SEC sees growth for blue bond offers

THE Securities and Exchange Commission (SEC) projects more room for blue bond issuances to grow in the Philippines and across Southeast Asia, a commissioner of the agency said on Monday.

“In the Philippines, we roughly have about $10 billion worth of green, social, and sustainability (GSS) [bond] issuances since 2018. So, we’ve been doing fairly well in this field,” SEC Commissioner Kelvin Lester K. Lee said in an interview with television program Market Edge.

According to Mr. Lee, blue bond transactions across the world have amounted to about $5 billion from 2018 to 2022.

“The Philippines was ranked second in ASEAN (Association of Southeast Asian Nations) in terms of outstanding GSS bond issuances, which include blue bonds. I foresee even more growth. We’re looking forward to more growth in this space not just in the Philippines but in ASEAN as well,” Mr. Lee said. 

On Sept. 21, the SEC issued Memorandum Circular No. 15 containing the guidelines on eligible blue projects and activities for the issuance of blue bonds in the Philippines.

The circular said projects and activities using proceeds from blue bond issuances should meet the United Nations’ Sustainable Development Goals 6 and/or 14, which seek to ensure the availability and sustainable management of water and sanitation, and to conserve and sustainably use the oceans, seas, and marine resources for sustainable development, respectively.   

The directive also mandated that proceeds from blue bonds should only be used to finance or refinance new and/or existing activities that directly seek to address sustainable water management and ocean protection. These activities include ecosystem management, sustainable fisheries management, and sustainable aquaculture.   

Meanwhile, Mr. Lee said the SEC is readying the release of a draft sukuk bond framework for the private sector by yearend or early next year.

“We’re looking to see about having a draft either this year or early next year for public dissemination to encourage issuances of sukuk bonds,” Mr. Lee said.

Sought for further comment, Mr. Lee said via mobile phone that the draft framework is being worked on by the SEC with support and assistance from the Asian Development Bank. 

“The sukuk bonds framework will govern private sector transactions for sukuk bond issuances in the Philippines,” Mr. Lee said.

Last month, National Treasurer Rosalia V. De Leon said the government is targeting to issue sukuk bonds, also known as Islamic bonds, by yearend or first quarter of next year. The move signifies the country’s debut in the Islamic bond market as part of efforts to fund its budget deficit. 

In July, Finance Secretary Benjamin E. Diokno said that the government was targeting to raise $1 billion from the sukuk bond deal.

“I’m sure that this particular sukuk bond that the government will issue will be successful. We’re hoping to use it as an impetus to drive home the next batch of sukuk bonds framework that we will issue for private sector,” Mr. Lee said. — Revin Mikhael D. Ochave