The Philippines has received a significant boost in its battle against climate change, with the Asian Development Bank (ADB) approving a substantial $500-million policy-based loan.
Approved in November 2024, the loan approval underscores the ADB’s commitment to supporting the nation as it strives to build resilience against the increasing threats posed by a rapidly changing climate.
The loan will support the second subprogram of the Philippines’ Climate Change Action Program (CCAP), a crucial initiative designed to implement the country’s Nationally Determined Contribution (NDC) under the Paris Agreement.
The CCAP focuses on accelerating transformative reforms across key sectors—from agriculture and natural resources to energy and transport—steering them towards more climate-resilient and low-carbon pathways.
The Philippines is particularly vulnerable to the devastating impacts of climate change. Ranked as the country with the highest disaster risk globally (World Risk Index 2022–2024), it has recently been battered by a succession of powerful typhoons, starkly illustrating this vulnerability.
The economic consequences of these climate-related disasters are potentially catastrophic, with estimates suggesting potential losses of up to 7.6% of the nation’s gross domestic product by 2030.
“Climate change is exacerbating all major development challenges in the Philippines,” said Pavit Ramachandran, ADB Philippines country director.
“The country’s high vulnerability impacts its economic momentum and outlook. This program is part of our commitment to help our host country avert economic damages from future climate change impact, mobilize green investment, and transform its economy,” he said.
The CCAP, initially approved in 2022, is a landmark initiative, representing ADB’s first climate policy-based loan in the Asia and Pacific region. It forms a key component of ADB’s new country partnership strategy for 2024–2029 and its country climate investment plan, which aims to mobilize $10 billion in climate finance to support the implementation of the Philippines’ NDC and National Adaptation Plan (NAP).
The Philippines’ NDC sets ambitious goals for greenhouse gas emission reduction and adaptation. Subprogram 2 is vital for achieving these ambitions, driving key reforms such as the adoption of the NDC Implementation Plan and NAP 2023–2050, increasing budget allocations for climate activities, and deploying climate technologies at both national and local levels. The program also strengthens policies and regulations designed to attract climate-related investment in crucial areas like renewable energy and energy efficiency, climate-resilient agriculture, and nature-based solutions.
This significant undertaking is a collaborative effort, with the Agence Française de Développement providing co-financing of $278.3 million to the Philippine government.