BPI to float Covid-19 bonds for lending to small business

The Bank of the Philippine Islands (BPI) announced plans to raise funds aiding the recovery of micro, small and medium enterprises (MSMES) via the bond market.

In a disclosure on Thursday, the Ayalaled bank said that it was eyeing to issue the country’s first Covid-19 Action Response (CARE) bonds to help eligible MSMES under its newly-established Sustainable Funding Framework (SFF).

The Securities and exchange Commission confirmed that such bonds qualify as social bonds under the Association of Southeast Asian nation (Asean) Social Bonds Standards in the Philippines.

“MSMES account for a relatively small percentage of total bank borrowings but a very large percentage of total nationwide employment,” BPI President Cezar P. Consing said. “Loans to MSMES go a long way to keeping Filipinos working.”

BPI said it is set to make further announcements regarding the offering soon.

Included in BPI’S initiative are loan payment deferral program, waiver of fees for online fund transfer and refining of loan products for qualified clients.

This is in addition to the efforts of its parent company, Ayala Corp., to uplift the sector by launching the Ayala enterprise Circle network, BPI said. The bank explained the program provides MSMES access to Ayala Group’s solutions and offerings, mentorship, online dialogues and master classes and business-matching opportunities.

earlier this month, BPI launched its SFF for the issuance of green, social or sustainable bonds or loans. The bank said the SFF is part of its Green Finance Framework, or GFF, which was launched in June last year to fund environmental initiatives. The bank said the GFF underscores the inclusion of projects that address social issues.

The GFF details the use of proceeds from the issuance, review and selection of projects, fund management and reporting, the bank said.

BPI explained that the said framework is also in line with the International Capital Market Association Green and Social Bond Principles, the Loan Market Association Green Loan Principles and the Asean Green, Social, and Sustainability Bond Standards.

In September last year, BPI priced its $300-million senior unsecured fixed-rate Asean green bond, proceeds of which will be used for financing and refinancing off eligible green projects. The bonds carry a coupon rate of 2.5 percent and reoffer yield of 2.577 percent.

BPI shares climbed 1.30 percent, or 95 centavos, to end at P73.95 apiece amid the 1.06-percent hike for the benchmark index on Thursday.