The Duterte administration is mulling over the possible expansion of the coverage of the ASEAN Green Bonds Framework to include sectors such as transportation, infrastructure and commercial banking, in step with heightened global efforts to mobilize investments aimed at improving the resilience of communities to the perils of climate change, Finance Secretary Carlos Dominguez III said Thursday.

Dominguez said the government wants to mainstream access to green financing, which refers to the funding of investments that encourage sustainable development, through banks and microfinance institutions.

The government is also exploring the possible funding of various public-private partnership (PPP) projects through green financing, he said during the forum on “Green Finance Towards a Sustainable Philippines” held this morning at the Bangko Sentral ng Pilipinas (BSP) Cafetorium Building in Manila.

ASEAN Green Bonds refer to bonds and sukuk (Islamic bonds) that comply with the ASEAN Green Bond Standards (GBS), which were developed through consultations with the International Capital Market Associations (ICMA), capital regulators and industry players in the Association of Southeast Asian Nations. Proceeds from the issuance of ASEAN Green Bonds will be exclusively applied to finance or refinance, in part or in full, new and/or existing eligible Green Projects.

Dominguez said the government’s strategies to meet the “encompassing challenge” of climate change–as outlined in the Philippine Development Plan (PDP) and the National Climate Change Action Plan (NCCAP)–require huge investments, which is why “we need to refine our concepts and instruments for green financing to help make investments in adaptation and resilience an attractive one.”

“The Philippines is among the most vulnerable to the effects of climate change. We have seen how increasingly severe weather conditions inflict a growing cost on our economy, increase the vulnerability of our communities and threaten our food security. We need to put in our best efforts to turn back climate change and improve resilience to minimize economic dislocation,” Dominguez said during the Green Finance Forum.

This event, which aims to serve as a platform for harnessing and building on the rapidly increasing interest in climate funding and development of new markets for green finance, was convened by the British Embassy in Manila in partnership with the Department of Finance (DOF), BSP, National Economic and Development Authority (NEDA) and the Climate Change Commission (CCC).

With climate change emerging as the most pressing global problem, Dominguez said green financing has turned into an effective weapon for countries, especially the highly vulnerable ones like the Philippines, to mobilize investments for both the government and private sector to carry out a broad list of initiatives, ranging from the wider use of renewable energy to improving the resilience of local communities to erratic weather patterns that lead to devastating natural calamities.

“The global response to the perils of climate change is two-pronged. First, we need to drastically reduce the amount of carbon we throw up into the atmosphere. Second, we need to prepare our communities to withstand the severe weather conditions that global warming has already brought to our doorstep,” Dominguez said. “The challenges posed by climate change demand all hands be on deck: government, the private sector and the non-government organizations.”

Dominguez said the private sector’s involvement in green financing shows that “there is clearly a great interest in the investment community in green investments.”

“The Philippine Government is keen on strengthening its policies on climate financing,” Dominguez said. “Specifically, government is looking at expanding the coverage of the ASEAN Framework for Green Bonds to cover such sectors as transportation, infrastructure, and commercial banking.”

“We hope to mainstream access to green financing through the banks and microfinance institutions. We are, to be sure, exploring possible funding of various public-private partnerships or PPPs through green financing,” he said.

The Philippine government and the financial sector, in tandem with multilateral institutions, have been carrying out initiatives to help strengthen the resilience of communities to climate change and mobilize investments for climate finance in line with the strategies outlined in the PDP and NCCAP.

Dominguez said these initiatives include the following:

· The launch in 2016 of the People’s Survival Fund as a financing program to fund climate change projects proposed by local government units. The Fund has an annual rolling minimum budget allocation of P1 billion;

· Approval by the Securities and Exchange Commission (SEC) on Aug. 16, 2018 of the Guidelines on the Issuance of Green Bonds under the ASEAN Green Bonds Standards. The guidelines provide a reference point for determining the eligibility of green projects covering renewable energy, energy efficiency, pollution prevention and control, environmentally sustainable management of living natural resources and land use, clean transportation and adaptation of green buildings;

· The Department of Budget and Management (DBM)’s “Green, Green, Green” Program launched on Oct. 1, 2018 to assist 145 cities in making life more livable for its residents through the development of public open spaces;

· Issuance in 2016 by the Asian Development Bank (ADB) of its landmark $225-million climate bond through the Bank of the Philippine Islands (BPI). The proceeds were used to finance the rehabilitation of the Tiwi-Makban geothermal facility;

· The first internationally rated Triple-A peso-denominated green bond called the Mabuhay Bond amounting to $90 million issued on June 25, 2018 by the International Finance Corporation (IFC) through BDO Unibank;

· China Banking Corporation (Chinabank)’s successful issuance on Oct. 19, 2018 of its first green bond in 2018, which raised $150 million with the IFC as sole investor. The proceeds will be used to fund climate-related projects in renewable energy, green buildings, energy efficiency and water conservation; and

· The Development Bank of the Philippines (DBP)’s Green Financing Program to assist strategic sectors, industries and local governments in adapting environment-friendly processes and technologies through both financing and technical assistance.

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