NINETEENTH CONGRESS 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
HOUSE OF REPRESENTATIVES 
Introduced by Representative Rufus B. Rodriguez 
House Bill No.  _____ 
EXPLANATORY NOTE 
The Constitution states that it is the policy of the State to protect and advance the right 
of the people to a balanced and healthful ecology in accord with the rhythm and harmony of 
nature. In 1996, Executive Order No. 291 was issued to facilitate the attainment and 
maintenance of a rational and orderly balance between socio-economic growth and 
environmental protection. It mandated the establishment of in-house environmental units in all 
implementing government agencies to ensure compliance of projects with existing standards 
provided in environmental laws. It covers government financial institutions (GFIs) and was 
intended to ensure that loan or related funding applications of government and private 
institutions have complied with the Environmental Impact System. 
The Asian Development Bank (ADB) has asserted in its study in corporate 
responsibility for environmental performance that though governments must continue to play 
a central role in maintaining environmental quality, it is also clear that this traditional focus 
does not attempt to work directly with the most active financier and player in the development 
equation- the private sector. While governments determine the rules under which businesses 
act, the firms themselves use natural resources, make products, and generate pollution. Thus, 
a sustainable future for the region is not possible without the active engagement of the private 
sector. In light of the rising corporate social responsibility, especially in the area of 
environmental protection, financial institutions are now adopting the concept of corporate 
environmental policy that is grounded on sustainable development. Further, the risk of default 
as a result of environmental upgrading or costs for works incurred by the borrower and other 
costs related to environmental risks are aspects that financial institutions consider. 
Hence, this bill which seeks to instate an environmental unit in lending institutions that 
will ensure that any loan or related funding applications are in compliance with environment 
laws.    
In view of the foregoing, early passage of this bill is earnestly sought. 
 RUFUS B. RODRIGUEZ 
April 12, 2023
6:30 pm
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NINETEENTH CONGRESS 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
HOUSE OF REPRESENTATIVES 
Introduced by Representative Rufus B. Rodriguez 
House Bill No.  _____ 
AN ACT 
ESTABLISHING ENVIRONMENTAL UNITS IN EVERY LENDING INSTITUTION TO 
ASSESS THE ENVIRONMENTAL COMPONENT OF LOAN APPLICATIONS 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Declaration of Policy. - It is hereby declared the policy of the State to 
strike a balance between economic development and environmental protection. In this regard, 
lending institutions are encouraged to adopt a corporate environmental policy to support 
environmental protection and sustainable development and to mitigate credit risks arising from 
adverse impact of loans and other projects for financing in the environment. Pursuant to this 
policy, loan evaluation, approval and release shall take into consideration the borrower's 
compliance with applicable environmental laws. 
SEC. 2. There shall be created an in-house environmental unit in every lending 
institution tasked to ensure that any loan or related funding applications of any natural or 
juridical entity have complied with the Environmental Impact Statement System under 
Presidential Decree No. 1586. 
SEC. 3. Lending institutions shall ensure that projects subject of financing applications 
and collateral offered as security shall conform with environmental laws. Compliance of 
projects and collaterals with environmental laws shall be among the basis for approval of 
environmental units of loan accounts with environmental impact.  
SEC. 4. Lending institutions shall encourage continuous compliance with 
environmental laws. Account officers (AOs) shall continue to monitor compliance of projects 
and collaterals until such time that the account is fully paid or the collaterals are released or 
substituted. The AOs shall look into reported complaints against client’s projects/collateral. 
Clients shall be required to submit copies of the periodic monitoring reports of the 
Department of Environment and Natural Resources of their projects/ collateral. 
SEC. 5. The environmental unit of every lending institution shall prepare an 
environmental assessment report for all projects and loans with environmental impact. The 
report shall be integrated into the project proposal and/or loan application.  
SEC. 6. The environmental unit shall be composed of three functional units, to wit: 
a) Environmental Review and Assessment Unit tasked to ensure the environmental
soundness of the project and the account’s compliance with environmental laws, thereby 
avoiding environmental risks; 
b) Environmental Policy, Planning and Systems Management Unit tasked to develop/
enhance the lending institutions internal policy to effectively implement the above corporate 
environmental policy; and 
c) Environmental Program Management Unit tasked to develop/ manage grant-
assisted environmental programs and assist project management units in developing 
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environment-related lending facilities that will provide services/ support to the bank and its 
clients. 
 
SEC. 7. The non-compliance of borrowers with applicable environmental laws shall be 
considered a condition for default. 
 
SEC. 8. Separability Clause. - If any provision or part hereof is held invalid or 
unconstitutional, the remainder of the law or the provision not otherwise affected shall remain 
valid and subsisting.  
 
SEC. 9. Effectivity Clause. -This Act shall take effect fifteen (15) days after its 
publication in at least two (2) newspapers of general circulation. 
 
 Approved,