Moody's: Philippines beating regional rivals in sustainable finance
Nov 3, 2026
With $23 billion, or roughly ₱1.46 trillion, in total issuance over the past decade, the Philippines has emerged as Southeast Asia’s third-largest sustainable bond market, trailing only Singapore and Thailand, according to an in-depth Nov. 2 report by Moody’s Ratings.
Domestic issuances of sustainability bonds accounted for nearly one-sixth of regional volumes from 2017 through the third quarter of 2026, Moody’s reported, citing Environmental Finance Data.
The rating agency noted that the bond market has shifted from being merely an additional source of funding to actively helping finance national priorities in infrastructure, resilience, and energy transition.
The sovereign was the Philippines’ largest issuer, accounting for nearly one-third of the market, or around $7.5 billion.
“It has directed funding toward climate adaptation and resilience projects, metro rail networks and electrification initiatives, supporting resilience, social and economic development objectives,” Moody’s said.
Major domestic issuers have increasingly turned to multipurpose sustainability-labeled debt securities rather than single-purpose green debt, capitalizing on their ability to fund both environmental and social projects simultaneously. Sustainability bonds offer local borrowers “greater flexibility to finance a range of projects and support multiple Sustainable Development Goals (SDGs).”
Sustainability debt has accounted for nearly three-fourths of cumulative Philippine issuance since 2017, contrasting sharply with global markets, where green bonds dominate at 64 percent. Since January, roughly $5.4 billion in local issuances has been sustainability-labeled.
Besides sovereign demand, domestic banks have become key enablers in scaling up sustainable capital. Nine local commercial lenders have issued thematic bonds, representing 54 percent of cumulative issuance over the past decade.
“Banks’ sustainable finance frameworks encompass a widening pool of eligible assets across both environmental and social categories,” Moody’s said, allowing lenders to fund energy efficiency, green buildings, water infrastructure, and financial inclusion.
As government fiscal space narrows, bank issuances provide crucial access to private capital—a shift most evident among the country’s largest commercial banks. According to the credit rating agency, the five commercial banks with the largest total assets in the Philippines had collectively mobilized ₱1.9 trillion in sustainable finance-related lending through 2025.
Sy-led lender BDO Unibank Inc. leads the banking sector with a sustainable finance-related lending portfolio worth ₱1.2 trillion, while portfolios among the other four major banks range from ₱140 billion to ₱376 billion.
Individual lenders have also undertaken landmark capital-raising initiatives to build focused development portfolios. BDO raised ₱100 billion through its fifth ASEAN Sustainability Bond in January and issued another ₱132 billion in July, bringing its aggregate sustainability bond total to ₱518.7 billion since 2022.
Targeted allocations are expanding across the industry as well. Ayala-led Bank of the Philippine Islands (BPI) allocated roughly two-thirds of its ₱33.7 billion in sustainable bond proceeds to micro, small, and medium-sized enterprises (MSMEs). BPI has also identified ₱50 billion in water assets for future blue bond issuances. Meanwhile, state-owned Land Bank of the Philippines (Landbank) issued ₱50 billion in sustainable bonds last February to support agricultural productivity and food security.
The market’s growth continues to be supported by regulatory policies from the Bangko Sentral ng Pilipinas (BSP), including Circular No. 1187 issued in 2024, which established guidelines for banks to classify sustainable activities, initially focusing on climate mitigation and adaptation.
