Metro Manila (CNN Philippines, June 15) — The World Bank has approved a $750-M loan for the Philippines to bolster environmental protection and climate resilience, specifically to realize the country’s targets for renewable energy and help reduce climate-related disaster risks.
“The US$750 million Philippines First Sustainable Recovery Development Policy Loan (DPL) supports ongoing government reforms to attract private investment in renewable energy; enhance plastic waste management through reduction, recovery, and recycling; promote green transport, including the use of electric vehicles; and reduce climate-related fiscal risks from the agriculture sector,” the World Bank said in a statement dated June 13.
The multilateral lender said the loan will support the national government’s target of 50% of renewable energy in total power generation by 2040, noting the country’s power sector needs a “significant increase in investments in solar and wind technologies and a strong policy environment conducive for investment in renewable energy” to achieve such a target. .
It will also fund the introduction of new insurance products for smallholder farmers and boost operations of the Philippine Crop Insurance Commission.
“The aim is to help mitigate climate-related disaster risks to the country’s budget and the farming sector,” the World Bank said. “If properly designed and targeted, crop insurance can help stabilize farm income, reduce poverty, and provide a climate safety net for food producers.”
The financing mechanism will also help in implementing the Extended Producer Responsibility Act, which mandates big business to recover up to 80% of plastic packaging waste by 2028.
The World Bank noted that the Philippines produces approximately 1.7 million tons of post-consumer plastic waste yearly, with an estimated recycling rate of only 28% for recyclable plastic waste while other plastic waste enters the ocean.
The $750-million loan is part of development policy loans the Washington-based financial institution lends to developing countries such as the Philippines to “support policy and institutional changes needed to create an environment conducive to sustained and equitable growth as defined by borrower-countries’ own development agenda.”
“The Philippines has rebounded strongly from the pandemic but continues to face serious challenges, including high global commodity prices, disruptions in global supply chains due to the Russian invasion of Ukraine, weaker exchange rates, and high inflation,” said World Bank Senior Economist Ralph Van Doorn.
“Reforms aimed at attracting private investments in public service sectors can open up new sources of economic growth and quality jobs,” he added.
