Philippines Edges Closer to 'Upper Middle-Income' Economic Class, Falls Short in Climate Change Targets
The Philippines, a country vulnerable to natural disasters, is making strategic moves to secure climate finance and achieve its sustainable development goals (SDGs). JC Punongbayan, the website's resident economist, argues that reaching upper middle-income country status may not significantly benefit the poor. However, maintaining this status is crucial for the nation's development.
Climate change has exacerbated the back-to-back storms that hit the Philippines in 2024, causing over 170 fatalities. The country's upper middle-class aspirations necessitate more funds to finance its climate action goals. The Philippines is making headway in its SDGs, except for three goals where regressions were recorded, particularly in climate action (SDG Number 13), which has regressed by 3.8% since 2015.
The Department of Finance (DOF) is actively engaging with the Green Climate Fund (GCF) to access up to USD 10 million in grants under the Readiness and Preparatory Support Programme (RPSP3). This strategy aims to strengthen capacity for climate finance access and align with national climate plans. The Philippines also benefits from bilateral climate finance, such as Canada’s commitment of over P1.2 billion (CA$30 million) for ecosystem restoration, disaster resilience, and water resource management partnerships.
Legislation led by Senator Loren Legarda is supporting the Development of a Climate Prosperity Plan (CPP), which aims to create a blueprint for local governments to attract and deploy investments in renewable energy, resilient infrastructure, and green jobs. Strengthening capability across national agencies to develop bankable and investment-ready climate projects is also underway, improving the quality and attractiveness of climate projects for funding.
Emphasizing renewable energy investments and local resilience building as priorities, the Philippines aims to maximize readily available low-carbon resources and translate international funds into societal impacts. The country remains one of the top countries vulnerable to disasters, experiencing an average of 20 storms every year. Despite having the country's lowest household poverty rates, cities on Luzon remain highly vulnerable to flooding due to urban sprawl, river silting, and deforestation.
These measures provide the Philippines a multi-faceted strategy for securing climate finance—international grants and funds, bilateral investments, legislative support for localizing climate action investments, and capacity building for project readiness. These efforts are crucial to reverse the recent regression in SDG 13 progress and maintain the country's upper middle-income status by integrating climate resilience into sustainable economic development.
The United Nations (UN) and the national government have released a 2024 progress report, highlighting the country's progress and challenges. The UN resident coordinator to the Philippines, Arnaud Peral, stated that the Philippines is close to reaching the upper middle-income country status. However, experts caution that climate change is only bound to worsen poverty and inequalities. As the global community gathers at climate summits, such as the recent one in Azerbaijan, the clamor for more funds to combat climate change grows louder.
References:
- DOF engages GCF for up to USD 10 million in grants
- Canada commits over P1.2 billion for climate action in the Philippines
- DOF, NCCC to strengthen capability in developing bankable climate projects
- Senate approves bill creating Climate Prosperity Plan
- PHL aims to maximize climate finance for renewable energy, local resilience
Personal-finance considerations are vital for the Philippines as it strives to secure climate finance, which is essential for financing its climate action goals associated with environmental-science and climate-change mitigation. The nation's upper middle-class aspirations necessitate more funds, and the Department of Finance (DOF) is actively seeking grants from the Green Climate Fund (GCF), bilateral climate finance from countries like Canada, and strengthening capability within national agencies to develop bankable climate projects for funding. These efforts aim to reverse existing SDG 13 regression and maintain the Philippines' upper middle-income status, while integrating climate resilience into sustainable economic development.
