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April 21, 2024

Diokno cites key role of green investments in a post-pandemic Philippines

The Bangko Sentral ng Pilipinas (BSP) recognizes the importance of green investments in driving the country’s post-pandemic recovery, said BSP Governor Benjamin E. Diokno at the recent Asia-Pacific Environmental, Social, and Governance (ESG) Investors Summit.

Citing data from World Bank’s International Finance Corporation, he said investments in the Philippines and in three other big emerging markets as China, Indonesia, and Vietnam may reach $5.1 trillion if the economies adopt a post-pandemic green recovery approach.

This approach includes investments in energy efficiency, green infrastructure, support for environment-related research and development, and incentives for low-carbon vehicles.

According to Diokno, the BSP has incorporated sustainability principles in its portfolio management as part of its sustainable central banking strategy.

The BSP invested $550 million in the Green Bond Fund managed by the Bank for International Settlements (BIS) and plans to invest in the BIS Asian Green Bond Fund in 2022.

The BSP also encourages banks and other supervised financial institutions to offer sustainable financial instruments that may support the post-pandemic recovery of the agriculture and the micro, small, and medium-sized enterprise (MSME) sectors.

“Since the Philippines is vulnerable to typhoons and climate-related risks due to its geographical location, green recovery is the ideal approach to strike a balance between implementing economic strategies and building climate and disaster resilience,” added the Governor.

The BSP is advocating the wider adoption of sustainable finance, which incorporates ESG standards to assess the value, performance, and long-term growth of an asset.

The BSP remains committed to fostering the country’s sustainability efforts to ensure a more stable, resilient, and inclusive Philippine financial system.