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May 27, 2024

Divestment urged: Philippine banks shift to renewables but fossil fuel funding remains high

BY Eileen Mencias

Philippine banks are channeling more funds into renewable energy projects but significant investments in coal and gas remain a hurdle, according to a report by the Withdraw from Coal: End Fossil Fuels (WFC-EFF) network.

The 2024 Fossil Fuel Divestment Scorecard identified China Bank and BDO Unibank, both controlled by the Sy family, as the top financiers of fossil fuel projects in the country.

However, the report also highlighted a shift, with both BDO and Ayala-led Bank of the Philippine Islands (BPI) increasing their lending to renewable energy initiatives. This contributed to BPI’s drop to fourth place in the ranking.

The report reflects a global trend, with renewable energy investments surpassing coal and gas for the first time in 2022 and tripling in 2023. Notably, Metropolitan Bank & Trust Co. of the Ty family was the sole lender to finance coal projects last year.

The WFC-EFF network, comprised of civil society and renewable energy advocates, emphasized that even higher levels of renewable energy investment are achievable if banks divert funds away from coal and gas projects.

The scorecard also pointed out Asia United Bank’s significant gas financing activity from 2009 and 2020, alongside their lack of concrete plans for fossil fuel phaseout or sustainability policies.

The WFC-EFF’s scorecard underscores the evolving landscape of energy financing within the Philippines. While a move towards renewables is underway, the continued presence of fossil fuel funding presents a challenge for the nation’s long-term energy security and climate objectives.