- IMF calls for heavy RE, resilient infrastructure investment vs climate risks.
- PHP 10.7T needed 2029-2050 (~2% GDP/year); adaptation at 2.7% GDP 2026.
- Private capital key; ambitious 50 GW offshore wind scenario: PHP 10.67T.
According to the International Monetary Fund (IMF), the Philippines must invest heavily in renewable energy and climate-resilient power infrastructure to insulate the country economically from the growing threats posed by climate change. The IMF sees the transition to renewable energy not only as an environmental necessity but also as a wise choice economically for protecting the growth and inflation of the Philippine economy from extreme weather events, price swings on fuel, and disruptions in supply chains.
The Philippine economy repeatedly suffers when typhoons disrupt utilities, mining, construction, and transport, causing reduced productivity and increased expense. Therefore, it is imperative to implement a diversified, resilient power generation system to limit exposure to price shocks. Average spending on climate adaptation measures during the 2022-2024 period has been about 1.7% of GDP, with spending expected to escalate until 2025 to 3.9 percent of GDP, with 2026 projected at 2.7% and focusing on sustainable energy. New investments in creating new resilient infrastructure will average approximately 0.6% of GDP per year (on an annual basis), not including retrofitting.
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The Philippines will need to invest around PHP 10.7 trillion (roughly 2% of its GDP) annually from 2029 to 2050, in order to meet its clean energy targets but a more aggressive goal would add additional costs of approximately PHP 10.67 trillion by implementing 50 GW of offshore wind capacity and ensuring that at least 50% of the country's electricity comes from renewable energy sources. Public funds will not be sufficient, so mobilising private sector financing is necessary to mitigate the impact of factors that delay projects and deter investment.
Renewable energy sources can provide alternative energy sources that do not depend on foreign fossil fuels, thereby decreasing the vulnerability of the country to fluctuations in the international market place. To achieve long-term sustainable development and provide sustainable investment growth in capital-intensive industries, The International Monetary Fund stresses the need for immediate action to facilitate investment in these sectors.