THE Bangko Sentral ng Pilipinas (BSP) has extended regulatory incentives allowing banks to increase lending for green and sustainable projects.
The incentives, first introduced in 2023 under BSP Circular 1185, will remain available for another two years starting Jan. 6, 2026, the central bank said on Monday.
Banks can continue to exceed the 25-percent single borrower’s limit by up to an additional 15 percent, provided that the excess exposure is for eligible green or sustainable projects.
Banks are also allowed to fully lend out proceeds raised from sustainable bond issuances as these funds are exempted from the usual 3-percent reserve requirement.
“The BSP will continue supporting the transition toward a climate‑resilient economy,” BSP Governor Eli Remolona Jr. said in the statement.
He added that the incentives were designed to channel more credit into green and sustainable activities while also strengthening the capital market by encouraging broader participation.
The extended incentive period is expected to support continued financing for sectors such as renewable energy, water and wastewater systems, clean transportation and climate-resilient infrastructure.
These priority areas are aligned with the country’s National Adaptation Plan, Nationally Determined Contributions under global climate commitments and the Philippine Development Plan, the BSP said.
Beyond extending the incentives, the central bank said it was studying a possible recalibration of risk weights for climate-resilience-focused financing. This aims to ensure that prudential treatment remains appropriate given while still encouraging banks to support sustainable investments.
The BSP is also exploring blended finance arrangements with government agencies, development partners and the private sector to help reduce risks associated with sustainable and climate-resilient projects and to widen investor participation.
“Before the extended two‑year incentive period ends, the BSP will conduct a comprehensive review of market conditions, utilization, and any refinements needed to further scale adaptation financing and support the country’s long‑term climate and development goals,” the central bank said.
