BSP Amends Rules on Outsourcing, Invests in Asian Green Bond Fund
The Bangko Sentral ng Pilipinas (BSP) amended regulations on outsourcing and information technology (IT) risk management, announced investment in the Asian Green Bond Fund, and advocates wider adoption of sustainable finance.
Below are the key highlights of these recent updates from BSP:
- BSP Circular No. 1137 sets out amendments to regulations on outsourcing and IT risk management, which shall take effect fifteen calendar days following its publication either in the Official Gazette or in a newspaper of general circulation. The amended regulations cover management of contracts and outsourcing, governance and management of outsourcing risks, outsourcing framework for banks and non banks, and emerging outsourcing models.
- Through its investment in the Asian Green Bond Fund of the Bank for International Settlements (BIS), BSP aims to help fund investments in green projects across the Asia-Pacific region. BIS launched the Asian Green Bond Fund, a USD denominated and open-ended fund, in collaboration with development finance institutions and an advisory committee consisting of various central banks, including BSP. The Fund provides a platform for central banks to invest their reserves in high-quality green bonds that meet internationally accepted standards.
- BSP also encourages banks and other supervised financial institutions to offer sustainable financial instruments that may support the post-pandemic recovery of the agriculture and the micro, small, and medium-size enterprise sectors. “Since the Philippines is vulnerable to typhoons and climate-related risks due to its geographical location, green recovery is the ideal approach to strike a balance between implementing economic strategies and building climate and disaster resilience,” said the BSP Governor. Thus, BSP advocates wider adoption of sustainable finance, which incorporates ESG standards to assess the value, performance, and long-term growth of an asset.
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Keywords: Asia Pacific, Philippines, Banking, Green Bond Fund, ESG, Climate Change Risk, Sustainable Finance, Outsourcing Risk, Cloud Service Providers, BIS, BSP
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