CITY SAVINGS BANK, Inc. (CitySavings), the thrift banking subsidiary of listed Union Bank of the Philippines, Inc. (UnionBank), has issued a social bond, with the International Finance Corp. (IFC) investing $100 million.

This makes CitySavings the first thrift bank in the Philippines to issue a social bond, IFC said in a statement on Thursday.

“Proceeds from the social bond will be used for loans to women in low and lower middle-income groups and encourage them to make investments in small businesses to supplement their family’s income in addition to payments for healthcare, education and housing,” the global development institution said.

The social bond follows The International Capital Market Association’s Social Bond Principles and the ASEAN Social Bond Standard, IFC said.

“This landmark issuance will help us expand our services to reach underserved and vulnerable segments of society, allowing us to further our mission to elevate the lives of people,” CitySavings Chief Executive Officer Lorenzo T. Ocampo was quoted as saying.

“Investing in women is not only the right thing to do, it also makes good business sense. This landmark issuance will build investor confidence and channel more capital to companies in the Philippines that promote social, economic, and gender equality,” IFC Regional Vice-President for Asia and the Pacific Riccardo Puliti said.

IFC said its investment in CitySavings’ social bond is in line with its goal to help deepen the Philippines’ capital markets for thematic bond issuances.

It also follows IFC’s investment in a $150-million social bond issued by CitySavings’ parent UnionBank. Proceeds from that issue funded 4,000 loans to micro-, small- and medium-sized enterprises to help them recover from the impact of the coronavirus pandemic on their businesses, IFC said.

CitySavings, which provides salary loans to public school teachers, government workers, pensioners, was the fourth biggest thrift bank in the country in asset terms at end-2023 with P153.408 billion, latest Bangko Sentral ng Pilipinas data showed.

Meanwhile, its listed parent UnionBank’s attributable net income dropped by 43.84% year on year to P1.98 billion in the first quarter due to one-time integration costs related to its acquisition of Citigroup, Inc.’s consumer business in the Philippines.

The bank’s shares went down by P1.10 or 2.89% to end at P36.90 apiece on Thursday.