Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. disclosed Friday a plan to monitor how Philippine banks use their funds to help or harm the environment.
“The BSP will work with scientists to develop a taxonomy of bank assets and examine whether these are beneficial or harmful to the environment,” Remolona said during the Philippine Economic Briefing in Toronto, Canada on July 13.
Remolona said in a presentation the BSP plays a vital role in slowing climate change and proposed 11 strategies, including encouraging banks to disclose the environmental, social and governance impacts of their specific assets.
He said that under the Reporting Climate-Related Disclosure, banks would be asked to report specific assets that are “good, not so good, bad and very bad for climate.”
The 11 sustainability strategies proposed by the BSP are vulnerability assessment, enhanced disclosure, climate stress testing, E&S risk in prudential policy, climate change in monetary policy, incentives for green lending, sustainability in BSP’s portfolio and risk management, task force for inclusive green finance, reporting climate-related disclosure, sustainability in BSP’s operations and capacity building.
Remolona attributed the Philippines’ outstanding recovery from the pandemic to the resiliency of the banking system that maintained around 16 percent in capital adequacy ratio.
He said Philippine banks maintained an impressive 188-percent liquidity coverage ratio, exceeding the global standard of 100 percent.
Remolona joined the Marcos Cabinet in apprising Canadian investors of business opportunities in the Philippines. The economic team hosted its eighth Philippine Economic Briefing at the Fairmont Royal York in Toronto, Canada.
“We have uncharted waters to explore in terms of trade and investments in mutual areas of interest, including electronics manufacturing, machineries and electricity, mining, and agriculture,” Finance Secretary Benjamin Diokno said in his keynote message.
Canada is the Philippines’ 20th largest trading partner in 2022 with total trade reaching $1.5 billion. Moreover, with nearly a million overseas Filipinos in Canada, cash remittances reached $1.2 billion in the same year.
Alain Auclair, managing director and head of global banking-Canada of UBS Securities Canada, acknowledged the Philippines’ strong credit status and attractive fixed-income instruments amid global headwinds.
“As a testament to the Republic of the Philippines’ growth story and credit, the sovereign successfully priced a triple-tranche US dollar 3-billion deal on the back of a 25-billion dollar peak order book just earlier this year, which marks the largest ever order book for any Southeast Asian borrower. It was a phenomenal outcome with the issuance achieving a negative new issue concession of about five basis points across the curve.
The deal reaffirmed the strength of the Philippines’ credit even in volatile times,” he said.
Department of Budget and Management Secretary Amenah Pangandaman presented an overview of the Philippines’ national budget, which has been largely allocated to the social services sector––equivalent to roughly 38.1 percent of the total budget of P5.3 trillion.
The DBM increased the budget for climate adaptation measures by 60 percent. The department will also be pursuing the Green Public ProcurementRoadmap to integrate green choices in public procurement.
National Economic and Development Authority Secretary Arsenio Balisacan presented on infrastructure development and investment in the Philippine socioeconomic agenda.
Balisacan said the NEDA board approved 194 high-impact infrastructure flagship [rojects amounting to P8.3 trillion.
More than 80 senior executives of Canada-based funds and corporates and representatives of business groups, industry associations, financial community and public sector attended the economic briefing.