Banks asked to support MSMEs

The Bangko Sentral ng Pilipinas (BSP) is urging banks to support the country's energy transition, hard-hit micro, small and medium enterprises (MSMEs), and agricultural sectors as part of a broader shift to mainstream sustainable finance.

BSP Governor Benjamin E. Diokno said during the Maybank 25th Anniversary Forum that the central bank provides an enabling regulatory environment to drive sustainable finance in the country as banks take on the green and sustainable path.

"We have started integrating sustainability principles in our investment process with over $550-million investment in the Green Bond Fund managed by the Bank for International Settlements," Diokno said.

"We are also reviewing our investment strategy to consider strategic allocation of investments toward those that espouse environmental, social, and governance principles," he added.

To further enhance the regulatory environment, the BSP issued the Sustainable Finance Framework (SFF) and Environmental and Social Risk Management Framework (ESRMF), setting the essential groundwork for succeeding BSP policy issuances in sustainable finance.

Released in April 2020, the SFF highlights principles of integrating sustainability and environmental, social and governance considerations in banks' corporate and risk governance frameworks, business strategies and operations.

The ESRMF, meanwhile, which was released in October this year, gives more detailed supervisory expectations on the management of environmental and social risks in the context of credit and operational risks.

"The BSP will remain steadfast in leading sustainability principles in the banking sector consistent with our national aspirations for sustainable development," Diokno said.

Source: TheManila Times