The Monetary Board approved the extension of existing regulatory incentives that allow banks to boost lending for eligible green or sustainable projects or activities.
The incentives, first released in 2023 under Bangko Sentral ng Pilipinas (BSP) Circular No. 1185, allow banks to exceed the 25 percent Single Borrower’s Limit (SBL) by up to an additional 15 percent for eligible sustainable projects. They also allow banks to lend all funds raised from sustainable bond offerings, thereby exempting these funds from the usual 3 percent reserve requirement (RR).
With the extension, the incentives will remain available for another two years from 06 January 2026, helping sustain banks’ momentum in scaling sustainable finance.
“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 M. Remolona, Jr. said.
The extended regulatory incentive period is expected to facilitate continued financing for renewable energy, water and wastewater systems, clean transportation, and climate‑resilient infrastructure, among other eligible activities. These activities are aligned with the National Adaptation Plan (NAP), Nationally Determined Contributions (NDCs), and the Philippine Development Plan (PDP).
In addition, the BSP is looking into recalibrating risk weights for climate resilience‑focused financing to ensure that the prudential treatment of these exposures remains appropriate to 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.
Before the extended two‑year incentive period ends, the BSP will conduct a comprehensive review of market conditions, utilization, and any refinements needed to further scale adaptation financing and support the country’s long‑term climate and development goals. PR