Structured finance in Philippines enters new tokenisation era

For the past decade, cryptocurrency in the Philippines has centred on digital payments, remittances and trading. The country’s large overseas workforce and growing adoption of digital wallets made it a natural environment for early crypto use cases.

But attention has gradually shifted towards a different application of blockchain technology – tokenisation – exploring how distributed ledger technology can represent traditional financial instruments and rights in digital form. This serves as a technological layer that enhances existing capital markets, including structured finance.

Tokenisation in structured finance explained

Tokenisation is the process of representing rights in an asset – such as a bond, receivable, or other income-generating instrument – through a digital token recorded on a distributed ledger. In capital markets, the token functions as a digital representation of ownership or participation in a financial asset. While the underlying legal rights remain governed by traditional contracts and regulatory frameworks, tokenisation streamlines issuance, settlement, record-keeping and servicing.

These efficiencies are particularly relevant in structured finance, where financial assets are pooled, repackaged and distributed to investors through specialised financial structures. Structured finance transactions typically involve the transfer of receivables or other financial assets to a special purpose entity, which then issues securities backed by the underlying assets.

Tokenisation does not fundamentally alter the legal mechanics of securitisation – such as the requirements of true sale, asset isolation and investor protection – but it may affect the technological infrastructure through which securities are issued and managed.

Philippines tokenised bonds, utility tokens

A notable example of tokenisation in the Philippines is the Bureau of the Treasury’s 2023 issuance of the first tokenised treasury bonds (TTBs), which remain integrated with the government’s existing securities registry. The initiative showed that tokenisation can be implemented within an established capital market infrastructure rather than replacing it entirely.

Within tokenised financial ecosystems, utility tokens often serve a supporting function. Utility tokens are designed to provide access to a digital platform or service. Such tokens may be used to pay transaction fees, enable participation in governance mechanisms, or facilitate operational functions within a blockchain-based issuance platform. On structured-finance platforms, utility tokens may serve roles in issuing, reporting, or secondary trading operations. However, determining the legal classification of utility tokens requires careful analysis. Under Philippine securities law, whether an instrument is classified as a security depends on its economic substance rather than the label it bears. A token labelled as a “utility token” might still be considered a security if it involves an investment of money with the expectation of profits mainly generated through the efforts of others.

Tokenised structured finance regulatory framework

The regulatory environment governing structured finance, crypto-assets, and tokenised instruments in the Philippines has significantly evolved in recent years:

1. 1. The Securitisation Act of 2004 governs structured finance. It is the legal framework for pooling of receivables, transfers to a special-purpose entity to issue asset-backed securities, and investor protection.
   2. The Securities Regulation Code is the primary legal framework for determining whether a digital token constitutes a security. Where a tokenised instrument qualifies as a security, it must comply with the applicable registration and disclosure requirements under the law.
   3. In 2025, the Securities and Exchange Commission issued rules governing Crypto-Asset Service Providers, establishing regulatory oversight of entities engaging in activities such as crypto-asset trading, offering and intermediation. These rules clarify that crypto-assets offered to the public may face disclosure obligations and, where appropriate, securities regulation.
   4. From a financial system perspective, the Bangko Sentral ng Pilipinas (BSP) regulates virtual asset service providers under BSP Circular No. 1108. Tokenised financial activities involving payment systems or digital asset transfers may fall under BSP oversight, in addition to compliance with securities regulation.
   5. The Anti-Money Laundering Act imposes customer due diligence and reporting requirements on crypto-asset intermediaries, requiring them to implement robust customer identification systems to prevent the laundering of proceeds of unlawful activity.
   6. The Financial Products and Services Consumer Protection Act establishes conduct standards designed to protect financial consumers.

Philippine structured finance tokenisation outlook

In conclusion, tokenisation represents an evolutionary development in Philippine structured finance that may complement traditional securitisation and capital markets practices, rather than radically replace them.

At the same time, its successful integration into the Philippine financial system will depend on careful alignment with established legal frameworks, regulatory oversight and investor protection standards.

Maria Elizabeth E Peralta-Loriega is a Founding and Co-Managing Partner, Marie Jourgen B Endaluz is a Partner, and Brian Earl A Leshen is an Associate at Sarmiento Loriega Law Office in Metro Manila

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