Accounting Alert

This Accounting Alert is issued to circulate Securities and Exchange Commission (SEC) Memorandum Circular (MC) No. 15-2023 dated September 21, 2023.

Scope and Applicability

1. In view of the guidelines, the SEC has considered the following:
2. The Commission has taken on an active role in promoting the use of capital markets in achieving the United Nations Sustainable Development Goals (UN SDG) and the targets under the Paris Agreement, to which the Philippines is a signatory of along with 174 countries to reduce the Greenhouse Gas (GHG) emissions to lower the global average temperature increase to well below 2 degrees Celsius;
3. The Philippines is an archipelagic country situated in the Asia-Pacific, the Commission recognizes the critical importance of ocean-based climate mitigation and resilience in building resilient communities and economies;
4. The Commission has adopted the ASEAN Green Bond Standards, the ASEAN Social Bond Standards, and the ASEAN Sustainability Bond Standards to attract sustainable investments in the debt security market and address key areas of environmental and social concern;
5. Blue Finance is an emerging area in sustainable finance with increasing interest from global investors, financial institutions, and issuers;
6. The subject Guidelines are based on the Blue Finance Guidance Framework developed by the International Finance Corporation (IFC) and the Green and Blue Bond Framework of the Asian Development Bank (ADB);
7. Section 8 of the SRC provides that securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the Commission;
8. Section 12 of the SRC, the relevant provisions of the 2015 Implementing Rules and Regulations of the SRC (2015 SRC IRR) and “Annex C” provides for the procedure for registration of securities and non-financial disclosure requirements;
9. Blue Bonds are a subset of Green Bonds where proceeds will be exclusively applied to finance or refinance, in part or in full, new and/or existing Blue eligible projects and/or activities; and,
10. The requirements under the subject Guidelines shall be in addition to the applicable requirements under Sections 8 and 12 of the SRC; unless there is an available exemption under Sections 9 or 10 of the SRC, where the Issuer shall submit the requirements as prescribed by the Commission;

Adoption and Issuance of Guidelines

The Commission adopts and issues the guidelines to supplement the requirements under Section 8 and 12 of the SRC.

Please refer to the attached circular for the details and respective discussion of each section.

See attached Memorandum Circular for further details.