The country’s biggest will continue its current policy of not lending to new coal projects but will support existing power facilities. It also aims to cut its coal exposure by 50 percent by 2033 while ensuring the fossil fuel source does not exceed 2 percent of its total loan portfolio.
BDO’s coal exposure is about 3.7 percent of its total loans.
Tan noted that while environmental, social, and governance (ESG) commitments are increasingly popular, they come with certain caveats.
“When you look at ESG, there's a trade off between E, environment, and S, which is social responsibility,” he said.
“You can’t say, unilaterally, because the impact of no electricity is probably a lot more than the impact of coal power plants,” he added.
The Ayala Group’s Bank of the Philippines Islands also stopped funding new coal projects and will bring down its loan exposure in the sector to zero by 2032.
Security Bank also separately committed to end funding for coal power projects by 2033.
The banks have yet to set targets for achieving net zero emissions in their lending and investment portfolios.
Isabelle Tong, analyst at Singapore-based energy transition advisory firm Asia Research & Engagement, said investors in the region are keen to see more banks adopting greener lending policies.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
