BSP eyes increased green bonds investments

BSP Governor Benjamin Diokno

MANILA – The Bangko Sentral ng Pilipinas (BSP) continues to monitor developments regarding the green bonds market and bids to increase its investments, which to date amounts to USD550 million. 

In a virtual briefing on Friday, BSP Governor Benjamin Diokno said monetary officials “recognize the importance of responsible investing”, thus are “working towards incorporating sustainability principles into our reserve management framework.” 

“We think that deploying our international reserves to support the funding of green projects, especially in the Asia Pacific, is a way to promote sustainability with significant impact,” he said. 

The Bank of International Settlements (BIS) initiated a green bond fund called BIS Investment Pool (BISIP) G1 in 2019, and BSP initially placed USD150 million in this fund. It was later increased to USD550 million. 

Diokno said BIS also announced another green bond fund in early 2022 and it is called BISIP G3, which the BSP also invested in. 

He, however, did not disclose the amount the BSP placed in the BISIP G3. 

Aside from portfolio management, Diokno said they also expect that exposure to high-quality green bonds will “provide benefits to the BSP in terms of diversification and return”, citing these debt papers are subject to international standards set by, among others, the International Capital Market Association and the Climate Bonds Initiative.

In July 2021, he said the Executives’ Meeting of Asia-Pacific Central Banks (EMEAP) has agreed to promote investments in green bonds through the Asian Bond Fund (ABF) to deepen the local currency-denominated green bond markets in the region. 

During the same briefing, BSP Market Research and Surveillance Department Director Ma. Genevie Alfonso hinted at increased BSP investments on green bonds. 

“The Bangko Sentral has been monitoring the developments in the green bonds market and the possibility of increasing (its investments) is on the affirmative because this is also the trend among other fellow central bank(s),” she said. 

Alfonso, however, declined to give specifics, saying they continue to assess the latest developments, noting that among the current issues for the market is the supply of green bonds. (PNA)

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