The Philippine government under the current Ferdinand Marcos Jr administration says that its climate change expenditure budget demonstrates its commitment to address climate change as well as support climate resiliency and sustainability. Reported climate change expenditures increase from Php464.5 billion in 2023 to Php543.4 billion in the proposed 2024 budget.[1] This is an apparently large 17% or Php79 billion increase for adaptation and mitigation programs.
Moreover, this is also interpreted in the context of the Philippine Development Plan (PDP) for 2023-2028 which has a chapter specifically on climate change and resilience and adopts a so-called whole-of-government approach not just to climate change but to the country’s development.
We would like to register our concern that the current administration’s approach to climate change and more broadly to national development and improving the welfare of the people is wanting. There is an underlying resistance to the fundamental changes in strategy and approach required to genuinely address the triple crisis faced by the Filipino people – environmental distress, chronic poverty and inequality, and economic underdevelopment.
We have three main points and three general recommendations.
First, notwithstanding the reported climate change budget there is actually a deprioritization of environmental concerns particularly as the administration overemphasizes “fiscal consolidation” as a major macroeconomic target.
The allocation for environmental protection in the national government budget for 2024 falls for the second straight year – from Php24.9 billion in 2022, to Php21.9 billion in 2023, and then further to Php21.8 billion in 2024.[2] This budget items covers biodiversity protection, pollution abatement, waste and waste water management, research and development, and other environmental protection items.
Also, the budget for the Department of Environment and Natural Resources (DENR) only increases marginally from Php24.3 billion in 2023 to Php25.6 billion in 2024.[3] The proposed 2024 budget is still smaller than the Php26.4 billion budget two years before this in 2022 – 3% smaller in nominal terms and 12% smaller in real terms (factoring in projected inflation in 2023 and 2024).
In contrast, spending on infrastructure primarily oriented to attracting foreign investment and supporting domestic big business remains unduly prioritized with the budget increasing from Php1.33 trillion in 2023 to Php1.42 trillion in 2024 – an Php87.2 billion or 7% increase.[4] This is related to the next point.
Second, the biggest expense items in the large reported climate change expenditure are not consistent with priorities identified in the National Climate Change Action Plan (NCCAP) 2011-2028.[5] Out of the proposed Php543.4 billion in climate change-tagged expenditures, 73% is accounted for by railways (Php155.4 billion, 29% of total) under “energy sufficiency” and flood control (Php238.6 billion, 44%) under “water sufficiency”.[6]
The NCCAP identified food security, water sufficiency, ecological and environmental stability, human security, climate-smart industries, climate smart industries and services, sustainable energy, knowledge and capacity development, and cross-cutting expenditures as strategic priorities.
For sustainable energy, the biggest challenge raised by the NCCAP is developing sustainable clean energy options and it prioritizes energy efficiency and conservation, renewable energy, sustainable transport, and climate-proofing energy systems. This is understandable given the country’s increasing dependence on fossil fuels as the economy expands. However, the Department of Energy (DOE) is allotted just Php985 million for attending to renewable energy and energy efficiency which is less than one-fifth of one percent (0.18%) of the total climate change budget.
Railways on the other hand did not figure in the plan even under the sustainable transport component. The Department of Transport (DOTr) or its precursor were also not even identified as among the lead government agencies for this strategic priority.
For water sufficiency, the intermediate outcome sought by the NCCAP is to sustainably manage water resources and ensure equitable access and for this it prioritizes restructuring water governance, ensuring access to safe and affordable water and the sustainability of water supply, and enhancing knowledge for adaptation. This is understandable given that 2.7 million Filipinos still rely on unsafe and unimproved water sources while three (3) million lack access to improved sanitation. However, the budget for these declared priorities is negligible at just Php1.4 billion or barely one-fourth of one percent (0.25%) of the total climate change budget – consisting of Php28.5 million for the National Water Resources Board (NWRB), the lead agency for this strategic priority, and another Php1.36 billion for water supply and sanitation projects under the Department of Public Works and Highways (DPWH).
Flood control and management are mentioned but only as one measure astride rehabilitating degraded watersheds and river basin areas and protecting existing ones, improving safe water supply systems, improving sanitation infrastructure, enhancing water governance and policy, and others.
