BDO is listed in the Philippine Stock Exchange with a market capitalization of US$2B and is generally well traded. SM Investment Corp. (SMIC) is the largest shareholder in BDO, and together with the Sy family and affiliated entities, has an aggregate interest of about 68% in the bank. The other main shareholders are Trans Middle East Philippine Equities, Inc. (4%), GE Capital Philippines (1.6%), United Overseas Bank (1%) and IFC (1%). The balance of the shareholdings is publicly owned.

The investment is expected to be funded by IFC Capitalization (Equity) Fund, L.P. and IFC Capitalization (Subordinated Debt) Fund, L.P, each sponsored by IFC (together, the "Fund") and/or by IFC. The total cost of the Project is up to US$277.5 million and will be comprised of both equity and subordinated debt.

150.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	150.0

* These investment figures are indicative

BDO is headquartered in Metro Manila, Philippines and operates 707 branches throughout the country. BDO also has a branch in Hong Kong Special Administrative Region of the People’s Republic of China.

The proposed Project is expected to have a high development impact as it will (i) support the consolidation of the Philippine banking sector; (ii) strengthen the capital base and adequacy of the Bank and thus, facilitate the Bank’s expansion of its financial services in the Philippines; (iii) advance capacity and institution building of the Bank; and (iv) improve the Bank's capacity in social and environmental management.

IFC’s role and expected contributions in this Project would be to (i) strengthen the Philippine financial markets by supporting bank consolidation; (ii) increase IFC’s commitment to the banking sector of the Philippines in times of economic slowdown via long-term engagement with a strong local bank and support to its strategic development programs; and (iii) deepen access to finance to the underserved sectors such as SMEs and infrastructure. IFC’s additionality stems from IFC’s ability to engage strategically with its clients and thus would (i) infuse long-term capital in to the Bank, mitigating current constraints in the market, particularly for Tier 1 equity capital; (ii) encourage more private sector investment, particularly equity, in the Philippine banking sector; (iii) strengthen a long term partnership with Banco de Oro by providing advisory services for capacity building; and (iv) potentially facilitate consolidation of the Philippine banking sector which would improve financial stability and intermediation in the country.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. During appraisal, IFC will analyze the bank’s portfolio for types of transactions, size, tenor and industry sectors and determine the Applicable Performance Requirements that may include a combination of:
 The IFC FI Exclusion List,
 The applicable National Social and Environmental Laws and regulations, and
 The IFC Performance Standards

IFC will also assess the bank’s capacity to manage social and environmental risks and review its labor practices according to the IFC’s Performance Standards 2: Labor and Working Conditions. If required, IFC will suggest Supplemental Actions to address any gaps identified. Based on the review, the bank will be required to:
 Develop an, or upgrade, if necessary, any existing Social & Environmental Management System (SEMS), prior to disbursement to the satisfaction of IFC
 Implement the SEMS, to ensure that its investments/activities are in compliance with the Applicable Performance Requirements
 Identify responsible, qualified persons to manage and implement the SEMS
 Commitment to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions
Submit a periodic report to IFC as per a format to be provided by IFC