MANILA - The Bangko Sentral ng Pilipinas on Monday said it was eyeing the possibility of extending more regulatory incentives for banks that "embrace" sustainable financing.
Included are banks that mobilize capital to address urgent global challenges, the central bank said in a statement.
BSP Governor Benjamin Diokno said the use of preferential rediscount rates or the provision of higher loan values are being explored "to enable banks to extend green loans or for 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," he said.
The extension of regulatory incentives is under the third phase of the Sustainable Finance Framework, the BSP said. The first phase was issued in April 2020, it said.
“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," Diokno said.
The Philippines, through its Green Force inter-agency technical working group led by the BSP and the Department of Finance, is taking a "well-coordinated policy formulation" to support sustainable finance.