The International Finance Corporation ( IFC ) is investing US$100 million in a social bond issued by City Savings Bank, a thrift bank in the Philippines, to expand financial inclusion and support human capital development in the country.

The transaction, announced on June 13, represents the first social bond issued by a thrift bank in the Philippines and conforms with the Social Bond Principles of the International Capital Market Association ( ICMA ) and the Asean Social Bond Standard.

Proceeds from the social bond will be used for loans to women in low and lower middle-income groups, encouraging them to make investments in small businesses to supplement their family’s income in addition to payments for healthcare, education and housing.

CitySavings, a subsidiary of Union Bank of the Philippines, is one of the largest thrift banks in the country and provides salary loans to public school teachers, government workers, pensioners and many other customer segments.

CitySavings chief executive officer  Lorenzo Ocampo says the landmark issuance will help the bank expand its services to underserved and vulnerable segments of society, thereby furthering its mission to elevate the lives of the people.

“Investing in women is not only the right thing to do, it also makes good business sense,” says IFC regional vice-president for Asia and the Pacific Riccardo Puliti. “This landmark issuance will build investor confidence and channel more capital to companies in the Philippines that promote social, economic and gender equality.”

IFC says its 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.

In July 2021, IFC invested in a US$150 million social bond issued by UnionBank, with the proceeds used to finance 4,000 loans to micro, small and medium-sized enterprises ( MSMEs ) to help them recover from the impact of the Covid-19 pandemic. In November 2021, IFC partnered with Ayala Corporation to issue the first social bond in the country's healthcare sector. Proceeds from the bond were allocated to develop a dedicated cancer hospital and received EDGE certification – a process administered by IFC – making it the first green hospital building in the country.

CitySavings is one of the country's largest thrift banks with more than 140 branches nationwide, providing a wide range of mass market financial products and services. It is well on its way to becoming the leading mass market bank in the Philippines, paving the way for inclusive and sustainable prosperity across the country.