The Governor of the Bangko Sentral ng Pilipinas (BSP) announced that the next phase of the Sustainable Finance Framework, the second-phase regulation to support green banking in the country, will be issued soon. The British Embassy Manila hosted the event in collaboration with the Green Force, an inter-agency technical working group on sustainable finance.
“We are set to release the second issuance on the Sustainable Finance Framework, which aims to provide granular expectations in managing environmental and social risks concerning credit and operational risk areas,” said BSP Governor during the Philippine Sustainable Finance Roadmap and Guiding Principles Launch Event.
The roadmap underscores our commitment to deliver on our carbon reduction pledges. We hope this roadmap will inspire other countries towards adopting the appropriate finance policies that will help in the reduction of carbon emissions.
– Carlos Dominguez III, Finance Secretary
The BSP is executing several initiatives under the Sustainable Central Banking Programme to incorporate sustainability concepts into the BSP’s operations and functions. The recently established Sustainable Finance Roadmap and its guiding principles on developing a green, sustainable and climate-resilient economy, according to Finance Secretary Carlos Dominguez III, would encourage other countries to implement similar plans and regulations to help cut carbon emissions.
The roadmap’s development recognised the important role those fiscal policies play in reversing the consequences of the climate catastrophe and facilitating the transition to a low-carbon economy. He went on to say that this was “a significant step forward in our overall national effort to battle climate change and promote our long-term recovery and prosperity.”
In addition, the roadmap is the outcome of the Philippines’ collaboration with the United Kingdom government in assisting the Philippines in implementing the ASEAN Low Carbon Energy Programme. The British government supported the establishment of the “Green Force”—the Inter-Agency Technical Working Group for Sustainable Finance led by the DOF and the BSP.
The master plan for sustainable finance in the Philippines will address policy and regulatory gaps in promoting sustainable investments through finance, implementing sustainable government initiatives, facilitating public infrastructure investments, and developing projects that promote sustainable financing.
Dominguez said that he would bring the blueprint to the next 26th United Nations Conference of the Parties on Climate Change in Glasgow, Scotland, where he would guarantee that the views of climate-vulnerable countries such as the Philippines were heard.
Adopting green or sustainable finance concepts and practises, according to the BSP Governor, might open a slew of prospects for the BSP and the banking sector. For instance, the BSP’s investment of $550 million in the Bank for International Settlements’ green bond fund allows for the diversification of gross international reserves because it provides adequate returns when compared to other fixed-income assets.
The BSP recognised the need for banks and financial institutions to understand and manage climate change and environmental, social, and governance risks to fully maximise the opportunities associated with lending or investing in green or sustainable projects. Banks can be able to design sustainable finance instruments to mobilise funds for pandemic response and recovery sectors, as well as other economic activities that contribute to long-term development
“As we advance sustainability initiatives and continue to collaborate with relevant government agencies and other multilateral development partners, we hope that the sustainability agenda will have a big leap for the next five years,” the BSP Governor said.
Ultimately, Dominguez felt that the Philippines’ audacious commitment to the Paris Agreement of reducing the country’s greenhouse gas emissions by 75% over the next decade necessitates a whole-of-nation strategy that can only be realised if the government begins spearheading the implementation of practical and achievable solutions on the ground.
