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Sustainable Finance in the Philippines: Momentum in 2025

  • Writer: Yen Roxas
    Yen Roxas
  • Jul 27
  • 3 min read

1. Setting the Strategy: Government & Regulations

  • The Department of Finance (DOF) has strengthened the Inter‑Agency Technical Working Group on Sustainable Finance (ITSF), known as the “Green Force,” to lead the 2025 Sustainable Finance Roadmap. This includes instituting three focused clusters (Policy, Financing & Investment), expanding membership to agencies like the Bureau of the Treasury and PHILGUARANTEE, and launching a Center of Excellence for sustainable finance training and coordination Green Finance Platform+1Bangko Sentral ng Pilipinas+1Bangko Sentral ng Pilipinas+5ESG News+5EcoActive ESG+5.

  • The Securities and Exchange Commission (SEC) kicked off its 2025 Sustainability Week in late June to accelerate capacity‑building, especially around the Sustainable Finance Taxonomy Guidelines (SFTG)InsiderPH.

  • The SEC is rolling out mandatory sustainability reporting for listed companies beginning in 2026 World Economic Forum Initiatives.


2. Central Bank: Embedding ESG into Finance

  • Bangko Sentral ng Pilipinas (BSP) issued its Environmental and Social Risk Management Framework (Circular 1128), requiring banks to align lending with ESG objectives and gradually increase their share of green/sustainable financing. Plus, the BSP is developing a formal sustainable finance taxonomy, climate stress‑testing protocols, and updated disclosure rules Bangko Sentral ng Pilipinas+1IFC+1.

  • It also supports regional ESG coordination via participation in ASEAN initiatives and the Financial Sector ForumDepartment of Finance+1InsiderPH+1.


3. Issuance & Market Growth: Bonds, Transition Credits & Finance

  • As of early 2025, the Philippines has issued approximately USD 7.5 billion in sustainable global bonds, funding projects in clean transport, climate adaptation, agriculture, and renewable energy Department of Finance.

  • Notably, in 2024 banks such as HSBC Philippines reported a 270% increase in sustainable finance volumes, and BPI expanded its corporate ESG bond portfolio, indicating strong corporate engagement in 2024–2025Euromoney.

  • Transition credits are gaining traction: ACEN (Ayala’s energy unit), GenZero, and Keppel are piloting early coal‑plant closures in Batangas to generate credits ahead of schedule, enabling funding for clean energy and retraining for impacted workers Reuters.


4. Large-Scale Projects & Blended Finance

  • The Philippines signed a landmark US $15 billion renewable energy deal with UAE-based Masdar, targeting 1 GW by 2030 (scalable to 10 GW by 2035) via solar, wind, and battery storage. The country is also preparing auctions for hydro and geothermal projects, with fully foreign ownership now allowed in renewables Reuters.

  • Blended finance mechanisms such as the SEACEF II fund (mobilizing US $175 million), debt‑for‑nature swaps, and early-stage concessional funding are helping mobilize private capital into clean energy and climate adaptation in the Philippines and the broader SEA region Wikipedia+1Reuters+1.


5. Challenges & Opportunities

  • Major challenges include:

  • On the opportunity side:

    • The National Adaptation Plan (2023–2050) and NDC Implementation Plan provide program frameworks for priority climate investments.

    • Demand for transition or carbon credits is building, and the emerging frameworks under Article 6 of the Paris Agreement could scale this market rapidly Bangko Sentral ng Pilipinas.


Summary

Overall, the Philippines is moving from policy groundwork into actionable implementation. In 2024 and early 2025, momentum in sustainable bond issuance, regulatory rollout (taxonomies, reporting), and high-profile renewable energy deals signal a maturing market. Government coordination via the Green Force, BSP and SEC frameworks, and project pipelines are aligning the public and private sectors for long-term growth.


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