There are several public and private “green” financing activities for sustainable real estate projects in the Philippines. Reports in recent years indicate that the Philippines is increasingly becoming a market leader in green financing activities in Southeast Asia.1
The country’s Bureau of Treasury (BoTR), Securities and Exchange Commission (SEC), and the Bangko Sentral ng Pilipinas (BSP), the Philippines’ central bank, are among the Philippine government agencies that have national initiatives of their own in the area of green financing.
In 2021, the BoTR issued the national Sustainable Finance Framework, which set out the Philippines’ policy in utilizing and raising green, social or sustainability bonds, loans, and other debt instruments to finance “Eligible Social Expenditures.” Eligible Social Expenditures include and especially highlight projects that contribute to affordable basic infrastructure and housing.
On the other hand, the SEC issued the Guidelines on the Issuance of Green Bonds Under the ASEAN Green Bonds Standards (SEC Memorandum Circular No. 12, s. 2018), the Guidelines on the Issuance of Social Bonds Under the ASEAN Social Bonds Standards in the Philippines (SEC Memorandum Circular No. 9, s. 2019) and the Guidelines on the Issuance of Sustainability Bonds Under the ASEAN Sustainability Bonds Standards in the Philippines (SEC Memorandum Circular. No. 9, s. 2019). These circulars spearheaded the issuance of green bonds by the private sector, as they set the standards for green bonds that may be availed of by the general public.
The BSP, on the other hand, apart from having a USD 550 million green bond portfolio if its own, has been implementing projects to encourage green financing among public and private banks, and financial institutions under its supervision. These initiatives include offering an additional 15% single borrower limit on loans, credit accommodation, guarantees to finance sustainable projects and a 0% requirement rate for sustainable bonds.
Among private entities, banks and real estate companies have taken the lead on green financing through issuing green bonds for real estate and infrastructure projects. For instance, a leading real estate developer with a residential and commercial portfolio, certified as “sustainable” by global organizations, recently offered a USD 61.8 million green bond to finance buildings and real estate projects in the Philippines. Similarly, two market leaders of the banking industry in the Philippines have issued green bonds in the amounts of USD 150 million and USD 408.6 million, respectively, to finance buildings and infrastructure projects in the country.
[1] ADB Southeast Asia Development Solutions, “The Philippines Grows Its Green Finance Market,” 12 January 2021, accessible through [https://seads.adb.org/solutions/philippines-grows-its-green-finance-market]