International Finance Corp., a member of the World Bank Group, said Friday its subscription of up to $100 million in BDO Unibank Inc.’s Blue Bond will help increase access to finance for blue projects in the Philippines.
IFC said in a statement the investment would also help tackle marine pollution and preserve clean water resources, while supporting the country’s climate goals.
Solid waste management and marine plastics are key issues for the Philippines, threatening several elements of the blue economy and urban public health.
The Philippines is the third largest contributor, with an estimated 0.75 million metric tons of mismanaged plastic entering the ocean every year, according to the Market Study for the Philippines: Plastics Circularity Opportunities and Barriers (World Bank Group, 2021).
The nation is also combating water stress with rapid urbanization. According to Water.org, more than 3 million people in the Philippines rely on unsafe and unsustainable water sources and 7 million lack access to improved sanitation.
“We welcome IFC’s timely support for BDO’s maiden Blue Bond issuance, which reinforces our commitment to sustainable finance and allows us to provide more support to critical areas such as water conservation, wastewater treatment, plastic recycling, sustainable tourism, fisheries, and sustainable seafood processing,” BDO Unibank Inc. chairperson Teresita Sy-Coson said.
“Marking our two-decade partnership, IFC’s investment will be key to helping BDO develop a Blue Finance Framework that will allow us to fund projects that support the country’s blue economy while establishing a new asset class in the Philippine debt market,” Sy-Coson said in a statement.
BDO’s Blue Bond will be the first such issuance in the Philippines and the first for IFC in the East Asia Pacific region. The BDO Blue Bond will adhere to the International Capital Market Association’s Green Bond Principle and IFC’s recently launched Blue Finance Guidelines.
IFC will also help BDO identify projects that can be funded by the Blue Bond while building its capacity in terms of monitoring the impact of these projects. IFC’s role is likely to further inspire confidence among other investors, promoting market competition.
“Given that the coastal blue economy is critical to the Philippines, a blue bond instrument will be key to the nation’s growth trajectory. By supporting the first blue bond issuance in the country, IFC continues its tradition of supporting the development of capital markets through issuances of thematic bonds and mainstreaming climate finance in the banking sector,” said IFC country manager for the Philippines Jean Marc Arbogast.
“Moving forward, a robust blue economy will help create jobs and alleviate poverty while strengthening the marine ecosystem in the Philippines,” Arbogast said.