BPI to borrow P100 billion through bonds, commercial paper issuance

MANILA, Philippines — Ayala-led Bank of the Philippine Islands (BPI) plans to raise up to P100 billion through the issuance of peso-denominated bonds and commercial papers under a new borrowing program.

The board of directors of the 170-year-old bank approved the new Philippine bond and commercial paper program last Wednesday.

“We established the program so we can issue bonds in a timely manner when the need arises. And when the need does arise, we may identify specifically what it’s for,” BPI treasurer Dino Gasmen told The STAR.

The program is the same as the P100-billion bond and commercial paper program approved by BPI in late 2019.

The country’s fourth largest lender in terms of assets last tapped the onshore debt market last January when it raised P27 billion via the issuance of two-year bonds due 2024.

The fund raising activity via the issuance of bonds with a fixed rate of 2.8068 percent per annum was oversubscribed from the original size of P5 billion.

BPI’s P21.5 billion fixed rate COVID Action Response (CARE) bonds, the first-ever COVID bond offering in the country, matured early this month while another P9.6 billion issued by BPI Family Savings Bank is set to mature next month.

Other bonds issued by the listed bank that have matured include the P25 billion fixed rate bonds issued in December 2018, as well as the the P33.89 billion fixed-rate bonds issued in March 2020 and the P15.33 billion fixed rate bonds issued in January 2020.

“As an example, the CARE bonds issued in 2020 out of our previous program were specifically to support SME (small and medium enterprises) lending,” Gasmen said.

The oldest bank in Southeast Asia and the Philippines taps both the offshore and onshore bond markets to raise funds to finance general corporate purposes, including refinancing.

The Ayala-led lender continues to invest in digital banking capabilities to better serve customers.

“But it may also be the case that we may issue bonds to support our ongoing digitalization efforts, manage liquidity risk, or simply for general corporate purposes or refinancing,” Gasmen said.

The earnings of BPI jumped by 59.6 percent to P8 billion, as revenues inched up by 4.3 percent to P25.4 billion in the first quarter of the year.