78794 Getting a Grip… on Climate Change in the Philippines Overview Contributing to the foundation and ensuring the future for a low-carbon, climate resilient society through the Philippine Climate Public Expenditure and Institutional Review Global climate change is taking its toll on the Philippines Climate Action can contribute to inclusive growth and poverty • Climate models show that global warming is likely to exceed the reduction 2°C projections, with a possible 4°C increase as early as 2060 • Adaptation measures help build assets and strengthen the resil- causing severe impacts to global, regional, and national econo- ience of communities, especially in poor areas. mies and livelihoods. • Increasing the climate resilience of agricultural practices alle- • As the third most vulnerable country in the world to weather-re- viates food insecurity, reduces malnutrition, and helps preserve lated extreme events, earthquakes, and sea level rise, the Philip- water resources. pines is already feeling the consequences of climate change. • GHG emission reduction measures improve air quality and pub- • The Philippines is exposed directly to multiple climate-related lic health, increase energy security, and reduce energy costs. hazards such as typhoons (in the northern and eastern parts), • Climate activities, especially in the fields of agriculture, infra- floods (in central Luzon and southern Mindanao), landslides structure, and energy, can create employment opportunities, (based on terrain), and droughts. which will help satisfy the Government’s priority of creating • Climate-related impacts will reduce cultivatable land, which will opportunities to increase the quality and quantity of jobs. decrease agricultural productivity and increase food insecurity. By acting now to develop its adaptive capacity and employ a • In a 4°C warmer world, coral bleaching and reef degradation and sustainable green growth strategy expanding on mitigation losses are very likely to accelerate in the next 10–20 years, which opportunities, the Philippines will avoid substantial economic could result in the loss of fisheries as well as having detrimental and humanitarian costs that could arise from the impacts of impacts on the country’s tourism industry. climate change • The urban poor in informal settlements are one of the most • Unless future development is carried out with accommodation vulnerable groups to climate-related impacts, due in part to the to climate change in mind, the country could be locked into additional pressures on urban systems created by rapidly increas- infrastructure development, land use changes, and urbanization ing population growth. processes that are more vulnerable to climate risks. • Environmental deterioration and unsustainable development • The Philippine Government has put forward a comprehensive practices aggravate the country’s climate vulnerability. and strategic climate reform agenda that focuses on transforming Greenhouse gas (GHG) emissions in the Philippines are in- the climate policies and institutions to better plan, prioritize, creasing rapidly execute, monitor, and report on climate change expenditures and activities in support of sustainable development goals. • While the Philippines has been a minor contributor to global warming, GHG emissions are projected to quadruple in the • A CPEIR was carried out at mid-term of the first phase of the energy sector and double in the transport sector by 2030 due to National Climate Change Action Plan (NCCAP), the PDP its growing economy, urbanization, and motorization. (2011–2016), and the current Administration; this review comes early enough to help guide the finalization and operationaliza- tion of the first phase of the NCCAP. The Philippines’ climate reform agenda aims to consolidate Centralized institutional coordination supports the climate climate policy across all levels of Government reform agenda • The 2009 Climate Change Act called for the formulation of a • Several new institutions have been created or are at various stag- National Framework Strategy on Climate Change, which defines es of mobilization, including the Climate Change Commission the overall parameters for developing the NCCAP. (CCC), the Cabinet Cluster on Climate Change (CCCC), and • The NCCAP serves as the lead policy document guiding the the People’s Survival Fund Board (PSFB). climate agenda at all levels of government from 2011–2028 and • The CCC is at the center of the new arrangement, coordinating is divided into three six-year phases, with each corresponding to across oversight Agencies and with sector Departments and the terms of the Administration and the PDP. Agencies on all aspects of climate policies. • The Climate Change Act and the NCCAP represent a clear • Sector Departments/Agencies and Local Government Units evolution of priorities from mitigation to adaptation. (LGUs) are assigned responsibility for planning and implement- Climate policy reform efforts are only partially aligned with ing Climate Action. development plan outcomes, limiting their effectiveness Execution and coordination of Climate Action are hindered by • The national, sectoral, and local development plans and policies a lack of clarity in roles and responsibilities across institutions are not fully aligned with the NCCAP, leading to difficulties in • The broad scope of CCC’s roles and responsibilities and the lack monitoring climate activities and