Debt and Climate
Debt & Climate
The countries that struggle the most with debt tend to be more vulnerable to the impact of climate change and these events then exacerbate debt problems further, creating a vicious circle. Explore how there can be no debt justice without climate justice in the following videos.
Madagascar
by Dina Niaina Mandroso
Madagascar is often portrayed as one of the poorest countries in the world. With around 75 per cent of the population experiencing poverty and a similar proportion of Madagascans affected by food insecurity, the country has been struggling with a series of external shocks.
On top of this, Madagascar is one of the countries most exposed to extreme climate events, despite contributing almost nothing to global emissions. Since 2020, the country has been hit by prolonged and recurrent droughts; back‑to‑back cyclones and floods; locust infestations and crop losses; as well as increasing water scarcity and soil degradation. In early 2026, back to back cyclones in Madagascar left more than 400,000 people in need of food assistance, with roads, power lines and homes severely damaged.
While the IMF and the World Bank consider Madagascar’s debt to be sustainable, the country’s total external debt has more than doubled in the past decade, and external debt service has tripled. As a result, Madagascar is in dire need of resources to invest in basic infrastructure and essential public services to combat existing deficiencies in electricity, water and sanitation, public health, and education, particularly in rural areas. Madagascar must also finance vital investments in climate adaptation and tackling damages from extreme climate events, at a time when Official Development Assistance (ODA) is in steep decline.
The country has gone through seven IMF programmes in the last two decades, with the last one agreed in 2024, each with their own austerity measures. The combination of these measures, high inflation (8.6 per cent in December 2024), severe water, electricity shortages, poverty, and corruption led to protests by Gen-Z Madagascans which culminated in the exile of President Andry Rajoelina in September 2025.
Madagascar holds significant reserves of graphite, titanium, and rare earth minerals, amongst others - all key to the energy transition. In its latest country report, the IMF highlights mining as a key element that can drive economic growth in the country. The Fund, however, fails to show the impact of this strategy on local communities and the environment. For ODG, “mining comes with an enormous social and environmental cost for the affected communities, turning Madagascar into a sacrifice zone for the Global North’s “green” transition”.
The Philippines
By Oriang Women's Movement, Quezon City
The Philippines is facing a serious debt and budget squeeze due to ever-growing debt servicing costs. At the end of 2024, national government debt was at US$276.1 billion according to official data, with domestic debt making up 68.1 per cent and external debt 31.9 per cent of the stock. While external debt service accounts for only 8.4 per cent of the government revenue, once domestic debt is included debt service increases to more than a third (37.13 per cent). At the same time, the government devotes just 8.77 per cent of revenue to health. As a result, the remaining public resources are nowhere near sufficient to tackle the problems that the country faces today, including the climate crisis.
The Philippines is highly exposed to typhoons, floods, sea-level rise and other climate shocks. Indeed, the World Bank describes the country as among the world’s most disaster-prone, and women in the Philippines are amongst those most affected by the vicious circle of debt and climate crises. With insufficient public resources to invest in adaptation and recovery from climate extreme events, women must deal with rebuilding their destroyed houses and businesses on their own.
Filipino civil society has long been campaigning for debt justice. In 2023, they launched a citizens’ debt audit campaign, calling for increased scrutiny of questionable and illegitimate debts. The campaign also challenges protocols that automatically allocate public funds to debt service without a democratic debate over the country’s social and climate needs.