PH 2023 green investments up by 57%
18 March 2024
THE Philippine private sector's investment in the green economy reached $1,464 million in 2023, rising by 57 percent when compared to the previous year. The country continues to make an upward trajectory in the 2024 Green Index Score, rising by three ranks to reach 39 out of 100. However, an investment gap exists and significant efforts must be made to meet the required capital investment of $16.6 billion.
This was the assessment made by the 5th edition of "Southeast Asia's Green Economy 2024 Report: Moving the needle," which was published by Bain & Co., GenZero, Standard Chartered and Temasek. The report studies the progress made by Southeast Asian countries in transitioning toward a greener economy, and then breaks down the achievements, challenges and outlook for each country.
It mainly says that Southeast Asia has a clear opportunity to leverage the coming transition for competitiveness and economic growth. Unlocking its green economy could be worth another $300 billion annually by 2030. The current models that investors often consider include green fuel sources, process optimization, improved farming practices, nature-based solutions and decarbonization.
In the Philippines, domestic investors' support of infrastructure for green energy has been "brisk." What is notable is the significant increase in waste management investment while investment momentum continues in the solar sector in 2023. For example, the Manila Water Co. has put in $682 million in investments in waste management while electricity distributor Meralco has acquired $285 million worth of shares in the solar sector.
Meralco has also invested in the Solar Power New Energy Corp., a developer of solar farms that intends to carry out "the largest solar project in the world." This planned solar project in Luzon is expected to develop 3,500 megawatts (MW) of solar panels and 4,000 MW hours of battery energy storage.
Other movements have spurred investment rise. The Renewable Energy Act was amended in 2023 to enable full foreign ownership of renewable energy projects. "Green Lanes" have also been established to expedite processes for investors and their companies to obtain licenses and permits.
The Philippines Rural Development Project significantly enhanced farm and fishery productivity by supporting smallholders. The Organic Agricultural Act provides tax incentives to organic agriculture entities and explicit support for the deployment and development of organic fertilizer.
An additional annual report on sustainability, including greenhouse gas emissions reporting, has been made mandatory for all publicly listed companies.
One persistent major challenge is the continuing deforestation, which happens because of commodity-driven forest loss from mining, forestry and other urbanization activities.
For the Philippines to accelerate the development of its green economy, the report recommends working toward successful blended finance cases, further developments in renewables regulations and strengthening regional collaboration.
Mike Samson, Standard Chartered Bank's chief executive officer and head of client coverage for the Philippines and the Asean, names three key areas where Southeast Asian countries, including the Philippines, can synergize: first, technological transfer and co-innovation of clean technologies; second, cross-border investment in areas like the greenification of manufacturing and processing of nickel for batteries; third, "finding shared agreement around key standards across many platforms — in batteries, climate taxonomy, recognition of carbon credits and joint papers on climate positions."
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