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beach, sea, boat, Philippines
Since 2009, AFD has been assisting the Government of the Philippines in its program to support decentralization. Its objective: build the capacities of local authorities and local climate strategies.

The Philippines’ decentralization policy reflects the complex geography of this archipelago with 7,101 islands. It is combined with a delegation of competences to local governments and a transfer of resources giving relative financial independence. However, this strengthening of local powers poses two challenges: the coordination between national priorities and local implementation conditions andthe good governance of these local authorities.

The Philippines are considered as the third most vulnerable country to climate change in the world. The country also very much faces the issues of natural disaster risk adaptation, mitigation and management, as shown by the devastating effects of Typhoon Haiyan (Yolanda) in November 2013.


The Government of the Philippines has benefited from a EUR 150m AFD loan, signed in 2010, for the implementation of the Local Government Finance and Budget Reform Program (LGFBR). This program’s priorities relate to:

  • State transfers to local authorities;
  • Financial management and planning;
  • The quality of public services;
  • Access to credit or the increase in own income for local authorities.

In addition, technical assistance (EUR 0.47m AFD grant) has analyzed the environmental risks and challenges faced by Philippine local authorities and developed climate plans in three pilot cities with different profiles, which were selected for their vulnerability: Santa Rosa (Laguna), Dagupan and General Santos.


The funded project and its technical assistance directly contribute to capacity building in local authorities, in key sectors for the country’s development: budgetary decentralization and the fight against climate change. This action was extended in 2014 with new budget support for the decentralization reform program, combined with a second technical assistance program to strengthen local natural disaster prevention systems.

Project start date
Project end date
Grand Manille
150 000 000
Financing amount
Republic of the Philippines
Department of Finance (DOF)
Department of the Interior and Local Government (DILG)
Climate Change Commission (CCC)