Securities and Exchange Commission Chairperson and Chief Executive Officer Francisco Lim (3rd from left) leads panelists during the Economic Journalists’ Association of the Philippines sustainability forum in Makati City on Monday (March 23, 2026). The officials underscored the importance for companies to heed the environmental, social and governance policies to help them manage risk and governance issues on their operations. (PNA photo by Joann Santiago-Villanueva)
Banks are making headway in meeting Agri-Agra lending requirements, with the government’s push for environmental, social and governance (ESG) standards helping drive better compliance across the financial sector, a Bangko Sentral ng Pilipinas (BSP) official said on Monday.
Speaking on the sidelines of an event organized by the Economic Journalists’ Association of the Philippines in Makati City, BSP Assistant Governor Pia Roman-Tayag said more banks are now meeting mandated lending targets while steadily integrating ESG principles into their governance and risk management frameworks.
She noted that many of the country’s larger corporations have already begun adopting ESG practices, prompting regulators to strengthen support for wider implementation, particularly within the banking industry.
Roman-Tayag said the BSP has been laying the groundwork for this transition for several years by aligning its policies with global standards and giving banks clearer guidance on what is expected of them.
“Recognizing that not all companies will immediately have the capacity to comply, for banks, we’ve issued our regulations as early as 2020 so the expectations are clear. They’re also really building up their own capacity. So I could say that more banks are now integrating ESG in their governance and their risk management system,” she said.
The BSP’s 2023 survey reflected this growing shift toward sustainable finance. About 71.5 percent of respondent banks said sustainable financing is highly important to their organizations, slightly higher than the 70 percent recorded previously. At the same time, 90.3 percent of respondents said they plan to extend financing to sustainable projects, up from 85 percent in the earlier survey.
To accelerate adoption, Roman-Tayag said the BSP has rolled out incentives for banks embracing ESG frameworks. These include higher single borrower’s limits and a zero-percent reserve requirement for sustainable finance exposures that may be counted toward Agri-Agra compliance.
Under the Agri-Agra law, banks are required to allocate at least 25 percent of their total loanable funds to agriculture and fisheries, with at least 10 percent earmarked for agrarian reform beneficiaries, in a bid to support countryside development and strengthen rural productivity.
Roman-Tayag added that the BSP’s sustainable finance taxonomy is also central to helping banks make more informed and aligned decisions.
“We want that to be as granular as possible so it will be clear for them. So, when they make investment decisions, they know they’re aligned,” she said.
In a separate interview, Philippine Stock Exchange chief operating officer Roel Refran said the country’s carbon credit market will need stronger legislative support to unlock its full potential.
Without a dedicated law, Refran said regulators remain largely reliant on the International Sustainability Standards Board framework, which provides a global baseline for sustainability-related disclosures.
“Because that is where it begins and ends,” he said, stressing the need for stronger incentives and more robust sustainability reporting standards to deepen the market’s development.