THE Philippine stimulus package to bring the economy back from the coronavirus crisis has neglected to target “green” and sustainable projects that could help ensure a stronge recovery, ING Bank said.
ING Bank N.V. Philippines, quoting its report, “Asia’s Lamentable Green Response to COVID-19,” said “green” spending in the Philippines’ stimulus package was zero, putting it in the same boat as Indonesia, Thailand and Taiwan.
ING said the Philippine stimulus package is equivalent to 5.2% of gross domestic product (GDP), with monetary measures accounting for 3.1% of GDP and fiscal measures at 2.1%.
Among the countries studied, New Zealand’s “green” investment as a proportion of its stimulus package was 13%, followed by Singapore (10.8%), India (5.2%), Malaysia (4.4%), South Korea (3.2%) and China (1.7%).
“Research suggests that in many if not most cases, green stimuli can deliver a stronger boost to the economy than other policies and generate a greater number of jobs,” it said.
ING said it remains unclear why countries in the region “have not taken a greener route to COVID-19 stimulus.”
“That the near absence of any green policies in Asia’s COVID-19 stimulus packages is a missed opportunity is one thing; it is doubly disappointing given how important Asia-Pacific is for global greenhouse gas emissions. This was an opportunity not just to catch up with other regions, but to restore trajectories towards Paris Agreement objectives,” it said.
In the Philippines, ING estimated that the government has rolled out a stimulus package worth P604 billion so far, with P409.6 billion in actual spending that largely went to fund cash aid programs, wage subsidies and healthcare expenditures, “with no emphasis on the environment or sustainability.”
It said other stimulus bills pending in Congress will also likely focus on income replacement, with still no priority given to green projects.
“With COVID-19 spreading across the Philippines and the economy in recession, it may be understandable that the majority of funds have been allocated to income subsidies, healthcare and support to SMEs (small and medium-sized enterprises),” it added.
It said the government can tie some of the proposed wage subsidies and low-interest rate loans to sustainable and environment-friendly requirements.
On infrastructure, which is thought to be an effective stimulus program due to its multiplier effects, it said the government can “identify and prioritize infrastructure projects depending on their green criteria.”
ING said the Philippines was showing “partial gains” in sustainability before the pandemic hit, with government agencies active in promoting and creating policies covering green financing.
However, the Philippines remains “heavily reliant on oil and coal for power generation which account for 81% of total electricity use, while hydroeletric and other renewable sources constitute just 11.7%.”
“The COVID-19 pandemic has offered governments around the world an opportunity for a total rethink on how their economies will operate in the decades to come. COVID-19 might be a near-term crisis, but global warming remains the longer-term threat. Few governments in Asia appear to have grasped this chance, with most choosing easier, but arguably less effective traditional stimulus approaches,” it said. — Beatrice M. Laforga