BSP sweetens perks for sustainable financing

The Bangko Sentral ng Pilipinas (BSP) has approved additional temporary measures to incentivize banks to extend loans or finance investments for green or sustainable projects or activities, including transition financing for decarbonization.

- LAWRENCE AGCAOILI

BSP Governor Eli Remolona Jr. said the central bank approved the measures in the form of extra lending capability and reduced reserve requirement rate on sustainable bonds issued by banks to scale up sustainable financing in the Philippines.

“As a sustainable finance champion, the BSP will continue to play an active, enabling role in fostering the transition toward a sustainable economy. We will identify and create appropriate incentives that are within our mandates, empowering the banking system to steer capital flows toward growing green or sustainable investments and accelerate the development of solutions addressing just transition and adaptation-related challenges,” Remolona said.

The BSP chief issued Circular 1185 granting additional single borrower’s limit SBL) for financing eligible projects and zero reserve requirement rate against sustainable bonds on Dec. 13. The measures were approved by the BSP Monetary Board through Resolution 1562 on Nov 30.

The introduction of the set of measures forms part of the suite of initiatives under the BSP’s 11-point Sustainable Central Banking Strategy to mainstream sustainable finance, as well as support the achievement of the country’s climate commitments and sustainable development goals.