbon economy.
In March, the
Green Climate Fund
(GCF) Board approved the
Adapting Philippine Agriculture to Climate Change
(APA) Project amounting
to US$ 39.2 million (about
PHP 2.2 billion), financed
by the GCF through a
grant of US$ 26.3 million
(about PHP 1.5 billion)
and Philippine government co-financing of US$
12.9 million (about PHP
718.8 million).
The Project
builds on the Adaptation
and Mitigation Initiative in
Agriculture (AMIA) led by
the Department of Agriculture (DA) through activities
that will help the country
shift towards a climate-resilient agricultural system
and increase climate resilience in rural areas.
The People’s
Survival Fund (PSF)
Board, chaired by Secretary Diokno, approved
grants totalling PHP 579
million in 2023 in order to
help LGUs pursue their climate adaptation projects.
President Ferdinand R. Marcos, Jr. officially presented the PSF
Resolutions approving the
historic amount of over
PHP 541 million for newly
approved climate adaptation projects to LGU beneficiaries in December.
The approval
of the said new projects
brought the total number
of PSF-funded projects to
11 climate adaptation initiatives and 6 projects for
the Project Development
Grants (PDGs), amounting
to a combined PHP 889.6
million. This increased the
PSF’s utilization rate to 89
percent.
In November,
the World Bank (WB) approved a US$ 500-million
(about PHP 27.9 billion)
development policy loan
that the Philippine government can immediately
draw upon in times of natural disasters and health
crises, mitigating their impact on the economy.
In the same
month, the Philippines,
through the DOF, was
formally inducted into the
Board of the Vulnerable
20 Group of Finance Ministers (V20) – Group of
Seven (G7) Global Shield
Against Climate Risks.
Global Shield
Against Climate Risks
aims to make considerable
progress towards providing and facilitating more
and better pre-arranged
protection against climate
and disaster-related risks
for vulnerable countries.
Furthermore, the
government has actively
implemented fiscal and
economic policies to attract more sustainable investments in the country
such as the Corporate Recovery and Tax Incentives
for Enterprises (CREATE)
Act, the Strategic Investment Priority Plan (SIPP),
the Sustainable Finance
Roadmap, the Energy Efficiency and Conservation
Act, the Renewable Energy Act, and the Philippine
Green Jobs Act.
With the Marcos,
Jr. administration’s ambitious Build Better More
program, the government
is heavily investing in 197
high-impact, sustainable,
and climate-resilient infrastructure projects through
a financing mix of domestic resources, official
development assistance
(ODA), and public-private
partnerships (PPP).
Through the Inter-Agency Task Force
on Sustainable Finance
(ITSF) or “Green Force”,
the DOF is building a sustainable finance ecosystem to synergize public
and private sector investments.
Upon launching
the Sustainable Finance
Framework last year, the
Philippines successfully
issued 4 sustainable global bond offerings amounting to US$ 3.55 billion
(about PHP 197.9 billion).
The government
has utilized the proceeds
from the bonds to finance
projects that support employment generation, access to essential services,
COVID-19 expenditure,
sustainable management
of living and natural resources, renewable energy, and climate change
adaptation.
The Bangko Sentral ng Pilipinas (BSP) and
other financial regulatory
agencies are currently developing principles-based
Sustainable Finance Tax-onomy Guidelines (SFTG),
which will serve as a tool
to determine whether an
economic activity is environmentally or socially
sustainable. This directs
private sector investments
towards climate change
adaptation and mitigation
(CCAM) initiatives.
The DOF has
also been aggressively
pushing for the passage
of several environmental
fiscal measures.
The proposed
imposition of excise tax on
single-use plastics (SUPs)
is expected to curb plastic
usage and generate additional revenues for the
country’s development
needs.
The proposed rationalization of the mining
fiscal regime will capture
the reasonable share of
mining revenues without
restricting mining investments.
