CAO Investigation of IFC Investments in Rizal Commercial Banking Corporation (RCBC) in the Philippines Approved

08 Apr 2022

Washington, April 8, 2022 — The IFC Board of Executive Directors approved IFC's Management Action Plan in response to an investigation of IFC's investments in Rizal Commercial Banking Corporation (RCBC) in the Philippines conducted by the Compliance Advisor Ombudsman (CAO), IFC's independent accountability mechanism.

IFC first invested in RCBC in 2011 to strengthen the financial sector in the Philippines in the wake of the global financial crisis by investing in financial intermediaries whose strategy was aligned with IFC's developmental objectives for the Philippines, including financial inclusion and sustainability.

CAO's investigation reviewed how IFC applied its environmental and social (E&S) requirements to its investments in RCBC and, in particular, how RCBC applied IFC's E&S requirements to 10 coal-fired power plants it financed in the Philippines, and 1 plant it committed to finance.

The investigation was prompted by a complaint to CAO from communities living in the vicinity of the power plants supported by nongovernmental organizations (NGOs), the Philippine Movement for Climate Justice, Inclusive Development International, and Bank Information Center. The complaint raised concerns that RCBC provided financial support to these projects without applying IFC's Performance Standards, leading to potentially serious environmental and social harms to local communities and contributing to global climate change. 

CAO's investigation identified non-compliance by IFC in its appraisal and supervision of environmental and social risks emerging from its investment in RCBC's banking business. It found that many of the alleged adverse impacts of the RCBC-financed coal-fired power plants on communities and the environment were likely to have occurred. It further found that shortcomings in IFC's review and supervision contributed to RCBC supporting the development and expansion of the power plants without assurance that the plants would operate in accordance with IFC's Performance Standards. This includes requirements to quantify and reduce greenhouse gas (GHG) emissions.

"We acknowledge the CAO's observations and the concerns of the communities reflected in the report. We are committed to addressing these and will work to support RCBC to make the improvements outlined in the action plan," said Makhtar Diop, IFC Managing Director. "In recent years, we have enhanced our E&S support to RCBC while also dramatically strengthening our procedures, resources, and guidance to financial sector clients. We draw additional lessons from this case which will guide us as we continue to improve our E&S approach to FI clients in general."

The Board-approved Management Action Plan developed by IFC in agreement with RCBC, after consultation with the Complainants, outlines four areas of improvement in response to CAO's recommendations, including:

  • Further strengthening the implementation of RCBC's Environmental and Social Management System (ESMS) including enhancing its E&S capacity and systematically incorporating Performance Standards requirements in high-risk projects financed by RCBC.
  • Assessing and addressing environmental and social impacts associated with the power plants financed by RCBC and the status of their compliance with IFC's Performance Standards.
  • Addressing GHG emissions related to the power plants and enhancing RCBC's climate-related disclosures.
  • Addressing opportunities to improve the E&S risk management of IFC's broader financial intermediary investments.

IFC management will supervise the implementation of the Action Plan and return to the Board for a meeting within 9 months to provide an update on progress and, if needed, propose adjustments.  CAO will monitor effective implementation of the actions set out in the Management Action Plan and publish IFC's progress reports on this website and in an annual monitoring report.

More information about this case, including the CAO Investigation Report and IFC Management Action Plan, are available here.

The Management Action Plan promises to improve the ability of IFC's client to apply IFC's environmental and social standards to its borrowers moving forward. It also provides a starting point for more detailed assessment of the adverse impacts of the coal-fired power plants on community health and the environment, and ways to reduce GHG emissions.  We emphasize the importance of effective and ongoing consultations with the complainants as IFC and its client implement the MAP.  More broadly, we support actions IFC has committed to take in improving E&S performance across its FI portfolio.

- Janine Ferretti, CAO Director-General.

About CAO

The Compliance Advisor Ombudsman (CAO) is the independent accountability mechanism of the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), members of the World Bank Group. CAO's mandate is to address complaints from people affected by IFC and MIGA projects in a manner that is fair, objective, and constructive, improve environmental and social outcomes, and foster accountability and learning to reduce the risk of harm to people and the environment. For more information, visit

About IFC

IFC, a member of the World Bank Group is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit

Mailchimp Survey


We Value Your Feedback

Thank you for visiting CAO’s new website. Help us improve your experience by taking our short survey.

Give Feedback No thanks