Building a sustainable future through renewables, finance

MANILA, Philippines — The Philippines stands at a critical juncture. As one of the world’s most climate-vulnerable nations, we face annual economic losses of P177 billion due to typhoons and earthquakes.

Yet, amid these challenges, our economy remains resilient. Inflation in January 2025 held steady at 2.9 percent year-on-year, well within the Bangko Sentral ng Pilipinas target range of two to four percent. Core inflation also eased to 2.6 percent, reflecting the BSP’s careful monetary stewardship.

This stability is fueling a transformative shift in our energy landscape, as renewable energy investments surge to unprecedented levels.

While recent weather disruptions and African swine fever have driven up prices for vegetables, fish, and meat, declining rice prices — supported by sufficient domestic supply and lower-tariff imports — have helped balance the equation. A slower annual increase in electricity rates has further moderated non-food inflation, creating a favorable environment for sustainable investments.

This economic stability is not happening in isolation. Globally, renewable energy investment trends are shifting. Established markets like the United States and United Kingdom saw declines of 12 percent and 68 percent, respectively, in 2024.

However, emerging markets like the Philippines are picking up the slack. According to BloombergNEF, the Philippines recorded a remarkable 45 percent increase in renewable energy investments last year, far outpacing the global average of eight percent. This growth, alongside gains in Thailand (70 percent), Malaysia (13 percent) and Indonesia (10 percent), has positioned Southeast Asia as a renewable energy powerhouse, with regional investment growth of 37 percent.

The scale of this transformation is undeniable. The Board of Investments reports that renewable energy accounted for 95 percent of the P1.35 trillion in approved investments last year. This staggering figure underscores the urgent need for financial institutions to develop scalable and innovative sustainable finance solutions.

The Philippines’ national framework for sustainable finance, anchored in the Philippine Development Plan 2023-2028 and our climate commitments, is driving this momentum. While social objectives are still being integrated, current initiatives are already channeling capital toward priority areas like healthcare, infrastructure, housing and food security — tying back to the pressing need to address rising food prices and ensure long-term resilience. — Jun Palanca