Green debt markets in Asean poised to grow — SEC

MANILA, Philippines — The green debt markets in ASEAN countries including the Philippines are poised to grow, according to the Securities and Exchange Commission (SEC).

In a keynote speech at the ASEAN+3 Bond Market Forum Meeting held recently at the Asian Development Bank (ADB) Headquarters in Manila, SEC commissioner Ephyro Luis Amatong said bond issuances under the ASEAN Green and Sustainability Bond Standards have reached more than $3.8 billion last year.

“While ASEAN may still be a relatively small player in the global Green/ Sustainability debt market – with $330 billion raised in 2019 – the rate of growth in ASEAN appears to show the necessary foundations for the development of such a green/ sustainability debt market have indeed been laid, including the issuance of a clear set of guidelines for issuers to follow and which investors, both international and domestic, recognize as holistic and reliable,” Amatong said.

Amatong said the issuance of a clear set of guidelines for issuers is among the “necessary foundations” for the development of the ASEAN Green and Sustainability debt market.

“First, we at the ASEAN Capital Markets Forum (ACMF) recognized early on the potential of green and sustainable finance to attract international investors, who, generally speaking, have had more funds to invest than investible options,” Amatong said.

Last year’s issuances amounted six times more than the $639 million issued in 2018, when the value increased by over 50 percent from 2017. Sustainability bonds accounted for $1.4 billion or 36 percent of last year’s total, up 14 times from just $100 million in 2018, according to the SEC.

Indonesia, Malaysia, the Philippines, Singapore and Thailand dominate the ASEAN Green and Sustainability bond market.

The Philippines alone has seen 15 issuances worth $3.04 billion by a range of private sector issuers, including renewable energy firms and banks taking advantage of both on- and offshore markets.

Issuers include Rizal Commercial Banking Corp. (RCBC), which has issued two sustainability bonds and one green bond totaling $742 million, of which $442 million is peso-denominated.

Ayala-led Bank of the Philippine Islands also issued green bonds under the ASEAN standards to raise $300 million and CHF100 million, with the latter transaction achieving a negative yield.

State-owned Development Bank of the Philippines also entered the domestic sustainability market, raising $352 million from the issuance of peso-denominated green bonds in late 2019.

The Philippines adopted the ASEAN Standards in August 2018, as the SEC issued the guidelines on the issuance of bonds for the financing or refinancing of projects that must provide clear environmental benefits.

These projects include renewable energy, energy efficiency, pollution prevention and control, environmentally sustainable management of living natural resources and land use, clean transportation, climate change adaptation, and green buildings.

Amatong also cited the participation of five ASEAN members in international initiatives that seek to enhance sustainability risk management and the adoption by seven members of policies to mainstream sustainable finance.