A Baseline Study on the State of Local Climate Change Expenditure Tagging (CCET) in the Philippines

Local government units (LGUs) in the Philippines are  situated at the forefront of climate change action. As they translate  local plans into investment programs, LGUs are required to implement  climate change expenditure tagging (CCET) to track budgeted items  related to climate adaptation and mitigation. However, numerous  LGUs in the Philippines have faced challenges in achieving sufficient  compliance with CCET. This study, therefore, aims to contribute to this area by assessing the state of local CCET and subsequently identifying  institutional and policy recommendations to improve its implementation. Using the evaluation criteria developed by the Organization for Economic Co-operation and Development (OECD), this study employs a qualitative descriptive design involving document analysis, literature reviews and, Key informant interviews (KII). In general, the findings highlight the  need for supporting legislation to ensure sustainability and propose an expansion of the tagging mechanics. This expansion may involve indicating  financing sources, integrating adaptation and mitigation objectives within PPAs, applying degrees of relevance through corresponding weights, accounting for negative expenditures, and tracking PPAs’ alignment with the five comprehensive development plan (CDP) sectors. To improve implementation effectiveness and efficiency, integrating CCET across LGUs’ planning, budgeting, and legislative functions is recommended, alongside institutionalizing administrative reforms for sufficient institutional capacities for CCET implementation.