Philippines

Yes.

In the Philippines, ESG disclosure/reporting is primarily governed by Securities and Exchange Commission (SEC) Memorandum Circular No. 16, series of 2025 (SEC MC No. 16-2025). It recently replaced SEC Memorandum Circular No. 4, Series of 2019 (Sustainability Reporting Guidelines for Publicly Listed Companies), which previously governed the sustainability reporting obligations of publicly listed companies (PLCs).

SEC MC No. 16-2025 expands sustainability reporting obligations to include PLCs, as well as non-listed entities (LNLs) with annual revenue exceeding PhP15 billion. Revenue is income arising in the course of an entity’s ordinary activities as defined by applicable PFRS Accounting Standards. The threshold is based on the consolidated or group-level revenue if the company is a parent; otherwise, it is at company level. 

ESG disclosure/reporting obligations of banks are currently governed by Bangko Sentral ng Pilipinas (BSP, the Philippine Central Bank) Circular No. 1085 (Sustainable Finance Framework), Section 153 of the Manual of Regulations for Banks.

Product-level ESG disclosure/reporting requirements are provided for in SEC regulations governing the issuance of green, social, sustainability, sustainability-linked, and blue bonds, and green equity and the establishment of Sustainable and Responsible Investment (SRI) funds.

The responses to the succeeding questions focus on SEC MC No. 16-2025, which is the key regulation on ESG disclosure/reporting in the Philippines.

The reporting requirement under SEC MC No. 16-2025 is mandatory. However, the circular adopts a phased implementation approach. Covered companies are required to report in accordance with the requirements of the circular beginning in 2026, 2027 or 2028, depending on their classification as follows:  

Furthermore, SEC MC No. 16-2025 provides for certain transition reliefs and exemptions, which are discussed in the response to section A.5 below.

SEC MC No. 16-2025 prescribes the use of Philippine Financial Reporting Standards (PFRS) S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and PFRS S2 (Climate-related Disclosures). PFRS S1 and PFRS S2 are respectively based on IFRS S1 and IFRS S2 issued by the ISSB.

IFRS S1 requires an entity to disclose information about all sustainability-related risks and opportunities, while IFRS S2 requires an entity to disclose information about climate-related risks and opportunities that could reasonably be expected to affect the entity’s cash flows, its access to finance or cost of capital over the short, medium or long term.

The disclosure requirements under SEC MC No. 16-2025 are based on IFRS S1 and IFRS S2 on a full alignment basis subject to the following transition reliefs:

1. covered companies under Tiers 1 and 2 are permitted to disclose information on only climate-related risks and opportunities in their first year of adoption, while covered companies under Tier 3 are allowed to do so in their first two years of adoption;
2. in their first year of adoption, covered companies under all tiers are permitted to submit their Sustainability Report after publishing the related financial statements either (i) together with the next second-quarter or half-year interim financial statements, or (ii) within nine months from the end of the reporting period if there are no interim financial statements;
3. in their first year of adoption, covered companies under all Tiers are not required to disclose comparative information. "Comparative information" refers to information from the preceding period corresponding to all amounts disclosed in the current reporting period;
4. in their first year of adoption, covered companies under all Tiers are allowed to use methods other than the Greenhouse Gas Protocol in measuring their GHG emissions; and 
5. in the first two years of adoption, covered companies under all Tiers are not required to report their Scope 3 GHG emissions and are required to report only their Scope 1 and Scope 2 GHG emissions.

Furthermore, an LNL may be exempt from submitting a Sustainability Report if its parent company files a Sustainability Report under the applicable framework in its jurisdiction, the LNL’s sustainability disclosures are included in the parent’s publicly available report, and the LNL submits a “Certificate of Exemption from Mandatory Sustainability Reporting” with its annual financial statements. The rules for exemption are further discussed below.

SEC MC No. 16-2025 focuses on single materiality.

Yes. Companies covered by the reporting obligation under SEC MC No. 16-2025 are required to report on their Scope 1, Scope 2 and Scope 3 GHG emissions, and must use the GHG Protocol in measuring their GHG emissions. However, this is subject to the transition reliefs discussed in section A.5.

SEC MC No. 16-2025 imposes mandatory external limited assurance for Scope 1 and Scope 2 GHG emissions by an independent assurance practitioner (i.e., certified public accountant or qualified non-accountant) two years after the reporting company’s initial implementation of PFRS S1 and S2. The requirement will progress toward reasonable assurance over time. Companies are also encouraged to obtain reasonable assurance over their full sustainability report.

No, voluntary ESG disclosures are not customary in the Philippines. However, 22% of listed companies disclosed their sustainability reports to the SEC as of 2017, even prior to the adoption of the SEC’s Sustainability Reporting Guidelines.

The Inter-Agency Technical Working Group for Sustainable Finance has prepared the Philippine Sustainable Finance Guiding Principles (Guiding Principles). The Guiding Principles were developed to provide principles-based guidance (rather than set rules detailing requirements) on identifying activities that contribute to supporting sustainable development, with a focus on addressing the impacts of climate change.

