The Bangko Sentral ng Pilipinas (BSP) has extended for two years the regulatory incentives allowing banks to raise sustainable lending under the Single Borrower’s Limit (SBL) by up to 15 percentage points above the 25 percent cap.
Originally set until January 6, 2026, the window for the incentives has been extended to 2028 “helping sustain banks’ momentum in scaling sustainable finance,” the BSP said in a statement on Monday, January 12.
It added Circular No. 1185, issued in 2023, also allows financial institutions “to lend all of the funds raised from sustainable bond offerings, exempting these funds from the usual 3 percent reserve requirement.”
“The BSP will continue supporting the transition toward a climate‑resilient economy. By providing targeted incentives, the BSP not only channels more credit into green and sustainable activities but also strengthens the capital market, fostering wider participation among issuers and investors,” BSP Governor Eli Remolona Jr. said.
The central bank said this move “is expected to facilitate continued financing for renewable energy, water and wastewater systems, clean transportation, and climate‑resilient infrastructure, among other eligible activities,” since these projects are aligned with the National Adaptation Plan, Nationally Determined Contributions (NDCs), and the Philippine Development Plan.
The BSP said it is also looking into the recalibration of risk weights for climate resilience‑focused financing to ensure that the prudential treatment of these exposures remains appropriate for the country’s domestic circumstances.
“The BSP is likewise exploring blended finance mechanisms, with government agencies, development partners, and the private sector, to help de‑risk sustainable and climate‑resilient projects and broaden investor participation,” it added. (PNA)
