THE International Finance Corp. (IFC), the private sector arm of the World Bank Group, has invested $100 million in Union Bank of the Philippines’ (UnionBank) first sustainability bond issuance to help spur job creation by expanding financing support for micro, small and medium enterprises (MSMEs).
In a joint statement on Wednesday, the institutions said proceeds from the bond issuance would be used to provide loans to MSMEs and grow UnionBank’s portfolio of sustainability assets, including renewable energy, energy efficiency, or green buildings.
The latest issuance followed IFC’s investment in the bank’s inaugural social bond in 2021, which financed more than 3,000 loans to MSMEs that had been heavily impacted by the Covid-19 pandemic.
Johnson Sia, UnionBank treasurer and global markets head, said the transaction built on the bank’s partnership with IFC and reflected its commitment to advancing its sustainable finance strategy.
“Following our successful collaboration on UBP’s first social bond, this second partnership with IFC strengthens our ability to support sustainable finance borrowers so they can grow their businesses, create jobs, and contribute to inclusive growth in the Philippines,” Sia said.
IFC Country Manager for the Philippines Amena Arif said the investment in the bank’s latest bond issuance was part of IFC’s continuing efforts to deepen the country’s local capital markets.
“Through this sustainability bond, IFC is helping ensure that growth translates into local jobs.... By expanding access to finance for MSMEs, we are enabling businesses to grow, hire locally, and build more resilient local economies,” Arif said.
IFC said it had also been providing technical support to UnionBank through its 30 by 30 Zero Program to help the lender diversify its portfolio to include new eligible sectors and segments and identify sustainability-related financing opportunities.
The transaction is also supported by the World Bank Group’s Joint Capital Markets Program for the Philippines, which seeks to promote long-term financing for infrastructure, housing and MSMEs through the development of local capital markets.
UnionBank noted that its first sustainability bond issuance will adhere to the sustainability bond principles of the International Capital Market Association.
Shares of the bank on Wednesday dropped P0.15, or 0.61 percent, to close at P24.55 each.
