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IEEFA: Philippines Central Bank offers new support for energy transition and renewables

May 08, 2020

May 7, 2020 (IEEFA) – The Philippines’ Central Bank (Bangko Sentral ng Pilipinas) has approved a Sustainable Finance Framework to safeguard the financial system from the evolving material hazards from climate change and energy transition risk including stranded assets, the Institute for Energy Economics and Financial Analysis (IEEFA) reports in a new briefing note.

“COVID-19 has exposed the country’s ill-prepared supply chains, lack of digitization, and inability to retain critical functionality in events of low probability but serious consequences, such as the pandemic,” says author of the note IEEFA energy finance analyst Sara Ahmed.

The Central Bank’s Sustainable Finance Framework offers new support for energy transition and renewables.

“But it also demands leadership from the finance and energy sectors to champion global standards, build real resilience, and improve the country’s ability to recover from shocks of non-financial origin,” according to the note.

In other words, it gives banks the impetus to start pricing not only climate and transition risk, but also to value climate-resilience and low-carbon opportunities.

The Central Bank’s new framework mandates that “banks shall adopt a transition plan with specific timelines to implement the board-approved strategies and policies integrating sustainability principles into their corporate governance and risk management frameworks as well as in their strategic objectives and operations.”

Ahmed says the transition plan will be an important catalyst for investors who are also putting more weight on environmental, social and governance (ESG) standards, and complements the work of the Philippines Securities and Exchange Commission which previously released mandatory ESG reporting guidelines for publicly-listed companies, starting in 2020.

For Meralco, the largest utility company in the Philippines, the country’s COVID-19 lockdown has meant a near 40% fall in peak demand for electricity and it has declared a “force majeure” to avoid having to buy power from several independent power producers.

For Manuel V. Pangilinan, Chairman of Meralco, “the pandemic has become the ‘catalyst’ for Meralco’s digital pivot…COVID-19 is life-changing, and it calls all of us to a paradigm shift in everything we do […] Meralco will play its part, regardless of the condition – this is the assurance we have given to our customers and the government.”

Read the briefing note: The Central Bank’s Sustainable Finance Framework Offers New Support for Energy Transition and Renewables

Media Contact: Kate Finlayson ([email protected]) +61 418 254 237

Author Contact: Sara Jane Ahmed ([email protected])

The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable, and profitable energy economy.


Sara Jane Ahmed

Sara Ahmed is founder of the Financial Futures Center and an advisor to the Vulnerable 20 Group of Finance Ministers (V20) of the Climate Vulnerable Forum (CVF).

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