Deputy Speaker and Antique lone district Rep. Loren Legarda expects more “green” investments in the Philippines after the Bangko Sentra ng Pilipinas (BSP) issued a circular on Sustainable Finance Framework (SFF).
Legarda backed the circular, which states that SFF aims to boost the country’s growth leaning towards a greener and sustainable development path.
“I have long expressed the view that despite the Philippines being a highly vulnerable country to climate change, we have yet to fully unlock our massive potential for green investments. The BSP’s circular on the Sustainable Finance Framework is a welcome policy direction for our banks and financial institutions to enshrine sustainability within their systems of governance and operations,” Legarda was quoted in a statement.
BSP issued the circular after the Monetary Board approved the sustainable finance policy framework.
The policy framework has provided expectations on the integration of sustainability principles, as well as environmental and social (E&S) risks in banks’ corporate governance and risk management frameworks, and their strategic objectives and operations, Legarda noted.
“As our country and the whole world slowly reopens the economy from closures [due] to the COVID-19 pandemic through financial stimulus packages, we hope that the new policy will lead to the financing of more investments on renewable energy, environmental protection, climate change adaptation and mitigation, and other low-carbon and sustainable initiatives,” Legarda said.
The BSP circular includes the SFF in the Manual of Regulations for Banks (MORB).
According to the MORB, the BSP recognizes “that climate change and other environmental and social risks could pose financial stability concerns” and that “physical and transition risks arising from climate change could result in significant societal, economic, and financial risks affecting the banks and their stakeholders.”
Legarda noted that SFF will create the way for climate finance access.
Legarda added the Philippines had been granted a P500-million grant for multi-hazard impact-based forecasting and early warning systems.
The Philippines was then part of a multi-country proposal to generate private sector investments in renewable energy and energy efficiency.
“Three readiness and preparatory support programs worth almost $1.7 million are also underway to enhance the capacities of the Land Bank of the Philippines as [an] accredited entity and other stakeholders involved in securing climate finance once national approval processes are completed,” Legarda noted.
Legards also asked the Climate Change Commission to cooperate with BSP to help financial institutions adopt the framework.
“Amid this COVID-19 pandemic and climate crisis, as the world clamors for a healthier planet as the new normal, I remain optimistic that these efforts and many more can sustain our gains towards resilience,” Legarda said.