Finance Secretary Benjamin Diokno asked the global community to rapidly digitalize payments as a key tool to accelerate climate action, speaking at a side event during the 2023 United Nations Climate Change Conference (COP28) on Dec. 4, 2023, at the Philippine Pavilion.
“The staggering numbers of annual climate-related losses and damages have prompted the government to explore and develop innovative solutions to secure a climate-resilient future for the Philippines,” Diokno said in his opening remarks.
The Philippines, located in the typhoon belt and the Pacific Ring of Fire, with about 60 percent of its population residing along coastlines, faces significant climate risks, incurring an estimated $10 billion in losses and damage over the past decade. Annual losses from typhoons alone have been estimated at 1.2% of the country’s GDP, with projected future losses from typhoons and earthquakes exceeding $3.2 billion annually.
Diokno, who spearheaded the launch of the Digital Payments Transformation Roadmap during his tenure as Bangko Sentral Governor, highlighted the potential of digital payments to improve efficiency and provide more options for beneficiaries of social protection programs. This is particularly evident in the success of the Philippines’ Pantawid Pamilyang Pilipino Program (4Ps), which utilized digital cash transfers to deliver rapid assistance to affected communities.
“Digitalizing the payments system can unlock greater efficiency and more options for beneficiaries of social protection programs,” Diokno said.
The Bangko Sentral ng Pilipinas (BSP) set a target of converting 50 percent of all retail payments into digital form by 2023. Development partners supporting the 4Ps program have also experienced significant reductions in administrative and transaction costs through its digital payment platform.
The Department of Social Welfare and Development (DSWD) teamed up with the World Bank (WB) on the Beneficiary FIRST (Fast, Innovative, and Responsive Service Transformation) Social Protection Project, which aims to achieve digital data governance and digital payments, including transactional accounts for 4Ps beneficiaries.
The Department of Finance (DOF) formulated the Philippines Disaster Risk Financing and Insurance Strategy, providing a comprehensive framework for implementing financial protection solutions at national, local, and individual levels.