Bulacan Polytechnic College

Bulihan City of Malolos Bulacan

Research Report on Bank of the Philippine Islands

Prepared for

Mrs. Cecilia Santos

NSTP 2 Instructor

Prepared by

Abigael P. Jacob
BSAIS – 1A
 Table of Contents

Introduction Page
About BPI ………………………………………………………………………….. 1-3
History ……………………………………………………………………………... 3

A History of Trust: The Philippine’s First Bank ………………………………….. 4-7

In the News Article …………………………………………………………………….. 8-10

Reflection ………………………………………………………………………………... 11
 Introduction
About BPI
Founded in 1851, Bank of the Philippine Islands is the first bank in the Philippines and in the
Southeast Asian region. BPI is a universal bank and together with its subsidiaries and affiliates, it
offers a wide range of financial products and solutions that serve both retail and corporate clients.

BPI's services include consumer banking and lending, asset management, insurance, securities
brokerage and distribution, foreign exchange, leasing, and corporate and investment banking.

The bank has a network of over 800 branches in the Philippines, Hong Kong and Europe, and close
to 3,000 ATMs and CDMs (cash deposit machines).

The establishment of BPI, originally known as El Banco Español Filipino de Isabel II, ushered in
the start of the Philippine banking and finance industry. The bank performed many functions, from
providing credit to the National Treasury to printing and issuing currency, making it in effect the
country's first Central Bank. BPI proudly carries on this tradition, financing many private and
public sector initiatives and enterprises in support of economic growth and nation building.
BPI is acknowledged as a leading provider of financial services in the Philippines.

Mission
Since the bank's founding 165 years ago, BPI has been inextricably linked to the growth of the
Philippine economy. Anchoring our institution on our four-fold commitment to Clients, People,
Shareholders, and Country, we aim to take advantage of the country's good macroeconomic
fundamentals by carefully and systematically overlaying scale over some of the best financial
metrics in the Philippine banking industry.
Our mission is enshrined in the BPI Credo.

The BPI Credo

We believe our first responsibility is to our Clients. If we understand and address our clients'
financial needs, we will be trusted with their most important financial transactions, and we will
build lasting relationships. We do well when our clients do well.

We believe in our responsibility to our People. We seek to hire the best people for each job, provide
them with the means to perform at a high level and reward them fairly. We value integrity,
professionalism, and loyalty. We promote a culture of mutual respect, meritocracy, performance,
and teamwork. We strive to be the employer of choice among Philippine financial institutions.
We believe in our responsibility to our Shareholders. We treat capital as a most valuable asset, and
seek to generate superior returns while being prudent in risk taking, spending, and investment.

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We believe in our responsibility to our Country. Our prosperity is greatly dependent on the well-
being of our nation. We aim to be inclusive and responsible in nation building. Through BPI
Foundation, we are committed to the welfare and sustainability of the communities we serve.

Vision
It is BPI's vision to be the Philippines' premier bank that builds on its heritage of being the principal
architect of the country's financial inclusion landscape, providing the most effective, efficient, and
innovative solutions for its clients to best manage their financial needs, while creating sustainable
value and shared prosperity for all stakeholders.

Review of Mission and Vision Statements

The Bank's vision and mission was presented to, reviewed and approved by the Board during the
annual Budget Planning exercise on December 13, 2017 in Makati City.

Review of the Corporate Strategy

The Board, at its annual Strategic Planning session on November 29, 2017, reviewed and approved
the company's corporate strategy as part of its continued commitment to its duties and
responsibilities as stated in the Manual on Corporate Governance.

Core Values
CUSTOMER SERVICE - Establish friendly relationships with clients, putting them first in our
list of priorities, to delight them with our services, and to always try to anticipate their every need.

EXCELLENCE - Employees, whatever their functions are, should always give their best and
continuously upgrade their knowledge, skills, habits, and attitudes to meet each challenge with
determination and drive, opening themselves to unlimited possibilities.

LOYALTY - To be proud of BPI, to be true to its ideals and vision, and to actively promote and
defend what BPI stands for.

TEAMWORK - Build deep and lasting relationships founded on trust and respect, to be totally
committed to the achievement of the objectives of our team and of BPI, to actively participate as
one in any undertaking, to contribute our individual knowledge and talents for the benefit of all.

INTEGRITY - As bankers, we should be worthy of the confidence put in us by BPI and the society
it stands for, earn the trust of those we meet and interact with, and always do what is morally, and
socially correct, contributing in our small way in shaping the future.

CONCERN FOR PEOPLE - Employees should be genuinely interested in people, to help others
in every way possible, to contribute to a sound environment, to be fair, supportive, friendly, caring,
and sincere in our relations with the people we meet.

