BPI adopts sustainable banking in economic development push

MANILA, Philippines - The Bank of the Philippine Islands has approved a total of P27.5-billion on loans for renewable energy, energy efficiency and climate resilience projects as part of its sustainability performance and initiatives as one of the country’s leading financial institutions.

BPI president and chief executive officer Cesar P. Consing said the billions of pesos in energy-related loans is just part of its sustainable development initiatives. The two other sustainable efforts are in financial wellness and financial inclusion.

“We continue to empower our people to innovate services, systems and products that address the nation’s biggest sustainable development challenges of poverty, food security, climate change, and ecosystem degradation,” Consing said.

But the sustainable efforts are also hinged on being profitable, and yet meeting the needs of the country.

The commercial bank of the Ayala Group registered a net and comprehensive income of P18 billion last year. Total revenues rose from P52.5 billion in 2013 to P55.8 billion last year.

It was so profitable that BPI declared total dividends worth P7.08 billion last year, or an annual payout ratio of 39.2 percent.

Meanwhile, loans issued to the energy sector are estimated to result in a possible reduction of greenhouse gases of 814 tons.

Sustainable practices within the bank has increased an operational efficiency of 84 percent as electronic channels reduced the need for more physical branches and fuel consumption of armored vehicles.

BPI also noted a 234-percent increase in financial transactions done through mobile apps (applications).

Meanwhile, Jo Ann B. Eala, BPI vice president, Sustainable Energy Finance & Specialized Lending Team, Corporate Banking said the size of its lending portfolio for sustainable energy was small relative to the bank’s total loan portfolio.

The focus is also on energy efficiency, like efficient air-conditioning units, renewable energy, and client resilience and efficiency.

Eala said that they have a risk sharing facility with the United States Agency for international Development (USAID) worth P1 billion, which is focused mainly on agriculture and outside the major urban centers like MM, Cebu and Davao.

The P27.5 billion is a risk sharing facility with the International Finance Corp. (IFC), wherein P4-billion are guaranteed loans by the private investment arm of the World Bank.

“We have 198 small and medium enterprises (SMEs) under the risk sharing scheme with IFC,” she added.

Eala said that their message of encouragement to other local banks is that the sustainable program is profitable.

“We do these as it is profitable for the borrower and the lender, and at the same time, we do our share for inclusive growth,” the BPI vice president added.