The government is exploring innovative ways to protect its financial health against future climate crises and other adversities, the Department of Finance (DOF) said in a statement yesterday.
Carlos Dominguez, DOF secretary, also said in a virtual event the Philippines is looking forward to a strengthened partnership with the World Bank in boosting the country’s fiscal sustainability.
“We are aware that more of these climate-related challenges will come, as they are symptoms of a long-term crisis that we have yet to address,” Dominguez said in his pre-recorded keynote speech at the online launch of the World Bank’s Philippine Economic Update.
“This difficult year threw a harsh light on our vulnerabilities, but it has steeled our determination to proactively manage our risks and make our communities more resilient,” he added.
Acknowledging the urgency of implementing stronger adaptation measures to help Filipinos survive and thrive amid the climate crisis, Dominguez said the government will strengthen the integration of disaster risk mitigation in its fiscal strategy.
He said the coronavirus disease 2019 (COVID-19) outbreak, along with the eruption of Taal volcano in January and the powerful storms that struck one after the other in November, has shown that the climate crisis remains a formidable threat to the Philippines’ gradual recovery from the prolonged pandemic.
“Even as we have to spend more for our COVID-19 and disaster response efforts, we will continue exercising fiscal discipline to ensure the resilience of our economy. We do not know when the next health crisis or disaster will be, but we know that it will come. We must be prepared,” Dominguez said.
“We will strengthen the integration of disaster risk mitigation in our fiscal strategy. We will also explore innovative financing structures to proactively protect the fiscal health of our government against adversities,” he added.
To ensure that Filipinos “will not just survive, but thrive in a new and resilient economy that (the administration) is building” amid a worsening climate crisis, Dominguez said the government is pursuing several measures.
Among these is shifting public investments to clean energy resources and green technologies. Dominguez recalled that the Philippines recently declared a moratorium on endorsements for greenfield coal power plants and liberalized foreign investments in the geothermal sector.
“These strides in utilizing clean energy sources are a confirmation of our country’s strong resolve towards sustainable development,” he said.
He also mentioned ramping up infrastructure spending and pushing structural reforms that will improve the business environment, foster competition, reduce trade costs, fast-track the digitalization of the economy and strengthen the country’s resilience to natural disasters.
Also among the measures are adopting an effective management of the country’s food supply by the Department of Agriculture and continued implementation of the Rice Tariffication Law to ensure food security; hastening the modernization of Philippine agriculture to boost the sector’s resilience against future emergencies; and deploying financial tools to build resiliency and widen financial inclusion from the household to the national levels through the increased use of modern technologies.
“The Philippines is turning the pandemic into an opportunity to accelerate our efforts to build sustainable and safer cities,” Dominguez said.
He added as the Philippines shifts to a more sustainable economy, other nations should also perform their respective roles in mitigating and, if possible, reversing the effects of the climate emergency.
“Protecting communities in climate-vulnerable countries like the Philippines must become a global effort. Our present challenges are previews of what other countries will face if the climate crisis worsens,” Dominguez said.
“If the international community beats back the climate emergency in frontline countries like the Philippines, we are more likely to succeed in adapting to this global challenge elsewhere,” he added.
Dominguez pointed out the Philippines continues to assume its responsibilities under the framework of the Paris Agreement in fighting the climate crisis and in respecting the regulatory benchmarks for allowable carbon emissions.
“We urge all countries to adhere firmly to their respective commitments under the agreement. We must also work together to come up with a broader and more comprehensive international climate action plan,” Dominguez said.
He said unlike COVID-19, in which vaccine development continues to make headway, there is no quick-fix solution to the warming of the planet.
“The effects of the climate emergency will be disastrous over the coming years unless we find the courage and resolve to undertake the measures needed to reverse it,” Dominguez said.
“All nations and international stakeholders must raise cooperation on the climate crisis to the highest level,” he added.
Dominguez said over the past years, the Philippines has put in place several sustainable development and climate adaptation and mitigation programs, including a National Climate Change Action Plan, a Catastrophe Risk Model and a National Asset Registry System to better deal with climate-related risks.
The Philippines also has a People’s Survival Fund that provides public financing to local government units for climate adaptation programs and projects, and a National Disaster Risk Reduction and Management Council that is organized down to the smallest political units to help localities prepare the logistics needed to save lives in the face of calamities, he said.
World Bank has been providing the Philippines access to appropriate financing products, such as the country’s first-ever Insurance-Linked Security or Catastrophe bond issued last year.
The World Bank is also currently supporting the Philippines through its 3rd Disaster Risk Management Policy Loan, which is a financing package that aims to strengthen the country’s capacity to prepare for, respond to and recover from natural disasters, including health emergencies like the coronavirus pandemic.
This World Bank policy loan support follows two earlier Risk Management Development Policy Loans with a Catastrophe-Deferred Drawdown Option, which provided the government with immediate liquidity to help fund its disaster relief and reconstruction efforts.