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History
Established on August 1, 1851 under Spanish colonial rule, BPI was originally known as El Banco
Español Filipino de Isabel II, named after then Queen of Spain, Isabel II.

The bank was the first to be established in the Philippines, and was responsible for starting the
country's banking and finance industry. Playing a unique role in the early economic history of the
Philippines, the bank performed many functions that in effect made it the country's Central Bank,
including providing credit to the National Treasury and printing and issuing currency in its own
name.

Following the Spanish-American War of 1898, the Bank was reorganized and essentially
privatized under the U.S. federal government's National Bank Acts of 1863 and 1864. The bank
adopted its current name on January 1, 1912.

In the early 1980s, the Monetary Board of the Central Bank of the Philippines (now the Bangko
Sentral ng Pilipinas) allowed BPI to evolve into a fully diversified universal bank, to offer
investment and consumer banking services in addition to traditional commercial banking activities.
This transformation into a universal bank was accomplished through both organic growth and
mergers and acquisitions.
Today, BPI is acknowledged as a leading provider of financial services in the Philippines.

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A History of Trust: The Philippine’s First Bank
Philippine banking was born on August 1, 1851, with the establishment of the El Banco
Español Filipino de Isabel II – or what we know now as Bank of the Philippine Islands (BPI). It
was also the first bank in Southeast Asia.

In its 166 years of existence, BPI’s history is closely intertwined with the Philippines’ narrative of
progress and development. The bank’s pioneering efforts in mobilizing industries such as
agriculture and transportation, as well as its milestones in modernizing and globalizing financial
transactions, all contributed to its current status as one of the most trusted organizations in the
country.

1851
By the middle of the 19th century, foreign trade composed 30% of the country’s gross national
product. Merchants needed financing to grow. The Spanish colonial authorities realized that this
can only be provided by a quasi-government bank.

Thus, upon the decree of the King of Spain, the Junta de Autoridades approved the establishment
of the first Philippine bank, El Banco Español Filipino de Isabel II.

The bank functioned as the Philippines’ first Central Bank and published the country’s first
bank notes.
1888
Commercial centers were booming along the Pasig River and in Binondo and Malabon. People,
goods, and services traveled by horses, trams, or occasionally, cars. As trade boomed and the
population grew, Manila needed a faster and more efficient means of transportation. Industries
should be equipped with financing facilities to buy more transport services.

Jacobo Zobel’s Compañia de los Tranvias de Filipinas, which provided Manila with its first trams,
sought to build the capital’s first steam railway system. He sought funding from a trusted financial
institution of the time.

The bank, now named Banco Español Filipino, approved Zobel’s loan of P50,000 to fund the
conversion.
Early 1900s
In the midst of the American Colonial period, a group of nationalists lobbied for the Philippines’
eventual independence through the Philippine Autonomy Act, also known as the Jones Law. It
paved the way for the Commonwealth Era in 1935. Ambitious economic policies then enabled
businesses to grow nationwide.

In 1912, Banco Español Filipino officially became known as Bank of the Philippine Islands.

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Under the US federal government’s law, the bank was reorganized and privatized. True to its new
name, the bank expanded its reach: it established its first branch in Iloilo in 1897, followed by two
more in Zamboanga, then Cebu.

The nation achieved its full independence from Japanese troops in 1946. The succeeding decade
was a period of reform and rebuilding for Filipinos and local companies.

Banking had to be accessible to more Filipinos.

Amidst a period of banking reform, along with the formal establishment of the Central Bank of
the Philippines, BPI achieved its own steady growth by setting up more branches all over the
Philippines.

In 1969, Ayala Corporation became a major stakeholder and BPI became the financial flagship of
the Ayala Group of Companies.

1960s - 70s
These years were characterized by a brief period of solid industrial growth. The Philippines’ gross
domestic product more than doubled during this era, although this was spurred by massive debt
from commercial banks.
Stability was needed in the financial industry. The bank forged strong partnerships in this era.

During the turbulent years under Martial Law, BPI was committed to serving the country’s vital
agriculture and mining industries.

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 1980s
Hard times hit the Philippine economy in the ‘80s – the weakening peso was further battered by
extremely high interest rates. Unable to survive high costs, many businesses collapsed. The Central
Bank undertook stringent means to restructure the country’s massive foreign debt. One of these
changes was the transformation of banks into diversified universal
banks, allowing them to offer investment and consumer banking
services.

BPI survived the crisis by focusing on modernization.

