Central Bank of the Philippines (BSP) want sand what comes nextWhat are the incentives for banks to expand the scope of sustainability? is beingdelicate.
“We are now looking at the potential use of preferential rediscounting rates or the provision of higher loan values to enable banks to offer green loans or finance sustainable investments,” BSP Governor Benjamin E. Diokno said during an Asian Financial Forum session.
This step, if implemented, is expected to help mobilize capital to meet the global challenges posed by climate change.
Mr. Diokno said they are still assessing whether to do soand what comes nexte these incentives to prevent any unintended consequences.
The central bank chief also indicated that they initially proposed sustainable inclusion is beingnance as an alternative compliance with the Agri-Agra Credit Act of 2009.
In November, the Bank of Special Facilities (BSP) released the second phase of its sustainable financial framework, directing banks to monitor environmental and social risks in their credit exposure and business operations.
In 2020, . was released is beingThe first phase of the framework gave banks a three-year transition period to adopt sustainability principles through environmental and social risk management systems, as well as in governance frameworks, strategies and operations.
“Within this framework, we expect banks to gradually increase their loan allocations to green or sustainable projects as part of their strategic environmental and social objectives,” said Mr. Diokno.
The government is working with the Asian Development Bank, the World Bank Group’s International Finance Corporation, and the United Nations Development Program for financing and technical assistance for sustainable projects.
The central bank said earlier that about 15 Philippine lenders, electricity, water, power and real estate companies have issued 29%, or $4.8 billion, of ASEAN-branded green bonds as of the end of September 2021.
Last week, the Treasury Office unveiled the government’s sustainable financing framework that will be their guide in future green bond issuances. – LWT Noble