World Bank extends $750-M loan to Philippines for green investments

MANILA, Philippines — The World Bank lent the Philippine government fresh funding to support ongoing reforms targeted at expanding investments in renewables as well as minimizing the Philippines’ carbon footprint. 

In a statement on Tuesday, the Washington-based lender indicated that $750 million parked in the "Philippines First Sustainable Recovery Development Policy" loan will address development constraints. 

“Government actions to encourage investments in this sector, such as promoting foreign direct investments and streamlining the permitting process, could unlock this potential," said Ndiamé Diop, World Bank country director for Brunei, Malaysia, Philippines, and Thailand. 

Broken down, the World Bank said that to achieve the state’s renewables target, of 50% within the total generation mix by 2040, increasing investments is a must. The financing program, which will bolster private investment in renewables, will help with this according to the World Bank.

Aside from that, the World Bank said in its statement that this loan will support new insurance products targeted at helping smallholder farmers and strengthening the coverage of the Philippine Crop Insurance Commission. The financing program is also geared at reducing fiscal risks in the agriculture sector arising from the climate crisis. 

Plastic pollution was also top of mind for the World Bank. The Philippines is clustered with China, Indonesia, Thailand and Vietnam as top plastic polluters, accounting for 55-60% of this artificial waste in oceans. 

To this end, the World Bank hopes the country will be able to trim and mitigate its share by way of this loan.

The World Bank reiterated that this loan will support amendments to the Public Service Act.

“This financing support addresses constraints such as, limited market competition in several key sectors as regulations create high barriers to market entry; underinvestment in infrastructure; and low foreign direct investment (FDI) resulting in part from regulatory restrictions,” the World Bank said. — Ramon Royandoyan