Structural weaknesses weigh on Manila’s green finance standing

By Alexandria Grace C. Magno

MANILA’S performance in green finance is constrained by deep structural weaknesses and a limited pipeline of bankable projects, analysts said.

Manila dropped four spots to 91^st out of 94 financial centers in the 16^th edition of the Global Green Finance Index (GGFI) after scoring 486 overall, placing it behind other East and Southeast Asian cities.

“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 disclosures, and incomplete policy frameworks, including the slow rollout of a unified green/transition taxonomy,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in a Viber message.

He added that the limited capacity of banks to originate green loans at scale, coupled with fragmented coordination among regulators and market participants, has made Manila less attractive than regional peers such as Singapore, South Korea, and Kuala Lumpur.

In the Asia-Pacific region, Singapore remained the top performer, followed by Busan and Seoul, while the Philippines continued to lag behind its neighbors.

The average decline in ratings across the region was 3.56%.

The GGFI, released by the Z/Yen Group as part of its Long Finance initiative, measures the quality and depth of green financial products offered by financial centers and tracks their progress toward a sustainable financial system.

“Based on this assessment framework, Manila would understandably rank low compared to other developed cities considering the limited use of renewable energy, lack of mass transport infrastructure, traffic congestion problems, frequent flooding episodes, huge wealth gap, evolving regulatory environment, governance and political stability concerns amidst the corruption scandal,” BDO Securities First Vice-President and Head of Marketing and Institutional Sales John Tristan Guillermo D. Reyes said in a Viber message.

He said addressing these issues would take time and require strong political will.

“Governance credibility also needs to be restored first before policymakers are able to focus on the problems at hand and prioritize measures that can move the country forward,” he added.

The 16^th edition of the GGFI covers 94 financial centers across Western Europe, North America, Asia-Pacific, the Middle East and Africa, Latin America and the Caribbean, and Eastern Europe and Central Asia.

Zurich topped the index, followed by London, Singapore, Geneva, Amsterdam, Copenhagen, Luxembourg, Stockholm, Paris, and Brussels. The British Virgin Islands ranked last, after Cyprus, Manila, the Cayman Islands, and Mumbai.

Mr. Rivera said the Philippines could strengthen its green finance ecosystem by fully operationalizing a national green taxonomy, improving ESG reporting rules, and developing a clear pipeline of bankable green projects in areas such as energy, transport, and climate-resilient infrastructure.

He added that stronger inter-agency coordination and targeted incentives for green bonds and sustainable lending would also help.

“The goal in the near term is not to jump to the top of the rankings, but to signal credibility, grow the market, and build momentum in the green finance ecosystem,” he said.

Green bonds, sustainable infrastructure finance, and green loans were identified by respondents as the areas of green finance with the greatest impact, while renewable energy investment was cited as the area of most interest.