THE Bangko Sentral ng Pilipinas (BSP) is proposing a phased rollout of new disclosure standards for the largest financial institutions to report climate and environmental risks under globally aligned rules starting in 2027.
Publicly listed banks with market capitalization exceeding P50 billion as of Dec. 31, 2025 are required to adopt the Philippine Financial Reporting Standards (PFRS) S1 and S2 beginning fiscal year 2026, with first reports to be submitted in 2027.
The disclosures standardize Environmental, Social, and Governance (ESG) reporting. These ensure that investors and banks receive reliable, comparable sustainability and climate data.
The BSP acknowledged the need for “more robust and consistent sustainability reporting, as climate change increasingly poses risks to financial stability and stakeholders demand more reliable and decision-useful information.” PFRS S1 covers general requirements for sustainability-related financial disclosures, while PFRS S2 focuses on climate-related disclosures. These are aligned with frameworks developed by the International Sustainability Standards Board (ISSB).
The BSP said the proposed amendments to Section 153 of the Manual of Regulations for Banks (MORB) aim to improve market discipline and help stakeholders better assess banks’ sustainability-related risks, opportunities and long-term resilience, the BSP said.
The implementation will follow a three-tier schedule based on market capitalization and bank size.
Tier 1, or publicly listed banks with market capitalization above P50 billion, will begin applying the standards for fiscal years starting Jan. 1, 2026, with first reporting due in 2027.
Tier 2, publicly listed banks with market capitalization of more than P3 billion up to P50 billion, as well as non-listed universal and commercial banks (UKBs) with capital exceeding P50 billion, will begin reporting in 2028 based on fiscal year 2027 data.
Tier 3, or banks listed only on the Philippine Dealing & Exchange Corp. (PDEx), and non-listed UKBs with capital of P50 billion or below — will start reporting in 2029 based on fiscal year 2028 data.
The phases were designed to support capacity building and give banks time to align their systems and reporting practices with international benchmarks.
During the transition period, banks will also be granted temporary relief measures to ease compliance burdens.
For the first year of adoption, banks may limit disclosures to climate-related risks and opportunities. Tier 3 banks will be allowed to do so for their first two years of reporting.
Banks will likewise not be required to disclose Scope 3 greenhouse gas emissions during the first two years of reporting across all tiers. Comparative sustainability-related information will also not be required during the initial year of application.
Publicly listed banks and UKBs will be required to submit sustainability reports either as attachments to or as integral parts of their annual reports submitted to the BSP. Banks may also submit the same sustainability reports filed with the Securities and Exchange Commission under SEC Memorandum Circular 16, series of 2025.
Non-listed thrift, rural, cooperative, digital and Islamic banks will follow simplified sustainability disclosure requirements rather than fully adopting PFRS S1 and S2.
