ADB approves $500M loan to support PH’s climate action efforts

The Asian Development Bank (ADB) on Tuesday announced it has approved a $500-million policy-based loan to further boost the Philippines' capacity to tackle climate change.

In a statement, the Manila-based multilateral lender said the $500-million Climate Change Action Program (CCAP) Subprogram 2 “supports the country in implementing its nationally determined contribution (NDC)—its commitment to help advance global efforts to stabilize the world’s climate under the Paris Agreement.”

The ADB said the loan program is expected to help accelerate reforms to transform key sectors such as agriculture, natural resources and the environment, energy, and transport into climate-resilient and low-carbon pathways.

The lender noted that the Philippines faces the highest disaster risk in the world, citing the World Risk Index 2022-2024.

In recent weeks, four strong storms impacted the country one after the other, highlighting the country’s vulnerability to increased frequency and intensity of extreme weather events, according to the bank.

The ADB said economic damage from climate-related disasters could be as high as 7.6% of gross domestic product by 2030.

“Climate change is exacerbating all major development challenges in the Philippines. The country’s high vulnerability impacts its economic momentum and outlook,” said ADB Philippines country director Pavit Ramachandran.

“This program is part of our commitment to help our host country avert economic damages from future climate change impacts, mobilize green investment, and transform its economy.''

The first CCAP for the Philippines was approved in 2022. It was also the ADB’s first climate policy-based loan across Asia and the Pacific.

The lender said the program is an important component of its new country partnership strategy 2024-2029 and its country climate investment plan, which aims to mobilize $10 billion in climate finance for the implementation of the country’s NDC and national adaptation plan (NAP).

Under its NDC, the Philippines aims to cut greenhouse gas emissions and scale up adaptation.

The ADB said the CCAP Subprogram 2 is “instrumental in delivering these ambitions through key reforms such as adopting the NDC Implementation Plan and NAP 2023–2050, scaling up budget allocations for climate activities, and deploying climate technologies at national and local levels.”

“The program also strengthens policies and regulations to mobilize climate-related investment in renewable energy and energy efficiency, climate-resilient agriculture, and nature-based solutions,” it said.

The ADB said the CCAP Subprogram 2 was prepared jointly with the Agence Française de Développement, which is providing co-financing of $278.3 million to the Philippine government. — VBL, GMA Integrated News