RCBC Backs BSP’s Plan to Incentivize Sustainable Finance
Regulatory perks for banks that are being considered by the Sustainable Central Banking program of the Bangko Sentral ng Pilipinas (BSP) will help spur interest in sustainability initiatives among local banks, said Rizal Commercial Banking Corporation (RCBC) President Eugene S. Acevedo.
The statement was made in support to the BSP’s reported plan to consider lending for green projects as compliance with the Agri-Agra Law. This law requires banks to allocate 25% of their loanable funds to farmers and fisherfolk. The BSP’s Sustainable Central Banking program seeks to help banks in complying with the BSP’s Circular 1085 on Sustainable Finance Framework.
In a recent presentation to the Bankers Association of the Philippines (BAP), Mr. Acevedo said RCBC has been an early adopter of Philippine sustainable and inclusive banking practices, having started the implementation of an Environmental and Social Management System (ESMS) in 2011. The ESMS enables RCBC to engage its customers, share best practices, and support clients that seek solutions to reduce their impact on the environment and communities.
RCBC’s sustainable and inclusive banking practices are also aligned with the objectives of BSP Circular 1085 which mandates lenders to include environmental and social considerations in their governance frameworks, risk management systems, strategies and operations. RCBC also supports the BSP’s recent membership with the Network for Greening the Financial System (NGFS), which is expected to benefit the banking industry through best practices in other jurisdictions, particularly in the areas of risk management and stress testing exercises.
“The COVID-19 pandemic has strengthened our resolve on helping address urgent environmental and social needs such as renewable energy, clean transportation and public health. These are needs that meet our sustainable finance framework,” said Mr. Acevedo.
RCBC issued its own Sustainable Finance Framework in April 2019, enabling the Bank to raise Sustainability Bonds last year: the two-year P8 billion ASEAN-labeled bond and the five-year $300 million bond, which marked RCBC’s return to the US dollar bond market. The bond proceeds refinanced the Bank’s sustainable lending portfolio, which extends support to projects with environmental benefits and those that are vital to society’s needs, primarily healthcare (hospitals and distributors of affordable generic medicines) and education. RCBC’s sustainable lending portfolio comprised 11% of its total loans as of end-July 2020.
As the pandemic underscores the relevance of financial inclusion, RCBC responded by further reaching out to unbanked Filipinos. Two months into the quarantine period, RCBC recorded over 2 million mobile app downloads of its DiskarTech platform, making possible the disbursement of the government’s emergency cash subsidy in at least eight regions nationwide. It also enabled unbanked and underserved Filipinos to access alternative financial services amid the pandemic through RCBC-DiskarTech’s payout partners such as rural banks, convenience stores, pawnshops, and payment centers.
“For RCBC, we have a commitment to help promote a low-carbon economy, develop services that respond to the needs of the unbanked and underbanked, and build a resilient balance sheet,” Mr. Acevedo stressed.
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