The Asian Development Bank (ADB) said it is keen on increasing its climate change-related financing support to the Philippines starting next year.
In a recent interview, ADB Philippine Country Representative Richard Bolt told the BusinessMirror the multilateral development bank has a couple of projects lined up that could help in various climate-change mitigation and adaptation efforts nationwide. “It’s going to be more forward, there’s going to be more from us in the future,” Bolt said.
He said one project involves the possibility of directly offering disaster-related insurance to local government units (LGUs).
While the ADB is still in discussion with the Department of Finance (DOF) regarding the specifics of the project, there is also an option that this can turn into a Catastrophe-Deferred Drawdown Option (CAT-DDO).
This is similar to the $500 million worth CAT-DDO from the World Bank, which was extended for emergency relief, recovery and reconstruction efforts following a major natural disaster. The drawdown from the World Bank’s CAT-DDO can be triggered by a presidential declaration of a “state of calamity.” The drawdown period is three years and is renewable up to four times or for a total of 15 years.
Whether this is going to be the same arrangement or an insurance financing scheme, Bolt said these fulfill the need to “reduce the burden on the national government in a postdisaster situation”. “We think [disaster insurance] is going to work better for larger cities so we’re still doing the scoping. The other is if we could use a catastrophe deferred drawdown facility, the same thing the World Bank did so that’s another option,” Bolt said.
Another project seeks to help the government “build back better” for housing units in disaster areas.
Bolt said the potential technical assistance project will be done by the ADB with the Housing and Urban Development Coordinating Council (HUDCC).
He added the ADB hopes that its recent efforts in “building back better” the schools in Yolanda-affected areas with the Japan Fund for Poverty Reduction (JFPR) will be replicated for homes destroyed by typhoons. Bolt said the schools they built with JFPR followed the new building code crafted by the Department of Public Works and
As a result, the buildings withstood the onslaught of Typhoon Ruby recently with only the paint of the buildings being chipped off.
The ADB, he said, is also working on “risk sensitive” land-use planning in parts of Region 8 based on the lessons learned after Yolanda. Bolt said the land-use planning includes relocation from high-risk areas.
“[For] others, it’s quite challenging mainly because communities themselves, I think, are having a hard time making the decision to move. Because if you say ‘okay, let’s move’, you basically say good-bye to generations of ties, social and economic ties,” Bolt said.
Financing climate-change projects is one of the primary concerns of finance ministers and senior officials from 15 developing economies across Asia and the Pacific or the Vulnerable Twenty Group of Ministers of Finance (V20), including the Philippines.
The top officials of the V20 are conducting a three-day regional consultation to mobilize international, regional and national investment for climate action, as well as discuss financial instruments for disaster-risk reduction, public financial management and carbon pricing.
The event will support the rollout of the V20 Action Plan—adopted in 2015 to address V20 climate finance needs— and provide an opportunity to exchange knowledge and experience between the countries in support of enhanced climate finance and technical capabilities.
It will also focus on disaster risk financing to strengthen the countries’ financial resilience against disaster risk at national and international levels. Led by the Philippines when it was established in 2015, the V20 has expanded to 43 developing economies from Africa, Asia and the Pacific, Latin America and the Caribbean.
The 15 participating countries in the Asia-Pacific consultation include Ethiopia (the current V20 chairman, Bangladesh, Barbados, Cambodia, Costa Rica, Fiji, Kiribati, Maldives, the Marshall Islands, the Mongolia, Palau, Tuvalu, Vanuatu and Vietnam. The Manila-based multilateral development bank said it is on track in meeting its goal of doubling climate-change financing to $6 billion by 2020.
The ADB has already approved $2.6 billion worth of new investments in mitigation and $1.1 billion in adaptation last year.