INVESTORS are pivoting their focus toward governance, demanding allocation tracking and credible impact reporting, as the Philippines’ sustainable bond market ranked third-largest in Southeast Asia with $23 billion in issuance.
In its sector in-depth report, Moody’s Ratings said the Philippine sustainable debt market trailed Singapore and Thailand, accounting for 17 percent of regional volumes from 2017 through the third quarter of 2026.
‘Sustaining this role as financing needs grow will depend in part on transparent reporting and effective governance that demonstrate how proceeds contribute to these priorities over time,’ the credit rater said.
The sovereign is the largest issuer, having raised about $7.5 billion to finance climate adaptation and resilience projects, metro rail networks, electrification initiatives and public investment programs.
With the Philippines ranking first globally on the World Risk Index 2026, rising adaptation and resilience needs are creating new financing opportunities, Moody’s said.
However, expansion would depend on issuers’ ability to demonstrate strong governance, transparency and clearly defined use-of-proceeds commitments, it noted.
‘As financing needs broaden, investors are likely to place greater emphasis on governance, transparency and the credibility of use-of-proceeds commitments, emphasizing the role of robust sustainable finance frameworks that can strengthen market alignment and investor confidence,’ Moody’s said.
For issuers, robust sustainable finance frameworks will be increasingly important given the Philippines’ elevated credit exposure to environmental and social risks.
The country’s relatively low income levels also constrain its capacity to respond to environmental and social shocks, Moody’s said.
Aside from the government, nine local banks have issued sustainable bonds, with the banking sector accounting for 54 percent of cumulative thematic issuance over the past decade.
These issuances have financed projects involving renewable energy, green buildings, water infrastructure and financial inclusion.
‘As fiscal space has become more constrained amid sizable infrastructure funding needs, sustainable financing can help financial institutions access private capital and support national social and economic development objectives,’ Moody’s said.
The five largest domestic banks have mobilized P1.9 trillion in sustainable finance-related lending through 2025, led by BDO Unibank Inc. with a portfolio of P1.2 trillion, while the other four ranged from P140 billion to P376 billion.
‘As banks expand their sustainable financing activities and regulatory frameworks provide greater clarity around eligible activities, financial institutions are likely to remain an important channel for directing private capital toward infrastructure projects in the Philippines, meeting both resilience and energy-transition needs,’ according to Moody’s.