The Philippine Sustainable Finance Taxonomy Guidelines (SFTG) were formulated through collaborative efforts between the BSP, the SEC and the Insurance Commission (IC). It serves as an overarching guide for the financial sector and its stakeholders to operationalise the Guiding Principles. The SFTG serves as a tool to classify whether an economic activity is environmentally and socially sustainable and guides different stakeholders in making informed investment or financing decisions. SEC-regulated entities are directed to deepen their understanding and familiarity with the SFTG and are encouraged to take into consideration its provisions and prescribed standards.

The SEC’s rules on green (including blue), social and sustainability bonds identify categories of projects eligible to be financed by proceeds from the issuance of said bonds. The list of eligible projects, while indicative, captures the most commonly-used types of projects supported or expected to be supported by the market for these types of bonds.

No. However, note that the BSP has announced plans to adopt PFRS S1 and S2 in connection with reporting obligations of banks, and to amend the Sustainable Finance Framework for this purpose.

The SEC is expected to issue subsequent guidance materials to assist covered entities in the effective implementation of SEC MC 16-2025.

In addition to SEC MC 16-2025, a bill has been re-filed in the Philippine House of Representatives in January 2026 (House Bill No. 7463) seeking to enact the Sustainability Reporting Act, which will require all corporations – both stock and non-stock – registered with the SEC (including publicly listed corporations, large private corporations and other corporations as may be determined by the SEC based on size, public interest and sectoral risk) to submit a sustainability report to the SEC in accordance with implementation guidelines or directives to be issued by the SEC. The objective is to institutionalise sustainability reporting with a double materiality perspective in the private sector. The bill is at the early stages of the legislative process.

The Philippines has committed to a GHG emissions reduction and avoidance target of 75%, referenced against the business-as-usual scenario, for the period of 2020 to 2030. Of this, 2.71% is unconditional and 72.29% is conditional. This commitment is embodied in the Philippines’ NDC communicated to the UNFCCC.

The National Climate Change Action Plan 2011-2028 outlines specific programs and strategies for climate change adaptation and mitigation. Four of these programs and strategies relate to achieving lower carbon emissions: (a) Ecological and Environmental Stability; (b) Climate-Smart Industries and Services; (c) Sustainable Energy; and (d) Knowledge and Capacity Development.

The NDC Implementation Plan sets out a roadmap and actions for implementing the Philippines’ NDC. It outlines policies and measures to reduce or avoid emissions in five sectors: agriculture, waste, industry, transport and energy.

Currently, there are no direct carbon pricing requirements in the Philippines.

However, under the Renewable Energy Act of 2008, renewable energy (RE) developers are entitled to tax incentives including, among others, an income tax holiday for the first seven years of commercial operations and a lower corporate income tax rate thereafter, duty-free importation, special realty tax rates and tax credits for certain RE machinery, equipment and materials. The sale of fuel or power generated from RE is subject to 0% value-added tax. In addition, all proceeds from the sale of carbon emission credits are exempt from all taxes. Furthermore, under the National Internal Revenue Code, as amended, coal and refined and manufactured mineral oils and motor fuels are subject to excise tax. Indirectly and to some degree, these impose a price on the negative externalities of fossil fuels.

A bill for the enactment of the Low Carbon Economy Act has been filed in the Philippine House of Representatives in July 2025. It provides for, among others, a domestic cap-and-trade ETS, with provisions on emission reduction measures and targets, a cap on GHG, allowances, and the establishment of a carbon trading system. The bill was approved by the House of Representatives under the 19th Congress but was not enacted into law before the latter adjourned in 2025. Its re-filing underscores the commitment of its proponents to secure its passage and enactment into law.  

Earlier in 2024, the then Secretary of Finance acknowledged, during the Technical Working Group Meeting for Preparing Carbon Pricing Instruments for the Philippines, the need for a study of carbon pricing instruments (including a carbon tax and an emissions trading system) and the optimal mix thereof.

Not explicitly. However, PFRS S2 requires disclosure of certain details of the reporting entity’s transition plan if it has one.

Yes. PFRS S2 requires a disclosure of the reporting entity’s performance in relation to climate-related risks and opportunities, including progress towards any targets the entity has set.   

The Extended Producer Responsibility Act of 2022 (EPRA) requires product producers (which include brand owners and product manufacturers) to recover up to 80% of their plastic packaging waste by 2028. Product producers obliged to implement EPR are those enterprises that generate plastic packaging whose total value of assets exceeds PhP100 million waste. They must establish or phase-in EPR programs for the effective management of plastic packaging waste, through reduction of non-environment friendly products and product waste recovery programs. Micro, small, and medium enterprises are not covered by the EPRA but are encouraged to practice EPR voluntarily.

None at the moment. However, the proposed Climate Accountability Act, which has been undergoing legislative consideration since November 2023, includes requirements to conduct due diligence on and address climate change-related human rights impacts and prevent human rights abuses throughout the value chains. See section B.8 below for the status of the bill as at the date of this publication.

With regard to taxonomies, please see our response to section A.10 above.

