The Bangko Sentral ng Pilipinas (BSP) is looking to offer sweeteners to local banks that embrace sustainability principles.
The incentives include the potential use of preferential rediscount rates or provision of higher loan values to enable banks to extend green loans or finance sustainable investments.
“The BSP is carefully evaluating these potential incentives so as not to create any unintended consequences. Nevertheless, we have initially proposed the inclusion of sustainable finance as a form of compliance with the mandatory credit to the agriculture sector,” Diokno said.
According to the central bank, the extension of regulatory incentives falls under the third phase of the Sustainable Finance Framework.
“Under this framework, we expect banks to progressively increase their loan allocations for green or sustainable projects as part of their set strategic environmental and social objectives,” he said.
Since 2017, Philippine banks have issued $1.15 billion in foreign currency denominated and P85.4 billion in local currency denominated green, social and sustainability bonds.