On April 1, 1980, the bank inaugurated its head office along Ayala
Avenue – which is now the business hotspot of the city. The
company evolved into a fully diversified bank by 1982 and was
among the first to offer investment and consume banking services
following mergers and acquisitions. It was also the first to offer
modern banking tools such as the Philippines’ first offsite ATM
machine in Greenbelt, Makati.

1990s
A string of natural disasters – including the 1990 earthquake and the 1991 eruption of Mt. Pinatubo
– cast a dark shadow over the country at the start of this decade.

The aftermath of these events put the compassion and strength of Filipinos in the spotlight.
In the book Enlightened Stewardship, Maria Teresa Colayco recounted the resilience and valiant
heroism of BPI and its employees during these crises. They responded immediately to calls for
help in their areas and helped facilitate the quick reopening of
BPI’s branches.

2000s
The turn of the millennium was defined by globalization and
rapid technological advancement. The Internet became a
primary medium of communication and information. Mobile
tools became widely accessible. Because of laws passed during
the Ramos administration, foreign-owned companies entered
the landscape, and local brands had to evolve to stay
competitive.

In the banking world, BPI was actually “ten strides ahead” of

the rest – as early as 1994, the bank already enabled clients to
withdraw cash overseas using partner facilities.

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BPI was the first to launch a full-service online portal and mobile app.
It also pioneered convenient services such as cash acceptance machines and branchless banking.
It also strengthened its service for OFWs and small-scale entrepreneurs.

66 years after it was founded, BPI continues to be a game changer that understands and provides
solutions to its clients’ needs, fears, and motivations.

In 2013, BPI built the first solar-powered bank branch. The solar power system installed in the
bank’s Ayala Extension branch consists of solar panels with a five kilowatt peak (kWp) capacity.
In 2016, BPI successfully carried out the first climate bond to fund geothermal facilities. It also
launched its own index series to guide investors and portfolio managers on the performance of
certain segments in the domestic stock or bond market.

This year, BPI further cemented its stake in financial inclusion by officially launching its micro
finance bank, BPI Direct BanKo Inc. Aside from providing self-employed microentrepreneurs
(SEMEs) with affordable loan products, BanKo aims to empower SEMEs with expert financial
advice and solutions that promote the growth and expansion of the SEME’s enterprises.

Today, BPI has transformed into an institution that redefines what a bank can do for Filipinos. BPI
values the trust that clients give, as they come to BPI for Trusted Advice built on expertise and
experiences, knowledge of the markets and financial products and an understanding of their needs
and objectives. – Rappler.com

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In the News Article
March 31, 2015
BPI named 2015 best retail bank
Bank of the Philippine Islands was named 2015 Best Retail Bank in the Philippines by The Asian
Banker for the 11th since it started the awards program in 2002.

The Best Retail Bank award highlights BPI's strong leadership in retail banking through its
commitment to sustainability, profitability, and providing best-in-class technology and distribution
channels.

"BPI's success is a result of many developments rooted on the bank's focus on its customers, "says
Natividad N. Alejo, head of the retail clients group.

"Among the bank's biggest achievements that merited this award is in the area of electronic
banking. Currently, eight out of 10 transactions of BPI clients are carried out through our electronic
channels."

Alejo said BPI's enhanced BPI Express Mobile app for IOS and Android devices had been
consistently the most downloaded finance app in the country.

Through the years, BPI has consistently made an impact in retail banking by providing clients with
product and service innovations. Apart from the mobile app, BPI is the first and only bank to offer
in-branch electronic assistants, called BEAs, which facilitate and shorten over-the-counter
transaction processes. BPI also has the most number of cash deposit machines deployed the
country.

October 9, 2017
Making the best out of banking
Here’s how you can move to a banking relationship that you can rely on for trusted advice.
(Published in Philippine Star, Business Section last October 9, 2017.)

According to the latest Consumer Finance Survey by the Bangko Sentral ng Pilipinas, “only 14%
of Filipino households save their money in banks.” The survey said that the foremost reason cited
by households for not having a deposit account was “not having enough money to keep an account.”
Majority also said they “do not like to deal with or do not trust banks or institutions.”

This reveals that most Filipinos are not maximizing the potential of banking capabilities to help
improve or manage their finances.

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Bank of the Philippine Islands (BPI) gives practical tips on how to help anyone make the most in
his or her financial journey with the bank.

Be comfortable with talking about money. Talking about money does not have to be worrisome.
The journey to making your finances grow starts with acknowledging what you have and what you
want to have.

“Reflect on your financial goals, and take time to identify what you really need to do to attain
them,” shares Joseph Gotuaco, BPI Executive Vice President and Head of Retail Clients Segments.
“Better yet, share your financial goals with your family or your trusted friends to educate yourself
as you make financial decisions.”

