Singapore seals carbon credit deal with the Philippines, its third S-E Asian partner

Singapore and the Philippines have signed a bilateral carbon credit agreement, strengthening regional climate cooperation and expanding carbon markets in Southeast Asia. The deal, signed on April 30 during ASEAN Climate Week in Manila, marks Singapore’s third such agreement in the region and the Philippines’ first participation in an international carbon trading framework.

The agreement allows Singapore’s government and carbon tax-liable companies to purchase verified carbon credits generated in the Philippines. These credits can be used to offset a portion of emissions, helping Singapore meet its climate targets while supporting emissions reduction projects abroad.

Officials highlighted that the partnership will channel climate finance into projects in the Philippines, including renewable energy, nature-based solutions, and emissions reduction initiatives. Singapore’s Minister for Sustainability and the Environment, Grace Fu, stated that the deal will deepen collaboration and unlock new opportunities for businesses and local communities.

The agreement operates under Article 6 of the Paris Agreement, which enables countries to trade emissions reductions through international carbon markets. By establishing a structured framework for carbon credit transfers, both countries aim to accelerate climate action, attract green investment, and strengthen regional leadership in building a low-carbon future

Singapore's third Article 6 bilateral (after earlier ASEAN partners) plus the Philippines' first participation in international carbon trading demonstrates the maturation of ASEAN carbon-market architecture. Article 6 provides the framework for internationally-transferable mitigation outcomes; well-designed bilateral agreements convert framework into functional cross-border credit flow.

The financing-into-projects dimension is particularly consequential for host countries. Carbon-credit revenue channelled into renewable energy, nature-based solutions and community-level emissions-reduction initiatives creates development co-benefits alongside emissions outcomes. The credibility of these co-benefits determines long-term buyer demand.

For carbon-project developers, corporate emitters with carbon-liability exposure, financial institutions supporting ASEAN carbon-market investment and their compliance advisors, Cognitud's climate action, nature-based solutions and impact assessment teams help clients evaluate Singapore-Philippines-linked opportunities, structure long-term carbon-project pipelines aligned with Article 6 bilateral framework, and prepare disclosures aligned with SGX, MAS, ISSB and jurisdictional carbon-market frameworks.