IFC has made multiple equity and loan investments to support Rizal Commercial Banking Corporation (RCBC), a major universal bank in the Philippines that offers a wide range of banking and financial products and services, including commercial and retail banking, credit cards, asset management, and treasury and investment banking.

According to IFC, its investments aim to support RCBC’s growth in microfinance, small and medium-sized enterprises, and retail banking as part of IFC’s strategy to strengthen the Philippine financial markets through investments in local financial institutions that play a crucial role in providing access to finance for underserved sectors.

In October 2017, CAO received a complaint from several communities and the Philippine Movement for Climate Justice (PMCJ), a national Civil Society Organization (CSO), regarding multiple active or proposed coal-fired power plants in different parts of the Philippines. The complaint raised concerns about RCBC’s financial support for the plants, either directly or through affiliated companies. The complainants also raised concerns about the environmental and social impacts of the plants, including threats to biodiversity, health risks from air pollution, inadequate compensation for displacement, loss of livelihoods, and violations of Indigenous Peoples' rights. 

Additionally, the complaint raised concerns on the broader climate change impacts on the Philippines and its residents, particularly the signatories, as well as issues with RCBC’s environmental and social risk management, lack of consultation, insufficient information about the projects' impacts, and the absence of grievance mechanisms for affected communities.

The complaint also critiqued IFC’s transparency regarding its financial intermediary portfolio and its oversight of RCBC’s environmental and social performance.

The complaint was filed with the support of several CSOs: Inclusive Development International (IDI) and Bank Information Center Europe (BIC Europe).

In November 2017, CAO found the complaint eligible related to 10 coal-fired power plants financed by RCBC and one plant that RCBC committed to finance in the Philippines. During CAO’s assessment, community representatives from nine of the 11 plants preferred to address their concerns through a compliance process. In the remaining two plants, there was no consensus among the project operators to engage in dispute resolution. Therefore, CAO transferred the case to its Compliance function for appraisal to determine whether an investigation of IFC’s environmental and social performance was warranted and issued an Assessment Report in April 2019. 

In October 2019, CAO concluded its compliance appraisal and issued an Appraisal Report (available in English and Filipino) with a decision to initiate an investigation. CAO’s investigation reviewed how IFC applied its environmental and social requirements to its investments in RCBC, particularly regarding 10 coal-fired power plants financed by RCBC and the one power plant RCBC had committed to finance. 

CAO finalized its Investigation Report (available in English and Filipino) in November 2021. The investigation identified non-compliance by IFC in its appraisal and supervision of the environmental and social risks arising from its investment in RCBC’s banking business. 

Specifically, the investigation found that many of the alleged adverse impacts of the coal-fired power plants funded by RCBC on communities and the environment were likely to have occurred. It further found that IFC’s shortcomings in review and supervision contributed to RCBC supporting the development and expansion of the coal-fired power plants without assurance that the plants would operate in accordance with IFC’s Performance Standards (PS), including requirements to quantify and reduce greenhouse gas (GHG) emissions. 

In April 2022, IFC’s Board approved a Management Action Plan (MAP) to address CAO’s investigation.  

IFC’s MAP, which was developed in agreement with RCBC, contained four areas of improvement in response to CAO’s recommendations, namely: 

1. Strengthen RCBC’s Environmental and Social Management System (ESMS) implementation with a focus on the application of IFC’s PS to high-risk sub-projects.  
2. Assess and mitigate the environmental and social risks and impacts associated with the 10 coal-fired power plants RCBC financed.  
3. Address GHG emissions from 10 coal-fired power plants and improve climate-related disclosures.   
4. Address opportunities to improve the environmental and social risk management of IFC’s broader financial intermediary investments.  

IFC’s Management Response and MAP are available in English. 

IFC finalized three Management Progress Reports on the implementation of the MAP in January 2023, December 2023, and November 2024.  

In May 2023, CAO completed its First Monitoring Report, which was included in CAO’s 2023 Omnibus Monitoring Report. CAO acknowledged significant efforts made by IFC. However, the delays in progress were concerning, particularly regarding RCBC’s incorporation of PS requirements into binding agreements for its high-risk sub-projects. 

In November 2023, CAO staff visited the Philippines as part of its monitoring activities. CAO met with complainants, RCBC management, and IFC staff. 

In January 2025, CAO completed a Second Monitoring Report. The report made the following observations: 

• IFC had not yet ensured that RCBC was implementing an environmental and social risk management system that applies to IFC’s PS to high-risk sub-projects. 
• An environmental and social gap analysis of the impacts of the 10 power plants had completed by an IFC consultant, noting that 43 community issues were attributed or likely attributed to the power plants. In relation to these issues, the assessment made 186 recommendations. However, IFC had not charted a path forward on how these recommendations would be implemented and noted that RCBC disagrees with the assessment findings and recommendations. IFC reported that RCBC had not shared the final gap analysis reports with the power plants.   
• IFC had been unable to assess the GHG emissions from the power plants. Unless additional action is taken, the plants will likely emit significant GHG emissions for decades, contributing to climate change and missing an opportunity to enhance their energy efficiency. 
   

Read CAO's Press Release on the Monitoring Report here. 

CAO continues to monitor the effective implementation of IFC’s MAP.