BPI eyes shift to monthly bond offers
Bank of the Philippine Islands (BPI) plans to step up its bond issuances, initially on an opportunistic basis before eventually moving toward a more regular, even monthly, program.
In a chance interview with reporters, BPI president and CEO Jose Teodoro “TG” Limcaoco and Treasurer Dino Gasmen said the Ayala-led bank is exploring more frequent offerings. This, after seeing strong investor demand for their recent P50-billion Sigla bonds.
“The challenge is to do it monthly,” Limcaoco said, noting that bonds are good not only for the capital markets but also for the banking system.
He added that regulators have been pushing to deepen the local bond market, making it a more efficient funding source.
For now, however, BPI will issue bonds opportunistically, taking advantage of favorable market conditions.
“If you do it opportunistically, you try to get as big a size,” Limcaoco said. “If you do a program, you limit it because you know you’ll come out again.”
Gasmen said the bank does not yet have all the processes in place for a fully programmatic approach.
Even then, BPI’s board has given marching orders to eventually move in that direction, he added.
“Monthly is the eventual target,” Limcaoco said. “But maybe not yet because there are process issues that need to be worked on.”
BPI had initially targeted P5 billion for its latest bond issuance but ended up raising P50 billion.
This underscored strong liquidity in the market. Gasmen said even smaller deals—around P5 billion—would still be worth pursuing if done more frequently.
The bank is also keen on sustainability-linked issuances. Gasmen noted that environmental, social and governance (ESG) bonds carry a zero-percent reserve requirement, compared with 5 percent for time deposits.
Even regular “plain vanilla” bonds, he said, have become more attractive after the Bangko Sentral ng Pilipinas reduced the reserve requirement for such instruments to 2 percent from 3 percent.
On deployment, BPI said proceeds from last year’s P40-billion ESG bond were fully matched with qualifying assets. The bank has generated ESG assets in excess of that size.
BPI has also expanded its sustainability framework to include more social bond categories and 17 sectors under its Blue Bond framework. This covers projects like water treatment, sustainable shipping and financial inclusion.
Gasmen said the success of recent bond offerings encourages the bank to continue tapping the market.
“We feel that people like our bonds. That’s really how they view BPI as an institution—that it’s strong, creditworthy, fulfilling its promises to its constituents, shareholders and other interested parties,” he said.
