The first phase will provide high level principles and broad expectations on the integration of ESG and sustainability principles in the corporate and risk governance frameworks as well as in the business strategies and operations of banks. The second phase will provide more granular expectations in managing climate change and other environment-related risks in relation to credit, market, liquidity, and operational risks.
The third phase may cover potential regulatory incentives. Complementary to the policy issuances is our own research on the impact of natural disasters on the Philippine banking performance. Using existing regional data, we found that episodes of extreme weather conditions have negative impact on financial intermediation (deposits, loans, NPL, provision for NPL, profitability).