In a major move to diversify the nation’s financial landscape, the Securities and Exchange Commission (SEC) has officially released the regulatory framework for Sukuk (Islamic bonds). The initiative aims to position the Philippines as a competitive hub for Islamic finance while providing a new stream of ethical investment opportunities for both local and international stakeholders.
On February 25, 2026, the Commission issued SEC Memorandum Circular (MC) No. 12, Series of 2026, titled Guidelines on the Issuance and Disclosure of Sukuk. This circular establishes the ground rules for how these Shari’ah-compliant assets are structured, registered, and managed.
Unlike traditional bonds, which represent a debt obligation, Sukuk are certificates of equal value representing undivided shares of ownership in tangible assets, usufructs (the right to use someone else’s property), or specific projects.
Because Shari’ah principles prohibit the charging or payment of interest (riba), Sukuk holders earn returns through profit-sharing or rental income generated by the underlying asset.
The SEC framework is designed to ensure the integrity of the Islamic capital market through three main pillars:
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Standardized Registration: Clear pathways for issuers to bring Sukuk to market, ensuring they meet national securities laws.
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Permissible Structures: Guidance on Shari’ah-compliant models (such as Ijara, Musharaka, or Murabaha) to provide flexibility for different business needs.
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Rigorous Disclosure: Enhanced reporting requirements to maintain transparency, protect investor interests, and verify ongoing Shari’ah compliance.
The introduction of these guidelines follows a concerted effort by the Philippine government to attract Middle Eastern capital and support the financial inclusion of the country’s Muslim population.
“The SEC recognizes Sukuk as a strategic instrument for capital raising and investment activities, both locally and internationally,” said SEC Chairperson Francis Lim. “By providing a clear and robust framework, we are not just expanding investment options; we are fostering an inclusive financial ecosystem that aligns with global ethical standards.”
With the implementation of MC No. 12, the SEC expects an uptick in infrastructure funding and corporate expansion projects financed through these Shari’ah-compliant instruments.
