Philippine trails Southeast Asian neighbors in decarbonization investments

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January 2, 2026 | 12:00am

MANILA, Philippines — The Philippines has been lagging behind some of its Southeast Asian neighbors in providing favorable conditions for decarbonization investments, the Green Finance Institute said.

In its report, GFI noted that while other countries have carbon taxes or trading systems, the Philippines is still in the early stages of design discussions and lacks the revenue necessary for low-carbon investments.

“Complex permitting and fragmented incentives, banks and private investors noted that the process for establishing green infrastructure projects can involve as many as 200 discrete approvals,” the report read.

In an interview, GFI Europe managing director James Hooton said a clear policy signal on a sectoral basis can be seen as a gateway for green investments in the country.

“The fiscal shifts are short-term. What we see is that actually the economic imperative, the economic truth of transition and financing can override any political chain to will,” he told The STAR.

The report pointed out that projects must first be approved as eligible for the green lane before accessing the expedited process.

“While Singapore and Indonesia already operate some form of carbon tax or trading system, the Philippines remains in early-stage design discussions, depriving low-carbon investments of potential revenue streams,” the report said.

In October 2025, the Board of Investments (BOI) formally endorsed a substantial portfolio of projects valued at P5.95 trillion, granting them eligibility to access the agency’s green lane services, which facilitate the expedited processing of permits and approvals.

The BOI One-Stop Action Center for Strategic Investments approved 219 projects between February 2023 and Oct. 20 last year. Renewable energy accounted for the bulk or 77 percent of the total certified projects for green lane services.

Hooton said the market and the energy sector were moving toward the transition, and political will would follow once projects prove to be commercially viable.

“And that’s what we are trying to do. The climate transition at the heart of an economic transition is totally viable when that transition is commercially viable,” Hooton added.