MANILA, Philippines — More banks are seen issuing bonds for green financing as the amount raised reached P114 billion to support the expansion of Philippine banks and at the same time diversify their funding sources, the Securities and Exchange Commission (SEC) said.
SEC commissioner Ephyro Luis Amatong said Philippine banks are seen following the footsteps of publicly listed Rizal Commercial Banking Corp. (RCBC) which recently raised P15 billion via the issuance of bonds that complied with the ASEAN Green Bond Standards.
The milestone fund raising activity of RCBC, he said, is the first peso-denominated green bond issuance by a universal bank in the Philippines and the first bond issuance under the ASEAN Green Bond Standards.
Amatong said green funding attracts clients looking to finance sustainable solutions.
According to the SEC official, a loan portfolio that includes sustainable assets is generally less exposed to risks posed by new environmental regulations, technological obsolescence, and climate change.
“Green funding then is also good risk management, for both sides of the balance sheet: greater diversification on the liability side and healthier loans on the asset side,” he said.
Estimates showed there is over $63 trillion worth of global capital looking for sustainable investments, representing the assets under management of 1,600 firms who have signed on to the United Nations Principles for Responsible Investment (PRI).
“This is more than a global trend; it is an opportunity for the Philippines. Certainly, the Philippines – with an established renewable energy industry, increasing interest in energy efficiency and sustainable buildings, and most importantly significant infrastructure demand – is an ideal destination for sustainable investment,” Amatong said.
He said sustainable Investment is aligned with the Duterte administration’s thrust to dramatically upgrade the nation’s infrastructure through the Build Build Build program.
The SEC official said Philippine banks could create a green portfolio to support environmental projects as they have green assets in their portfolio and there is competitive demand particularly from the retail side.
The Bangko Sentral ng Pilipinas (BSP) has issued Circular No. 1010 giving banks alternative source of funding through the issuance of bonds and commercial papers last August.
So far, five banks have raised funds via the issuance of bonds. These include BDO Unibank Inc. with P35 billion, Metropolitan Bank & Trust Co. (Metrobank) with P28 billion, Ayala-led Bank of Philippine Islands (BPI) with P25 billion, Rizal Commercial Banking Corp. (RCBC) with P15 billion ASEAN green bonds, and Aboitiz-led Union Bank of the Philippines with P11 billion.