BPI Family to sell own green bonds

Published November 17, 2019, 12:00 AM

by manilabulletin_admin

By Lee C. Chipongian

The country’s biggest thrift bank, BPI Family Bank, a wholly-owned subsidiary of Bank of the Philippine Islands (BPI), will issue its own green bonds in the offshore market as part of the bank’s $2-billion medium-term note (MTN) program.

BPI has done two drawdowns from the MTN for its green finance this year. The first was the Swiss franc-denominated CHF100 million two-year green bonds last August. The second was the $300-million five-year ASEAN green bonds issued in September.

BPI President and CEO, Cezar P. Consing, said: “Right now we are in the market with BPI Family. That’s ongoing in the market. (How much to be issued) depends on the actual demand but I feel good about that.”

As with the first two issuances, the proceeds of the next one will fund borrowings for green projects eligible under BPI’s green finance framework, or projects with environmental benefits.

When asked if there is a low demand for green bonds locally, Consing said it is just a matter of currency they are looking for, as well as pricing and accessing other markets.

“I believe there is a lot of domestic demand for green (but whether to issue here or abroad) a lot of it depends on what we need going forward… I don’t want to be too prescriptive about any of this. All I know is over time, we have to do better,” he told reporters on the sidelines of BPI’s media launch of its sustainable development finance last Friday.

Business Banking Head, Junie Veloso, said most of the demands for green bonds are coming from the international investors, who have clients engaged in green projects. “The awareness (for green bonds) is much stronger outside of the Philippines. Maybe you can issue a green bond here but quite frankly the pricing differential is not existent. But, over time, there will be a green bond market movement here,” he said.

BPI Chief Financial Officer, Maria Theresa M. Javier said that in the future, they see the possibility of issuing peso-denominated green bonds as the demand is expected to grow for local currency issuance.

Javier said that given the need for green finance, BPI will be looking for opportunities to fund it. “That’s in our plans going forward. The demand for peso bonds under (BPI) green finance framework will definitely be there, it’s just that right now and even in the global markets, there is no real premium for issuing (peso bonds) whether its green or not green. But as long as it could qualify under the green finance framework, we could definitely look at that possibility because most of the demand here under this program will probably be in peso financing,” she said.

At present, about 10 percent of the bank’s loan portfolio are for sustainable energy finance (SEF). “Sustainability loan is 10 percent and our renewable mix is 50-50. These are ratios that we are committed to improving over time… we’re also focused on digitalization (and) it goes hand-in-hand with sustainability,” said Consing.

BPI’s Head of Sustainable Energy Finance, Jo Ann Eala, reported that as of June this year, they have under its loan portfolio 330 SEF projects, of which 48 percent are for energy efficiency, 28 percent for climate resilience and 24 percent for renewable energy. The bank also offers sustainable agriculture loans.

BPI has disbursed ₱125.8-billion sustainable energy and climate resilience loans over the last 10 years, and this is about a 58 percent share in renewable energy. As of June, the amount has gone up to more than ₱130 billion.