With regard to blended finance, under the Public-Private Partnership (PPP) Code of the Philippines, alternative financial instruments such as Green Financing, corporate or project bonds and securities, and other forms of capital market financing may be allowed for PPP Projects.

Lastly, BSP Circular No. 1185 aims to scale up sustainable finance by (a) granting an additional single-borrower limit of 15%  of net worth on loans, credit accommodation and guarantees for the purpose of financing eligible green or sustainable projects (including transitional activities to support decarbonisation) and (b) gradually reducing the reserve requirement rate to 0% for new and outstanding sustainable bonds issued by banks.

Carbon trading

Significant movements have been observed in the development of frameworks for voluntary carbon trading, including:

1. the issuance of Department of Environment and Natural Resources (DENR) Administrative Order No. 2026-02 (Adoption of the Philippines’ Readiness in the Voluntary Forest Carbon Market: Roadmap (2026-2030) and DENR Administrative Order No. 2026-05 (Forest Carbon Credit Projects Guidelines);
2. the issuance of Department of Energy Department Circular No. DC 2025-09-0018 (General Framework for Carbon Credits in the Energy Sector); and
3. the execution of the Implementation Agreement on Carbon Credits Collaboration under Article 6 of the Paris Agreement between Singapore and the Philippines signed on 30 April 2026.

At present, the Philippines does not have carbon rights legislation which provides a comprehensive legal framework for carbon rights, including the recognition, transfer and benefit-sharing of carbon credits derived from emission reduction and emission removal activities. The measures are an attempt to fill, by way of executive action, the gap in legislation. These measures will provide carbon projects a level of transparency, credibility and stability not previously afforded to such projects in the Philippines. While key components of a fully operational framework are still under development, the above-mentioned measures demonstrate the Philippine government’s commitment to, and support for, carbon emissions reduction and removal projects and carbon trading.

Climate Accountability Act

In addition to the proposed Low Carbon Economy Act, another piece of legislation that will have game-changing impact is the proposed Climate Accountability (CLIMA) Act which has been under legislative consideration since November 2023. One of the key features of the draft CLIMA Act is the imposition of responsibilities on businesses that have reported revenues of more than PhP15 billion in the previous tax year and carbon majors (regardless of gross income) to:

1. make climate-related financial disclosures;
2. measure, analyse and report their GHG emissions;
3. prevent human rights abuses throughout their value chains;
4. conduct due diligence on and address their climate change-related human rights impacts;
5. develop mitigation and adaptation strategies that will comprise their decarbonisation climate action plan and report on the status of this plan on an annual basis; and
6. submit an annual compliance report which shall contain their emissions baseline and reduction progress, reduction activities and outcomes, emissions allowance and excess emissions, and future plans.

The bill was filed in the House of Representatives under the 19th Congress but was not approved by both the House of Representatives and the Senate before the 19th Congress adjourned in 2025. Its re-filing underscores the commitment of its proponents to secure its passage and enactment into law. There are reports that the House of Representatives intends to approve it within 2026.

We are not aware of any such proceedings, actions or investigations.

No, but some guidance does exist.

1. BSP Circular No. 1149 (Guidelines on the Integration of Sustainability Principles in Investment Activities of Banks) requires banks to adopt measures to ensure that investments are channelled to, among others, companies that do not engage in greenwashing. It defines greenwashing as the deceptive marketing used to persuade the public that an organisation's products, aims, and policies are environmentally friendly. Greenwashing may also come in the form of dissemination of misleading information, whether intentional or not, regarding a company's environmental strategies, goals, motivations, and actions that can induce a falsely positive perception of a company's environmental and social performance.
2. As previously mentioned, SEC regulations set guidelines when bonds may be labelled as green, blue, social, sustainability, or sustainability-linked bonds, and when funds may be labelled as SRI funds.

The draft CLIMA Act defines greenwashing as: “the conveyance of false information on the environmental soundness of [a company’s] products, operations, and services.” Acts of greenwashing include, but are not limited to, “outright false statements, understating impacts, omitting trade-offs, absence of proof backing up claims, vague or overbroad claims, [and] false third-party certifications.”

Likely grounds for a suit include:

1. making false or misleading statements, or fraud under the Securities Regulation Code;
2. false, deceptive or misleading advertisement under the Consumer Act of the Philippines;
3. fraud, giving rise to damages under the Civil Code;
4. estafa by false pretences or deceit under the Revised Penal Code; and
5. breach of express warranties in a contract of sale.

Administrative penalties may also be imposed against investment funds for unauthorised use of SRI, ESG, or any other similar or associated terms in the name and/or marketing materials, or for making false statements as to its qualification as an SRI fund or over-emphasising sustainability or ESG features in any communication or advertising materials.

We are not aware of any cases filed before Philippine courts or tribunals on claims for breach of directors’ duties in relation to sustainability matters or anti-ESG lawsuits. While legal scholars have opined that directors’ fiduciary duties may extend to climate and other sustainability-related risks, no such claims appear to have been tested in reported Philippine litigation to date.