Philippines plans maiden green bond offering

MANILA, Philippines — The Philippines will offer government-issued green bonds in line with efforts to maximize public and private funds in pursuing sustainable projects.

Finance Secretary Carlos Dominguez  said yesterday the government would sell green bonds for the first time, expanding the financing options for raising infrastructure that emits less carbon.

“We are also in the process of completing our sustainable finance framework for the issuance of our first-ever sovereign green bonds,” Dominguez said at the 8th Corporate Governance Forum hosted by the Philippine Stock Exchange and the Securities and Exchange Commission.

While Dominguez did not specify how much the government plans to raise from the maiden issuance, he said the plan forms part of the government’s three-pronged approach in climate financing. He said the issuance would set in motion the measures laid out in the sustainable finance roadmap launched in October.

At the 26th Conference of the Parties (COP 26), Dominguez proposed that public and private institutions use a mix of grants, investments and subsidies in delivering programs to mitigate the climate crisis.

At the forum, Dominguez also announced that the Philippines would conduct a feasibility study on what business model would fit private firms operating in the country.

Dominguez said the business model should introduce investors to ways by which they can shift to renewable energy with minimal losses and maximum efficiency.

The Philippines has partnered with the Asian Development Bank in testing the energy transition mechanism (ETM) in a bid to retire coal plants and promote alternative options.

Through the ETM, the country can decommission at least half of its coal facilities within the next 10 to 15 years. Coal accounts for about 54 percent of the energy mix in the country and, consequently, contributed around half of carbon waste in 2019.

Last week, Dominguez confirmed that the Philippines also plans to tap the $10 billion global fund pooled by the Bezos Earth Fund, IKEA Foundation and The Rockefeller Foundation. If permitted to access the fund, he said the financing can hasten the Philippines’ plan to improve Mindanao’s hydropower plants and wean the region from coal energy.

According to the Department of Finance, local firms issued a total of $4.8 billion in green, social and sustainable (GSS) bonds in 2019.

The amount is equivalent to roughly 29 percent of GSS bonds issued in Southeast Asia, the highest in the region, placing the country in a position to widen its climate financing.