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Green Climate Fund Philippines

Green Climate Fund Our Reality Climate Financing Introduction

Climate Financing for Adaptation and Mitigation

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Consistent with its international commitments and the National Climate Change Action Plan (NCCAP), the Philippine government has undertaken a responsive climate change reform agenda in the last decade. This is evident in the scaled-up financing for climate adaptation and mitigation in its National Expenditure Program.

The NCCAP, which was mandated by the Climate Change Act of 2009, turns to climate financing by leveraging both public and private investments to address the country’s climate challenges.

The United Nations Framework Convention on Climate Change, to which the Philippines is a party, defines climate financing as “the local, national or transnational financing—drawn from public, private and alternative sources of financing—that seeks to support mitigation and adaptation actions that will address climate change.”

The Climate Change Act of 2009 mandates all relevant government agencies and local government units (LGUs) in the Philippines to allocate sufficient funds for the development and implementation of their climate change programs and plans. This includes spending for capacity-building, direct intervention, public awareness campaigns, education and training, and micro-credit schemes to strengthen the country’s resilience to the impacts of climate change.

Four agencies—the Climate Change Commission (CCC), Department of Budget and Management (DBM), National Economic and Development Authority (NEDA), and Department of Finance (DOF)—are tasked to oversee the Philippines’ climate reform initiatives.

To assess gaps in policies and financing, and to fast-track the implementation of the climate agenda, the DBM and CCC asked the World Bank to do a Climate Public Expenditure and Institutional Review (CPEIR). Conducted between February 2012 and March 2013, the CPEIR examined the limitations and possibilities in the government’s approaches to addressing climate issues.

The CPEIR recommended scaling up climate action guided by three pillars:

  • Strengthening the planning, execution and financing framework for climate change
  • Enhancing leadership and accountability through monitoring, evaluation, and reviews of policies and activities
  • Building capacity and managing change

In 2013, the DBM and CCC established a common framework for Climate Change Expenditure Tagging to be used by all national government agencies in the planning, budgeting, monitoring, and reporting of their climate change expenditures, as defined by the NCCAP. In 2014, the DBM, CCC and Department of Interior and Local Government issued another memorandum encouraging LGUs to tag climate spending in their Annual Investment Plans.

Since then, there has been a notable increase in the allocation of local and national budgets for climate change activities. The total national climate allocation for climate-tagged expenditures went up from 5 percent in 2015 to 7.3 percent in 2018, with a large part going to climate adaptation, as seen below:

FISCAL YEAR ADAPTATION BUDGET (Php) MITIGATION BUDGET (Php)
2016 157.41 billion 11.01 billion
2017 149.92 billion 44.60 billion
2018 263.83 billion 7.26 billion

The Program Budget Approach (PBA) was instrumental in facilitating public expenditure on climate change. Through the PBA, government agencies were able to work together and use the extra fiscal space they each have to fund climate-related priority programs. This was what the multi-agency Cabinet Cluster on Climate Change Adaptation and Mitigation-Disaster Risk Reduction did in 2015, when over 80 percent of its PBA was channeled to climate adaptation and mitigation, representing half of the total climate expenditures in the 2015 General Appropriations Act.

However, despite the Philippine government’s increased climate spending, the domestic budget is far from adequate to address the climate challenges in the country.

According to the CCC, the Philippines needs US $12-15 billion to meet its intended Nationally Determined Contributions (NDCs) of reducing up to 70 percent of the its greenhouse gas (GHG) emissions by 2030. This is where global climate financing comes into play to bridge funding gaps in addressing the country’s climate change challenges.

The government continues to invest in climate resilience not only to protect the country from present risks and reduce future impacts of global warming but to reap the socio-economic and environmental benefits of a low carbon and climate-resilient development pathway.

But the national government cannot do it alone.

The private sector must be engaged in financing mitigation activities, especially in the energy sector. LGUs, too, must be equipped with capacities to plan their climate actions and secure climate financing, especially from multilateral organizations.

The World Resources Institute has identified seven key multilateral climate funds to help sort the country’s climate finance needs, some of which are already available to the Philippines.