In support of the Philippine government commitment to the global climate summit last year, the Bangko Sentral ng Pilipinas last week released Annex A to the Sustainable Finance Framework that was issued in April 2020 embodying the guiding principles. Among the incentives being considered are preferential rediscount rates or provision of higher loan values that would bring about a significant increase in the share of green financing in banks’ loan portfolios.
This seemingly auspicious scenario is canceled by continuing government support to fossil-fuel producers and consumers. According to OECD and the International Energy Association, in the year 2020 alone G20 countries and emerging economies spent $345 billion subsidizing fossil-fuel use.
The BSP and the Department of Finance are spearheading the Green Force’s efforts to promote sustainable investments by “bridging policy and regulatory gaps.” Since 2017, seven banks have issued $1.15 billion in foreign currency denominated and P85.4 billion in local currency denominated green, social and sustainability bonds. Amid the pandemic, two local banks have issued social bonds worth approximately P29 billion to finance the needs of eligible micro, small and medium enterprises.