BSP leads in mobilizing funds for green projects

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is collaborating with the Department of Finance (DOF) and other key government agencies to facilitate the mobilization of funds toward green and sustainable projects.

In his speech during the webinar of the Joint Foreign Chambers of the Philippines led by the European Chamber of Commerce of the Philippines, BSP Governor Benjamin Diokno said the collaboration, coined as “Green Force,” would help embark on the development of a principle-based taxonomy.

Diokno said the central bank has joined the international community in its call for climate change and sustainable finance and is championing the promotion of the sustainability agenda in the financial system.

The BSP chief said the central bank issued the Sustainable Finance Framework for Banks in April last year to emphasize the role of the board of directors in leading and institutionalizing the adoption of sustainability principles across the organization.

Aside from the broad principles set out in the framework with respect to the adoption of an environment and social (E&S) risk management system, he added the BSP is also issuing more granular expectations covering the interplay of E&S risks and the key risk areas such as credit, market and operational risks.

Diokno said the sustainable central banking program is one of the strategic priorities of the BSP from 2020 to 2023.

“BSP will advance the sustainability agenda by fostering environmentally responsible and sustainable policies and work practices, as well as integrating environmental, social and governance aspects in the BSP’s key operations or functions,” he said.

The Philippine central bank participated in the green bond fund launched by the Bank for International Settlements (BIS) as part of sustainable investing in reserve management.

It has so far invested $350 million in the BIS open-ended fund after infusing an additional $200 million in August last year to diversify the country’s gross international reserves.

BSP is a member of the Network for Greening and Financial System (NGFS) that consists of central banks and supervisors organized to enhance the role of the financial sector in managing climate and other environment-related risks and mobilize capital to support a transition toward a sustainable economy.