IFC investing $100 million in CitySavings social bond

MANILA, Philippines — The International Finance Corp. (IFC) is investing $100 million in the social bond issued by Aboitiz Group’s thrift bank City Savings Bank Inc.

In a statement yesterday, the private sector arm of the World Bank said CitySavings is the first thrift bank to issue a social bond in the country.

The social bond follows the International Capital Market Association’s Bond Principles and the Association of Southeast Asian Nations Social Bond Standard.

IFC said the bond issuance is intended to provide loans to women in low and lower middle-income groups.

“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,” CitySavings CEO Lorenzo Ocampo said.

CitySavings is a subsidiary of Union Bank of the Philippines, the banking arm of the Aboitiz Group.

It provides salary loans to public school teachers, government workers, pensioners and other customer segments.

IFC said its investment in CitySavings’ social bond is in line with its aim to help deepen capital markets in the country.

“Investing in women is not only the right thing to do, it also makes good business sense,” said Riccardo Puliti, IFC’s regional vice president for Asia and the Pacific.

He said the bond issuance will build investor confidence and channel more capital to companies in the Philippines that promote social, economic and gender equality.

In July 2021, IFC invested in a $150-million social bond issued by UnionBank to provide loans to help micro, small and medium enterprises to bounce back from the impact of the pandemic.

In November of the same year, IFC worked with Ayala Corp. for the issuance of the first social bond in the healthcare sector in the country to support the development of a dedicated cancer hospital.