When Martijn Hoogerwerf first evaluated the Philippines’ sustainable finance market several years ago, the head of ING’s Sustainable Solutions Group for Asia Pacific found plenty of talk, little action.
“In the first three to four years, we monitored the Philippine markets and noted significant interest, though actual issuance remained limited,” notes Hoogerwerf. “Growth began to accelerate in 2024, supported by shifts in government policy and increased corporate engagement.”
That landscape has since transformed dramatically. While regional sustainable debt issuance shrank 7% in 2024, amid greenwashing concerns and regulatory uncertainty, the Philippine market has emerged as an unlikely bright spot. With sustainable finance volume surging to 2.3 times its 2023 level, the Philippines offers crucial lessons for financial institutions seeking to develop sustainable finance across emerging Asia.
The surge in activity across multiple institutions suggests the market has reached a tipping point. HSBC Philippines reported a 270% increase in sustainable finance volume in 2024, while local champion BPI has built a corporate portfolio exceeding PHP958 billion ($17 billion) aligned with UN Sustainable Development Goals. The Philippines has also significantly contributed to ING’s 39% growth in APAC sustainable finance volume.
The targeting strategy
ING’s approach to cracking the Philippine market reveals a blueprint that could work across similar emerging economies. Rather than casting a wide net, the bank focused on influential conglomerates and financial institutions that could create momentum for broader adoption
“We were very tactical,” explains Diana Tang, director in ING’s Sustainable Solutions Group. “It was important to identify early adopters – clients whose leadership could help create momentum across the wider market.”
The approach bore fruit with BDO Unibank‘s PHP55.7bn ($1 billion) sustainability bond in July 2024, where ING served as sole arranger and sustainability coordinator. The deal featured the region’s most complex framework with 29 eligible categories spanning green, blue (ocean-related), social and gender initiatives, navigating several overlapping taxonomies.
“We developed a framework that others could adapt,” says Hoogerwerf. “That initial effort has since served as a reference point for local corporates exploring sustainable finance.”
Making sustainability tangible
A key ingredient in reviving dormant sustainable finance markets has been the ability to translate sustainability into concrete business incentives. In discussions with C-suite executives, banks have highlighted tangible benefits like potential reductions in insurance costs through improved climate resilience.
“We raised the point that if you’re not addressing adaptation or resilience, your insurance costs are likely to go up,” notes Tang. “That’s when a lot of the C-suite starts to take notice—because these tactical considerations have a direct impact on budgeting and planning.”
We raised the point that if you’re not addressing adaptation or resilience, your insurance costs are likely to go up
Diana Tang, ING
This pragmatic framing has proven effective across the market. BPI, for instance, pioneered an Environmental Risk Assessment tool that maps physical climate risks – helping clients understand flooding, typhoon and earthquake exposures in a country straddling the typhoon belt.
Such practical tools have earned banks invitations to client strategic planning sessions, positioning them as trusted advisors rather than just financiers.
Knowledge sharing as strategy
Perhaps most distinctive for success is the deliberately collaborative approach to sharing expertise – a strategy that accelerates sustainable finance development the entire ecosystem.
When structuring Hong Kong broadband provider HKBN’s HK$5.25 billion ($670 million) sustainability-linked loan, ING developed an unconventional cybersecurity KPI and then shared the methodology openly.
“We actually share the thought process openly,” Tang adds. “Through this sharing, we hope that other banks and companies in the same sector can benchmark their own KPIs and contribute to improving sustainability overall.”
This collaborative philosophy has evolved into a multi-layered ecosystem of knowledge transfer. International banks conduct workshops for local institutions, sharing technical expertise in structuring and risk assessment. But the collaboration extends well beyond bilateral exchanges.
The partnership between HSBC and the Asian Development Bank to co-fund AsiaLink’s $115 million social loan for women-led SMEs demonstrates how knowledge sharing between commercial banks and development finance institutions can unlock entirely new market segments. Such collaborations bring together international best practices with deep local market knowledge and patient development capital.
Equally important has been the engagement with regulators. Banks have worked closely with the Securities and Exchange Commission and the central bank of the Philippines, whose circulars on sustainable finance and environmental risk management have provided crucial frameworks while maintaining flexibility for innovation.
Beyond green bonds
While renewable energy finance remains important – with some banks reporting over 60% of their energy portfolios in renewables compared to just 24% in the national grid – the Philippine market’s real innovation lies in expanding sustainable finance beyond traditional green categories.
Social finance has emerged as a particular strength. HSBC’s support for telecommunications giant PLDT’s first green and social term loans – funding energy-efficient fibre networks and digital inclusion initiatives – demonstrates how sustainability principles are being embedded across sectors traditionally outside the green finance sphere.
Collaboration is essential. Progress requires the involvement of banks, companies and broader stakeholders
Martijn Hoogerwerf, ING
Financial inclusion initiatives have proven equally transformative. BPI’s Agri NegosyoKo program partners with agri-tech companies to provide digital agronomy services alongside financing, helping farmers increase yields from 4.15 tons per hectare to 7 tons through app-based guidance on planting, harvesting, and fertilizer application. Meanwhile, targeted lending programs for public school teachers and healthcare workers address critical social infrastructure needs while building new customer segments previously overlooked by traditional banking.
The breadth of these innovations reflects a deeper organizational shift in how banks approach sustainable finance. ING’s success in the Philippines exemplifies this evolution through its broader Asian strategy, distinguished by embedding its 12-strong Sustainable Solutions Group within frontline banking units across Singapore, Seoul, and Sydney.
This frontline positioning contrasts with competitors who separate sustainable finance functions by product type or place them within compliance departments. ING’s approach enables comprehensive solutions spanning bonds, loans and advisory services, positioning themselves as solutions-focused advisors rather than merely financial facilitators.
“We are not a standard-setting or policy-setting team,” emphasizes Hoogerwerf. “This gives us the flexibility to work with clients on their specific needs and transition priorities.”
Looking ahead
With APAC’s sustainable finance market projected to dip in 2025, the groundwork laid in the Philippines positions it defensively. Healthcare, digital inclusion, and gender finance have emerged as non-cyclical niches less vulnerable to market fluctuations.
As Hoogerwerf put it, “However, collaboration is essential. Progress requires the involvement of banks, companies and broader stakeholders. Systemic change is not achievable in isolation.”
With each deal and dialogue, the Philippine market is paving the way for a greener, more inclusive future – one transition at a time.
