Philippines Central Bank’s sustainable finance framework offers new support for energy transition and renewables
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Key Findings
Now is an ideal time to drive the energy transition as Meralco has experienced a fall in peak demand of almost 40% during the lockdown to 4,516 megawatts (MW) in March 2020 and further to 4,289 MW in April.
The market will need to adjust to this significant decline in demand and build its knowledge of these risks into corporate governance and risk management, while benefiting from the opportunities that arise from reduced exposure, which is what the Sustainable Finance Framework advocates.
Executive Summary
The Covid-19 pandemic has revealed weaknesses in many aspects of the Philippines’ energy and financial market design and is now accelerating trends with the potential to reshape society, businesses, and social and physical infrastructure. But it has also demanded a demonstration of leadership in the Philippines as it champions global standards for finance and business. The pandemic has exposed the country’s ill-prepared supply chains, lack of digitization and inability to retain critical functionality during low-probability and high consequence events.
Rebuilding emerging market economies like the Philippines, and locking in a healthy recovery, hinges on increasing resilience and improving the country’s ability to deal with shocks of non-financial origin. This calls for leadership from the financial and energy sectors to encourage critical investments in climate mitigation, pandemic preparedness, and sustainability.
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