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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.
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A history of trust:
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The Philippines’
First Bank

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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.
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The bank functioned as the Philippines’ first Central Bank and published the country’s first bank notes.
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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.
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The bank, now named Banco Español Filipino, approved Zobel’s loan of P50,000 to fund the conversion.
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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.
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.
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In 1912, Banco Español Filipino officially became known as
Bank of the Philippine Islands.
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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.
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.
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Banking had to be accessible to more Filipinos
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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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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.
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In 1969, Ayala Corporation became a major stakeholder and BPI became the financial flagship of the Ayala Group of Companies.
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BPI survived the crisis by focusing on modernization.
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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.
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.
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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.
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.
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The aftermath of these events put the compassion and strength of Filipinos in the spotlight.
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BPI was the first to launch a full-service online portal and mobile app.
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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.
It also pioneered convenient services such as cash acceptance machines and branchless banking. It also strengthened its service for OFWs and small-scale entrepreneurs.
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166 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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Sources:
A Tradition of Leadership and Enlightened Stewardship by Maria Teresa Colayco