Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. underscored the urgency of understanding the impact of nature on emerging economies—its risks, opportunities, and policy challenges—during the International Workshop on “Nature, Macroeconomy, and Finance” held from 29 to 30 January 2024 at the BSP Head Office in Manila.
The workshop was a joint initiative of the BSP, the London School of Economics and Political Science-Grantham Research Institute on Climate Change and the Environment, the World Wide Fund for Nature (WWF), and the International Network for Sustainable Financial Policy Insights, Research, and Exchange (INSPIRE).
It gathered researchers from diverse backgrounds, policymakers, regulators, and representatives from the academe, multilateral agencies, and financial institutions who discussed urgent risks due to the degradation of nature, through economic activities including deforestation and land use change. Protecting nature and biodiversity, especially for a country like the Philippines, is integral to climate-resilience.
Taken from the perspective of emerging market economies, the workshop delved into the dynamics, dependencies, and impact of nature on ecosystem services, opportunities, and financial risks; and policy challenges of nature on the macroeconomy and the financial sector.
Governor Remolona said, “The BSP’s mandate is to promote financial stability. Thus, we have been building our analytical and research capabilities to monitor the nature-related risks in the financial system.”
Beyond managing the risks, the BSP aims to encourage financing for projects and activities aligned with the country’s climate objectives. Thus, the BSP has co-developed with other agencies the first sustainable finance taxonomy of the country. The taxonomy is foundational for further climate initiatives, such as the development of carbon markets.
The workshop tackled the importance of green taxonomy and prospects for integrating nature in financial policy; the current state and challenges of compiling data on nature; potential policy implications for supervisors of nature-related risks; and cutting-edge research themes on nature.
A highlight of the workshop was a panel session on financial inclusion and how micro, small, and medium enterprises (MSMEs) may potentially embrace environmental considerations.
Moderated by Monetary Board Member V. Bruce J. Tolentino, the panel members featured insights from the BSP, financial institutions, and development funders on the challenges and opportunities in promoting financial inclusion to drive nature-resilience of the economy and the MSMEs.
The workshop in the Philippines is the fourth by INSPIRE in Southeast Asia, following a roundtable workshop with regional regulators in Singapore, and separate events it organized with Bank Indonesia and Bank Negara Malaysia.