ADB grants $250-M loan for Philippines' climate change efforts

Manila-based multilateral lender Asian Development Bank (ADB) on Tuesday said it has approved a $250 million policy-based loan aimed at supporting the Philippine government’s climate change adaptation and mitigation efforts.

The policy loan is under the ADB’s Climate Change Action Program, which aims to help the Philippines deliver its “nationally determined contribution — its commitment to help advance global efforts to stabilize the world’s climate under the Paris Agreement — and intensify efforts to transform vulnerable sectors toward a climate-resilient and low-carbon economy.”

“We have a climate emergency, and all countries must come together and address the causes and adapt in a way that ensures food security, protects our biodiversity, and improves the well-being of millions of vulnerable persons,” said ADB Vice President for East Asia, Southeast Asia and the Pacific Ahmed M. Saeed.

“The Philippines has adopted important climate actions and goals that will help address these threats and challenges and guide a green and resilient recovery after the COVID-19 pandemic,” added Saeed.

“This is ADB’s first climate action policy-based loan. It will support the Philippines to develop, deliver, and finance a holistic approach to address climate change by transitioning to low-carbon pathways, strengthening the ability of vulnerable sectors to adapt to climate change, and increasing conservation of land and marine resources.”

The Global Climate Risk Index 2021 ranks the Philippines fourth among countries most affected by extreme weather globally from 2000 to 2019.

The pandemic has heightened the country’s vulnerability to the economic impact of severe weather events, according to the ADB.

Poorer households are disproportionately affected, especially in urban areas with less secure infrastructure, and those situated along the country’s vast coastal areas most exposed to extreme weather, the lender also said.

The ADB said the new program targets policy reforms and will help the Philippine government build planning, financing, and institutional systems to scale up climate action.

The program will also support reforms to enhance the resilience of farming and fishing communities to the increasing impacts of climate change and reduce greenhouse gas emissions through the deployment of renewable energy, energy efficiency, and sustainable transport.

The ADB said the program was prepared jointly with the Agence Française de Développement, which is providing co-financing of $172 million to the Philippine government.

Policy-based loans transfer loan amounts to a government’s general budget instead of paying for explicit project costs, the lender said.

The ADB added that loan funds are disbursed only when the borrower completes policy reforms or actions that have been agreed with the multilateral bank.

“This is ADB’s first policy-based loan that addresses climate change as its core objective,” it said. —Ted Cordero/KBK, GMA News