The Asian Development Bank (ADB) has approved a $500 million policy-based loan to further strengthen the Philippines’ efforts to tackle climate change.

In a statement, Pavit Ramachandran, ADB Philippines country director, said the Climate Change Action Program (CCAP) Subprogram 2 supports the country in implementing its nationally determined contribution (NDC).

NDC is the Philippines’ commitment to help advance global efforts to stabilize the world’s climate under the Paris Agreement.

ADB said the fresh loan seeks to help accelerate reforms to transform key sectors such as agriculture, natural resources and the environment, energy, and transport toward climate-resilient and low carbon pathways.

“Climate change is exacerbating all major development challenges in the Philippines. The country’s high vulnerability impacts its economic momentum and outlook,” Ramachandran said.

“This program is part of our commitment to help our host country avert economic damages from future climate change impact, mobilize green investment, and transform its economy,” he added.

The Philippines faces the highest disaster risk in the world, according to the World Risk Index 2022–2024.

In recent weeks, four strong typhoons impacted the Philippines one after the other, highlighting the country’s vulnerability to increased frequency and intensity of extreme weather events.

Economic damages from climate-related disasters could be as high as 7.6 percent of gross domestic product by 2030.

Under its NDC, the Philippines aims to cut greenhouse gas emissions and scale up adaptation.

Subprogram 2 is instrumental in delivering these ambitions through key reforms such as adopting the NDC Implementation Plan and NAP 2023–2050, scaling up budget allocations for climate activities, and deploying climate technologies at national and local levels.

The program also strengthens policies and regulations to mobilize climate-related investment in renewable energy and energy efficiency, climate-resilient agriculture and nature-based solutions.

The Philippines’ CCAP was approved in 2022 as ADB’s first climate policy-based loan across Asia and the Pacific.

The program is an important component of ADB’s new country partnership strategy 2024–2029, and its country climate investment plan, that aims to mobilize $10 billion in climate finance for the implementation of the country’s NDC and national adaptation plan (NAP). CCAP Subprogram 2 was prepared jointly with the Agence Française de Développement, which is providing cofinancing of $278.3 million to the government.