The International Monetary Fund has called on the Philippines to significantly scale up investment in renewable energy and climate-resilient power infrastructure, warning that climate risks pose growing threats to economic stability, inflation, and long-term growth.
According to IMF estimates, achieving the country’s clean energy and climate goals between 2029 and 2050 will require cumulative investment of around PHP10.7 trillion, equivalent to roughly 2 percent of 2024 GDP per year over the period. The IMF framed the energy transition as both a climate imperative and an economic strategy, noting that clean and resilient power systems can help buffer the economy from extreme weather, fuel price volatility, and energy supply disruptions.
The IMF highlighted that recurring typhoons in the Philippines frequently disrupt critical sectors such as utilities, mining, construction, and transport, which form the backbone of the energy system. Because these sectors sit upstream in the economy, shocks quickly cascade into higher costs and prices across other industries, reinforcing the case for a diversified and resilient energy mix.
Climate adaptation spending in the Philippines has already been rising, averaging about 1.7 percent of GDP from 2022 to 2024, increasing sharply in 2025 and remaining elevated in proposed 2026 budgets. Sustainable energy development has been identified as a priority area, with the IMF estimating that new climate-resilient infrastructure, including energy assets, could cost an additional 0.6 percent of GDP, excluding retrofitting of existing facilities.