Philippine central bank rolls out framework for renewables transition

Banks are expected to provide transition plans in the next six months.

The Bangko Sentral ng Pilipinas (BSP) has approved a framework for offering new support for energy transition and renewables, the Institute for Energy Economics and Financial Analysis (IEEFA) reported.

Under the framework, banks will have three years to integrate transition plans, with timelines, into their corporate governance and risk management framework. Banks are expected in the next six months to provide transition plans to the central bank.

This framework aims to safeguard the financial system from hazards arising from climate change and energy transition risk including stranded assets, the briefing note stated. It also seeks to give banks impetus to start pricing climate and transition risk, as well as to value climate-resilience and low-carbon opportunities

“A near-term boost to the economy could include modernizing energy infrastructure to drive job growth supported by domestic renewable energy and storage, with financing from banks looking to comply with the Sustainable Finance Framework,” according to the note.