IFC backs UBP bid floating 1st social bond

Our goal in issuing this bond is to support the recovery of MSME from the Covid-19 pandemic

Union Bank of the Philippines (UBP) will be using the International Finance Corp’s (IFC) $150 million investment to offer its maiden social bond issue, which will have a maturity of seven years.

UBP chief financial officer Jose Emmanuel Hilado expressed his satisfaction with the development amid expectations of higher jobs to be created through the IOU offer while helping micro, small and medium enterprises (MSME) to recover from the pandemic.

“Our goal in issuing this bond is to support the recovery of MSME 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,” Hilado explained.

“It could not have come at a better time, as this market segment has been hit particularly hard by the current crisis,” he added.

Financing boost

According to the bank, the World Bank unit’s investment will help provide over 2,000 loans to MSME that were affected by the health crisis while also supporting UBP’s support for the same through its supply chain financing platform using digital technologies.

Alfonso Garcia Mora, vice president for Asia and Pacific at the IFC said that this deal with the UBP will help deepen the Philippines capital markets while contributing to the expected faster economic recovery.

“In the wake of the Covid-19 crisis, 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 the recovery,” Mora said.

“This landmark deal marks IFC’s first Covid-19 response to 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,” he added.