Philippines: IFC investing $150m in Union Bank’s first social bond

International Finance Corporation (IFC), a member of the World Bank Group, is considering investing $150 million in a seven-year social bond to be issued by Union Bank of the Philippines (UBP), one of the country’s largest banks.

The bond will be issued under Union Bank’s new sustainable finance framework and will be the first social bond by the bank and its longest-term USD-denominated to date. It also marks the second social bond of its kind in the Philippines.

Proceeds from the bond are expected to finance over 2,000 loans to micro, small, and medium-sized enterprises (MSMEs), which have been disproportionately impacted by COVID-19, the listed lender disclosed to the Philippine Stock Exchange Friday.

In the Philippines, MSMEs accounted for over 90% of businesses and over 60% of jobs pre- COVID-19, but MSME loans only accounted for 6% of total bank loans in the country, according to data from the Asian Development Bank. This makes increasing access to MSME financing critical to fostering a resilient and inclusive recovery.

Union Bank said IFC’s investment will help Union Bank boost financing for MSMEs through its supply chain financing platform, enabled using digital technologies.

“Our goal in issuing this bond is to support the recovery of MSMEs from the COVID-19 pandemic. We are confident that we can achieve this through the use of IFC’s long-term funding and by leveraging our supply chain financial platform,” said Jose Emmanuel Hilado, the bank’s chief financial officer.

Alfonso Garcia Mora, vice president, Asia and Pacific at IFC, said the use of social bonds to generate financing to meet the needs of vulnerable underserved people, including small businesses, will be critical to helping spur recovery.

“This landmark deal marks IFC’s first COVID-19 response social bond investment in Asia and will help create jobs, strengthen and deepen the country’s capital markets, and contribute to the development of a more resilient, efficient and inclusive financial sector,” Mora said.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.