MOBILIZING PRIVATE RESOURCES FOR FINANCING INCLUSIVE GREEN GROWTH

Philippine Experience

Jerry Clavesillas

Director, BMSMED

Department of Trade and Industry

About the PHILIPPINES

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• 7,000 islands, 30,000 km2

• GDP 6.2% (2012)

• Employment generation: 997,000 (2012)

• Gains in industry sectors, particularly services

2010 2011 20130

1

2

3

4

5

6

7

8

Gross Domestic Product (GDP)7.6%

3.9%

6.2%

Source: National Statistical Coordination Board

National Income Accounts, Growth Rates (in %)

Source: National Statistical Coordination Board

Industry Origin 2010 2011 2012

Agriculture, hunting, forestry, fishing

(0.2) 2.7 0.8

Industry 11.6 2.3 5.4

Services 7.1 5.1 7.7

Source: 2011 List of Establishments, NSO

RP Enterprises(820,255)

MSMEs - 99.6%(816,759)

Large - 0.4%(3,496)

Contribution of MSMEs• 99.6% of total firms

Micro - 90.6%(743,250)

Small - 8.6%(70,222)

Medium - 0.4%(3,287)

Overview of Philippine Micro, Small and Medium Enterprises (MSMEs)

• 61% of employment• 35.7% of value added

Assets = Eu 52,000

Employees = 1 to 9

Philippines and Climate ChangeWorld Risk Report 2011

1 Vanatu2 Tonga

3 Philippines4 Solomon Islands5 Guatemala

Typhoon Pedring (September 2011) and Typhoon Quiel (October 2011):

10M Euros, 80 dead, 500,000 persons displaced

Typhoon Sendong (December 2011):

75M Euros, 1,200 dead, 1M persons displaced

Typhoon Ondoy (September 2009):

350M Euros

Typhoon Pablo (December 2012 ):

670m EUR1,067 Dead, 834 missing

2,066 Injured

Annual cost of damage due to extreme weather

events = 1 percent of GDP/yr

(1990-2008)

Figure 1 Most Vulnerable Areas to Potential Climate Hazards in the Philippines

Source: Department of the Environment and Natural Resources 2010: Philippine Strategy for Climate Change Adaptation, 2010 - 2022

Storm surges will affect 14% of the total population and 42% of the coastal population (World Bank, 2013)

4oC = 50cm sea level rise(World Bank, 2013)

Public Policy frameworks

• Policies to promote a green economy• Solid Waste

Management Act• Clean Air Act• Clean Water Act• Renewable Energy Act• National Climate Change

Action Plan

Globalization

Corporate Social

Responsibility Green Growth

Business

Opportunities

from M

igration

Gender Responsiveness

Market SystemDevelopment

Sector

CompetitivenessLo

cal a

nd Re

giona

l

Com

petiti

vene

ss

A2F

P&E A2M

BE

MSME

RELENDING FACILITIES

Green Finance in the Philippines

SUSTAINABLE ENERGY FINANCE PROGRAM (SEF)

Green Investments

• Renewable energy (solar, biomass, mini hydropower)

• Cleaner production• Water conservation• Proper waste management• Energy efficiency

Challenges of Financing Inclusive Green Growth

• Consciousness and responsibility towards the

environment

• Understanding the economic benefits of going green

• Documented success stories

• Availability, accessibility of technology and expertise on greening business operations

Measures to Overcome the Challenges

• International level• Revitalize the clean development mechanism (CDM) and carbon

trading market• National architecture for green finance

• In the Philippine setting, enterprise level interventions are critical to have a larger impact on the national economy• Enhancing the knowledge and awareness of MSMEs on the

benefits of going green, technology and expertise available• Incentives for enterprises to go green• Adopt greening practices that require zero or minimal investments• Reduce documentary requirements, lower interest rates, collateral

substitutes and cash-flow based lending

Final Message• Green finance plays an important role in greening the

national economy

• In the Philippines, we need to approach it from a bottom-up perspective, looking at the importance of the MSMEs for a Green Economy

• For MSMEs Green Finance should come in only where it is appropriate and economically beneficial for the MSME in the medium term.

Thank you very much for your attention

Maraming salamat Po!

Jerry Clavesillas

Director

Bureau of Micro, Small and Medium Enterprise Development

Department of Trade and Industry (BMSMED-DTI)

jtclavesillas@yahoo.com