BPI Sustainable and Responsible Lending Policy

At the Bank of the Philippine Islands (BPI), we continue to pursue a vision to be a responsible and sustainable bank, and with this is our commitment in promoting sustainable growth and development through sound lending practices and providing credit responsibly.  This begins with our recognition that environmental risks, including climate-related, as well as social, health and safety factors may impact BPI’s and our borrowers’ operations, resilience, reputation, and financial condition.  As one of the Country’s most trusted banks, it is essential that we have a better understanding of the risks and opportunities arising from environmental and social issues associated with our lending businesses.  And with this, a need to integrate sustainable and responsible lending practices as part of our Environmental and Social Risk Management Framework.

Anchored on the sustainable finance-related guidelines of the Bangko Sentral ng Pilipinas (BSP) and in line with the Philippine Sustainable Finance Roadmap, BPI advocates for sustainable and responsible lending. To complement our strategies geared towards financing sustainable development, financial inclusion, and supporting nation-building, we have also integrated environmental and social factors into our credit risk management practices for a better-informed credit-granting process.

Our credit strategies and risk appetite are established at the Board level, demonstrating our dedication to embedding E&S risk consciousness throughout the organization. Decisions regarding lending to specific business sectors, industries, or types of borrowers with material E&S risks are carefully evaluated and approved at the Senior Management and/or BPI Board-Level Committees, as appropriate.

All loan proposals and credit accommodations undergo comprehensive credit evaluation to ensure that risks are well understood, adequately addressed, or mitigated, including those arising from potential issues or violations on environmental and social laws and regulations, namely: environmental pollution, loss of biodiversity, hazard to human health, safety and security concerns, involuntary resettlement, and harm to indigenous communities and cultural heritage.

Material E&S issues that emerge during E&S assessments require that we perform necessary actions and risk mitigations, which may include securing additional credit enhancements such as insurance or collateral top-ups, enhancing due diligence including business or financial justifications subject to the required approvals by the Bank’s credit authorities, and/or submitting supplemental documentation in accordance with BPI's policies and regulatory guidelines.

We have also established processes for ongoing E&S assessments and reviews.  This includes annual reviews of credit facilities by our Business Units or more frequent assessments when significant developments affect a borrower's operations or collateral properties. These reviews also provide an opportunity for BPI to communicate potential risks to borrowers and raise awareness in alignment with our sustainability strategies.

We also have credit administration, risk measurement, and reporting mechanisms in place, ensuring transparency to senior management and the board, regulatory bodies and other stakeholders, where applicable. This includes addressing emerging and complex E&S issues and developing plans to manage any identified concerns.

All these efforts underscore our commitment to adopting best practices in sustainable and responsible lending across the BPI organization and for the benefit of our key stakeholders. We believe that by integrating E&S factors into our lending practices, we are dutifully promoting economic growth but at the same time, meaningfully contributing to a more sustainable and resilient future for the Country.