Q&A: Building Strong Foundations for a Prosperous, Inclusive, and Climate-Resilient Philippines

Infrastructure development has been receiving huge support from ADB in recent years. Will this continue under the new CPS?

Infrastructure gaps have unfortunately meant that not everyone has equal access to the Philippines’ strong growth, especially for its most vulnerable. The new CPS recognizes these challenges and will continue to prioritize support for climate-resilient infrastructure as a way to help increase access to jobs, markets, schools, and public services and drive inclusive growth.

The CPS will also focus on developing new regional centers and economic corridors. ADB-financed projects such as the Bataan-Cavite Interlink Bridge and the North-South Commuter Railway, both key components of the Luzon Economic Corridor, are expected to further ease travel, deepen regional integration, and stimulate growth across the Greater Manila Bay area. In addition to transportation, our investments will also target energy and digital infrastructure. These strategic focus areas will help lay the foundation for a more inclusive and resilient future.

How will ADB balance its support for human development and climate and disaster-resilient development with the country’s need for more infrastructure financing?

Human development, climate resilience, and resilient infrastructure are not separate endeavors but are deeply interconnected. They must come together in a cohesive strategy to help the country achieve inclusive and sustainable growth. ADB’s new CPS for the Philippines ensures this integrated approach.

The country’s high vulnerability to climate change, which affects the poorest of the poor, and persistent poverty and income inequality, need to be urgently addressed to ensure the growth trajectory is sustained and will not be derailed despite disasters and shocks.

Climate action is embedded across ADB's support to the Philippines, ensuring that investments contribute to long-term sustainability and disaster preparedness, while also considering human development.

Right-of-way and resettlement issues can delay implementation of infrastructure projects. How does ADB plan to avoid these delays?

Given the potential impact of project delays on communities, right-of-way acquisition and resettlement issues are critical challenges for us. To address these challenges, ADB is working closely with the government to ensure that infrastructure investments are implemented efficiently and fairly as part of the new CPS. Our approach focuses on three key areas:

(i) Collaboration with relevant government agencies to identify and implement strategies that expedite right-of-way acquisition. This includes providing technical assistance to improve land acquisition processes, improve compensation frameworks, and ensure that resettlement plans are effective and fair.

(ii) Close coordination with government agencies to make sure funds are secured and available when needed. Earlier budget allocation allows for more efficient project execution.

(iii) Support for the government in strengthening coordination among various agencies involved in infrastructure projects, minimizing administrative delays.

The latest World Risk Index report categorizes the Philippines as the most disaster-prone country. What actions will ADB undertake to help build resilience?

This is a critical area of ADB support, with natural hazards accounting for as much as 4.6% of GDP during super Typhoon Haiyan (Yolanda) in 2013, in addition to lost lives and livelihoods. The new CPS prioritizes building resilience to disasters, recognizing the country's vulnerability and the increase in climate-related hazards. There are some key actions that focus on this in the CPS, which include:

The development of climate-smart infrastructure: ADB is focused on investing in infrastructure designed to withstand extreme weather events, such as typhoons, floods, and earthquakes. This includes the construction of resilient roads, railways and bridges; flood control systems; and disaster-resistant public facilities that can protect communities and help them continue their lives during and after disasters.

Promoting a low-carbon economy: ADB aims to support renewable energy projects and promote energy efficiency. This will not only reduce greenhouse gas emissions but also improve energy security and diversify the country’s energy sources, making it more resilient to global energy price fluctuations.

Sustainable natural resource management: The CPS will include programs aimed at protecting and sustainably managing the Philippines' rich natural resources. This involves promoting sustainable agriculture, forestry, and fisheries, as well as climate-resilient agricultural practices. Moreover, ADB will help to conserve biodiversity, protect critical ecosystems, and rehabilitate damaged environments, which are vital for sustaining livelihoods and reducing disaster risks.

How does ADB plan to help the Philippines address income inequality, lack of job opportunities, and education reform?

There are several ways in which the CPS is addressing these root causes of poverty and inequality. These include:

Enhancing access to quality education and healthcare: ADB will prioritize investments that improve access to and the quality of education and healthcare services, particularly for marginalized and low-income communities. By providing both these vital services, we aim to empower individuals with the knowledge and health they need to improve their livelihoods and break the cycle of poverty.

Strengthening social protection systems: ADB will continue to support flagship social assistance programs, such as the Pantawid Pamilyang Pilipino Program (4Ps), or conditional cash transfer program, and the Walang Gutom (No Hunger) 2027: Food Stamp Program, which provide critical basic needs and support to poor households. These programs are essential to safeguard vulnerable populations against economic shocks, and help reduce income inequality.

Improving employment opportunities: Recognizing the close link between poverty and the quality of employment, the CPS will focus on equipping Filipinos, particularly those from low-income households, with the skills and resources that improve their access to economic opportunities. This includes vocational training, technical skills development and entrepreneurship programs designed to upskill and support small business creation.

Promoting rural development: Given that a significant portion of the Philippines’ poorest communities live in rural areas, ADB will encourage investments in agricultural productivity, agribusiness, and value chains. By stimulating economic activity in these regions, we aim to raise incomes and create sustainable livelihoods for rural communities, thereby reducing regional disparities.

 

How will ADB foster more private sector participation in the country’s development?

Engaging the private sector is critical to enhancing productivity and innovation. To do so, the Philippines must foster an environment that attracts investment, strengthens markets, and expands access to finance. There are several components to ADB’s support for this:

Accelerating a green energy transition: Private sector engagement is critical to ensuring the funding needed to close the climate financing gap. ADB is helping to build policy and regulatory reforms that encourage private sector investment in renewable energy and energy efficiency projects. With this transition to green energy, we aim to reduce carbon emissions and promote sustainable economic growth.

Catalyzing private sector participation at the urban and subnational levels: To unlock private sector investment in urban development and at the local government level, ADB focuses on infrastructure projects that improve livability, sustainability, and economic resilience in cities across the Philippines.

Supporting a strong, inclusive, and sustainable financial system: ADB will help strengthen the financial sector by promoting inclusive finance initiatives, widening access to credit for small and medium enterprises (SMEs), and supporting the development of capital markets. These efforts will help create a more robust financial system that supports private sector growth.

Deepening digital transformation and ease of doing business: ADB believes that digital innovation and reforms improve the ease of doing business, making the Philippines a more attractive destination for investment. Our support includes initiatives that streamline regulatory processes, improve digital infrastructure, and foster a business-friendly environment.

In line with the government’s thrust to foster more private sector participation in the country’s development agenda, ADB will also promote public-private partnerships (PPPs) in key sectors such as transport, clean energy, agriculture, and healthcare. Building on the Philippines' relatively mature PPP ecosystem, ADB aims to extend the use of PPPs to local government units, leveraging models that optimize PPPs to enhance the quality and impact of sovereign operations.

How much financial assistance will ADB offer to the Philippines under its new CPS?

Last year we provided $4.5 billion in both sovereign and non-sovereign assistance, and we expect to sustain a similar level of annual financial support during the new CPS. This is an indicative amount which is subject to annual review with the government. Our support includes project preparation and feasibility studies for the government’s big-ticket investments under the Infrastructure Preparation and Innovation Facility as well as transaction advisory services for PPP projects.

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