Banks in the Philippines are showing improved compliance with the government's lending mandates, being increasingly adoptive of ESG principles to address governance and management risks.
In a report by the Philippine News Agency, lenders in the country are now viewed complying with Agri-Agra lending requirements, driven by the government's push for ESG policies.
According to Pia Roman-Tayag, assistant governor of the Bangko Sentral ng Pilipinas, several companies in the country, particularly large firms, are early adopters of ESG practices. That is why the country's central bank seeks to support broader adoption especially among banks.
This, according to Roman-Tayag, will be through aligning policies with global standards, including the Institutional Shareholder Services roadmap.
BSP has been introducing several incentives to encourage lenders to adopt ESG frameworks, which include additional single borrower's limits and a zero-percent reserve requirement for sustainable finance counted toward Agri-Agra compliance.
