It seems that there is an increase in local financial institutions shifting to adhere to the so-called sustainable finance principles in terms of their lending activities.
This is according to the Philippine Central Bank’s latest report or known as Bangko Sentral ng g Pilipinas (BSP).
The evidence to the observed trend, according to the agency, is the adoption of their growing number of “green bonds” being sold.
The agency also mentions that so far issued $1.8 billion worth of debt securities that conform with environmental and climate risk management tenets. This is on top of the P21.5 billion worth of social bonds.
Suppose we use sustainability or allocation reports of selected banks as a basis. In that case, we can say that around 10.6 percent of the total loan portfolio of the banking system as of end-2019 was expended in loans to finance green and social projects and underwrite to achieving the United Nations’ Sustainable Development Goals, the central bank said.
Moreover, the BSP is working thoroughly with banks to enhance sustainable framework and for this area.
The BSP Governor Benjamin Diokno added that “The impact of COVID-19 certainly provides the impetus for crafting a sustainable recovery plan. Thus, the BSP and the banking industry are working together to advance the sustainability agenda in the financial sector.”
Geared towards creating and providing a way for BSP’s climate capacity, the central banking program is anchored to more sustainable environmental risk management, BSP vulnerability assessment, which includes offices and operations risks, and roadmap development articulating green practices and strategies within the company.
In line with this, the BSP will have high-level dialogues with the industry on how banks will comply with the sustainable finance framework, which provides for a three-year transition period starting May 2020.