People's Survival Fund

Ministerial Meeting on the Role of Finance Ministers in Mobilizing Public and Private Climate Finance for Developing Countries

Benjamin E. Diokno
Secretary of Finance

December 4, 2023
6:00PM – 7:30PM

The Philippine government has long viewed finance as an indispensable tool in achieving inclusive, sustainable growth while galvanizing climate action at every level.

Today, developing countries are faced with fiscal challenges due to a difficult global environment, impeding progress towards climate action and sustainable development.

This reality underscores the importance of effective public debt management and carefully crafted fiscal consolidation plan.

Recognizing this, the Philippines formulated its first-ever Medium-Term Fiscal Framework in July 2022. It is the government’s strategy for maintaining fiscal health, supporting economic recovery, and promoting environmental sustainability.

The MTFF works in harmony with the Climate Change Expenditure Tagging, which mainstreams and institutionalizes climate action in the country’s development plans and budgets.

An effective scale-up of sustainable and climate finance requires three things:

First, the full alignment of financing and investments with national climate plans and development agenda;

Second is the rational allocation of financial resources;

And third is the mobilization of all available financing for green and sustainable initiatives, including disaster risk management.

To improve the country’s investment climate, we are pursuing structural reforms such as the newly-approved Public-Private Partnership Code to establish an enabling PPP environment for smart, modern, climate-resilient infrastructure.

We have also established a Sustainable Finance Framework to support our sustainability commitments and create a conducive environment for the issuance of sovereign Green, Social or Sustainability debt instruments.

Since its establishment in 2022, four transactions have been completed under this Framework, totaling around 3.6 billion US dollars.

Financial regulatory agencies are also currently developing a principles-based Sustainable Finance Taxonomy Guidelines that is aligned with the Philippine Sustainable Finance Roadmap and its Guiding Principles.

The Guidelines aim to provide market clarity on whether an economic activity is environmentally or socially sustainable, thereby encouraging private sector investments towards climate change adaptation and mitigation initiatives.

The increasing costs associated with climate action calls for more innovative sources of financing.

Ministers of Finance must therefore leverage the public sector’s ability to influence financing and investment opportunities, as well as the private sector’s comparative advantage on financial capital and technological innovation.

Scaling efforts will require more than just sustainable finance flows. It will require effective technology transfers and country-specific capacity building.

Combining capacity-building with technology transfers will help us translate aspiration into concrete action.

The Philippines strongly believes that financing climate action should not be viewed as a competing priority. Rather, it should be treated as an indispensable part of the economic growth and development agenda.

With collective action, we can simultaneously achieve our individual development goals and the larger climate agenda.