The BSP was eyeing for more regulatory incentives for banks to boost sustainable finance shift
BSP — The Bangko Sentral ng Pilipinas said that it was eyeing more regulatory incentives for banks that “embrace” sustainable financing.
According to BSP Governor Benjamin Diokno, the use of preferential rediscount rates or the provision of higher loan values were being explored in order to enable banks to “extend green loans or for sustainable investments”.
The BSP chief added that the central bank was carefully evaluating those potential incentives so as not to create any unintended consequences.
Diokno also said that they have initially proposed the inclusion of sustainable finance “as a form of compliance” with the mandatory credit to the agriculture sector.
BSP said that the extension of regulatory incentives was under the 3rd phase of the Sustainable Finance Framework. The central bank added that the 1st phase was issued last April 2020.
Under the said framework, Diokno said that they expected banks to progressively increase their loan allocations for sustainable or green projects as part of their set strategic environmental and social objectives.
The country, through its Green Force inter-agency technical working group led by the central bank and the Department of Finance (DOF), was taking a “well-coordinated policy formulation” in order to support sustainable finance.
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Meanwhile, BSP Deputy Governor Chuchi G. Fonacier said that the central bank expected the country’s first 6 digital banks will become fully operational in the first 6 months of this year.
According to Fonacier, banks that were converting into digital banking operations may start their new business sooner, perhaps within the 1st 3 months of 2022.
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