The Bank of the Philippine Islands (BPI) aims to reduce its lending to coal-fired power plants in half by 2026. Coal and diesel-fired power projects account for 45 percent of BPI’s loan portfolio for sustainable development projects, which is close to the amount extended for renewable energy projects.
In 2020, BPI’s sustainable development financing (SDF) for energy efficiency projects reached PHP835 million, renewable energy (RE) projects received PHP47.8 million and climate adaptation projects received PHP6.9 billion. The majority of SFD’s green energy funding portfolio is comprised of large-scale RE projects.
This move is in line with the Philippines’ aim of eliminating coal use by 2037, as stated out in the Paris Agreement. According to the Paris Agreement, coal usage for power production should peak by 2020 and then be drastically reduced in the following years. It aims to reduce coal-fired power generation by 80 per cent below 2010 levels by 2030, and phase it out entirely by 2040. The phase-out deadline is 2037 for Asian countries that are not members of the Organisation for Economic Co-operation and Development (OECD).
Currently, RE and gas fired power plants contribute 21 per cent each to Philippines’ power source, while coal is a major contributor at 58 per cent.
