NextGen Day

President Ferdinand “Bongbong” Marcos Jr. will continue to pursue a nationwide strategy for reducing climate risks, according to Finance Secretary Benjamin Diokno, as the Philippines pledges to be at the forefront of international climate action.

“The Philippines is one of the nations most vulnerable to climatic calamities. To combat the catastrophe, we are therefore committed to being a global leader, Diokno remarked during the G20 high-level breakfast conversation on climate change mitigation last Saturday.

The G20, or Group of Twenty, is an intergovernmental organization that aims to address issues related to sustainable development, international financial stability, and climate change reduction.

It is made up of 19 nations plus the European Union, which have the largest economies in the world and account for around 60% of the world’s population, 80% of the world’s gross domestic product (GDP), and 75–80% of global commerce.

The group’s member countries’ finance ministers and central bank governors reviewed climate-related policy levers to facilitate the shift to greener economies.

The Indonesian government extended an invitation to the Philippines, which is not a member of the G20, to attend as a guest nation and present an outline of its climate policy agenda. Presently serving as both the group’s president and chair is Indonesia.

In his inaugural speech, plastic pollution and climate change were mentioned as important topics that President Marcos’ government will address.

Additionally, despite generating only 0.3 percent of the world’s emissions, the government earlier established an ambitious goal to reduce greenhouse gas emissions by 75 percent by 2030.

Diokno revealed that the Department of Finance (DOF) is supporting the passage of a measure that would either limit or charge the use of single-use plastics to further President Marcos’s goals.

He claimed that the DOF is looking into the possibility of imposing a carbon tax on the nation.

He noted that the government has gathered a team of Filipino specialists to assist areas that are vulnerable to climate change in implementing localized action plans.

Diokno said the G20 that the government is collaborating with other nations to hasten the switch from coal to clean energy in the nation, such as through an ongoing relationship with the Asian Development Bank (ADB).

He said, “We will develop clean and renewable energy sources, such as hydro, geothermal, wind, and solar power, to address the effects of climate change while reducing energy costs.

The Energy Transition Mechanism (ETM) initiative, which aims to hasten the transition of nations in Southeast Asia from coal to green energy, has been launched in partnership with the ADB with the Philippines and Indonesia.

The 26th Conference of the Parties on Climate Change (COP26) was held in October of last year, and both the announcement and the inauguration of the ETM facility took place there.

climatic financing

Given the nation’s susceptibility to climate-related catastrophes, Diokno informed the G20 that the government had elevated climate finance to a strategic policy priority.

According to him, “our climate financing initiatives will support a sustainable orchestration of grants, investments, and subsidies.”

The government is currently utilizing the Green Force, an interagency task force co-led by the DOF and the Bangko Sentral ng Pilipinas, to raise funds for climate change (BSP).

In order to close policy and regulatory gaps and promote sustainable investments, the task force is in charge of putting the Philippine Sustainable Finance Roadmap (PSFR) into action.

According to Diokno, the Philippines has received significant backing for its climate finance initiatives from multilateral partners and investors.

With the signature of the USD250 million policy-based loan for the Climate Change Action Program, Subprogram 1 (CCAP1) with the ADB in June, he claimed that the Philippines is one of the forerunners in the financing of the creation of climate policy. The first loan made by the ADB based on a climate change policy was CCAP1.

He added that despite market instability, the Philippines recently issued its first-ever sustainability global bonds and sustainability samurai bonds, both of which were in high demand.

With the issuance of USD 2.25 billion in triple-tranche 5-year, 10.5-year, and 25-year Global Bonds in March 2022, the Philippines was able to successfully access the global capital markets. The deal was the Philippines’ first triple-tranche US dollar issue.

The nation’s first Environmental, Social, and Governance (ESG) Global Bonds offering was a $1 billion 25-year bond issued under the government’s Sustainable Finance Framework.

With its JPY70.1 billion (USD 600 million) issuance of multi-tranche 5-year, 7-year, 10-year, and 20-year Sustainability bonds with an ESG label across all four tranches, the nation successfully made a comeback to the Samurai market in April 2022. This is the nation’s first-ever sale of Asean Sustainability Bonds on the Samurai Bond Market.

The proceeds from the sustainability bonds will be used to finance the government’s general budget and to finance or refinance assets in accordance with the Sustainable Finance Framework for the Philippines.

Despite the internal shift toward more sustainable operations, Diokno acknowledged that the Philippines cannot address climate change on its own or without concerted efforts from other countries.

Therefore, The Philippines pledges to lead the global campaign for climate justice. We support all countries in their call for fair and effective climate action, he said.

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