The Philippines’ new central bank head is pushing for lenders’ disclosure of climate-related assets, pledging that the Southeast Asian nation’s banking system will join the global efforts to slow climate change.
Bangko Sentral ng Pilipinas Governor Eli Remolona said the monetary authority is working with scientists to develop a metric for banks’ climate-related assets, which will be used to score banks in terms of their role in fighting climate change.
“We look at each kind of loan or asset and what it’s financing, and decide what it’s doing for climate change: is it slowing down or accelerating climate change?” Remolona said in a live-streamed speech at an economic briefing in Canada, one of his first addresses before an international audience as new central bank chief.
The central bank will make the banks’ scores public, and will ask lenders to also disclose their assets, Remolona said. “We hope that the disclosure alone will do the trick.”
A number of Philippine banks are already taking steps to help combat climate change, with some including Bank of the Philippine Islands and Rizal Commercial Banking Corp. making time-bound commitments to zero out their outstanding coal energy loan portfolio while looking to bolster renewable energy lending.
Central bank policymakers around the world have recently spotlighted climate change and energy transition amid volatile energy prices and more frequent extreme weather events. The Philippines, one of the most vulnerable nations to the impact of climate change, has set a goal to cut greenhouse gas emissions by 75% by the end of the decade from 2020 levels.
In the same speech, Remolona also said the BSP is “determined” to bring inflation back to its 2%-to-4% target range. Headline inflation will likely fall within that goal by the fourth quarter, and “will overshoot on the low side” early next year before settling back to the target range, he added.
