BPI on track to hit goal of P1 trillion in green loans

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Bank of the Philippine Islands' chief finance officer and chief sustainability officer Eric Luchangco also says they're finalizing framework for blue bond offerings, which will fund marine and ocean-based projects

MANILA, Philippines – The Bank of the Philippine Islands (BPI) is set to exceed its goal of P1 trillion in sustainability loans by 2026, a senior officer said.

BPI’s CFO and chief sustainability officer Eric Luchangco told reporters on Thursday, May 29, that green debt comprises P900 billion of its P2.3 trillion loan portfolio as of the first quarter.

The Ayala-owned bank initially set this target in 2021.

“Our goal is that at least 50% of our book should be sustainability linked. P900 billion out of 2.3 trillion is not 50%, so there’s still a bit of ways to go from that perspective that at least 50% should be sustainability linked,” he said.

Luchangco cited the strong demand for green financing, particularly for renewable energy and energy efficiency projects.

BPI’s Sustainable Development Fund (SDF) has so far funded 485 projects, 177 of which were tied to energy efficiency initiatives and 145 towards renewable energy pursuits.

Aside from big-ticket energy projects, BPI’s SDF also funded building conversion projects to make infrastructure more sustainable in terms of energy and water consumption.

In its consumer segment, BPI also offers loans for the installation of solar panels and the purchase of electric and hybrid vehicles.

“And then if you add to that also on the social side, we talk about the kind of lending that we’re doing linked to SMEs (small and medium enterprises) or to microentrepreneurs. We also consider that as part of our sustainability portfolio,” he added.

However, Luchangco also said that having a 50% slice of its loan portfolio for green debt may be challenging since BPI’s non-sustainability loan business is also growing.

Sustainability bond offerings

Luchangco disclosed the growing demand for green bond offerings, with BPI currently finalizing the framework for its blue bond offerings. Blue bonds aim to raise funding for marine and ocean-based projects.

Since BPI is still finalizing its framework, Luchangco said they have yet to finalize a timeline for its first issuance. He added that the framework also includes the classifications of certain projects.

Luchangco also shared that BPI raised over P5 billion from its 1.5-year peso-denominated Supporting Inclusion, Nature, and Growth (SINAG) bonds. BPI began the offer period on Tuesday, May 20, but ended this earlier than scheduled due to high demand.

The SINAG bonds are set to be issued and listed on the Philippine Dealing and Exchange Corporation on Tuesday, June 10.  – Rappler.com