ADB Approves $500M Loan to Bolster Philippines’ Climate Resilience and Low-Carbon Transition

“Climate change exacerbates all major development challenges for the Philippines, impacting economic momentum and long-term prospects,” said Pavit Ramachandran, ADB Philippines Country Director.

The Asian Development Bank (ADB) has approved a $500 million policy-based loan to reinforce the Philippines' efforts to combat climate change and advance its commitments under the Paris Agreement. This initiative, part of the Climate Change Action Program (CCAP) Subprogram 2, aims to accelerate reforms across key sectors such as agriculture, energy, transport, and natural resources to promote climate resilience and transition to low-carbon pathways.

Addressing Urgent Climate Risks

The Philippines is ranked the most disaster-prone country globally, according to the World Risk Index 2022–2024. The recent onslaught of four consecutive typhoons underscores the country's extreme vulnerability to climate-related disasters, which could cost as much as 7.6% of GDP by 2030.

“Climate change exacerbates all major development challenges for the Philippines, impacting economic momentum and long-term prospects,” said Pavit Ramachandran, ADB Philippines Country Director. “This program underscores our commitment to helping the country mitigate economic damages, mobilize green investments, and transition to a sustainable economy.”

Key Features of CCAP Subprogram 2

The program builds on ADB’s 2022 approval of the Philippines’ Climate Change Action Program, its first climate-focused policy loan in Asia-Pacific. Subprogram 2 is pivotal to delivering the country's nationally determined contribution (NDC) and supporting its National Adaptation Plan (NAP) for 2023–2050.

Key reforms under Subprogram 2 include:

NDC Implementation Plan: Advancing the Philippines' goal of cutting greenhouse gas emissions by scaling up renewable energy and energy efficiency measures.

Climate-Resilient Agriculture: Promoting sustainable farming practices and nature-based solutions to protect livelihoods and ecosystems.

Increased Climate Funding: Scaling up budget allocations for climate initiatives at the national and local levels.

Technology Deployment: Integrating climate technologies in infrastructure, agriculture, and disaster risk management.

Policy Enhancements: Strengthening regulations to attract private investment in climate-related projects, including renewable energy and green infrastructure.

Long-Term Impact and Partnerships

The program aligns with ADB’s Country Partnership Strategy (2024–2029) and the country’s Climate Investment Plan, which aims to mobilize $10 billion in climate finance over the next decade. It is complemented by $278.3 million in cofinancing from the Agence Française de Développement, further bolstering the government’s capacity to execute climate reforms.

Through these measures, the Philippines will enhance its disaster preparedness, reduce economic losses from climate impacts, and position itself as a regional leader in sustainable development.

“This program is critical for enabling the Philippines to transform its economy, secure a greener future, and improve resilience against the intensifying impacts of climate change,” added Ramachandran.

With this robust approach, the Philippines is set to advance climate adaptation, strengthen its environmental resilience, and ensure sustainable growth for generations to come.