Perks for ‘green’ banking extended for 2 years
The Bangko Sentral ng Pilipinas (BSP) has extended by two years the regulatory incentives for banks that finance green or sustainable projects, part of a broader effort to support the government’s climate commitments.
The extension took effect on Jan. 6 under Circular No. 1227, which amended two sections of the Manual of Regulations for Banks. The previous two-year incentives were approved in December 2023.
Among the perks is a higher credit exposure limit to a single borrower. Under the revised rules, the total amount of loans, credit accommodations and guarantees may be increased by up to an additional 15 percent of a bank’s net worth when used to finance eligible green or sustainable projects. These include transitional activities toward decarbonization.
The central bank said any resulting concentration of credit risk must be reflected in a bank’s internal assessment of capital adequacy, in line with its overall risk profile and operating environment.
At the same time, the BSP continued to waive the reserve requirement on green, social, sustainability or other sustainable bonds issued by banks. The central bank earlier said the removal of the reserve requirement for sustainable bonds did not signal a shift in monetary policy, but was intended solely as a tool to promote sustainable finance.
Such bond issuances must comply with Securities and Exchange Commission rules and with relevant regional or international standards accepted by the market, including those of the International Capital Markets Association or endorsements from the Association of Southeast Asian Nations Capital Markets Forum.
Issuing banks are also required to meet disclosure standards under the Sustainable Finance Framework, as well as to avoid greenwashing.
Data from the BSP showed that total green, social, sustainability and sustainability-linked bond issuances had reached an estimated P515.9 billion in the first half of 2025, with sustainability bonds accounting for P385.5 billion.
Based on BSP staff estimates, cumulative issuances by Philippine banks during the period also included P89.1 billion in green bonds, P35.6 billion in social bonds and P5.7 billion in blue bonds.
