DoF in talks with banks on maiden green bond offer
THE DEPARTMENT of Finance (DoF) is in talks with banks on its $500-million green bond offering this year as it assesses the appropriate tenor, the Finance chief said on Thursday.
“We are discussing with various banks the appropriate structure for our maiden ESG (environmental, social, and governance) offering, including size and tenor as well as looking at window of opportunity in different currency markets,” Finance Secretary Carlos G. Dominguez III told reporters in a Viber message.
He said the department will release more details when the Philippines is ready to move forward with the transaction.
Funds raised from green bonds are used for climate mitigation and environmental projects.
Earlier this month, Mr. Dominguez announced that the Philippines is eyeing a $500-million green bond offer “in the immediate future” while the government awaits favorable market conditions.
He has said that the country’s sustainable finance framework seeks to harness public and private investments to support the transition to a clean, sustainable and climate-resilient economy.
On Wednesday, fixed-income news provider IFR reported the Philippines had mandated Bank of China, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Mizuho Bank, Morgan Stanley, Standard Chartered and UBS for a potential US dollar bond offering in the ESG format.
Citing a source aware of the development, IFR said the Philippines was looking to raise $1 billion to $2 billion from medium- to long-term bonds.
A Reuters source with knowledge of Philippine plan, however, said the Philippines’ first sovereign green bond offer may not just involve a dollar-denominated issue, but declined to elaborate.
Kalpana Seethepalli, director of ESG Asia-Pacific at Deutsche Bank, has said that the Philippine government’s first green bond could set the tone for sustainable finance in the private sector.
Similarly, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the issuance would help make green bonds become more mainstream in the Philippines.
He said that investors globally have become more particular in choosing investments that are compliant with ESG standards.
“The issuance of more green/sustainable bonds and securities would also be consistent with increased commitments by both governments and companies to reduce, if not completely eliminate, carbon emissions,” Mr. Ricafort added. — Jenina P. Ibañez with Reuters
