The Bangko Sentral ng Pilipinas announced plans to develop a green taxonomy in January 2024, with Governor Eli Remolona identifying the classification framework as a central pillar of the central bank's strengthened sustainability agenda. The taxonomy is intended to increase transparency across the financial system, define which economic activities qualify as environmentally sustainable, and make the Philippines a more attractive destination for foreign capital directed at climate mitigation and adaptation projects.
RESERVE REQUIREMENT ON ESG BONDS
Before the taxonomy announcement, the central bank had reduced the reserve requirement rate applicable to ESG bonds issued by banks to 0%.
CLIMATE RISK SUPERVISION
The BSP has also been integrating environmental considerations into its assessment of banks' risk management practices and expanding its climate risk supervision framework. A draft version of the Philippine Sustainable Finance Taxonomy Guidelines had been circulated for consultation in 2023.
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