Explainer: What is IFC doing in the Philippines?

Updated on March 16, 2025 at 1:35 p.m.

MANILA, Philippines — International Finance Corp. (IFC), a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets like the Philippines.

It operates in more than 100 countries, using capital, expertise and influence to catalyze markets and opportunities in the developing world.

In fiscal year 2024, IFC committed a record $56 billion to boost private companies and financial institutions. By hatching private sector solutions and mobilizing private capital, this multilateral organization aims “to create a world free of poverty on a livable planet.”

Here in the Philippines, the Securities and Exchange Commission announced in January a partnership with IFC to boost sustainable finance capacity in the debt market amid the surge in demand for thematic bonds. The corporate regulator intends to work with IFC in conducting capacity-building initiatives for issuers, investors and debt watchers.

Veteran Pakistani banker Amena Arif, recently appointed as new IFC country manager for the Philippines, is similarly expected to focus on mobilizing private sector investments to support job creation, reduce the impacts of climate change and promote financial inclusion.

READ: IFC names Pakistani banker new Philippines chief

Women and financial inclusion

The last few projects crafted by the IFC for the Philippines were mostly to drive financial inclusion.

In January, it announced $130-million investment in Asialink Finance Corp., which provides tailored financial solutions to micro, small and medium-sized enterprises (MSMEs).

The investment is seen to help Asialink in expanding its financing for MSMEs, with at least 60 percent of loan proceeds earmarked for women-owned or led firms.

READ: IFC invests $130M in Asialink

Although 75 percent of MSMEs are located outside Metro Manila, Bangko Sentral ng Pilipinas (BSP) figures show that only 14 percent of the loans from the banking system serve companies outside the capital region.

A 2021 BSP Financial Inclusion Survey also indicated the low penetration of banking solutions, especially among women. Only 20 percent of women own formal bank accounts compared with 26 percent of men.

In 2024, IFC invested in two fintech startups, Salmon and First Circle, both of which cater to consumers and MSMEs unable to access the formal credit market.

READ: 2 Philippine fintech firms get fresh funds from IFC

In July 2024, IFC invested $100 million in a social bond issued by City Savings Bank, with the proceeds used for lending to women in low and lower middle-income groups. The thrift bank arm of Union Bank is encouraging women to invest in small businesses to supplement family income in addition to payments for health care, education and housing.

Green, blue bonds

In 2023, IFC also agreed to invest $250 million in the “green” bond issuance of Ayala family-led Bank of the Philippine Islands – the biggest deal IFC has done with a financial institution in this part of the world.

Proceeds funded eligible green assets, including renewable energy, energy efficiency, green buildings, electric vehicles and climate-smart agriculture projects, among others.

In 2022, IFC also announced a $100-million subscription to “blue” bonds issued by Sy family-led BDO Unibank, the largest bank in the country.

“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,” IFC had said.

The Philippines was the third largest contributor of such waste, with estimated 0.75 million metric tons of mismanaged plastic entering the ocean every year, according to the World Bank’s Market Study for the Philippines: Plastics Circularity Opportunities and Barriers (2021).

Nonlife insurance

Citing the need to grow the nonlife insurance market for small businesses and vulnerable households, IFC announced in May 2024 an investment of up to $10 million in a special purpose vehicle that bought into MAA General Assurance Philippines Inc. (MAAGAP).

IFC joined a consortium of investors led by Triple P Capital, an investor in Southeast Asian financial services, to acquire 85 percent of MAAGAP.

The consortium also includes German development finance institution Deutsche Investitions- und Entwicklungsgesellschaft MBH, the Belgian Investment Company for Developing Countries SA and OP Finnfund Global Impact Fund I KY.

Sustainability

Aiming to promote private sector participation in initiatives that accelerate a green transition, IFC partnered with the European Union (EU) in August 2024 for the Green Economy Program for the Philippines (GEPP). This part of the EU’s new Global Gateway initiative.

Launched in the same year by the Department of Environment and Natural Resources and the EU, GEPP seeks to enhance waste management, support the transition to a circular economy, accelerate the deployment of renewable energy and promote technologies that can improve energy efficiency.

In July 2024, IFC also backed the first sustainability-linked financing package of Ayala Land Inc. (ALI), supporting the decarbonization of the property giant’s commercial real estate portfolio. It announced an investment of up to P14.5 billion ($250 million) in the form of a sustainability-linked loan for ALI.

The loan was linked to two specific sustainability performance targets: 1) certify 1.5 million square meters of ALI’s existing office portfolio by the end of 2025; and 2) reduce greenhouse-gas emissions by 42 percent across ALI’s malls, offices and hotels by 2030.

Likewise, IFC signed in 2023 a collaboration agreement with Lopez family-led First Balfour, a leading engineering and construction company, to ramp up efforts to decarbonize the transport sector. It aimed to help First Balfour conduct assessments and viability studies to develop a robust electric vehicle system at the First Philippine Industrial Park, including charging infrastructure powered completely by renewable energy.

’30 by 30’ Zero

IFC launched in 2022 the ‘30 by 30 Zero’ program that aims to help financial institutions, especially banks, better incorporate green finance strategies into their investment plans.

The goal is to work with financial institutions to strengthen their role as aggregators of climate financing. Specifically, IFC wants then to grow climate-related lending to 30 percent of total portfolio with near-zero coal exposure by 2030.

Kick-starting the program in the Philippines, IFC worked with CARD SME Bank, one of the largest microfinance organizations in the country, on financing “climate-smart” agricultural solutions for farmers.

Open finance pilot

IFC and its parent institution, World Bank, supported the Open Finance Philippines pilot of the Bangko Sentral ng Pilipinas in 2023, marking a milestone in the establishment of an open finance ecosystem for the country. This aims to help the unbanked—particularly those who lack documentation—build a financial profile and credit history and, over time, access loans and other services that were once out of reach.

The pilot is a voluntary undertaking of financial institutions to co-develop an open, inter-operable and scalable ecosystem that empowers consumers to take more control over their financial data. By doing so, it enables consumers to access a range of financial products and services from different providers.

Other projects

These were the other undertakings announced by IFC in 2022:

• It invested $100 million in a 10-year social bond. Proceeds were channeled to Ayala Group’s heath-care arm AC Health.
• It joined the Series C funding round of e-commerce start-up GrowSari, which raised $77.5 million for the digital transformation of MSMEs. Other investors included KKR and Pavilion Capital of the Temasek Group.
• It agreed to provide Quezon City with advisory services to improve vaccination strategy and testing facilities.
• It teamed up with Aboitiz Power Corp. to study the viability of renewable energy as a source of base load power.— Doris Dumlao-Abadilla