SEC confirms BPI’S RISE as Asean social bonds

THE Bank of the Philippine Islands (BPI) announced last Wednesday it is at the final stages of its planned offering of 1.5-year peso fixedrate bonds due 2024 that the lender calls the “BPI Reinforcing Inclusive Support for MSMES Bonds,” or “BPI RISE Bonds.” The lender said it has received confirmation from the Securities and Exchange Commission (SEC) that the bonds will qualify as “Asean Social Bonds.”

The latter, a statement by the lender said, are an emerging class of investments developed by the Association of Southeast Asian Nations (Asean) Capital Markets Forum to support the region’s need for sustainable development instruments. Bonds carrying this classification have been independently verified to have systems in place to ensure that proceeds raised will be directed toward projects that benefit society.

This gives bondholders confidence that their investments will be used to make a positive social impact. With its “RISE Bonds,” the bank intends to demonstrate its continuing commitment to achieve positive social outcomes and create value not only for its business, but also for other stakeholders towards nation building, BPI’S statement read.

Unique opportunity

THE lender said that the upcoming issuance of its bonds presents investors with a unique opportunity to support micro-scale, small-sized and mediumscale enterprises (MSMES).

MSMES underpin the Philippine economy, accounting for 99.6 percent of businesses and 64.7 percent of total employment1. Recognizing this significant contribution to the economy, the bank will offer and issue an aggregate principal amount of P5-billion BPI RISE Bonds, with an option to upsize and use the net proceeds to finance or refinance the business requirements of eligible MSMES in accordance with BPI’S “sustainable funding framework ” (SFF). The lender said it considers support for such MSMES as critical to the post-crisis recovery of an economy battered by high unemployment, rising inf lation and disrupted supply chains.

Under BPI’S SFF, eligible social projects include loans to MSMES that meet the qualifications set in the “Manual of Regulations for Banks” of the Bangko Sentral ng Pilipinas and the “Guidelines on the Issuance of Social Bonds” under the Asean Social Bonds Standards in the Philippines issued by the SEC.

Support to MSMES

THESE include loans that: benefit underdeveloped regions; support and promote underserved and under banked segments of the population; or, support MSMES negatively impacted by natural calamities, with significant consequences on the people, public health, infrastructure, assets, or the economy are also entitled for sustainable financing.

“As a member of the Ayala Group of companies, the bank’s issuance of the RISE Bonds contributes to the Group’s many initiatives to support MSMES,” said the country’s third-largest lender in terms of assets.

In the Philippines, the SEC regulates the use of the Asean Social Bond label to ensure that only issuances that comply with the corresponding Asean Social Bond Standards use this classification. The terms of the BPI RISE Bonds are consistent with BPI’S SFF, which has been identified in the second-party opinion issued by Chicago-based investment research firm Morningstar Inc. to be aligned with the Asean Social Bonds Standards.