THE International Finance Corp. (IFC) has committed a total of $399 million to Philippine-based investments in fiscal year 2021.
The private sector lender of The World Bank Group said in a statement that most of its investments in the Philippines were “aimed at fostering a more resilient and inclusive recovery from Covid-19.”
The IFC said its Covid-related investments in the country during the fiscal year benefitted the following: Card Bank Inc. and Card SME Bank Inc.; Cebu Air Inc.; Union Bank of the Philippines; and Growsari Inc., a B2B (business-to-business) startup.
“The Philippines has been deeply affected by Covid-19, which has reversed many of the development gains the country has achieved,” Jean-Marc Arbogast, Country Manager for the Philippines at IFC, said.
“This has created an even greater sense of urgency to foster a more inclusive recovery; and IFC is committed to remaining a steadfast partner to the Philippines through the challenges that lie ahead,” Arbogast added.
The investment in Card Bank Inc. and Card SME Bank Inc. is expected to benefit over 60,000 companies, 44,000 of which are micro, small and medium enterprises (MSMEs) owned or led by women.
The IFC said its investment in budget carrier Cebu Air was in the form of convertible bonds aimed to help the airline continue to provide affordable transportation.
Investment in Unionbank was a 7-year social bond. The proceeds for the bond issuance will be used to finance over 2,000 loans to MSMEs.
The IFC said its investment in Growsari aimed to help lower prices, boost sales and digitalize supply chains in the country. The technology solutions firm connects mom-and-pop stores in the Philippines with manufacturers and wholesalers of milk, rice and other consumer products.
Globally, the total commitment of IFC is at $3.8 billion. This includes $2.8 billion in long-term financing from its own account and $956 million mobilized from other investors.
In addition, the IFC said it provided $1.5 billion in short-term finance in the Southeast Asian region to facilitate trade flows.
The IFC also said it has committed $1.9 billion to Covid-19 response efforts since the onset of the health crisis in the East Asia and the Pacific (EAP) region.
“Despite the challenges posed by the pandemic, IFC continues to play a critical role in leveraging the private sector to mobilize long-term capital for infrastructure, provide green, blue, social and sustainable financing, attract cross-border investments and promote innovation-led growth to accelerate the recovery in East Asia and the Pacific,” Alfonso Garcia Mora, IFC’s Vice President for Asia & Pacific, was quoted in a statement as saying.
The first transaction under IFC’s $4-billion “Global Health Platform,” which addressed the severe shortage of medical supplies in developing countries, was in the EAP region. About $3 billion was also committed to support the region’s financial institutions serving MSMEs.
MSMEs, which have been disproportionately impacted by the pandemic, account for the vast majority of businesses in the region and are collectively EAP’s largest employer.
Around 26 percent of projects, which amounted to $744 million in long-term financing, focused on tackling climate change and the marine plastics crisis.
The IFC said the EAP region contributed 30 percent of global gross domestic product and is home to 30 percent of the world’s population. The region is also responsible for 60 percent of global greenhouse-gas emissions with some of the biggest contributors to marine plastic waste.