The International Finance Corp. (IFC) will invest in BDO Unibank, Inc.’s sustainability bond sale that aims to help finance marine and ocean-based projects while supporting the country’s climate goals.
In a statement, IFC said on Friday, April 29, that the World Bank Group unit will subscribe up to $100 million, or roughly P5.2 billion, to a “Blue Bond” to be issued by the Sy-controlled BDO, the largest bank in the country.
IFC said its new investment in BDO will help increase access to finance for blue projects in the Philippines and will help tackle marine pollution and preserve clean water resources.
Solid waste management and marine plastics are key issues for the Philippines, threatening several elements of the blue economy as well as urban public health.
The country is the third largest contributor, with an estimated 0.75 million metric tons of mismanaged plastic entering the ocean every year, according to the Market Study for the Philippines: Plastics Circularity Opportunities and Barriers.
The nation is also combating water stress with rapid urbanization. According to Water.org, more than three million people in the Philippines rely on unsafe and unsustainable water sources and seven million lack access to improved sanitation.
Teresita T. Sy, BDO chairperson, said IFC’s investment reinforces their commitment to sustainable finance and allows the bank to provide more support to critical areas such as water conservation, wastewater treatment, plastic recycling, sustainable tourism, among others.
“Marking our two-decade partnership, IFC’s investment will be key to helping BDO develop a Blue Finance Framework that will allow us to fund projects that support the country’s blue economy while establishing a new asset class in the Philippine debt market,” Sy said
BDO’s Blue Bond will be the first such issuance in the Philippines and the first for IFC in the East Asia Pacific region.
IFC will also help BDO identify projects that can be funded by the Blue Bond while building its capacity in terms of monitoring the impact of these projects.
Given that the coastal blue economy is critical to the Philippines, Jean Marc Arbogast, IFC country manager said a blue bond instrument will be key to the nation’s growth trajectory.
“By supporting the first blue bond issuance in the country, IFC continues its tradition of supporting the development of capital markets through issuances of thematic bonds and mainstreaming climate finance in the banking sector,” Arbogast said
“Moving forward, a robust blue economy will help create jobs and alleviate poverty while strengthening the marine ecosystem in the Philippine,” he added.