BPI to hit P1 trillion green loans ahead of target

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May 30, 2025 | 12:00am

MANILA, Philippines — The Bank of the Philippine Islands (BPI) expects its sustainable financing to breach the P1-trillion mark earlier than target, although it may take a while before it accounts for half of its loan book.

BPI chief finance officer Eric Luchangco yesterday said the bank is close to attaining its goal of disbursing P1 trillion in sustainability-linked loans by 2026, a target it set in 2021.

As of March, Luchangco said BPI has issued about P900 billion in loans for sustainable projects, accounting for 39 percent of the bank’s credit portfolio.

However, Luchangco said it would be challenging to hit the other objective of making sustainable financing take up half of BPI’s loans by 2026. Overall, borrowings are increasing, helped by the reduction in interest rates, and this is driving loan activity even for non-sustainable purposes.

BPI reported a 13-percent jump in gross loans in the first quarter. Luchangco said sustainability loans expanded quicker than this, and the bank expects this trend to go on moving forward.

“I think we will achieve the P1 trillion earlier than expected, but 50 percent of the total loan book will be more challenging to achieve because the non-sustainability-linked (side) is also growing well,” Luchangco said.

“I would say that it [sustainable financing] is growing a little faster than our overall loan book, so the share of the book is creeping up,” he added.

BPI is issuing its sustainability loans for financial inclusion, digitalization initiatives and green projects through the sustainable development finance (SDF).

To date, BPI has extended P322 billion in loans to fund 485 projects through the SDF, and none of the accounts are listed as non-performing. The financing supported mostly projects on energy efficiency (177), renewable energy (145), climate resilience (80) and sustainable agriculture (74).

Luchangco said BPI is now kept busy by efforts to develop a framework for the issuance of blue bonds. He vowed that the bank would complete the framework this year, but has yet to determine when the maiden issuance would be made.

So far, BPI is identifying which projects the blue bonds would fund, but opportunities may arise in sustainable water management, marine renewable energy, among others.

Banks are raising their loan allocation for sustainable financing to support programs and projects that promote environmental, social and governance targets.