As the Philippines pursues its mission of decarbonization in the energy sector by 2030, a target which aims to achieve a 35% share of renewable energy (RE) in the country's power generation mix, the broad participation of merchant plant developers and banks is crucial. Developers of merchant plants can generate supply of renewable energy, while banks can provide the financing. Nonetheless, banks traditionally do not lend to fully merchant plants, particularly by small proponents who have no implicit guarantor. In recent years, as more banks embed sustainability principles in their corporate philosophy, the question arises on whether this trend has also impacted the bank lending logics, especially with respect to how banks evaluate the risk-return profiles of RE projects, including pure merchant plants by small developers. Using qualitative research methods, we collected data through interviews and desk research from six banks in the Philippines (private and government-controlled, as well as universal and rural). To unpack the lending logics of banks, we presented ten credit enhancement options for the banks to appraise. We found that government-controlled banks, partly due to their mandate in supporting national development, have more appetite towards small merchant plants, unlike private banks, despite the latter's aggressive pursuit of sustainability targets. In the end, a fundamental gap between private banks and merchant plants remains. Since addressing it is crucial for the Philippines to achieve its mission of energy decarbonization, we end with some recommendations on how this gap may be bridged.