Open up to your bank. Once you’ve overcome your anxieties to discuss money matters, it’s time
to talk to the group most qualified to listen to your financial goals and have the expertise to help
you do something about it: your bank.

“When you come to the bank, don’t be afraid to share specific goals that matter most to you,”
shares Dennis Montecillo, BPI Executive Vice President and Head of Corporate Clients, “Don’t
be afraid to share with us your ambitions, dreams, or even your fears, as this is the only way that
we can provide you with solutions that you will truly benefit from.”

Bankers may be considered as partners when it comes to making big decisions. “BPI Unibankers
are equipped with experience and knowledge on market and industries to give you advice on
possible financial solutions. Find the time to collaborate with them in achieving your aspirations,”
Montecillo adds.

Know your options. It is important to be aware of bank services available to you, but these services
have to match your needs. These services come with the financial advice that is customized
depending on your goals. For BPI, highly trained individuals bring to life the institution’s promise
to make the best happen for all its clients.

“The bank’s relationship and branch managers personify BPI. Through them, we strive to identify
our clients’ needs and aspirations to provide them with appropriate solutions and trusted advice.
We aim to be the bank that clients will go to for their most important financial transactions, from
deposits, to loans, to estate planning and capital markets transactions,” says BPI President and
CEO Cezar P. Consing.

You can approach these BPI relationship managers and account officers for financial education
and advice on how specific financial products can work together to maximize financial solutions.
“Our product experts play a vital role in ensuring that our clients are informed and guided properly.
BPI Unibankers collaborate with different groups in the bank to ensure that they give clients the
solutions that are most suited to them,” shares Simon Paterno, BPI Executive Vice President and
Head of Financial Products and Services Segment.

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Invest in a relationship with your bank where you can get Trusted Advice. “A regular update on
market developments and projections is always helpful. You should be aware of risks and
opportunities that your companies and personal portfolios can guard against and--or take
advantage of--using various investments and hedging products that the bank offers. By doing so,
you have better chances of growing your business and portfolios to support retirement or even
future generations,” says Antonio Paner, BPI Executive Vice President, Treasurer and Head of
Global Markets Segment.

As with every relationship that is beneficial for you, make time for people whom you can trust to
get you closer to your financial goals.

“The relationship manager and investment counselor are partners in helping you achieve your
financial goals. Our systems in BPI are designed to ensure that we support this advisory
relationship so we can deliver quality results at a very personalized level,” says Ramon Jocson,
BPI Executive Vice President and Head of Enterprise Services.

“Some of our customers have actually grown their businesses from a single proprietorship to a
large corporation with the help of their long-time relationship manager. The more the BPI
Unibanker knows you, the more that he or she is better able to advice you and push you more
towards your goals and potential opportunities,” Montecillo supports.

As the first bank in the country, BPI continues to carry its legacy and renewed commitment to
enable Filipinos to lead their best lives through financial literacy and sound advice. At the same
time, it emphasizes the importance of customers making a connection with their bank as the first
step to making the best happen in every journey that they choose to embark on.

“For BPI, we do well when our clients do well. Getting to know you is only the beginning of the
path to success, from understanding your real concerns, to providing you with financial advice you
can rely on. Our bankers are key to ensuring our continued success as an institution, and we look
to them to create a differentiated service that our clients can truly depend on,” concludes Consing.
ABOUT BANK OF THE PHILIPPINE ISLANDS

The 166-year-old Bank of the Philippine Islands is the first bank in the Philippines and Southeast
Asia. We are a universal bank with an expanded banking license. We provide diverse financial
services that include deposits, cash management, asset management, securities brokerage, foreign
exchange and capital markets investments, bancassurance, corporate lending, leasing, and
investment banking. BPI has significant financial strength, with strong Tier 1 capital adequacy
ratios and profitability, underpinned by a strong risk management regime. BPI is rated investment-
grade by international credit ratings agencies.

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Reflection
I chose the Bank of the Philippine Islands (BPI) to be the subject of my report because as
we all know, BPI is one of the most famous bank in our country, given the fact that it is the
Philippine’s first bank and was also the first bank in Southeast Asia. But what made them to the
top surprised me. Even if hard times hits the bank, they learned to cope it with modernization. In
the book Enlightened Stewardship, Maria Teresa Colayco recounted the resilience and valiant
heroism of BPI and its employees during these crises. They responded immediately to calls for
help in their areas and helped facilitate the quick reopening of BPI’s branches. BPI became a huge
help for Filipinos in terms of money exchange. The success story of BPI is truly inspiring and there
is no doubt that they are one of the leading establishment in the Philippines. Let us hope that they
will continue on helping the Filipinos and they can overcome the issues in the economy.