Finance Secretary Benjamin Diokno recently assured the G20 or Group of Twenty recently, President Ferdinand “Bongbong” Marcos Jr. will continue to pursue the government’s whole-of-nation approach in mitigating climate risks, as the Philippines commits to be at the forefront of global climate action.
“The Philippines is one of the countries at the highest risk for climate-related disasters. We are thus determined to be a world leader in this fight against the crisis,” Diokno said.
The G20 is an inter-governmental forum that works to address global economic issues, including international financial stability, climate change mitigation, and sustainable development.
It is composed of 19 countries plus the European Union, which together, comprises the world’s largest economies, accounting for around 60% of the world’s population, 80% of global gross domestic product (GDP), and 75-80% of international trade.
During its recent forum, Finance ministers and central bank governors from the group’s member countries discussed climate-related policy levers to enable the transition towards greener economies.
The Philippines is not part of the G20 but was invited to participate by Indonesia as a guest nation to share an overview of its climate policy agenda. Indonesia currently chairs the group as its president.
President Marcos, in his inaugural speech, identified plastic pollution and climate change as among critical issues his administration will address. The Philippine government previously set an ambitious commitment to reduce greenhouse gas emissions by 75% by 2030 despite contributing only 0.3% of the total global carbon emissions.
To support the agenda of President Marcos, Diokno shared that the Department of Finance (DOF) supports the passage of a bill by Congress that would either regulate or tax the use of single-use plastics.
He said the DOF is also studying the imposition of a carbon tax in the country, and the government has assembled a group of Filipino experts to help climate-vulnerable communities execute localized action plans.
The Philippine government, Diokno said, is working together with the international community, like its ongoing partnership with the Asian Development Bank (ADB), to quicken the country’s transition from coal to clean energy.
“We will deal with the impact of climate change while bringing down energy costs through developing clean and renewable energy sources, such as hydro, geothermal, wind, and solar power,” he added.
The ADB has partnered with the Philippines and Indonesia in rolling out the Energy Transition Mechanism (ETM) project, which aims to accelerate the transition of countries in Southeast Asia from coal to green energy.
The ETM facility was announced and launched at the 26th United Nations Climate Change Conference of the Parties (COP26) in October of last year.
Diokno told the G20 forum that, considering the Philippines’ vulnerability to climate-related disasters, the government has made climate finance a strategic policy priority.
“Our climate finance initiatives will promote a sustainable orchestration of grants, investments, and subsidies,” he said. Currently, the government is mobilizing climate finance through the Green Force, an inter-agency task force jointly led by the DOF and the Bangko Sentral ng Pilipinas (BSP).
The task force is mandated to implement the Philippine Sustainable Finance Roadmap (PSFR), with the goal of bridging policy and regulatory gaps in promoting sustainable investments.
Diokno said the Philippines has drawn in strong support from multilateral partners and investors for its climate finance initiatives.
He said the Philippines is one of the pioneers in climate policy development financing with the signing of the US$250 million policy-based loan for the Climate Change Action Program, Subprogram 1 (CCAP1) with the ADB last June. CCAP1 was the ADB’s first-ever climate change policy-based loan.
He also shared that the Philippines recently issued its first-ever sustainability global bonds and sustainability samurai bonds, which were all met with strong demand despite the global market’s volatility.
Last March, the Philippines successfully tapped the international capital markets with the country’s offering of US$2.25 billion triple tranche 5-year, 10.5-year, and 25-year Global Bonds. The transaction was the first triple tranche US dollar offering from the Philippines.
The 25-year Global Bonds worth US$1 billion were issued under the government’s Sustainable Finance Framework and marks the country’s debut Environmental, Social, and Governance (ESG) Global Bonds offering.
This was followed in April 2022 by the country’s successful return to the Samurai market with its JPY70.1 billion (US$600 million) offering of multi-tranche 5-year, 7-year, 10-year, and 20-year Sustainability bonds with an ESG label across all four tranches. This is the first-ever Asean Sustainability bond transaction issued by the country in the Samurai bond market.
Proceeds from the sustainability bonds will help fund the government’s general budget and finance/refinance assets in line with the Philippines’ Sustainable Finance Framework.
The Finance Secretary, however, admitted that while there is a shift to more sustainable activities domestically, the Philippines cannot solve climate change alone without the conscientious and orchestrated actions by all nations.
“The Philippines, therefore, commits to be at the forefront of the global movement for climate justice. We stand in solidarity with all nations in calling for concrete and equitable climate action,” Diokno stressed.