hampering coordination and of coordination among stakeholders have hindered leadership convergence across sectors and levels of government. and accountability in implementing the climate agenda. • Mainstreaming the NCCAP in the Departments’ plans and • The roles of and relationships between the CCC and the other work programs requires the adoption of a common approach to oversight Agencies are not yet clarified, formulated, prioritized, tagging climate Programs, Activities, and Projects (PAPs) and or streamlined, which can limit the CCC’s effectiveness as a the establishment of indicators and targets. policy coordinating body. The Climate Change Act requires the national government to • The CCCC has not yet been fully effective in carrying out the provide technical and financial assistance to Local Govern- climate agenda due to limited decision making opportunities ment Units (LGUs) to formulate local climate change action and fragmented support. plans (LCCAPs), but support remains insufficient Existing monitoring and evaluation (M&E) systems have • New requirements to develop LLCAPs and integrate them into cumbersome reporting requirements, and the lack of climate local development plans impose significant administrative bur- indicators limits their usefulness dens and pressure on the LGUs. • Systems are not in place to collect and integrate results from • To lighten this load, the CCC encouraged LGUs to incorporate various Government Agencies, and a lack of agreed-upon indi- their LCCAPs into their Comprehensive Development Plans and cators and targets has hindered the process of monitoring the Comprehensive Land Use Plans and is working toward develop- integration of the NCCAP, impeding an evaluation of results ing supporting guidelines. across climate PAPs. Leveraging a low-carbon green-growth strategy and promotion • Department M&E systems have complex reporting require- of market-based instruments can strengthen engagement with ments, affecting managers’ ability to use reports for planning the private sector purposes. • Though mitigation activities are being carried out, there is cur- • At the local level, the Community Based Monitoring Program rently no common strategy dictating roles and responsibilities on and the Department of the Interior and Local Government’s low-carbon development and green growth. Local Government Performance Management System serve as • While some policies have promoted market-based instruments starting points for developing a systematic M&E system. and private sector engagement, their scope remains limited to a Insufficient institutional capacity, including limited access to few sectors. knowledge, and the complexity of planning tools have hindered Climate change adaptation (CCA) and disaster risk reduction efficient execution of the climate reforms and Climate Action management (DRRM) policies have converged • Departments have an insufficient number of knowledgeable and • Both policies consider climate adaptation as an appropriate mech- skilled staff on climate policy, financing, and institutions. anism for addressing climate-related disaster risk prevention. • Knowledge gaps and the lack of a knowledge management • Coordination among institutions on DRRM and CCA has been system have been key barriers for scaling up Climate Action in difficult because of overlapping responsibilities, action plans, and Departments and LGUs. tools, and limited monitoring and reporting requirements for • Tools to support planning and prioritization are often not main- climate adaptation and climate-related disaster risk prevention. streamed and too complex to use. Climate appropriations have been increasing relative to overall Differences in the classification of climate PAPs hinders cli- Government budgets mate budget planning and prioritization • Between 2008 and 2012, climate appropriations increased by • Multiple approaches used for classifying climate activities two and a half times in real terms and on average 26 percent (NCCAP, KRA-5, Department work programs, Multilateral annually, outpacing the growth of the national budget (around Development Bank classifications) across the Government result 6 percent). in a three-fold variation in climate appropriations. Climate appropriations focus on a few large PAPs Climate appropriations have been funded largely from domes- tic sources, while Development Partners’ support has concen- Figure 1. Evolution of Climate Appropriations Based on the NCCAP Classification, 2008–2013 trated on flood control and management 100 • Domestic resources have funded on average 82 percent of cli- mate expenditures in the four selected Departments (DPWH, DENR, DOE, PAGASA) between 2008 and 2011. 80 • Development Partners’ support is concentrated with the DPWH, accounting for 80 percent of the total support. 60 Climate appropriations have been focused on adaptation, but Percentage the share of appropriations for mitigation funding has been 40 rising faster • Nearly three-fourths of climate appropriations have been direct- ed toward adaptation intervention over the 2008–2013 period. 