Benjamin E Diokno: Sustainability in investing
Speech by Mr Benjamin E Diokno, Governor of Bangko Sentral ng Pilipinas (BSP, the central
bank of the Philippines), at the Year-End Market Forum for Maybank Philippines' 25th Anniversary
Launch, 23 November 2021.
* * *
To Finance Secretary Carlos P. Dominguez
National Economic and Development Authority Undersecretary Rosemarie Edillon;
Ms. Puan Fauziah Hisam, Chairperson of Maybank Philippines Incorporated;
Ms. Abigail Del Rosario, President and CEO of Maybank Philippines Incorporated;
Chua Hak Bin of Maybank Kim Eng Singapore;
guests, ladies and gentlemen, good afternoon.
I am honored to be here at the Year-End Market Forum for Maybank Philippines' 25th Anniversary
Launch.
Since Maybank opened its doors in the country in November 1997, the bank's network has grown
to over 60 branches nationwide. Through your corporate social responsibility initiatives and
various community and sustainability programs, you were able to demonstrate Maybank's brand
of humanizing financial services.
BSP commends Maybank's sustainability initiatives.
We recognize the Maybank Group's long-term commitments launched in July 2021, including the
mobilization of 50 billion Malaysian Ringgit in sustainable finance by 2025, carbon neutral position
by 2030, and net-zero position by 2050.
We also commend the bank's governance reforms reflecting its desire to integrate sustainability
principles in its corporate structure.
As banks take on the "green and sustainable" path, BSP provides the enabling regulatory
environment to drive sustainable finance in the country.
BSP is also leading by example. We endeavor to embed sustainability principles in everything we
do as an institution, as guided by BSP's Sustainable Central Banking Program.
This program underscores the essential roles of the BSP as an enabler, mobilizer, and doer.
As an ENABLER, BSP provides policies and structures that will support and facilitate sustainable
finance. In this respect, we have issued the Sustainable Finance and Environmental and Social
Risk Management Frameworks.
Released in April 2020, the Sustainable Finance Framework highlights the overarching principles
of integrating sustainability and ESG considerations in banks' corporate and risk governance
frameworks, business strategies and operations.
This Framework also underscores the responsibilities of the board of directors in institutionalizing
sustainability principles within the organization.
Supplementary to this is the Environmental and Social Risk Management Framework. This
framework gives more detailed supervisory expectations on the management of environmental
and social risks in the context of credit and operational risks.
Among these expectations are the gradual increase of loan portfolio allocation for green or
sustainable activities or projects, and the consideration of environmental and social risks in the
banks' operational risk management framework.
These frameworks set the essential groundwork in promoting sustainable finance and serve as
anchors for succeeding BSP's policy issuances. Both frameworks will kick into effect by 2023.
As a MOBILIZER, the BSP leads and inspires its supervised financial institutions to make
environmentally and socially responsible business decisions.
We have started integrating sustainability principles in our investment process with over USD
550 million investment in the Green Bond Fund managed by the Bank for International
Settlements.
We are also reviewing our investment strategy to consider strategic allocation of investments
toward those that espouse environmental, social, and governance principles.
Several Philippine banks have already started participating in the growing green, social, and
sustainability bond market.
Latest figures show that those banks have issued green, social, and sustainability bonds totalling
USD 1.15 billion and PHP 85.4 billion in both foreign and local currency denominated bonds,
respectively.
Amid the pandemic, two banks issued social bonds worth approximately PHP 29 billion to
finance or refinance the needs of eligible micro, small, and medium enterprises. Issuances by
Philippine companies, including banks, reached USD 4.8 billion or 28 percent of the total
ASEANlabelled Green, Social, and Sustainability Bonds as of end-October 2021.
Climate-proofing the financial system provides growth opportunities for banks such as Maybank.
Just recently, we witnessed the landmark climate summit unfold at COP26 in Glasgow. The
world's financial leaders committed to fund the shift to reduce carbon emissions. Private capital
was also pledged through the Glasgow Financial Alliance for Net Zero toward the transition to a
net-zero economy.
Accordingly, the latest Philippine Energy Plan targets 50 thousand megawatts of renewable
energy under a clean energy scenario by 2040, or equivalent to 54.3 percent of the total energy
mix.
In line with this, banks, like Maybank, should start investing in sustainable financial products and
services as contribution in achieving the country's carbon emission reduction targets.
Another opportunity is the introduction of other innovative sustainable financial products to fund
the post COVID-19 recovery of the MSMEs and agricultural sectors, which were greatly hit by the
pandemic.
We believe that these opportunities complement the Maybank Group's long-term sustainability
goals.
As I end my presentation, let me assure that the BSP will remain steadfast in leading
sustainability principles in the banking sector, in line with our national aspirations for sustainable
development.
Congratulations to Maybank Philippines Incorporated on your silver anniversary. Thank you and
Mabuhay!