BANK of the Philippine Islands (BPI) is on track to hit its target of P1 trillion in sustainability-linked loans by 2026.
“We’re well on that [path],” BPI Chief Sustainability Officer and Chief Financial Officer Eric M. Luchangco told a news briefing on Thursday, referring to the goal that the lender set in 2021.
BPI’s sustainability-linked loans had reached almost P900 billion as of the first quarter, he added. That means more than a third of the bank’s P2.3-trillion total loan portfolio.
The publicly listed bank would finance bigger projects that need more sustainability planning, Mr. Luchangco said. They would also do projects on energy efficiency, which are smaller and tend to get fewer headlines, he added.
He said BPI could also finance projects on water treatment, pollution control and agri-lending. “Those are also a significant factor or contributor to our SDG (sustainable development goals).”
The CFO said the bank’s small and medium enterprise (SME) loans, which also fall under sustainable lending, have been its fastest-growing loan book.
Mr. Luchangco said they hit the target earlier since sustainability loans have been growing faster than regular loans.
As part of its sustainability financing targets, BPI also wants 50% of its loans to be sustainability-themed by 2026, but Mr. Luchangco said this might be harder to achieve.
“Between those two goals, I think that one will be the more challenging one to achieve,” he said. BPI’s overall loan growth was about 13% in the first quarter, he added.
Meanwhile, Mr. Luchangco said BPI could finalize its framework for blue bonds this year, but the bank has yet to decide on its first issuance, which will depend on funding requirements.
He also said BPI raised more than the initial P5-billion plan from its recent offer of 1.5-year peso-denominated fixed-rate BPI Supporting Inclusion, Nature, and Growth (SINAG) bonds.
The bank ended the offer period early on March 23 instead of May 30 as originally scheduled.
“We haven’t publicly disclosed the size, but it will definitely be larger than the initial disclosed offer, which I believe was P5 billion,” he said. “The demand for this bond has been very, very strong.”
BPI started the offer period on May 20, pricing the notes at 5.85% per annum to be paid quarterly. The debt will be issued and listed on the Philippine Dealing and Exchange Corp. on June 10.
The bonds were sold at a minimum investment amount of P500,000 and in increments of P100,000 above that.
The SINAG bonds will make up the first tranche of the bank’s P200-billion bond and commercial paper program approved by its board in October last year.
BPI would use the proceeds of the bond sale to finance or refinance eligible projects under its sustainable funding framework, it said earlier.
The bank tapped BPI Capital Corp. and Standard Chartered Bank as the joint lead arrangers and selling agents for the offer.
BPI’s net income rose 9% year on year to P16.6 billion in the first quarter.
Its shares fell by 0.72% or a peso to P138 each at the close of trading. — Aaron Michael C. Sy
