Sustainability reporting in the Philippines is entering a new phase. What began as a disclosure exercise for listed companies is now evolving into a formal regulatory requirement aligned with global standards. By 2026, large and publicly listed companies will face clearer Securities and Exchange Commission (SEC) expectations on how they report environmental, social, and governance (ESG) performance.

The SEC is raising these standards to help companies and stakeholders understand the financial impacts of sustainability-related risks and opportunities, thereby driving long-term value creation and enabling smarter capital allocation decisions.

How Sustainability Reporting Began In The Philippines

The Philippines formally introduced sustainability reporting in 2019, when the SEC required publicly listed companies to submit sustainability reports alongside their annual filings. The objective was to encourage transparency on non-financial risks and opportunities, including environmental impact, labor practices, and community engagement.

Initially, the SEC allowed flexibility. Companies could choose from established global frameworks, such as the Global Reporting Initiative (GRI), and disclosures were largely descriptive. While compliance improved over time, reporting quality and comparability varied widely across sectors.

In the years that followed, sustainability reporting gained traction as more investors, lenders, and regulators began using environmental and social data to assess business resilience. However, the absence of a single, mandatory reporting standard limited the usefulness of disclosures, particularly for cross-border investors.

Who Is Required To Report In 2026

The regulatory landscape changed with the issuance of SEC Memorandum Circular (MC) No. 16, Series of 2025. This circular formally adopts the Philippine Financial Reporting Standards (PFRS) on Sustainability Disclosures, which are aligned with the International Financial Reporting Standards (IFRS) issued by the International Sustainability Standards Board (ISSB).

Under the new rules, sustainability reporting is no longer limited to publicly listed companies. Certain large non-listed entities meeting SEC thresholds are now included, marking a major expansion in scope.

Implementation of the new sustainability reporting rules will follow a phased approach:

• Tier 1: Listed companies with a market capitalization above ₱50 billion will begin reporting in 2027, covering fiscal year 2026.
• Tier 2: Listed companies with a market capitalization between ₱3 billion and ₱50 billion will start reporting in 2028.
• Tier 3: Smaller listed companies and large non-listed entities with annual revenues exceeding ₱15 billion from their ordinary activities, as defined under the applicable PFRS Accounting Standards, will be required to report starting in 2029. For parent companies, the revenue threshold will be based on consolidated or group-level revenues; otherwise, it will be based on company-level revenues.

The rules also allow covered companies to adopt other internationally recognized reporting frameworks in addition to PFRS S1 and S2, provided that these frameworks do not conflict with the PFRS standards, do not obscure material information, and are fully disclosed in the sustainability report.

All covered companies must submit sustainability disclosures as part of their annual regulatory filings, with reports reviewed and approved by their boards. After a transition period of two years, companies will be required to obtain limited external assurance for certain climate-related disclosures, including Scope 1 and Scope 2 greenhouse gas emissions.

How The Philippines Compares Globally And Within Asia Pacific

Globally, sustainability reporting has moved rapidly toward standardization. Studies by international research and advisory firms show that most large companies worldwide now publish sustainability or ESG reports, and many jurisdictions are adopting standards aligned with the International Sustainability Standards Board.

In the Asia Pacific region, markets such as Japan, South Korea, and Taiwan have advanced sustainability disclosure requirements, particularly for listed companies. Southeast Asian economies are also strengthening their frameworks, driven by regional capital flows and international investor expectations.

The Philippines’ adoption of ISSB-aligned standards underscores the regulators’ commitment to high-quality, comparable, and globally aligned sustainability reporting. While not among the earliest adopters, the country’s phased and structured approach gives companies time to build capacity, enhance both financial and nonfinancial disclosures, and ensure alignment with international standards.

What Lies Ahead

By 2026, sustainability reporting in the Philippines will move beyond compliance formality to become a core pillar of corporate disclosure – subject to rigorous regulatory oversight and investor scrutiny. Companies that act early by strengthening governance, improving data quality, and embedding sustainability into business strategy will gain smoother compliance and stronger market credibility. Those who delay risk higher costs, operational strain, and reputational risk.

As sustainability risks increasingly shape financial performance, the SEC’s reforms deliver a clear signal: transparency on sustainability is now indispensable to doing business in the Philippines.