From green to greener: Security Bank to double green, sustainable loans

MANILA, Philippines — Security Bank Corp. plans to double its new sustainable loans to about P80 billion by the end of 2025 as it seeks to take advantage of the growing financing needs for the country’s green transition.

Eduardo Olbes, the bank’s executive vice president and chief financial officer, said they plan to “roughly double” the green and social loans that the bank registered at the end of last year.

“We will basically add new loans to the tune of about P40 billion,” Olbes said in a recent press briefing.

The bank executive noted that a “substantial” size of the new loans would be achieved this year given the “healthy” pipeline that the bank has in the renewable energy sector.

Security Bank is seeing an uptick in the interest of its retail consumers to shift toward renewable energy as indicated by loans they extended for the purchase of electric vehicles and housing upgrades involving solar panels, Olbes said.

At the end of 2023, the bank posted P43.6 billion in qualified green and social loans, mostly for renewable energy. The bank extended P20.6 billion worth of loans for renewable energy, P14.3 billion for access to basic infrastructure, P6.6 billion for green building and P2.1 billion for access to essential services.

Like other banks in the world, Security Bank has stopped bankrolling new projects involving coal-fired power plants, Olbes said.

Olbes added that the bank could start offering new loan products that would have “sustainability” elements.

Sustainability is one of Security Bank’s key commitments. Thus, the bank has strengthened its institutional policies and frameworks, including its Sustainable Finance Framework, which was approved by the bank’s board of directors last year.

Toward this end, Security Bank and MUFG Bank Ltd., part of the Mitsubishi UFJ Financial Group Inc. (MUFG) gathered more than 150 business leaders, policymakers, industry experts, and partners to its inaugural sustainability conference in the Philippines at Makati Shangri-La on June 19, 2024.

MUFG N0W (Net Zero World) is MUFG’s flagship regional thought leadership series aimed at fostering public-private dialogue and cooperation to tackle sustainability issues and prospects in Asia. In the Philippines, MUFG and its strategic partner Security Bank teamed up to host this event.

With the theme “Scaling up for a decarbonized future – the Philippines’ green transition,” the event featured a keynote speech by Energy Secretary Raphael Lotilla, as well as key insights from Bangko Sentral ng Pilipinas Deputy Governor, Chuchi Fonacier.

In his keynote speech, Lotilla reaffirmed the government’s target to achieve at least 35 percent renewable energy share in the power generation mix by 2030 and 100 percent household electrification by 2028.

Through partnerships with international stakeholders like Japan, he noted, the country “can significantly enhance our climate resilience. Additionally, through comprehensive transition finance strategies, we can unlock new opportunities to drive economic growth, create green jobs, promote right-skilling the workforce, and improve the quality of life of Filipinos.”

“With the unwavering support of both our domestic and international partners, we remain confident in our ability to drive the path in realizing this vision,” Lotilla said.