Philippine ranks 3rd in Southeast Asia’s sustainable bond market

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November 4, 2026 | 12:00am

MANILA, Philippines — The Philippines has emerged as Southeast Asia’s third-largest sustainable bond market, raising $23 billion from 2017 through the third quarter of 2026, as growing demand for infrastructure, climate resilience and clean energy financing drives market expansion.

In a report, Moody’s Ratings said the Philippines accounted for 17 percent of the region’s sustainable bond issuance during the period, trailing only Singapore and Thailand, based on data from Environmental Finance.

“The market has evolved beyond a supplementary source of capital, helping direct long-term funding toward national priorities in infrastructure, resilience and energy transition,” Moody’s said.

“Sustaining this role as financing needs grow will depend in part on transparent reporting and effective governance that demonstrate how proceeds contribute to these priorities over time,” it added.

The report showed that sustainability bonds, which finance both environmental and social projects, accounted for 74 percent of the country’s cumulative sustainable bond issuance since 2017.

Green bonds, which exclusively fund environmental projects, represented 21 percent, while social bonds accounted for the remaining five percent. This contrasts with the global market, where green bonds dominated with a 64-percent share of cumulative issuance.

In the Philippines, all sustainable bonds issued so far this year amounted to approximately $5.4 billion. The national government has been a major contributor, raising about $7.5 billion through long-term sustainable bond issuances.

Financial institutions have also emerged as major players, accounting for 54 percent of cumulative sustainable bond issuance over the past decade.

Moody’s said nine Philippine banks have issued sustainable bonds, with financing increasingly extending beyond renewable energy into energy efficiency, green buildings, water infrastructure and financial inclusion.

The country’s five largest banks collectively mobilized P1.9 trillion in sustainable finance-related lending through 2025, led by Sy-led BDO Unibank Inc. with a P1.2-trillion portfolio.

BDO has also raised a combined P518.7 billion through six sustainability bond issuances since January 2022, including P100 billion in January and P132 billion in July this year.

Bank of the Philippine Islands of the Ayala Group, meanwhile, allocated about two-thirds of the P33.7 billion raised from its sustainable, environmental and equitable development bonds to lending for micro, small and medium enterprises.

State-owned Land Bank of the Philippines also raised P50 billion in February to support agricultural productivity, rural incomes and food security.

Moody’s expects financial institutions to remain important channels for mobilizing private capital as sustainable financing frameworks expand to cover more development-related activities.

Beyond traditional infrastructure, the rating agency identified climate adaptation and disaster resilience as emerging opportunities for sustainable financing.

The energy transition is another major growth driver, particularly as the Philippines seeks to reduce its dependence on imported fossil fuels and address high electricity costs.

Under the Philippine Energy Plan 2023-2050, the government aims to double the share of renewable energy in electricity generation to 50 percent by 2040 from 25 percent in 2025.

Moody’s said the plan’s more ambitious clean-energy scenarios would require an additional $120 billion to $180 billion in investments, particularly in offshore wind, nuclear generation, transmission networks and energy storage.

However, the debt watcher cautioned that continued market expansion would depend on credible project selection, transparent reporting and strong governance.

It added that stronger sustainable finance frameworks would be necessary to maintain investor confidence and ensure that funds raised deliver measurable environmental and social benefits.