Clear sectoral policies seen as gateway for green investments

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December 31, 2025 | 12:00am

MANILA, Philippines — Sector-specific policies in energy and transport are crucial to unlock private capital for the green transition, as investors need clearer regulatory detail, while stronger green force governance can provide certainty and confidence in government climate commitments, according to the Green Finance Institute (GFI).

In an interview, GFI Europe managing director James Hooton said policy serves as the enabler while finance acts as the facilitator of the transition, requiring clear and specific sector-based policy and demand signals to guide investment decisions and mobilize capital.

“We need to see that detail. But from an overarching perspective, our recommendation is that green force governance piece, which I think will give some of that surety to the capital, the government,” he told The STAR.

In its report, GFI said high costs and limited revenue streams are restricting private investment in the Philippines’ recycling, co-processing and waste-to-energy facilities despite growing waste volumes and the introduction of Extended Producer Responsibility (EPR) legislation.

It noted that interviewees flagged poor enforcement and opaque sanction processes, creating uncertainty over the reliability of EPR revenues for recyclers and co-processors.

Hooton said there is no single overarching framework, although an executive order establishing a green force, alongside climate change commitments enshrined in law and supported by a government structure, could serve as a unifying mechanism.

“For me, as we see it, policy is the enabler, and finance is the facilitator of this transition. It’s about giving fine policy signals, specific policy signals, demand signals, demand signals, on a sector basis,” he said.

When asked which governance changes could best align political priorities with long-term green financing goals, Hooton said the public and government both seek a transition, but achieving it requires collaboration to bridge the gap between transactions and actual implementation.

“And so, you’ve got private capital that is there, seeing a return, and then you’re seeing the environmental and social benefits of that investment. I don’t think any government is going to be able to turn around and stop that,” Hooton said.

GFI’s report highlighted that private banks remain cautious about lending to fragmented, high-risk operators, most of whom lack adequate equity or collateral, while high energy costs and expensive transportation modernization make savings from electrified transport options largely unattainable.