Finance Secretary Benjamin Diokno asked the World Bank and other multilateral development banks (MDBs) to provide more concessional financing for low and middle-income countries.
“The response of multilateral development banks to the COVID-19 pandemic and post-pandemic recovery has stretched their lending capacity. This threatens their ability to respond to ongoing crises, including climate-related hazards, food insecurity, public health risks and learning poverty,” Diokno said in his intervention during the Intergovernmental Group of Twenty-Four (G-24) Ministerial Meeting on Oct. 10, 2023.
Diokno welcomed proposed measures that could further increase the financing capacity of MDBs.
He acknowledged the World Bank’s successful implementation of recommended measures by the G20 Capital Adequacy Framework—creating up to $50 billion in additional lending capacity over the next 10 years.
“In this context, we welcome the proposed additional measures that could further increase the WB’s financing capacity, especially towards providing concessionality for low- and middle-income countries,” Diokno said.
Diokno proposed that MDBs make available better financing terms especially amid rising interest rates and increasing costs of international borrowing.
“The rapid increase in the level of the Secured Overnight Financing Rate (SOFR) poses significant risk burdens to IBRD countries such as the Philippines,” he said.
Diokno also urged MDBs to provide more concessional financing for climate adaptation and mitigation projects in support of the $4 trillion to $6 trillion investment requirement for the global transformation to a low-carbon economy.
“Better concessionality in climate finance is a necessary step towards climate justice,” he said.