Main Findings

In the Philippines, climate considerations are increasingly being integrated into nearly every public financial management (PFM) function, with very few areas remaining untouched. Importantly, these approaches are progressing in the right direction. There is significant awareness of climate change within the public administration, as evidenced by key policy documents such as the Philippine Development Plan (PDP) 2023–2028,8 where climate change is not only featured in a dedicated chapter but is also treated as a cross-cutting issue across various topics. This overarching observation is reinforced by the Climate Budget Integration Index assessment for the Philippines, commissioned by the United Nations Development Programme and conducted in 2023. 

The country shows a strong commitment to transparency and an open government approach, which are essential prerequisites for effectively implementing green PFM. By mainstreaming climate change into PFM, additional information is provided for decision making while ensuring that climate action is executed effectively. Furthermore, there is clear political will and ownership of green PFM reform, with the government and public administration taking the lead—contrasting with situations elsewhere where development partners dominate the agenda.

The Philippines benefits from a strong institutional foundation for climate action, characterized by a comprehensive climate law, robust policies, and a greenhouse gas (GHG) inventory. The emphasis on adaptation is appropriate, and established coordination mechanisms ensure that climate issues are addressed in an integrated manner within public administration. Overall, the Philippines possesses strong PFM fundamentals. With the exception of budget execution reporting, all prerequisites for successfully mainstreaming climate change consideration in PFM systems are in place.