10/19/2021 | Press release | Distributed by Public on 10/20/2021 00:51
The Bangko Sentral ng Pilipinas (BSP) recognizes its vital role in promoting sustainable development, cognizant that sustainability issues pose significant risks to its core mandates of price and financial stability.
"Sustainability, as a principle, is embedded in the charter of the BSP. We are committed to remain responsive and proactive in our stance towards these risks to maintain price and financial stability," BSP Governor Benjamin E. Diokno said.
To safeguard the stability of individual financial institutions and the entire system, the BSP implemented tangible actions, including the issuance of the Sustainable Finance Framework for banks in April 2020 and the launch of the Sustainable Central Banking Program.
To align with the National Government's approach toward sustainable finance, the BSP actively participates in the Inter-agency Technical Working Group on Sustainable Finance or the "Green Force". The inter-agency council co-chaired by the Department of Finance (DOF) and the BSP, together with 16 financial sector authorities and critical government agencies, aims to harmonize government policies on green and sustainable projects, establish an action plan to institutionalize and accelerate the growth of sustainable finance, and develop a pipeline of sustainable investments.
The BSP also joined the Network for Greening the Financial System in July 2020. This is a group of central banks and financial supervisors that discusses best practices in developing environmental and climate risk management guidelines in the financial sector.
According to Governor Diokno, adopting green or sustainable finance principles and practices can unlock various opportunities for the BSP and the banking sector. "For instance, the BSP's investment of a total of USD 550 million in the Bank for International Settlements' green bond fund allows the diversification of the Gross International Reserves as it offers adequate returns compared to other fixed-income assets," explained the Governor.
In the case of the banking sector, the BSP sees a need for the banks and financial institutions to understand and manage climate change and Environmental, Social, and Governance (ESG) risks to fully maximize opportunities behind lending or investing in green or sustainable projects. For instance, banks can be innovative in designing sustainable finance instruments in mobilizing funds for sectors supporting pandemic response and recovery, and other economic activities that contribute to sustainable 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," Governor Diokno said.
In line with their sustainability initiatives, the DOF and the BSP will spearhead the Philippine Sustainable Finance Roadmap and Guiding Principles Launch Event and Donors' Forum on 20 October 2021, 2:00 p.m. to 3:15 p.m. The event, which will be livestreamed on the BSP's Facebook page, is organized by the British Embassy Manila, in partnership with the "Green Force," to present the Philippine Sustainable Finance Roadmap and Guiding Principles developed under the ASEAN Low Carbon Energy Programme.