DOF supports increased ASEAN funding for green infrastructure

The Department of Finance (DOF) has pledged its commitment to expand green infrastructure projects within the country, aligning with the Association of Southeast Asian Nations (ASEAN) objective of achieving sustainable growth, accounting for at least 50 percent of the global economy.

During the 10th ASEAN Finance Ministers and Central Bank Governors Meeting held in Jakarta, Indonesia, ASEAN members reached a consensus to bolster funding for climate change mitigation infrastructure projects, aiming to allocate up to 30 percent of the ASEAN Infrastructure Fund (AIF) for these initiatives by 2026. 

DOF Secretary Benjamin Diokno expressed his support for the proposal to align the AIF with the ASEAN Taxonomy for Sustainable Finance and to enhance the ASEAN Catalytic Green Finance Facility’s potential to attract foreign investors. 

The ultimate goal for ASEAN members is to allocate a larger share, ranging from 60 to 70 percent, of the AIF to green infrastructure projects by 2030. 

The AIF complements member states’ financing strategies, which include official development assistance from governments, loans from global financial institutions, and contributions from other partners. 

With the abundant natural and human resources in Southeast Asia, the International Monetary Fund (IMF) has projected that ASEAN could contribute as much as half of global economic growth. However, the World Bank has recommended that ASEAN nations channel more resources into labor enhancement, renewable energy, and low-carbon emissions, as well as focus on strengthening trade. 

In line with these objectives, Secretary Diokno highlighted the Philippine government’s launch of the Davao Public Transport Modernization Project, which will introduce electric buses in Davao City, the country’s third-largest city. 

According to the United Nations, electric buses have the potential to reduce carbon emissions by up to 50 percent and prevent approximately 3,700 premature deaths resulting from air pollution. 

The Davao bus project will receive $10 million in aid from the AIF and a $1 billion loan from the Asian Development Bank to facilitate its implementation.