Pro-environment groups on Friday, September 16, lauded the pronouncement of a local bank that it will abandon coal projects.
“While this is a considerable development from the bank with the third highest exposure to coal nationally, we are wary over policy gaps through which funding for the coal industry is funneled and sustained,” said Gerry Arances of the Center for Energy, Ecology, and Development (CEED).
Last week, BDO Unibank Inc. published its “Energy Transition Finance Statement,” which says the banking sector plays a “critical role” in the country’s transition to a low-carbon economy and in upscaling sustainable and affordable energy.
During the publication’s launch, Frederico P. Tancongco, BDO senior vice president and head of its Compliance Group, said the bank “does not intend to finance any new capacity that will increase harmful greenhouse gas [GhG] emissions in the environment.”
“BDO will support its customers’ transition to reduced carbon emissions by providing access to capital so they may invest in innovative technologies that will lessen their GHG emissions, or adapt their business to renewable energy alternatives,” he said.
CEED’s Arances, however, raised concern over the manner by which BDO defines its coal exposure, “referring only to term loans and failing to include short-term working capital and bonds.”
The pro-environment group noted that while the bank has had no new coal lending since 2019, its investment banking arm, BDO Capital & Investment Corporation, “acted as joint issue manager, joint book runner, and joint lead underwriter for four of coal developer Aboitiz Power’s bonds.”
Arances told LiCAS News that BDO’s net proceeds from the bonds were used to finance two coal projects — GNPower Dinginin and GNPower Mariveles.
He urged the bank to clarify its pronouncement that it “does not intend to finance any new capacity” that will increase GHG emissions. “Does it cover the threat of massive natural gas expansion in the Philippines?” said Arances.
Faith-based group Living Laudato Si’ Philippines said BDO’s announcement “is seen as a victory in our fight for climate justice.”
Rodne Galicha, executive director of the group, said the bank can still “speed up the process to finally phase out coal-financing in all forms by 2030, with clear and strong policies on just transition based on science and intergenerational climate justice.”
He said BDO’s exit from coal projects should not lead the bank to invest in the expansion of fossil gas utilization and the development of nuclear energy.
“It must fund more renewable energies that wouldn’t only help the environment, but also all Filipinos in having a clean, affordable, and secure energy system,” he said.