BSP Issues Statements on Digitalization and Sustainable Finance
The Central Bank of the Philippines (BSP) announced its commitment to helping microfinance institutions move forward in their digitalization journey. The BSP Governor Benjamin E. Diokno urged microfinance institutions to explore digital innovations under the Digital Payments Transformation Roadmap of BSP. One of the key initiatives of the roadmap is the issuance of a policy on digital banks, which can act as service partners for microfinance institutions. BSP also encouraged trust entities to actively consider environmental, social, and governance (ESG) standards in their risk management and capital allocation processes. During a summit, the BSP Governor underscored the importance of differentiated investment strategies for funds classified as sustainable. BSP is advocating the wider adoption of sustainable finance, which incorporates ESG standards to assess the value, performance, and long-term growth of an asset.
BSP also announced its commitment to pursuing the "G.R.E.E.N. strategy" as part of its broader push to integrate sustainability into the operations of its supervised entities and the entire financial system. The strategy is implemented through regulatory issuances, which aim to embed sustainability principles in the strategies, corporate governance, risk management, and operations of banks. The strategy is intended to direct the flow of capital toward green and sustainable projects. As per the BSP Governor, the central bank will put "G.R.E.E.N. strategy" into action through the following initiatives:
- Guiding the financial system and promoting a conducive backdrop for sustainable finance to flourish
- Raising awareness and building capacity as a continuing task to mainstream sustainable finance and increase appreciation of sustainability principles
- Enabling a regulatory environment through policy issuances
- Engaging all stakeholders
- Navigating the path toward post-COVID-19 economy and a financial system that is more stable, resilient, and inclusive
Related Links
- Press Release on Microfinance Institutions
- Press Release on ESG Standards
- Press Release on G.R.E.E.N. Strategy
Keywords: Asia Pacific, Philippines, Banking, Sustainable Finance, Climate Change Risk, ESG, Fintech, Digital Banks, Regtech, BSP
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