Philippines joins green central banking network

The supervisor has been mulling the move since earlier this year

Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, has formally joined the Network of Central Banks and Supervisors for Greening the Financial System (NGFS).

The NGFS bills itself as a “coalition of the willing” and is focused on developing a body of best practices for management of climate-related risks by central banks and supervisory authorities. It recently issued a report on the impact of climate change on monetary policy and guidance on stress-testing the financial sector for climate-related risks, as is also working on analysis around decarbonisation in the real economy.  

In a release, BSP Governor Benjamin Diokno said that membership would “contribute to the effective management and mitigation of the impact of climate and other environment-related risks in the financial sector”.

“Philippines has a lot to share with respect to our country’s experience in coping with calamities and natural disasters,” he said. The Philippines’ location within the Pacific Ring of Fire, and its complex system of tectonic plates, causes a high number of earthquakes, typhoons and volcanic eruptions. 

Including the BSP, the NGFS now has 69 members and 13 observers.

This is not the BSP’s only climate-focused collaboration with peer supervisory authorities. The Bank also sits on the ASEAN Taskforce on the Roles of Central Banks in Addressing Climate and Environment-Related Risks – established in Malaysia last year – which RI understands will release a report on the topic once it has been finalised and approved by ASEAN central bank members.

Philippines is also a member of the IFC-backed Sustainable Banking Network. 

The news comes amid a wider push on sustainability from BSP. In May, the supervisor said it expected regulated banks to consider climate risks in their annual stress tests, ensure board and senior management oversight of sustainability issues and disclose their ‘risk appetite’ on environmental and social risks.

At the time, BSP said the new rules would be the “first of a series of circulars on sustainable finance”.

It also chairs a national taskforce that is developing a draft executive order to establish “deliverables and targets in relation to green finance initiatives”.

Members include the country’s Climate Change Commission, National Economic and Development Authority, Bureau of the Treasury and the Department of Energy.