FARMERS try to recover whatever they can after rice fields in Cagayan Valley were flooded when Typhoon Ulysses swept through the region in November 2020. — PHILIPPINE STAR/ MICHAEL VARCAS

A SYSTEM for rating local governments’ creditworthiness will someday facilitate their issue of bonds, including green bonds, enhancing their financial self-sufficiency, a Department of Finance (DoF) official said.

“In the future, how do we help capacitate them so they can float, for example, their own green bonds to fund their own sustainable projects?” Finance Assistant Secretary Paola A. Alvarez said at a webinar organized by the European Chamber of Commerce of the Philippines on Wednesday.

Funds generated by green bonds are used for climate mitigation and environmental projects.

The Bureau of Local Government Finance, Ms. Alvarez said, is looking into developing an LGU (local government unit) credit rating system that is acceptable to both investors and the LGUs themselves.

“The Secretary of Finance stressed the importance of the participation of multilateral development banks,” she said. These banks, she added, are considered trusted intermediaries by both investors and local governments.

The DoF has been asking multilateral banks to come up with guidelines for vetting climate adaptation projects in developing countries in order to create a “seal of good housekeeping” that would attract private investors.

Meanwhile, members of the new national panel of technical experts under the Climate Change Commission were given their assignments last year to represent various Philippine provinces.

The provincial assignments are intended to address the problem of lack of capacity at many local governments in preparing viable climate adaptation projects to be supported by a climate change fund, known as the People’s Survival Fund.

“The goal here is to help local government units understand how to properly plan their local adaptation plan, taking into consideration the different risk exposures that are specific to an island province,” Ms. Alvarez said.

The Philippines’ maiden green bond offering of at least $500 million is set to be issued “in the coming weeks.”

The offering will raise funds for the Philippines’ clean energy projects and other climate-change mitigation initiatives. — Jenina P. Ibañez