In 2021, the Philippines Sustainable Finance Roadmap was introduced to give direction to and promote sustainable finance in the Philippines. It seeks to provide financial institutions, regulators, and other stakeholders with a framework for incorporating Environmental, Social and Governance ("ESG") factors into their corporate plans and daily operations.
In this regard, on 18 September 2023, the Financial Sector Forum, composed of the Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Insurance Commission, and Philippine Deposit Insurance Corporation, released its Proposed Philippine Sustainable Finance Taxonomy Guidelines ("Proposed SFTG") for public consultation.
The Proposed SFTG aims to establish a common understanding at a high-level as to what constitutes "sustainable" economic activity, and serves as a tool to classify whether an economic activity is environmentally or socially sustainable. It aims to guide a variety of users, including companies, investors, financial institutions, regulators, and consumers, to help them make an informed decision to originate, invest, finance, purchase or monitor an asset, product, project, activity, company, or portfolio with ESG considerations.
In this connection, the country is also formulating its finance taxonomy with the primary purposes of (i) directing and increasing capital flows to economic activities that further sustainability objectives; (ii) minimising the risk of "greenwashing" or misleading or deceptive publicity to represent an environmentally responsible public image; and (iii) promoting a just transition to a sustainable economy.
