BPI expands green financing for auto, housing loans

Ayala-led Bank of the Philippine Islands (BPI) has expanded its green financing with the sustainable Green Solutions, the first local bank to offer eco-friendly financing options for housing and auto loans, it said in a statement.

BPI’s Green Solutions are loans for sustainable homes and electronic or e-vehicles.

BPI head of retail lending and bancanssurance Dexter Lloyd Cuajotor called its latest green financing a “pioneering step in sustainable financing” as it provides customized solutions for housing and auto loans to “make sustainable homes and e-vehicles more accessible and affordable to the market.”

The financing options also include solar mortgage, eco-build financing and EV financing.

Cuajotor said that while solar panels and EVs are expensive, BPI will have flexible payment options and discounts until March 31, 2024.

BPI’s green financing program already include sustainable agriculture, renewable energy, energy efficiency, and climate resilience under a rebranded Sustainable Development Finance (SDF) Program since 2019.

“Reflecting the growing diversity of services furthering sustainable development provided by the bank, the SDF Program is proof of BPI’s stronger commitment to the United Nations Sustainable Development Goals (UN SDGs),” said the bank.

Based on an ad hoc survey conducted by the Bangko Sentral ng Pilipinas (BSP), about 75 percent of the country’s big banks have financed or approved loans supporting green or sustainable projects totaling P830 billion and $14 million as of end-June 2022, representing approximately seven percent of the Philippine banking system’s total loan portfolio.

The top five green or sustainable activities or projects supported by these banks are renewable energy, sustainable water and wastewater management, energy efficiency and green buildings.

Last December 2023, the BSP approved additional temporary measures to incentivize banks to extend loans or finance investments for green or sustainable projects or activities, including transition financing for decarbonization.

These take in the form of extra lending capability and reduced reserve requirement rate on sustainable bonds issued by banks, said the BSP.

The measures are part of the BSP’s 11-point Sustainable Central Banking Strategy introduced in 2023.