World Bank OKs $750 million loan for Philippines climate resilience

MANILA, Philippines — The World Bank has approved a $750-million policy loan to support reforms that promote environmental protection and climate resilience in the Philippines.

In a statement yesterday, the multilateral lender said its board of executive directors gave the green light to the $750-million Philippines First Sustainable Recovery Development Policy Loan.

This loan will support reforms being undertaken by the government to attract private investment in renewable energy; enhance plastic waste management through reduction, recovery and recycling; promote green transport, including the use of electric vehicles, and reduce climate-related fiscal risks from the agriculture sector.

“The Philippines has tremendous potential for renewable energy generation, especially in solar and wind. Government actions to encourage investments in this sector, such as promoting foreign direct investments and streamlining the permitting process, could unlock this potential,” World Bank country director for Brunei, Malaysia, Philippines and Thailand Ndiamé Diop said.

“Renewable energy can help the Philippines mitigate climate change and bring numerous benefits, including enhanced energy security, the creation of green jobs and improved access to electricity. It is a crucial step towards a more sustainable and resilient future for the country,” he said further.

The government is aiming to have renewable energy (RE) account for 50 percent of total power generation by 2040.

To achieve the goal, the World Bank said more investments in solar and wind technologies and a strong policy environment conducive for investment in RE would be needed.

Aside from reforms to promote RE, the loan also supports the introduction of new insurance products for vulnerable smallholder farmers, and strengthens the coverage and operations of the Philippine Crop Insurance Corp. to help mitigate climate-related disaster risks to the country’s budget and agriculture sector.

In addition, the policy loan supports the implementation of the Extended Producer Responsibility Act, which mandates large enterprises to recover up to 80 percent of plastic packaging waste by 2028.

The Philippines, along with China, Indonesia, Thailand and Vietnam, accounts for 55 to 60 percent of the plastic waste that end up in the ocean.

Ever year, approximately 1.7 million tons of post-consumer plastic waste are generated in the Philippines, with an estimated recycling rate of only 28 percent for recyclable plastic waste. The balance either leaks into the environment or is disposed of as part of the mixed waste stream.

The World Bank’s development policy loans are being provided to support the necessary policy and institutional changes to create an environment that will enable sustained and equitable growth.

“Advancing economic reforms to transform the economy remains imperative, not only to accelerate, but also to sustain the economic recovery and boost long-term growth,” World Bank senior economist Ralph Van Doorn said.

While the Philippines has rebounded from the pandemic, it continues to face challenges, including high global commodity prices, disruptions in supply chains due to the Russian invasion of Ukraine, weaker exchange rates and high inflation.

Climate conference

Meanwhile, President Marcos was invited to attend the 2023 United Nations Climate Change Conference or the Conference of the Parties of the United Nations Framework Convention on Climate Change to be held at the Expo City in Dubai in December.

United Arab Emirates (UAE) Ambassador Mohamed Obaid Salem Alqataam Alzaabi extended the invitation to Marcos during a courtesy visit at Malacañang on Tuesday, the Presidential Communications Office (PCO) said in a statement.

The PCO yesterday has yet to respond to queries on whether the President has accepted the invitation.

The administration has allotted P453.1 billion this year for climate adaptation and mitigation programs, a 56 percent increase from the P289.7-billion budget last year.?In a speech at the Asian Development Bank on May 22, Marcos emphasized that “climate change can, will and already is unleashing nature’s fury upon our communities and our people.” ?The Chief Executive has made commitments to prioritize climate resiliency and sustainability in all social and infrastructure projects of his administration.

The UAE envoy has reaffirmed his country’s strong commitment to the Philippines – one of its allies in Asia – to support the country’s environmental and economic programs.

Alzaabi also told Marcos that they are looking forward to the Philippines becoming a member of the “Global Mangrove Alliance,” noting that it will benefit the country, being prone to calamities and disasters.

Marcos said joining the alliance would be good for the Philippines, noting the government’s efforts in preserving and restoring the mangroves.

“We have made great efforts to preserve and restore our mangrove ecosystem… the law in the Philippines is, you cannot touch mangroves at all, and because of that, the mangroves have grown back,” Marcos said. 

“In fact, they grow back so much that sometimes they are already beginning to block the rivers. So maybe there is much you can learn on the management of it because I think we have done as much as we can in terms of preservation,” he added. 

The Department of Environment and Natural Resources will be very pleased to participate in the Global Mangrove Alliance, Marcos said.

“But again, the preservation of the mangroves is a big issue. It is a very important point for the Philippines because of all the waterways that we have,” he added. – Helen Flores