BPI looks to finalize blue bond framework within this quarter

BANK of the Philippine Islands (BPI) expects to finalize its framework for blue bonds within this quarter, but the timing of its first issuance will still depend on its funding needs.

-  Aaron Michael C. Sy

“There's just an approval process that we need to go through. I continue to expect that before the end of the year, it should be in place. In fact, I think even before the end of the third quarter, it should be done,” BPI Chief Financial Officer Eric M. Luchangco told Business World last week.

He added that the bank already has some projects that it could finance under the framework once it gets finalized.

“We already have some projects that are eligible for it. We will definitely continue that as time goes on... but we already have some projects that would be eligible once we have the framework,” Mr. Luchangeo said.

However, BPI Treasurer and Global Markets Head Dino R. Gasmen told Business World that while there is strong demand for local currency issuances, the bank could still wait until the end of the year before it launches another bond offer.

“I think one of the reasons why there’s so much demand from retail investors is because I think they believe that the BSP (Bangko Sentral ng Pilipinas) is going to bring down policy rates. So, it’s better to lock it down because it looks like they will cut rates. For banks, it’s the reverse — we want to take advantage of the lower rates, so we'll probably wait for rates to go lower before we issue,” he said.

Ideally, they want to wait until the BSP finishes its current easing cycle, Mr. Gasmen said.

“But it depends. If there’s a strong pipeline, we may not need to wait for the BSP to reduce rates,” he added.