MB ANNIVERSARY SPECIAL
The government, through the Department of Finance (DOF) and the Bangko Sentral ng Pilipinas (BSP,) is strictly adhering to Philippine Sustainable Finance Roadmap and Guiding Principles on the use of low carbon energy, in support of global efforts to fight climate change which was launched in October 2021.
The roadmap sets the policy and regulatory gaps in promoting sustainable investments in the country that aims to synergize investments from the public and private sector towards green and social projects.
The masterplan, developed under the auspices of the United
Kingdom (UK) Government’s ASEAN Low Carbon Energy Program (ALCEP), also gave an overview of the Sustainable Finance landscape in the Philippines.
Under this roadmap, the development of sustainable financing on green policies and programs is built on three strategic pillars, namely: Policy—creating a conducive environment; Financing—mainstreaming sustainable finance; and Investment—developing a sustainable pipeline.
Also, there is a set of Guiding Principles that will serve as taxonomy for the sustainable finance ecosystem in the Philippines.
The said principles have also been aligned with ASEAN Standards for Green Bonds, the EU Taxonomy, and other internationally accepted standards for green taxonomy.
The Roadmap and its Guiding Principles are expected to spur investments from various financing sources to support the country's Nationally Determined Contribution and long term priorities.
Just recently, the Asian Development Bank (ADB) has extended to the Philippines its first-ever climate change policy-based financing worth $250 million, making the country one of the pioneers in climate policy development financing.
The Philippines has also successfully tapped the international capital markets with its offerings of Sustainability Bonds. The recent issuances in March 2022, October 2022, and January 2023 received strong demand from investors.
At the Asia House Annual Outlook on Jan. 25, Finance Secretary Benjamin Diokno briefed ministers, key government organizations, and senior business leaders of the Philippines’ economic outlook and agenda.
During the forum, Diokno particularly zeroed in on the DOF’s sustainable finance ecosystem, which will synergize investments from the public and private sector. “This highlights the growing investor-investee confidence in our commitment to achieving sustainable development and mitigating climate change,” said Diokno. Moreover, Diokno stressed with his fellow finance ministers last
December their vital role in integrating green solutions into global economic recovery and development.
“Ministries of Finance across the globe play a vital role in pushing for reforms that incentivize and finance the integration of biodiversity considerations into economic recovery and development,” said Diokno.
He cited that world expenditures on biodiversity conservation only amount to $120 billion to $140 billion.
These are mostly sourced from domestic public spending and accounts for only around 20 percent of the annual cost of implementing the proposed post-2020 global biodiversity framework that is valued at not less than $700 billion.
“We are not waiting around for longoverdue commitments to materialize. We are moving ahead with reforms to quicken our shift to more sustainable practices,” Diokno emphasized.
For one, the Philippines has begun its shift towards sustainability with the recently approved House Bill No. 4102 or the Single-Use Plastic (SUP) Bags Tax Act. The bill seeks to help regulate the consumption of SUPs as part of the country’s efforts to reduce plastic pollution.
The DOF is also studying the feasibility of implementing carbon pricing mechanisms such as carbon tax to generate revenues that can be tapped for environmental concerns.
“The twin challenges of biodiversity loss and climate change are fundamentally interlinked. They must be addressed together as part of a broader green and inclusive recovery. The Philippines stands in solidarity with all nations in the global call for an equitable green recovery,” Diokno said.