The Department of Finance (DOF) has been on top of ensuring that the Philippines is equipped with the right policy tools for Environmental, Social, and Governance (ESG) compliance to take the lead in financing climate action and ensure sustainable economic growth.

The DOF, in collaboration with other government agencies and the private sector, has been developing the Climate Finance Strategy (CFS) to help finance its climate priorities, support its active membership in the global multilateral funds, and scale up sustainable finance efforts through the Interagency Task Force on Sustainable Finance (ITSF).

The CFS will serve as a national blueprint to scale up financing for climate-related initiatives through harmonized public and private sector efforts. The CFS has identified key steps to ensure a steady stream of resources toward the pursuit of a climate-resilient Philippines. This includes accelerating the Implementation of the National Adaptation Plan (NAP), Nationally Determined Contribution Implementation Plan (NDCIP), and Sustainable Finance Roadmap (SFR); strengthening stakeholder capacity for Climate Finance Stewardship; unlocking finance from International Mechanisms;
maximizing Domestic Budget Allocations for Climate Action; advancing Climate Outcomes vis-a-vis Public-Private Partnerships; and increasing Transparency and Accountability in Climate Action.

The initiatives on the CFS are funded by the projects of the United Kingdom Foreign, Commonwealth & Development Office through the Climate Finance Network, as well as the Government of Canada through its Accelerating Green and Climate Finance for the Philippines Project.

Furthermore, the ITSF is prioritizing the crafting of a policy and legal framework for Carbon Markets on Voluntary Carbon Markets (VCM) and Article 6 Internationally Transferred Mitigation Outcomes (ITMOS), and the potential for financing Green Projects under the Public-Private Partnership (PPP) Code.

The DOF also continues to coordinate with the World Bank (WB) for its support for the Technical Working Group (TWG) on Carbon Pricing Instruments (CPIs). In designing our carbon policy, the TWG carefully considers its potential socio-economic impacts to ensure that the policy will be non-inflationary, conducive for investment, and well-suited for the country.

“It is our priority to work in close coordination with other key government agencies to prepare the necessary institutional arrangements, infrastructure, registry, and robust monitoring, reporting, and verification measures to send clear policy signals to the domestic and international market that we produce high-integrity carbon credits,” DOF Undersecretary Maria Luwalhati Dorotan-Tiuseco said.

To boost public sector investment in green infrastructure, the government is also updating its Sustainable Finance Framework to enhance the scope of eligible expenditures to be financed by the proceeds of the bonds, incorporate updated sustainability principles, and include more innovative sustainable finance structures. As of 2025, the Philippines has issued a total of USD 7.5 billion in sustainable global bonds. The proceeds from the bond issuances have been used to support the country’s green agenda across clean transportation, climate change adaptation, sustainable agriculture, and renewable energy, among others.

On top of this, the country is also equipped with a reliable funding mechanism that is designed to help local government units (LGUs) implement climate change adaptation projects.

The People’s Survival Fund (PSF) Board has already fully committed the fund for 13 projects and 6 Project Development Grants for locally-led climate adaptation projects in 2024.

Serving as the Designated Alternate Chair of the Board, DOF Undersecretary Dorotan Tiuseco also announced the recent and first ever replenishment of the PSF amounting to PHP 1 billion under the General Appropriations Act FY 2025. This funding will be used to implement NAP-aligned projects of local government units.

As a testament to its leadership in climate action, the Philippines also holds board memberships in several international climate funds through the DOF.

Undersecretary Tiuseco, who also sits as a board member of the Green Climate Fund (GCF) and Adaptation Fund (AF), shared that the DOF has been leveraging more financing from the operating entities of the Financial Mechanisms of the United Nations Framework Convention on Climate Change (UNFCCC) and UN Convention on Biological Diversity.

Last January 2025, the Philippines was renewed for another term in the GCF Board as an Alternate Board Member under the Asia Pacific Group Constituency and was also appointed as a member of the AF Board for 2025 to 2027.

The AF provides financing to projects and programs that help vulnerable communities in developing countries adapt to climate change.

The DOF is currently advancing its application to be a national implementing entity of the AF to allow it to receive direct financial transfers to implement adaptation projects and programs.

The DOF also serves as co-chair of the Board for Accelerating Green and Climate Finance in the Philippines: Nature-Based Solutions (AGCF).

With an approved funding of USD 4.5 million, the AGCF is a project funded by the Government of Canada that aims to contribute to strengthening the Philippines’ resiliency against natural hazards by advancing gender-responsive policies and Nature-based Solutions from March 2022 to December 2026.

Some of the projects under the AGCF include the Securities and Exchange Commission (SEC) Small and Medium Industries and Large Enterprises Embracing Sustainability (SMILEES) Roadshow.

The project has capacitated both SMEs and Publicly Listed Companies in embedding sustainability within their business operations and developing tools for enhanced reporting. This initiative helps usher businesses towards green capital markets and tap the vast opportunities that sustainable finance can offer.

The AGCF has also contributed to the development of a one-stop shop for Sustainable Development Goals (SDG) implementation in the Philippines through the National Economic and Development Authority’s (NEDA) Stakeholder Partnership Accelerator for Convergence and Engagement (SPACE) web application. This helps the public and private sectors identify and develop bankable projects.