The benefits of railways to lower GHG emissions and of flood control to deal with worsening floods due to climate change are not being contested. The concern, rather, is their opportunity cost and whether they are the best use of scarce resources. Disproportionate amounts appear to be spent on these infrastructure projects over likewise pressing (or even more pressing) renewable energy, safe water access, food security, ecosystem sustainability, human security, climate smart industries and services, and other climate change expenditures. Moreover, in the Philippine context, such “hard” infrastructure projects have become notorious for corruption and rent-seeking.
The large reported climate change expenditures are flawed for not addressing urgent strategic priorities. Unfortunately, thirdly, they also appear to have been prioritized for being supportive of the current inequitable and unsustainable economic growth strategy that keeps millions of Filipinos poor and the most vulnerable to climate distress. The railway and flood control projects reinforce the prevailing service-oriented and low value-added economy. Among the major commercial beneficiaries will be real estate developers and locators in export enclaves whose logistics will be improved. In the absence of a more ambitious development plan, these projects do not support a structural transition to more developed agriculture and industry and will not reduce poverty. Greener poverty is, unfortunately, still poverty.
Development policy must consider how some 22 million Filipino families (78% of families) are poor/borderline poor[7] (June 2023) including almost 19 million households (70% of households) without any savings[8]. On the other hand, the richest 2% of Filipinos have a net worth of Php25 trillion which is equivalent to the combined wealth of the poorest 90 million Filipinos (poorest 80%).[9] This wealth is concentrated in just 3,000 billionaires who have a combined net worth of Php8.2 trillion.
Climate change-related spending can be used not only for adaptation and mitigation but also to steadily nudge the economy towards more equitable, sustainable and broad-based development. For instance, criteria for choosing climate spending can also include employment and income multipliers, emergency relief for distressed families or communities, developing sustainable agriculture and industry, and building domestic technological capacity.
Addressing climate change necessarily involves addressing entrenched inequalities and imbalances of power, unsustainable patterns of production and consumption, and even the global barriers to meaningful domestic action.
Following from the above, our three recommendations are for the Philippine government to:
- Demonstrate its commitment to climate change and related concerns with greater budgetary priority for environmental protection and the Department of Environment and Natural Resources (DENR).
- Realign general budget items and also climate change spending items to at least be more consistent with the NCCAP’s strategic priorities with due consideration of sequencing and phasing.
- Support and pass House Resolution (HR) No. 8 urging the House of Representatives (HOR) to adopt the People’s Green New Deal for a Just and Green Economic Recovery which has tentatively already been tentatively approved by the HOR Committee on Climate Change. This is a comprehensive framework for job- and income-generation, sustainable agriculture and industrialization, and net-zero greenhouse gas emissions.
[1] Table B.21, CLIMATE CHANGE (CC) EXPENDITURES BY DEPARTMENT AND SPECIAL PURPOSE FUND, FYs 2022-2024; Budget of Expenditures and Sources of Financing FY 2024
[2] Table B.5.b, CLASSIFICATION OF THE FUNCTIONS OF GOVERNMENT, FYs 2022 – 2024; Budget of Expenditures and Sources of Financing FY 2024
[3] Table B.8, EXPENDITURE PROGRAM, BY DEPARTMENT/SPECIAL PURPOSE, BY GENERAL EXPENSE CLASS, FY 2022 – 2024; Budget of Expenditures and Sources of Financing FY 2024
[4] Table B.3, INFRASTRUCTURE OUTLAYS, FY 2022-2024; Budget of Expenditures and Sources of Financing FY 2024
[5] Even the World Bank’s 2022 Country Climate and Development Report on the Philippines which is more recent than the NCCAP does not give railways and flood control such emphasis.
[6] FY 2024 NEP CLIMATE CHANGE EXPENDITURES BY DEPARTMENT, BY AGENCY, BY PROGRAM / ACTIVITIES / PROJECTS (P/A/P); National Integrated Climate Change Database Information and Exchange System (NICCDIES)
[7] Social Weather Stations (2023), “48% of Filipino families feel Poor, up from 45% in June; 27% feel Borderline, and 25% feel Not Poor”, Oct 31, 2023
[8] Bangko Sentral ng Pilipinas (2023), Consumer Expectations Survey Report, Second Quarter 2023
[9] IBON Foundation estimates
