MANILA — The Bangko Sentral ng Pilipinas (BSP) announced on Tuesday that it will extend existing regulatory incentives allowing banks to increase lending for eligible green and sustainable projects for another two years.

First issued in 2023 under BSP Circular No. 1185, the incentives allow banks to exceed the 25 percent Single Borrower’s Limit (SBL) by up to an additional 15 percent for qualifying sustainable projects. Banks are also permitted to lend all funds raised from sustainable bond offerings, which are exempt from the usual 3 percent reserve requirement.

“The BSP will continue supporting the transition toward a climate‑resilient economy. By providing targeted incentives, the BSP not only channels more credit into green and sustainable activities but also strengthens the capital market, fostering wider participation among issuers and investors,” BSP Governor Eli M. Remolona, Jr. said.

The extension is expected to sustain financing for projects such as renewable energy, water and wastewater systems, clean transportation, and climate‑resilient infrastructure. These activities align with the country’s National Adaptation Plan (NAP), Nationally Determined Contributions (NDCs), and Philippine Development Plan (PDP).

The BSP is also exploring recalibration of risk weights for climate resilience‑focused financing to ensure prudential treatment remains appropriate for domestic circumstances. Additionally, the central bank is examining blended finance mechanisms with government agencies, development partners, and the private sector to de‑risk sustainable projects and attract more investors.

Before the two-year incentive period concludes, the BSP will review market conditions, utilization, and possible refinements to further scale adaptation financing and support long-term climate and development goals.