BSP steps up climate action, green finance push
The Bangko Sentral ng Pilipinas (BSP) is stepping up its climate agenda, advancing reforms to strengthen risk oversight, mobilize green finance, and embed sustainability in its own operations.
In its latest annual report, the central bank outlined a three-pronged strategy to build a climate-resilient financial system—focusing on stronger supervision, improved data analytics, and increased financing for sustainable investments. These efforts signal a shift from policy development toward implementation, aligning finance with national climate goals.
Stronger climate risk oversight
The BSP enhanced the integration of climate and environmental risks into financial supervision, particularly through climate risk stress testing, which assesses banks’ resilience under severe climate scenarios. Capacity-building efforts with partners such as the World Bank deepened understanding of how climate risks can affect credit, market, and liquidity exposures.
The BSP also refined its regulatory relief framework for banks operating in calamity-hit areas to ensure continued delivery of financial services while managing elevated risks. Supporting these efforts is the Sustainability Platform for Analytics, Research, and Knowledge, which consolidates fragmented climate datasets to improve policymaking and supervision.
Scaling up green finance
To mobilize capital, the BSP operationalized the Philippine Sustainable Finance Taxonomy Guidelines (SFTG) and issued clarifications to support consistent use in lending and product development. The SFTG serves as a classification tool to determine whether an economic activity is environmentally and socially sustainable. It promotes transparency and credibility of sustainability disclosures and minimizes greenwashing risks; thus, enabling investors to make informed decisions.
The Monetary Board also extended regulatory incentives for sustainable lending by two years starting January 2026, allowing banks to exceed exposure limits and easing reserve requirements for sustainable bond proceeds. These measures aim to boost financing for renewable energy, clean transport, and climate-resilient infrastructure.
The central bank is also preparing a phased roll-out of the Philippine Financial Reporting Standards to support stricter sustainability reporting rules for banks by 2027. This will help the public and investors better understand how well banks are prepared for future challenges, while also encouraging banks to strengthen how they manage sustainability-related risks.
Greening operations and tracking emissions
Internally, the BSP strengthened the integration of environmental, social, and governance (ESG) principles in reserves management, launched a “Toward Zero Waste” program, and advanced greener currency production and digitalization initiatives.
In 2025, it also conducted its first comprehensive greenhouse gas accounting, estimating total emissions at 33.07 million kilograms of carbon dioxide equivalent, largely driven by electricity use.
Overall, the BSP’s initiatives reflect a more integrated approach to managing climate risks and supporting a low-carbon, climate-resilient economy—positioning sustainability at the core of financial stability.
