The BSP was looking to set up a credit facility to boost green loans.
BSP — The Bangko Sentral ng Pilipinas was looking to set up a credit facility in order to boost green loans.
The BSP was looking to set up a separate credit facility that will urge lenders to provide sustainable financing.
In a statement obtained by BusinessWorld Online, the central bank said that it was exploring regulatory incentives which may include the use of preferential rediscount rates or provision of higher loan values.
“This may be implemented through enhancements in the existing rediscounting facility and/or creation of a new credit facility for banks that lend to priority green sectors,” BSP said.
In November, the BSP launched the 2nd phase of its sustainable finance framework. Its focus was directing banks to monitor social and environmental risks in their credit exposures and business operations.
According to the central bank, they’re still assessing potential regulatory incentives for green financing.
The Bankers Association of the Philippines (BAP) welcomed BSP’s move to explore regulatory incentives that could help boost lending for green projects, noting that local banks have issued more than USD 1.15 billion of green, social, and sustainability bonds since 2017.
READ ALSO: BSP and COMELEC Sign Escrow Deal For Safekeeping Of 2022 Election Source Codes
Chamber of Thrift Banks Executive Director Suzanne I. Felix, meanwhile, said that they’re actively collaborating with BSP on a training program that will help banks in the implementation of the sustainable finance framework.
Rural Bankers Association of the Philippines (RBAP) President Albert T. Concha, Jr. said that smaller banks were still navigating how to implement the sustainable framework as their borrowers were mostly small businesses and “backyard industries” that didn’t particularly focus on green practices for business operations.
Concha said that apart from the potential regulatory incentives floated by BSP, a separate valuation and classification for loans that were classified under the green sector should also be considered.
Thank you for visiting Newspapers.ph. You may express your reactions or thoughts in the comments section. Also, you may follow us on Facebook.