The Philippines needs to take into account the financial risks that may come with its plans to move away from coal energy, Bangko Sentral ng Pilipinas (BSP) governor Benjamin E. Diokno said.
“While we are accustomed to physical risks such as typhoons and earthquakes, we should focus our attention as well to the transition risks that arise from migrating out of fossil fuels,” Mr. Diokno said in a statement Friday.
“This may seem like a very long-term risk, but in reality, it also takes a long period to properly move towards low greenhouse gas emissions, especially for a country that is traditionally dependent on fossil fuels,” he added.
He made the remarks during a recent meeting of the Financial Stability Board (FSB), a global body that monitors the international financial system.
The FSB was created in 2009 to advise economies on achieving financial stability.
The Department of Energy (DoE) is planning to move away from coal in favor of cleaner energy sources. It has a target of sourcing 66% of energy requirements from clean or renewable sources after 20 years.
In October, the DoE stopped endorsing new coal power plant projects while allowing foreign investors to take full ownership of geothermal plant projects.
“This is the very point of financial stability. We have to assess the systemic risks, most especially those that we do not readily see, and make choices with the welfare of the general public in mind, across various constituents, across varying conditions, and across periods of time,” Mr. Diokno added.
Mr. Diokno co-chairs the FSB Regional Consultative Group for Asia. — Beatrice M. Laforga