Southeast Asian leaders are calling for a major shift in how governments fund climate action, warning that climate change is no longer just an environmental issue but a growing economic and fiscal risk.
At a regional forum organized by the United Nations Development Programme in partnership with the Department of Environment and Natural Resources and the Department of Finance, officials stressed the need for a “whole-of-economy” approach that mobilizes public, private, and international funding to strengthen resilience.
DENR Undersecretary Analiza Rebuelta-Teh said climate-related disasters are increasingly straining government budgets and economic productivity.
“Climate shocks are fiscal shocks,” she said.
Finance officials echoed the concern, warning that unchecked climate impacts could drive up public debt and weaken economic stability, making climate resilience a core responsibility of economic planners.
Experts urged ASEAN countries to integrate climate initiatives into broader fiscal strategies, including turning Nationally Determined Contributions (NDCs) into investment-ready portfolios to attract large-scale funding.
Stronger public financial management systems were also highlighted as key to building investor confidence and unlocking capital for climate projects.
The Philippines’ Climate Change Expenditure Tagging (CCET) system was cited as a model for improving transparency in climate spending, although officials noted the need for better data use to guide policy decisions.
Regional cooperation is also gaining ground. The Asian Development Bank introduced the ASEAN Climate Finance Policy Platform (2025–2027), aimed at helping member-states strengthen financial systems for climate action.
However, officials said a significant gap remains in adaptation financing. Improving project “bankability,” expanding access to funding for local governments, and reducing investment risks were identified as key priorities.
Participants also called for wider use of digital tools to track climate spending and outcomes, emphasizing the need for transparent, data-driven systems to attract investment and improve accountability.
While no formal agreements were signed, the forum outlined a clear direction for ASEAN: integrate climate action into fiscal policy, scale up financing mechanisms, and strengthen data systems to support long-term resilience.