Ayala-led Bank of the Philippine Islands (BPI) is preparing to issue blue bonds—debt instruments dedicated to financing marine and ocean-based sustainability projects—as part of its broader drive to scale up green and sustainable finance in the Philippines.
According to BPI Chief Finance Officer and Chief Sustainability Officer Eric Luchangco, the bank has completed work on a blue bond framework, which sets out eligible projects and uses for the proceeds. The timing of the issuance, however, will depend on market conditions and the bank’s funding requirements.
“When we’re ready to come to the market, I think there’s a good chance we’ll come with a blue bond,” Luchangco said. “It’s inevitable that we’re going to do it — it’s just a question of timing.”
Strong investor demand fuels BPI’s blue ambitions
BPI Chief Finance Officer and Chief Sustainability Officer Eric Luchangco
Blue finance typically supports initiatives in sustainable water and wastewater management, marine renewable energy, sustainable shipping and fisheries, and coastal tourism, among others. It is a growing subset of the broader sustainable finance sector, which aims to channel capital toward projects that protect ecosystems while generating economic returns.
Luchangco said the blue bond issuance could materialize as early as the first half of 2026, though no final decision has been made on whether it will be issued in the local or international market. He added that the bank continues to assess investor appetite, noting that there is strong interest in sustainability-linked instruments following the success of its Supporting Inclusion, Nature, and Growth (BPI SINAG) bonds earlier this year.
“We’ve seen very strong demand for the SINAG bonds,” Luchangco said. “It gives us confidence that the market for sustainability-linked and blue bonds is definitely there.”
BPI’s first SINAG bond offering — a peso-denominated, one-and-a-half-year issuance — was part of the bank’s ₱200-billion bond and commercial paper program, carrying an interest rate of 5.85% per annum.
The initial offer, originally planned to close on May 30, was cut short to May 26 due to robust demand. The issue was subsequently listed on the Philippine Dealing & Exchange Corp. on June 10, 2025.
Ayala-led bank strengthens role in green transition
The lender’s move into blue bonds aligns with its goal of reaching ₱1 trillion worth of sustainability-linked loans by 2026, a target first set in 2021. As of the first quarter of 2025, BPI had already reached nearly ₱900 billion in sustainability-linked loans — equivalent to about 39% of its ₱2.3-trillion total loan portfolio.
Luchangco expressed confidence that the bank will meet its ₱1-trillion target ahead of schedule, though he acknowledged that reaching its secondary goal — having half of its total loan book sustainability-linked by 2026 — could be more challenging.
“I think we’ll achieve the ₱1 trillion earlier than expected,” he said. “The 50% target is more difficult because the rest of our loan portfolio is also growing rapidly, but we remain committed to both goals.”
BPI’s sustainable development finance (SDF) portfolio currently spans 485 projects, including 177 in energy efficiency, 145 in renewable energy, 80 in climate resilience, 74 in sustainable agriculture, and six in sustainable water initiatives. By the end of 2024, its Sustainable Development Goal (SDG) portfolio reached ₱958 billion, reflecting significant investments in industry, infrastructure, clean energy, and sustainable communities.
The planned blue bond issuance underscores BPI’s position as a frontrunner in the Philippine banking sector’s sustainability journey — particularly as the country seeks to strengthen its climate resilience and transition toward a low-carbon, inclusive economy.
“We believe the market is ready,” Luchangco said. “The framework is in place, and the demand for sustainability-driven investments continues to grow. It’s only a matter of time before we take the next step.”
