By Alexandria Grace C. Magno
MANILA’S push for green finance is hampered by deep structural weaknesses and a limited pipeline of unfunded projects, analysts say.
Manila dropped four places to 91St 94 out of 16 financial institutionsth The Global Green Finance Index (GGFI) program after receiving 486 points, which puts it behind other cities in East and Southeast Asia.
“Manila ranks low mainly because the Philippines still has a small pipeline of green projects, weak climate- and environmental, social and governance (ESG)-related data and disclosure, as well as incomplete policy frameworks, including the gradual release of a green taxonomy / transition,” John Paolo R. Rivera, senior researcher at the Philippine Institute for Viber Studies, said.
He added that banks’ limited ability to originate green loans at scale, combined with patchy communication between regulators and market participants, made Manila more attractive than regional peers such as Singapore, South Korea, and Kuala Lumpur.
In the Asia-Pacific region, Singapore remained the leader, followed by Busan and Seoul, while the Philippines continued to lag behind its neighbors.
The average drop in ratings across the region was 3.56%.
The GGFI, released by the Z/Yen Group as part of its Long-Term Finance program, measures the quality and depth of green finance products offered by financial institutions and tracks their progress towards a sustainable financial system.
“Based on this evaluation framework, Manila will be understandably lower compared to other developed cities considering the limited use of renewable energy, lack of transportation infrastructure, traffic congestion problems, frequent floods, large wealth gap, emerging regulatory environment, governance and political stability amid a corruption scandal,” BDO Securities Head of Marketing First Vice-President John Guidant D. Reyes said in a Viber message.
He said that dealing with these problems will take time and requires strong political determination.
“The credibility of governance also needs to be restored first before policy makers can focus on the problems at hand and prioritize measures that can move the country forward,” he added.
16th The GGFI system includes 94 financial institutions across Western Europe, North America, Asia-Pacific, the Middle East and Africa, Latin America and the Caribbean, and Eastern Europe and Central Asia.
Zurich is the best, followed by London, Singapore, Geneva, Amsterdam, Copenhagen, Luxembourg, Stockholm, Paris, and Brussels. The British Virgin Islands ranked last, followed by Cyprus, Manila, the Cayman Islands, and Mumbai.
Mr. Rivera said the Philippines can strengthen the green finance ecosystem by making full use of the national green taxonomy, improve ESG reporting regulations, and develop a clear pipeline of scalable green projects in areas such as energy, transportation and climate-resilient infrastructure.
He added that stronger inter-agency cooperation and targeted incentives for green bonds and sustainable lending would also help.
“The goal in the near term is not to jump higher in the ratings, but to show credibility, grow the market, and build momentum in the green finance system,” he said.
Green bonds, sustainable infrastructure finance, and green loans were identified by respondents as areas of green finance with the highest impact, while renewable energy investment was cited as the most profitable area.
