Philippines and Green Growth model

Philippines: Efforts to cope with the climate change risks while boosting the economy based on Green Growth model


The Philippines are known, all over the world, as a tropical and fantasy place to spend your vacations. The awesome “chocolate” Hills a series of 1.268 perfectly symmetrical, haycock-shaped hills that rise some 30 meters above the ground, or the magical beaches in Boracay where walking barefoot that shod is the rule than the exception, are only few of the many beautiful places that you can visit.

Because of the tourism and other economic factors, the country has been achieving steady economic growth in the past years, reaching a GDP growth rate of 7.8 in the first quarter of 2013. The country’s economic momentum is mainly driven by the business process outsourcing (BPO) industry, mining and construction sector, domestic consumption and oversees remittances.

Unfortunately, Philippines are also known for its devastating disasters that took place over the last years, due to the climate change. In fact is ranked highest in the world for being vulnerable to the impacts of climate change, owing to its archipelagic characteristics and location prone to tropical cyclones.

The government, through the national strategy on climate change places a greater emphasis on adaptation than mitigation, and is anchored into the national agenda for sustainable development. Of course, dealing with sustainable development and climate change issues is not new to the country. More specifically, as a commitment to Agenda 21, The Philippines adopted the Philippine Agenda 21 (PA21) as its own agenda toward sustainable development in the year 1992.

In 2009, the Climate Change Act (RA9729) was enacted which provided the basis for the establishment of the Climate Change Commission (CCC) as the government’s lead policy making body to respond to climate change risks. Furthermore, taking into account the country’s commitment to multilateral treaties including the UNFCCC, the CCC set up the “National Framework Strategy for Climate Change (NFSCC)” was adopted as the country’s roadmap in creating a climate risk-resilient. Moreover the ”National Climate Change Action Plan (NCCAP)” was developed to provide guidelines for local government units in preparation of their respective Local Climate Change Action Plans.

Moreover, an Inter-Agency Committee on Climate Change driven by the Department of Environment and Natural Resources (DENR) is tasked with consolidating the relevant efforts of the national government, the scientific and academic communities, advocacy groups and local governments. Their combined inputs will go into shaping a National Strategy for Climate Change Adaptation to prepare the country’s institutions at the national and local levels for the challenges and opportunities presented by climate change.

It is with no doubt that several external and internal changes have profoundly affected Philippines over the last decades, and with that the private sector. The country’s internal economic environment has changed, as there has been significant economic growth, a series of regulatory and institutional developments have been undertaken, new public–private partnerships (PPPs) have taken place. Externally, the rapidly expanding Association of Southeast Asian Nations (ASEAN) region, fast-growing regional economic powers such as the People’s Republic of China (PRC) and India, recent food and oil price shocks, and global economic slowdown have altered the climate for private investments in the Philippines.

In most ASIAN economies, but also world widely, the private sector is the driver of growth. It is therefore expected to play a significant role in the process of economic integration. In the Philippines, the private sector has dominated the economy, contributing about 95 percent of GDP, but it has not lived up to its potential. Geographically speaking the distribution of enterprises throughout the country indicates a high concentration in the National Capital Region, which accounts for 24% of all the establishments and 40% of all the employees.

The private sector in The Philippines is extremely skewed. Large enterprises comprise a miniscule part of the economy, however, they contribute more to the GDP, rather than the micro SMEs, even though the last accounted for 99% of the establishments. In addition, in terms of sector distribution, half of the SMEs are in wholesale and retail trade, whereas hotel, restaurants and business activities seem to go up lately.

Over the last years, serious regulatory initiatives have been undertaken by the government to boost the private sector and especially the SMEs. Some of them are the “Magna Carta” legislation bill which is about fostering the dynamics of the rural-agri0based SMEs. The “SME Development Strategy”, which consists of 5 strategic imperatives, focused on promoting linkages between SMEs and corporations, narrow the focus on 5 private sectors, strengthen R&D initiatives, reinforce HR development and most importantly improve access to finance.

Among other governmental initiatives noteworthy are, the set up of the Department of Trade & Industry and the Philippine Export Development Plan. The Department of Trade & Industry (DTI) is a formulation of governmental divisions in one body, which acts as a national policy strategy for strengthening the SME sector, by expanding the private sector and upgrading its productivity. The Philippine Export Development Plan begun in 2001 and it is a three-year project to set the lay groundwork for developing a globally sustainable export industry. It focuses on industry and it also defines roles for the public and the private sector.
Last but not least, is the Public-Private Partnership Program, which was established by the President Benigno S.Aquino. Guided by the principles of transparency, accountability, and good governance, the Program will engage the private sector as vital partners who can bankroll critical infrastructure projects that will deliver much needed services for its growing populace. Under the hallmark of good governance, the Philippine government guarantees that the private sector will be able to do business in an environment that nurtures fair and transparent transactions. Government ensures that the interests of both the private sector and its citizens are balanced, where policies and procedures are continually enhanced. The robust pipeline of PPP projects is a product of the government’s continuing efforts to deliver viable and well-structured proposals that will attract investors to bring their business to the Philippines.

In the Philippines, there are now a number of assisted climate change adaptation programmes and projects that are being implemented. The Government has put Green Growth in the top of its agenda and along with other international actors tries to prepare the country for the climate change impacts. However, in terms of the private sector, sustainable economic development continues to be elusive for the Philippines. A wide spectrum of economic policies has been implemented during the past five decades. Yet the boom-bust cycle has remained a constant feature of the economy along with relatively high poverty incidence.


Nicolas Tzouanos
Business Integration Manager
Global Green Growth Institute