The International Finance Corp. (IFC) said Thursday it is investing $100 million in a social bond issued by City Savings Bank Inc., the first thrift bank in the Philippines to do so.
“This landmark issuance will help us expand our services to reach underserved and vulnerable segments of society, allowing us to further our mission to elevate the lives of people,” said CitySavings chief executive Lorenzo Ocampo.
CitySavings, a subsidiary of Union Bank of the Philippines, is one of the largest thrift banks in the country which provides salary loans to public school teachers, government workers, pensioners and other customer segments.
The bank said it would use the proceeds from the social bond for loans to women in low and lower middle-income groups and encourage them to make investments in small businesses to supplement their family’s income in addition to payments for healthcare, education and housing.
“Investing in women is not only the right thing to do, it also makes good business sense. This landmark issuance will build investor confidence and channel more capital to companies in the Philippines that promote social, economic, and gender equality,” said IFC regional vice president for Asia and the Pacific Riccardo Puliti.
IFC’s investment in CitySavings’ social bond is part of a broader approach in the Philippines to work with partners to deepen capital markets for thematic bond issuances such as social bonds, green bonds and blue bonds.
IFC in July 2021 invested in a $150-million social bond issued by UnionBank where proceeds financed 4,000 loans to micro, small and medium-sized enterprises (MSMEs) to help them recover from the impact of the pandemic on their businesses.
IFC teamed up with Ayala Corp. in November 2021 to issue the first social bond in the healthcare sector in the Philippines. Proceeds were used to develop a dedicated cancer hospital and received EDGE certification, making it the first green hospital building in the country.