Climate or debt? Between the devil and deep blue sea
Enough of using agencies that have become graft delivery systems, and coordinate with LGUs that are directly impacted.
While most Filipinos are entranced by the impeachment teleserye, the global economic order is edging toward yet another reckoning.
Iran is escalating as America heads into its midterm elections. The benchmark 10-year US Treasury bond yield has breached the five-percent psychological threshold — its highest level in 24 years. For emerging markets, this means tighter money, weaker currencies, and more expensive foreign debt refinancing.
The Philippines remains vulnerable. The national government debt closed 2025 at P17.71 trillion, up 10.3 percent from the P16.05 trillion a year earlier — still short of P20 trillion but inching uncomfortably closer.
Countries are discovering they have governments they can no longer comfortably afford. Investment guru Ray Dalio warns that while debt balloons, the spread between debt yields and equity returns narrows. Yet the S&P flirts with record highs, powered by a narrow basket of tech and AI stocks.
Irrational exuberance, turbocharged
Meanwhile, scientists and environmentalists warn of a super El Niño, with drought and water scarcity again on the horizon. The irony is hard to miss. Between May and August, we had too much water. Now experts warn we could expect little in the months ahead.
Official climate earmarks are staggering and raise sobering questions. Civil society budget analysis says the government allocated P1.15 trillion for climate in the 2025 General Appropriations Act — more than double the previous year’s allocation. That amount was about 6.5 percent of the P17.71-trillion national debt recorded at the end of 2025.
The problem is not the size of the allocation; it is whether the spending is producing results. Put bluntly, we borrowed more, tagging more spending as climate spending. The result? Ghost flood control projects, more flooding, money lost, and suffering for hapless Filipinos.
World Bank and IMF models show that adverse climate impacts could reduce Philippine economic output by up to 3.7 percent by 2030. This is an eye-watering P962 billion using the nominal 2025 GDP of P26 trillion. Conversely, they stress that effective adaptation and mitigation measures could reduce this by up to 2.5 percent, or P650 billion.
In the meantime, the economy is slowing, hit by a triple whammy: geopolitically driven inflation, slower government spending due to corruption, and narrowing fiscal space because of ballooning debt.
The question is not whether we should spend on climate but how to deploy whatever funds are left. Climate adaptation should be a growth-supporting investment: irrigation, water management, resilient agriculture, logistics, transport, and energy infrastructure hardening.
Done properly, it saves lives, protects livelihoods, and could stimulate a slowing economy. Done badly, it becomes the worst of both worlds: new debt today, more plunder with weaker resilience tomorrow. Rolling over is not an option, and hope is not a strategy when it comes to confronting the climate juggernaut.
The policy choice cannot be paralysis. Take the climate adaptation and mitigation money away from agencies that have squandered the public trust, and channel it through lean, transparent, PPP-oriented climate resilience mechanisms working directly with LGUs.
Enough of using agencies that have become graft delivery systems. Coordinate with LGUs that are directly impacted. We must rebuild where citizens can see the results and judge for themselves: drainage that drains, irrigation that irrigates, farms that survive drought, and flood control projects that don’t disappear with the next audit.
This leap of faith may sound delusional in this climate (pardon the pun) of cynicism, but the price of inaction is worse: a country drowning in floods, parched in drought, and buried in debt — desperate for a government worthy of its trust.