Finance Secretary Carlos Dominguez has urged the Asian Development Bank (ADB) to spearhead an Asean-wide initiative that would allow member-countries to exchange information and best practices on localized climate adaptation and mitigation programs.
Dominguez broached this proposal as the Philippines marked the signing of two loan agreements with the ADB through an exchange of documents last June 3, the Department of Finance (DOF) said in a statement yesterday.
One of the loan accords is aimed at supporting the country’s climate action agenda, while the other seeks to further develop the domestic capital market as a source of financing for the country’s infrastructure modernization program.
Dominguez said his proposed intra-Asean exchange of information plan is a better option than relying solely on international fora such as the annual United Nations Climate Change Conference of the Parties (COP) which focuses on the big picture in tackling the climate crisis, and usually overlooks solutions tailor-fit for local communities.
“Climate change might be a global problem. The issue, however, exhibits itself most starkly in our smallest communities. I am sure that the ADB will be ready to help us promote the exchange of climate change action and adaptation practices among the Asean countries,” Dominguez said in his speech after the exchange of the loan documents at the DOF office in Manila.
Dominguez, on behalf of the Philippine government, and ADB deputy director-general Winfried Wicklein, representing the multilateral development institution, exchanged documents for the $250 million policy-based loan for the Climate Change Action Program, Subprogram 1 (CCAP1).
The government of France, through the Agence Franí§aise de Développement (AFD), is also providing a separate 150 million euros loan to support the CCAP1’s objectives.
The signing of the loan accord for the CCAP1 makes the Philippines one of the pioneers in climate policy development financing in the region, as this is the ADB’s first-ever climate change policy-based loan.
“This initiative will hopefully encourage other countries to design and accelerate the implementation of their own climate programs. This sends a very strong signal to the international community that the Philippines is fully committed to deliver on our climate ambitions,” Dominguez said.
The ADB and AFD co-financed CCAP1 in recognition of the Philippine government’s accomplishments of policy actions in the following reform areas: planning, financing and institutional linkages for climate action; enhancing resilience to climate impacts; and strengthening low-carbon pathways.
During the event, Dominguez and Wicklein also signed the agreement for the Capital Market Generated Infrastructure Financing, Subprogram 2 (CMGIF2), which provides the Philippines with a $400 million loan to help deepen the capital markets as a source of financing for both the public and private sectors for infrastructure projects.
The CMGIF2 aims to enable the government to fund its infrastructure program at lower relative costs and allow the private sector to fund infrastructure projects through the capital markets.
“The two programs (CCAP1 and CMGIF2) are not unrelated. An improved infrastructure backbone will increase the efficiency of our economy. It will enable us to improve our climate resiliency and spur sustainable growth,” Dominguez said.
The CCAP and CMGIF 2 are intended to be budget-support loans that will form part of the country’s external financing program for 2022. – Angela Celis
