How the Philippines can leverage its Asean chairship to meet climate goals

United States President Donald Trump started the year by pulling out of the United Nations climate treaty; the West–China rivalry continues to intensify over global critical minerals, while accelerated clean energy transitions for cross-border electricity trade all add to an already complex regional and global environment.

For Asean, a region deeply embedded in global trade and investment, these shifts highlight the growing importance of “regional cohesion, adaptability and forward-looking economic cooperation”, said the Asean Business Advisory Council (BAC), the private sector arm of the regional bloc established by the member countries’ heads of state and government.  

“By strengthening trade and investment linkages, accelerating digital transformation, integrating micro, small and medium enterprises, leveraging the creative economy and innovation, and advancing sustainable and inclusive growth, the Philippines’ chairship responds thoughtfully to both current challenges and long-term opportunities,” Asean BAC said in a statement in December.

 As we usher into the new year, here are some policies the Philippines would need to move the needle on climate action for itself and the region along with it.

1. Ambitious NDC to credibly lead Asean

The Philippines, apart from Thailand, Laos, Cambodia, Myanmar and Brunei, is one of the few countries in Southeast Asia that has yet to update its nationally determined contribution (NDC). Although not mandatory to do so under the Paris Agreement, an updated NDC is an indicator of “the level of commitment a country has to address the climate crisis,” said John Leo Algo, national coordinator of Aksyon Klima Pilipinas, a nonprofit network of 40 civil society organisations. 

“With the Asean being one of the most vulnerable regions, the Philippines setting not only an ambitious NDC, but a feasible and robust implementation plan, sends the right message to our neighbouring countries and the rest of the world that we are truly ready to champion climate action that adequately responds to this crisis,” said Algo.  

Department of Environment and Natural Resources (DENR) Secretary Raphael Lotilla addresses local government units, civil society and corporates during the multi-sectoral meeting to refine the country’s nationally determined contribituion (NDC) on 3 December 2025. Image: DENR

Although the delay is attributed to the government wanting to ensure all calculations are evidence-based, some state officials have also looked at the Philippines’ chairship of the Asean this year as an ideal platform to launch its updated climate targets, given that climate action is one of the country’s intended priority agenda, Algo told Eco-Business.

Five years ago, the Philippines first submitted to the United Nations its NDC to the Paris climate accord, aiming to curb emissions by 75 per cent.

But 72.29 per cent of the target is conditional, and will only be met through funding and assistance from the international community. The government has pledged to use its own resources to meet the remaining 2.71 per cent.

In a multi-stakeholder meeting in December, the government expressed its intent to set the Philippines’ next mitigation target at 75 per cent, with an unconditional target between 10 to  20 per cent, said Algo, who was present at the consultations.

This target “could be seen as ambitious”, but looking at how the national climate budget has been used in the past five years, mostly tagged as infrastructure projects, instead of solutions aligned with the NDC and other climate plans, it is clear that the Philippines has a much higher capacity to be unconditional than what the previous percentage would indicate, he added.

2. Reliance on domestic sources for climate spending

Trump’s withdrawal from the UN Framework Convention on Climate Change (UNFCCC) is widely expected to affect climate funding flows that Southeast Asia relies on for adaptation and mitigation efforts.

The US historically contributes 22 per cent of UNFCCC budgets and billions to the Green Climate Fund (GCF), creating gaps in grants and concessional loans that support Asean initiatives like the Catalytic Green Finance Facility (ACGF), which supports green infrastructure investments in the region.

Southeast Asia, which needs more than US$200 billion annually for green transitions amid rising green bond ambitions, risks losing key multilateral leverage, as the US Agency for International Development (USAID) cuts already shutter clean energy and conservation efforts.

With the US less reliable as a climate funder, the Philippines is expected to rally the regional bloc around boosting investment in climate and adaptation projects, with blended finance as a key focus, finance authorities have said. 

Since it took over the cudgels from Malaysia as Asean chair, the Philippines vowed to continue its predecessor’s priority to support cross-border electricity trade in the region.

The Asean Power Grid (APG), a major regional initiative to connect Southeast Asian nations’ electricity networks projected be established by 2045, requires around US$100 billion for transmission lines alone, while total generation and transmission investments could reach up to US$ 800 billion.

Southeast Asian nations are raising finance for the APG primarily through multilateral development banks, blended finance, and public-private partnerships.

The Asian Development Bank (ADB) and World Bank launched the Asean Power Grid Financing (APGF) Initiative in October 2025, committing up to US$10 billion from ADB over 10 years and US$2.5 billion initially from the World Bank, plus technical assistance grants totaling US$18.7 million to develop bankable projects, de-risk investments, and integrate renewables. 

Apart from multilaterals sources, the Philippines as chair could push for more domestic sources to fill the funding gap for other green projects.

BDO Unibank, Inc, the country’s largest lender, launched the public offer of its sustainability bonds this month, looking at least P5 billion (US$83 million) to expand its sustainable finance capacity for projects related to renewable energy, green buildings and pollution prevention, among others. 

The Philippines can collaboratively tackle climate adaptation projects as well to build regional resilience, drawing from frameworks like the Asean Climate Change Strategic Action Plan, which leads research on sustainable solutions for urban communities facing floods, heat, and sea-level rise in cities across not just in the country, but in the wider region like Indonesia, Malaysia and Brunei. 

State-owned Landbank also issued this month a sustainability bond targeting to raise a minimum of P30 billion (US$505 million)  not just for clean energy but social projects for food security, affordable housing, health, education, access to essential services, and employment generation.

3. Upholding the human rights dimension of critical minerals

The Philippines, along with Indonesia, could benefit from the G7 Critical Minerals Production Alliance, launched in 2025 and advanced at this month’s G7 finance ministers’ meeting, as Western investments seek to expand mineral supply chains in Southeast Asia. 

Both nations hold vast reserves, positioning them as prime partners for G7 de-risking.

The Philippines, rich in nickel, copper, and gold, benefits from deals like Luzon Economic Corridor projects, which aims to lure US and Japanese battery and semiconductor firms to the country, offering incentives to establish processing plants for nickel, cobalt, and copper, thus moving beyond raw extraction.

Indonesia, the world’s top nickel producer, with over half of global supply, can secure funding for downstream processing and electric vehicle battery hubs through alliances with G7, Australia and Philippines.

Apart from economic gains, the Philippines as Asean chair could reframe transition minerals as “strategic, finite resources that must be governed in line with climate goals and human rights”, said Angela Asuncion, coordinator for Asia Pacific of the Transition Mineral Accountability Working Group for nonprofit Resource Justice Network.

“Asean leadership offers a platform to align mineral governance with regional climate resilience rather than short-term supply chain demands,” Asuncion told Eco-Business.

“As Asean chair, the Philippines can help steer both itself and Indonesia toward stronger environmental and human rights due diligence (EHRDD) by asserting collective leverage over minerals that are geographically concentrated in the region.”

This includes pushing home states such as Canada and other G7 members to uphold EHRDD obligations across their overseas value chains, and advancing robust mineral traceability systems so downstream users of batteries and green technologies are fully accountable for preventing human rights abuses and environmental harm, she added.