SEC issues framework for blue bond issuance

MANILA, Philippines — The Securities and Exchange Commission (SEC) has come up with a framework for the issuance of blue bonds to encourage more companies to support investments in healthy oceans and blue economies.

As defined by the Asian Development Bank (ADB), a blue bond is a relatively new form of a thematic bond where the issuer will use the capital raised to support sustainable investments aligned with the United Nations’ Sustainable Development Goal 14 or Life below water.

The SEC launched the guidelines yesterday alongside a conference titled, “Advancing the Role of Capital Markets in Financing the Philippines’ Blue Economy,” co-organized with the ADB and in partnership with the Government of the United Kingdom.

The conference sought to analyze the status and potential of blue bonds in the local market, explore innovative financial instruments and capital market solutions to support the blue economy, and provide a platform for stakeholders to discuss opportunities to finance investments into the blue economy.

SEC chairperson Emilio Aquino said the release of the guidelines on blue bond issuances is a giant leap toward fostering a sustainable blue economy and building a robust capital market in our country.

“Blue bonds, as a specialized class of debt securities, are emerging as a powerful tool globally to promote environmental sustainability, not only in the corporate sector but also at the sovereign level. These bonds provide a unique opportunity for us to channel investments into projects that support marine conservation, sustainable fisheries, and responsible aquaculture,” Aquino said.

ADB Finance Sector director Xiaoqin Fan said the agency supports the SEC’s promotion of blue bonds, noting that the ADB’s objectives are “strongly aligned” with the aspirations of the SEC.

“These guidelines will boost investors’ confidence by fostering transparency and systemization…ADB is delighted to support this important step in partnership with the SEC and the British government,” Fan said.

Several issuers have since expressed their interest to take advantage of the new investment product.

Projects to be funded by blue bonds include ecosystem management and natural resources restoration of coastal, marine, river, lake, and other marine- or water-based ecosystems; sustainable fisheries management; and sustainable aquaculture, among others, as long as they aim to address sustainable water management and ocean protection.

The issuance of blue bonds must also comply with Sections 8 and 12 of Republic Act No. 8799, or the Securities Regulation Code (SRC), on the registration of securities, unless the blue bond issuance would fall under an available exemption under Sections 9 and 10 of the SRC.