Framework sets out a roadmap outlining how the government intends to raise green, social and sustainability bonds, loans, and other debt instruments in international capital markets.
The Philippines’ government has launched a new Sustainable Finance Framework, following an assessment that confirms its alignment with national and international obligations.
Vigeo Eiris, an affiliate of Moody’s Corporation, assisted the Philippine government in assessing the framework for alignment with the Green Bond Principles and Social Bond Principles published by the International Capital Market Association (ICMA), as well as the Green Loan Principles and Social Loan Principles published by the Loan Market Association (LMA).
In a statement on Thursday (13 January), the country’s Department of Finance (DOF) said the framework sets out a roadmap on how the government intends to raise green, social or sustainability bonds, loans, and other debt instruments in the international capital markets.
Proceeds from the issuances will be used to support sustainable projects across the country, including education and healthcare for the poor, basic infrastructure in rural areas, food security for farmers and disadvantaged populations, job creation, and social assistance.
The framework “lays out the process that will be used to ensure transparency and disclosure of the use of proceeds, as well as the expected environmental and social impact of eligible green and social projects, in keeping with international best practices,” the DOF said.
“Proceeds raised under this framework will be used to support projects that reflect the Philippines’ commitment toward sustainable development and the United Nations Sustainable Development Goals.”
The issuance of sustainable financing instruments will also provide additional support to achieve national and international climate change targets, which include cutting greenhouse gas emissions by 75% by 2030, among other targets aimed at infrastructure development.
Under the framework, green expenditures eligible for sustainable fundraising and also can include direct or indirect investments, subsidies, support schemes, incentive mechanisms, foregone tax, and selected operational expenditures.
Green expenditures may include projects that promote clean infrastructure, climate change adaptation, renewable energy, and environmentally sustainable management of living natural resources and land use.
Within one year of issuance and annually thereafter until full allocation of any green, social and sustainability bond, the DOF intends to obtain an independent assurance review in order to confirm that the proceeds have been allocated in accordance with the framework.
In October 2021, the Bangko Sentral ng Pilipinas (BSP) amended its banking regulations to incorporate new guidelines on environmental and social risks into its own sustainable finance framework, which was issued six months earlier.