Some banks in the country are still channeling funds to coal mining amid concerns raised by environmental groups over the effects of the use of coal on climate change.
In a statement, the Withdraw from Coal (WFC) said the financing activities of some Philippine banks to coal mining that eventually promotes the use of dirty energy sources must serve as a challenge to the next administration to put mechanisms in place to accelerate just energy transition and commit to climate goals.
“We need to fix this disconnect between domestic banks’ no-coal stance with the reality of their financing activities. The findings of the report show us that banks managed to dodge being direct coal financiers by underwriting or selling bonds issued by coal developers. Banks cannot trick us into believing that they are truly divesting from coal unless they close this loophole of funneling funds through bonds,” said Gerry Arances, executive director of Center for Energy, Ecology, and Development and co-convenor of WFC.
Since 2020, WFC has been releasing its annual Coal Divestment Scorecard to assess the financing activities of domestic banks, gauge their current divestment efforts in the coal industry, and evaluate their climate action policies.
The 2022 Scorecard revealed that despite the welcome development of at least five banks now having public stances against coal and even as no new coal loans were detected for the period covered by the report, banks still in effect enable financing to flow into coal projects by underwriting or selling bonds issued by coal developers.
Another cause of alarm, according to Arances, is the upsurge of domestic banks investing in another fossil fuel in the form of fossil gas – dubbed as the Philippines new preferred fuel and peddled as a cleaner alternative to coal.
A total of 27 power plant projects and nine liquefied natural gas (LNG) terminal projects are in the pipeline, one of them is seen to have grave socio-economic and environmental impacts in Batangas, including the Verde Island Passage, considered to be the world’s center of the center of marine shorefish biodiversity, according to the WFC.
Arances said WFC is hoping that the bank scorecard will be among the many civil society-led efforts that will wake the next administration in taking the right path for climate and energy transition action.
“With the window to take action closing fast, all actors – including banks –must take drastic actions to align their policies to the Paris Agreement, divest from funding coal and fossil fuel projects of all kinds, and cease all types of financing activities that pump cash into the coal industry. Policy directions from the incoming government will dictate how easily this can happen,” added Arances.
Some Church leaders have also expressed alarm over the issue and vowed to be continuously vigilant.
“We call for banks to totally divest from coal and cease to invest in the equally climate-destructive energy source that is fossil gas. Opening up the country to gas projects is at odds with our climate targets. Allowing gas terminals into the country, including in biodiversity hotspots like our very own Tanon Strait or Verde Island Passage in Batangas, exposes us to decades of methane emissions and can cost us all remaining hope in the fight to meet Paris goals,” said WFC convenor San Carlos Bishop Gerry Alminaza.
“We will sustain our action to demand drastic ecological economic transformation of financial institutions. Investing more in sustainability where no one is left behind is the right way forward. We enjoin everyone to continuously pressure our banks to divest from dirty products and services. It is not only a duty as citizens of this planet but a moral responsibility,” said Rodne Galicha, Executive Director of Living Laudato Si’ Philippines, for his part.
Philippine banks have increasingly been the recipient of calls from their respective stakeholders to end their contribution to the continued dependence on coal, gas, and other fossil fuels – including through a Pastoral Statement on Ecology released by the Catholic Bishops Conference of the Philippines (CBCP) earlier this year.
“In it, we commit to engage our banks and use our position as shareholders, clients, or stakeholders of financial institutions in and beyond the Philippines, but especially towards domestic banks, to demand for policies and plans to phase out their exposure to coal, fossil gas, and destructive energy in line with the 1.5°C ambition. [Dioceses and religious institutions also have a deadline to withdraw all our resources that are with these banks not later than 2025, and hold them accountable to their fiduciary duties and moral obligations as climate actors] should such engagement efforts fail to bear fruit,” said Bishop Colin Bagaforo, National Director of Caritas Philippines.