DOF calls for more climate resilience financing

Published November 25, 2022, 8:56 AM

by Chino S. Leyco

The Department of Finance (DOF) urged climate experts and leaders from the public, private, and development sectors to invest more in resilience finance to reduce climate risks and disasters.

At the Climate Investment Forum organized by the Climate Change Commission (CCC), Finance Secretary Benjamin Diokno raised the need to increase the availability of adaptation and resilience finance, particularly for sustainable and climate-resilient infrastructure.

Diokno said the country’s high exposure to climate and disaster risks has pushed the government to be more proactive in prioritizing disaster risks and climate change impacts.

As such, the DOF proposes a three-pronged blended approach of grants, investments, and subsidies as modalities of climate finance.

This considers the private sector, multilateral development banks (MDBs), and global financial regulatory bodies as vital partners in the mobilization of financing for adaptation and mitigation projects.

The government also continues to seek support from international channels and partners to ensure sufficient fiscal space in addressing the climate crisis.

The Philippines submitted its first nationally determined contribution or NDC in April 2021.

“The first NDC commits to a projected greenhouse gas emission reduction and avoidance of 75 percent, representing the country’s ambition for GHG mitigation by 2030 for the agriculture, waste, industry, transport, and energy sectors,” Diokno explained.

He said that the private sector is an important pillar in realizing a just transition to low-carbon economy through energy transition, technology development and deployment, and building of climate-resilient communities, with due regard to natural resources and ecosystem integrity.

To encourage private sector participation, the DOF and the Bangko Sentral ng Pilipinas (BSP) have established a sustainable finance ecosystem to synergize public and private investments in green projects and create the environment for greener policies.

Meanwhile, the Securities and Exchange Commission (SEC) has released guidelines on the issuance of Green Bonds under the ASEAN Green Bonds Standards.

“This provides a reference point for determining the eligibility of green projects covering renewable energy, energy efficiency, pollution prevention and control, environmentally-sustainable management of living natural resources and land use, clean transportation, and adaptation of green infrastructure,” Diokno said.

The government has also developed the Sustainable Finance Framework that lays out the process for ensuring transparency and disclosure of the use of proceeds, as well as the expected environmental and social impact of eligible green and social projects, in keeping with international best practices.

“These efforts have helped us successfully issue our first-ever sustainability global bonds worth $1 billion, and sustainability samurai bonds worth $600 million,” Diokno said.

Last month, the Marcos administration tapped the international capital markets for the first time with an offering of $2 billion triple-tranche global bonds.

The 25-year global bonds were issued under the Philippines’ Sustainable Finance Framework and marks the country’s third Environmental, Social, and Governance (ESG) G3 bond offering.

“There is clearly a great interest in the investment community in green investments. The Philippine government is keen on strengthening its policies on climate financing,” said Diokno.