Moreover, the
DOF is exploring the implementation of a Motor
Vehicle User’s Charge
applicable to all vehicle
types as well as the consideration of a carbon tax
and carbon pricing instruments.
The DOF is also
conducting a study, in
partnership with the World
Bank, on the feasibility
of complementary implementation of a carbon tax
and an emissions trading
system. The carbon tax
will put a price on greenhouse gas emissions,
while an emissions trading
system will fix the quantity
of greenhouse gas emissions.
Just recently,
the DOF championed the
Philippines’ landmark initiatives for climate action
and efficient mobilization
of climate finance at the
2023 United Nations Climate Change Conference
(COP28) from December
1 to 12, 2023 in Dubai,
United Arab Emirates
(UAE).
Secretary Diokno
called for collective and
decisive action from partner financing coalitions in
catalyzing global public
climate finance, thanking
specifically the ADB for
being a strong and reliable partner in the country’s fight against climate
change.
At COP 28,
ADB President Masatsugu Asakawa announced
the Bank’s commitment
to provide US$10 billion
(about PHP 557.3 billion)
in climate finance support
for the Philippines from
2024 to 2029.
Aside from its
support in mobilizing climate finance, the ADB is
helping the Philippines develop its Nationally Determined Contribution Implementation Plan (NDC IP),
which will be instrumental
in facilitating a sound and
robust climate finance
ecosystem in the country.
Secretary Diokno
also pushed for the urgent
preparation of the New
Collective Quantified Goal
(NCQG) to sustain and enhance both the quality and
quantity of climate finance.
He recommended setting up a five-year
timeframe to ensure coherence in the overall
climate action under the
United Nations Framework Convention on Cli
mate Change (UNFCCC).
To close the climate finance gap, Secretary Diokno advocated
for the use of gender-responsive nature-based
solutions, saying that the
Philippines has made significant strides in integrating elements of gender-responsive climate action
into its efforts.
He cited the PSF
as a prime model for gender-responsiveness as it is
managed by a multi-sectoral Board wherein women and girls are amply
represented through the
Philippine Commission on
Women (PCW).
Moreover, its criteria for approval take into
account the responsiveness of a project to gender-differentiated vulnerabilities to climate change.
The DOF is also
co-implementing the Accelerating Green and Climate Finance in the Philippines for Nature-Based
Solutions Project, which
aims to increase the climate resilience of the
Philippine population and
economy by mobilizing
private sector investments
into gender-responsive
nature-based solutions for
climate-resilient technology, innovations, practices,
and approaches. It was
launched in 2022 with financial support from the
Government of Canada.
The DOF also
advocated for the digitalization of the payments
system which can help
unlock greater efficiency
and more options for beneficiaries of social protection programs, citing the
success of the Pantawid
Pamilyang Pilipino Program (4Ps) that brought
swift relief to affected sectors of the country through
digital cash transfers.
D e v e l o p m e n t
partners that utilized the
4Ps’ digital payment platform testified to the significant reduction in their
administrative and transaction costs.
The Marcos, Jr.
administration has put
emphasis on pushing for
more digitalized transactions in all government
agencies, especially frontline offices like LGUs to
provide seamless and accurate service to the Filipino people.
This is in line with
the President’s 8-Point
Socioeconomic Agenda
on enhancing the digital
economy and is laid out
in the Philippine Development Plan (PDP) 2023-
2028.
Finally, Secretary
Diokno called for mobilizing blended finance to
scale up climate action,
saying that innovative
sources of financing are
needed to augment the
increasing financing costs
associated with climate
action.
The Philippine
delegation to the COP 28
was led by Department
of Environment and Natural Resources (DENR)
Secretary Ma. Antonia Yulo-Loyzaga.
COP28 is the
28th annual meeting of
parties to the UNFCCC.
The Parties are composed
of the 198 countries that
signed up to the original
UN climate agreement in
- DOF.GOV
