No loans extended to Climate Change Commission – Alvarez

MANILA, Philippines –  Climate Change Commission vice chairman Heherson Alvarez has denied that loans related to the government’s climate change program have been spent by the agency.

Renato Redentor Constantino, executive director of the Institute for Climate and Sustainable Cities, had earlier raised concern about the possible misuse of various foreign loans for climate change including the combined $361-million loans recently approved by the World Bank and Japan.

In reaction to this, Sen. Juan Ponce Enrile announced that a Senate investigation into the agency’s funds is forthcoming.

“There has been no loans whatsoever extended to this commission, and we surely cannot spend what we do not have,” Alvarez said, adding that he welcomes Enrile’s announcement.

“It is unfortunate that Senator Enrile may have been grossly misinformed by irresponsible individuals. The commission is not yet in any position to seek or receive loans from any source because it has not yet completed the National Climate Change Action Plan, one of three basic requirements of Republic Act 9729 or the Climate Change Act of 2009,” he said.

Alvarez said that a simple check with the Department of Budget and Management (DBM) will show that not a single centavo, or even an operational fund to jump start the new agency, has been released to the commission since it was created in October last year.

He said the commission has not received or contracted any loan from domestic or international funding agencies to support any of its programs or projects.

On the alleged misuse of the supposed climate change fund of 150-million euro (about P10.5 billion) from the Agence Francaise de Developement (AFD) to plug the budget deficit, Alvarez reiterated that the fund went directly to the Department of Finance (DOF).

“A close scrutiny of the agreement will show that the DOF, together with the Department of Interior and Local Government, DBM and the National Economic and Development Authority, were named responsible for the loan’s management. The commission was never mentioned and did not receive any amount. At that time, we were not yet fully organized, as we were doing the IRR (Implementing Rules and Regulations) as mandated by law to organize the commission. We were not in the position to receive or manage any fund,” Alvarez said.

The loan agreement was reportedly signed by Finance Secretary Gary Teves on Feb. 15, 2010, the same day Yeb Saño was appointed commissioner, completing the composition of the commission. Commissioner Lucille Sering was appointed on Jan. 8, 2010.

Alvarez also noted that the agreement never mentioned “climate change,” and listed the purpose of the loan as funding “to improve local financing, through the facilitation of access of LGUs to development credit, service delivery of public financial management and implementation of procurement reforms at the LGU level.”

A statement released by the French embassy in Manila on July 17 reiterated that the loan “was not related to climate change mitigation” and was supposed to “strengthen financing to LGUs in order to enhance delivery of environment, health and social services.”

Scrutinizing the law

Enrile has also called for the review of Republic Act 9729 or the Climate Change Act of 2009, a day after Sen. Loren Legarda sought an inquiry into the budgetary allocations and funding mechanisms of climate change projects.

Enrile said he will likely summon Alvarez to clarify issues on funds and loans, and the supposed “unwarranted exercise of unwarranted authority.”

The commission is chaired by the President, with the vice chairman actually overseeing its operations.

Enrile pointed out that RA 9729 has offered inadequate solution on climate change, and is biased toward mitigation rather than adaptation. Mitigation involves projects that aim to reduce greenhouse gas emissions globally while adaptation deals with the implementation of projects designed to protect the population from the effects of climate change.

Legarda had said that RA 9729 already sets the policy for adaptation, mitigation and disaster risk reduction, but expressed openness for its review.

Enrile said the upcoming inquiry will also encompass all loans, not only the 150-million euro French loan.

Constantino revealed that there is also a $250-million IBRD loan that had been approved by the World Bank (WB) on May 20, 2010 under the Philippine Development Policy Operation/Supplemental Support for Post-Typhoon Recovery.

The WB loan reportedly has a 25-year maturity with a grace period of 10 years; seeks to help provide the fiscal space to begin immediate reconstruction and is premised on the government’s commitment to transparent spending.

The Japan Ministry of Foreign Affairs also approved last April 26 a ¥9.912-billion loan for post-“Ondoy” and “Pepeng” short-term infrastructure rehabilitation projects.

The repayment period will be 40 years including a 10-year grace period.

The loan was exchanged on April 26 between Makoto Katsura, Ambassador of Japan to the Philippines, and Foreign Affairs Secretary Alberto Romulo.

The Japanese ODA loan will carry out repairs and reinforcement of overpass bridges that were partially destroyed or rendered impassable, as well as flood control facilities in Luzon, Mindoro and Palawan that had been damaged or eroded.

Where have all the loans gone?

Constantino revealed that the country has total loans amounting to $1.09 billion for direct climate change adaptation and mitigation supplied by multilateral agencies and foreign government creditors from 1992 to 2018.

He said that based on a report of the Asian Development Bank (ADB), by 2010, the possible cost of climate change for the country is about P150 billion a year, or three percent of the Gross National Product.

Enrile called on President Aquino to include climate change issues in his State of the Nation Address (SONA) on Monday.

“What kind of assistance and loans have we gotten? How much loans have been obtained? And where have these money been used?” he asked.

Enrile said the government may call for a moratorium or reduction of current foreign loans.

“We have to be more innovative on how to fund our efforts,” he said. –-Rhodina Villanueva (The Philippine Star) with Christina Mendez