20 • Appropriations for mitigation PAPs have grown at an average real annual rate of 46 percent, nearly three times as fast as adap- 0 tation PAPs, which have grown at an average real annual rate of 2008 2009 2010 2011 2012 2013 Actual Actual Actual Actual Budget Proposed 17 percent. ■ Water su ciency ■ Food security ■ Ecosystem & ■ Sustainable energy Financing gaps for knowledge and capacity development may Environmental Stability ■ Knowledge and slow implementation progress Capacity Development • In comparing the budget with the Public Investment Program • Most of the climate expenditures and appropriations in the De- and Departments’ work programs, some major climate PAPs partments fall under the NCCAP priorities on Water Sufficien- are adequately funded while others remain underfunded or not cy, Ecosystem and Environmental Stability, and Food Security. funded at all. • The upward trend in climate appropriations is due to increased • Knowledge and capacity development is largely underfunded allocations to a few major PAPs, concentrated within a few despite its importance and prominence in the NCCAP. Departments and Agencies. The DPWH commands 52 percent • While the PSF provides a dedicated source of funding for local of climate appropriations, reflecting the Government’s desire to adaptation activities, funding gaps remain for mitigation and prioritize investments for flood control protection due to period- national/regional adaptation activities. ic flooding events in the recent past. LGUs are action-oriented, but sources of funding are frag- Figure 2. Composition of Expenditures and Appropriations by NCCAP Strategic Priority Area, 2008-2013 mented and their available amounts are limited 35 2.5 • The Albay Province and Makati City case studies indicate that climate appropriations at the local level are directed toward the 30 primary concerns of the LGUs. Climate Appropriations (in Php Billions) 2.0 • The LGUs most vulnerable to the impacts of climate change Percentage of National Budget 25 have the greatest need for public support, yet generally have the 1.5 least capacity to provide support under the current revenue-shar- 20 ing arrangements. 15 1.0 • Assessing local level expenditures is challenging, as funding is highly fragmented across many different sources. 10 Convergence of the CCA and DRRM agendas is not reflected 0.5 5 in budgets • Tracking the utilization of climate resources at the local level 0 2008 2009 2010 2011 2012 2013 0.0 is difficult, and available evidence indicates that funding is still Budget Budget Budget Budget Budget Proposed channeled toward recovery and rehabilitation. ■ Adaptation ■ Adaptation and Mitigation • At the national level, most of the resources continue to be direct- ■ Mitigation ■ As a % of the National Budget ed to response, recovery, and rehabilitation efforts. The Public Finance Management reform agenda provides op- portunities to improve planning, prioritization, execution, and monitoring of climate PAPs • The budget process provides entry points for mobilizing and targeting finance for Climate Action. • Strengthened procurement procedures and improved budget exe- cution contribute to improving the management of climate PAPs. • The formulation of sectoral Medium Term Expenditure Frame- works provides an opportunity to translate the NCCAP’s priori- ties into multi-year fiscal planning and budgeting. • The introduction of a new Results-Based Performance Manage- ment System across all Departments and Agencies is expected to improve reporting and auditing systems and enhance mid-year and year-end M&E of climate PAPs. • The adoption of new budgeting tools, such as the Program Ap- proach and the Bottom-Up Budgeting approach, offers unique opportunities to enhance climate outcomes, increase conver- gence, reduce duplication, and leverage additional resources. The way forward... The recommendations of the review aim to consolidate the strategic direction of the NCCAP and set the stage for scaling up Climate Action over the remaining two phases of the NCCAP. The goals for the remainder of this Administration’s term should be to: • Ensure that the enabling environment is firmly in place by completing and implementing the remaining pieces of the core climate change reforms; • Formulate, enact, and support complementary sector and local-level policy and institutional reforms; • Enhance design and implementation of climate programs, activities, and projects to improve their effectiveness; and • Through the above reforms, increase efficiency of resource use and provide support for higher levels of financing. These recommendations, together with the Strategic Action Plan, are anchored to the Government’s climate reform agenda through a framework that includes three pillars. Each of these pillars includes a set of objectives and underlying activities: Strengthening the Planning, Pillar 1: Pillar 2: Enhancing Leadership and Pillar 3: Building Capacity and Managing Execution, and Financing Framework Accountability through Monitoring, Change for Climate Change Evaluation, and Review of Climate Change Policies and Activities Objective 1: Strengthen the Budget Objective 1: Enhance the CCC’s Objective 1: Build Skills and a Planning and Execution Framework for Leadership Role in Reviewing and Knowledge-base on Climate Change Managing Climate Programs, Activities, Communicating Climate Change and Projects Performance Align Plans and Strengthen Objective 2: Strengthen Coordination Objective 2: Raise Public Awareness of Objective 2: Implementation to Achieve Climate between the CCC and Oversight Climate Change Change Goals Agencies and Departments Objective 3:Rationalize and Harmonize Objective 3:Strengthen Monitoring Climate Financing Instruments and Evaluation in the Departments and LGUs