The Philippines will issue more than USD500m of green bonds to raise funds for clean energy projects, as reported by Reuters on February 18. The Southeast Asian country resolves to push forward its emission reduction target but requires financial support from wealthier countries to do so, according to Philippine Finance Secretary Carlos Dominguez. The secretary revealed that these debt securities, known as environmental, social, and governance (ESG) sovereign bonds, will debut in the coming weeks. According to fixed income news provider IFR [IFR:CN], the fundraising scale is allegedly to range from USD1bn to USD2bn from investors including Bank of China (BoC) [3988:HK], Citigroup [C:US], Credit Suisse [CSGN:SW], and Deutsche Bank [DBK:GR].
The announcement marks the first green bond offered by the Philippine government, following a batch of Philippine companies leveraging such bonds in recent years. The country aims for a 75% reduction in greenhouse gas (GHG) emissions by 2030, compared to the anticipated 3,340.3 tons of carbon dioxide equivalent (CO2e) under a business-as-usual scenario from 2020 to 2030. Of the 75% target, around 72.29% will depend on climate finance, technology support, and capacity development provided by developed countries, with the remaining 2.71% target fulfilled through domestic resources. Amid the trend of decarbonization, the ESG-involved bond issuance in Asia (excluding Japan) hit a record high of USD58.6bn as of October 2021, and the figure is expected to reach USD100bn in 2022 according to forecast by JPMorgan [JPM:US].